Bulls, Bears & Bucks #17: Beren nemen het roer weer over

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Op vrijdag 18 juli 2008 14:52 schreef simmu het volgende:

[..]

mwach. een jaar geleden werd de hele huizenbubble nog ontkend, en viel dat dan weer onder BNW. ik denk dat we het er nu wel over eens kunnen zijn dat er wel een huizenbubble was

ps: op een persoonlijke noot toch even: simmu zal ergens in de komende weken opeens een week of wat afwezig zijn, dit ivm het kweken van een mini-simmu volle termijn --> tijd om te bevallen! dus dan zal die grote crash wel komen wie gokt wanneer?

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Op vrijdag 18 juli 2008 15:25 schreef Eduard37 het volgende:

Der Untergang-Bedrijfsuitje

Ok, nog eentje dan. Voordat ik weer commentaar krijg!

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Wall Street's Great Deflation

Phil Gramm, the senator-banker who until recently advised John McCain's campaign, did get it right about a "nation of whiners," but he misidentified the faint-hearted. It's not the people or even the politicians. It is Wall Street--the financial titans and big-money bankers, the most important investors and worldwide creditors who are scared witless by events. These folks are in full-flight panic and screaming for mercy from Washington, Their cries were answered by the massive federal bailout of Fannie Mae and Freddy Mac, the endangered mortgage companies.

When the monied interests whined, they made themselves heard by dumping the stocks of these two quasi-public private corporations, threatening to collapse the two financial firms like the investor "run" that wiped out Bear Stearns in March. The real distress of the banks and brokerages and major investors is that they cannot unload the rotten mortgage securities packaged by Fannie Mae and banks sold worldwide. Wall Street's preferred solution: dump the bad paper on the rest of us, the unwitting American taxpayers.

The Bush crowd, always so reluctant to support federal aid for mere people, stepped up to the challenge and did as it was told. Treasury Secretary Paulson (ex-Goldman Sachs) and his sidekick, Federal Reserve Chairman Ben Bernanke, announced their bailout plan on Sunday to prevent another disastrous selloff on Monday when markets opened. Like the first-stage rescue of Wall Street's largest investment firms in March, this bold stroke was said to benefit all of us. The whole kingdom of American high finance would tumble down if government failed to act or made the financial guys pay for their own reckless delusions. Instead, dump the losses on the people.

Democrats who imagine they may find some partisan advantage in these events are deeply mistaken. The Democratic party was co-author of the disaster we are experiencing and its leaders fell in line swiftly. House banking chair, Rep. Barney Frank, announced he could have the bailout bill on President Bush's desk next week. No need to confuse citizens by dwelling on the details. Save Wall Street first. Maybe lowbrow citizens won't notice it's their money.

We are witnessing a momentous event--the great deflation of Wall Street--and it is far from over. The crash of IndyMac is just the beginning. More banks will fail, so will many more debtors. The crisis has the potential to transform American politics because, first it destroys a generation of ideological bromides about free markets, and, second, because it makes visible the ugly power realities of our deformed democracy. Democrats and Republicans are bipartisan in this crisis because they have colluded all along over thirty years in creating the unregulated financial system and mammoth mega-banks that produced the phony valuations and deceitful assurances. The federal government protects the most powerful interests from the consequences of their plundering. It prescribes "market justice" for everyone else.

Of course, the federal government has to step up to the crisis, but the crucial question is how government can respond in the broad public interest. Bernanke knows the history of the last great deflation in the 1930s--better known as the Great Depression--and so he is determined to intervene swiftly, as the Federal Reserve failed to do in that earlier crisis. By pumping generous loans and liquidity into the system, the Fed chairman hopes to calm the market fears and reverse the panic. So far, he has failed. I think he will continue to fail because he has not gone far enough.

If Washington wants real results, it has to abandon the wishful posture that is simply helping the private firms get over their fright. The government must instead act decisively to take charge in more convincing ways. That means acknowledging to the general public the depth of the national crisis and the need for more dramatic interventions.

Instead of propping up Fannie Mae or others, the threatened firm should be formally nationalized as a nonprofit federal agency performing valuable services for the housing market. That is the real consequence anyway if the taxpayers have to buy up $300 billion in stock.

The private shareholders "are walking dead men, muerto," Institutional Risk Analytics, a private banking monitor, observed. Make them eat their losses, the sooner the better. The real national concern should be focused on the major creditors who lend to Fannie Mae and other US agencies as well as private financial firms. They include China, Japan and other foreign central banks. Foreign investors hold about 21 percent of the long-term debt paper issued by US government agencies--$376 billion in China, $229 billion in Japan.

It is not in our national interest to burn these nations with heavy losses. On the contrary, we need to sustain their good regard because they can help us recover by bailing out the US economy with more lending. If these foreign creditors turn away and stop their lending now, the US economy is toast and won't soon recover.

Americans should forget about whining; it's too late for that. People need to get angry--really, really angry--and take it out on both parties. What the country needs right now is a few more politicians in Washington with the guts to stand up and tell us the hard truth about out situation. It will be painful to hear. They will be denounced as "whiners." But truth might be our only way out.

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DFT

Na gisteren staat hierdoor de wereldwijde meter van verliezen en afschrijvingen als gevolg van de impact van de huizenmarkt- en kredietmarktcrisis op $ 435 miljard. Ongeveer $ 14.000 miljard aan marktwaarde is wereldwijd verloren gegaan sinds oktober vorig jaar als gevolg van de grove koersdalingen op de beurzen.

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Op vrijdag 18 juli 2008 16:12 schreef Eduard37 het volgende:
14.000 miljard? Eigenlijk wel logisch toch? Hoe wil je anders die forse geldgroei (M3) weer terug op peil krijgen? De Fed drukt steeds maar nieuw geld dat moet ergens weer rechtgezet worden. Normaal gaat dat via een oorlog misschien laten ze nu door het systeem oplossen.

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Op vrijdag 18 juli 2008 16:26 schreef Drugshond het volgende:

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Nou ik denk het niet. Als Obama president wordt zal het buitenlandse beleid flink op de schop gaan.
Sterker nog... G.W.Bush is met een charme offensief bezig (betrekkingen Iran te verbeteren). Om later niet in de geschiedenisboekjes terecht te komen als de president die een nogal agressieve buitenlandse politiek voerde.
Na Irak en Afghanistan is de gemiddelde amerikaan een beetje oorlogsmoe geworden. En het momentum is weg. Er zijn genoeg andere problemen.
Het zet hun wel de spiegel voor..... met een denkbeeldige vijand heb je een doel waar je naartoe kunt werken. Maar de wereld/globalisering/media zit er anno 2008 er heel anders uit. En nu mogen ze zelf hun eigen problemen oplossen (en die zijn vrij ernstig... hun leading economie is niet meer zo leading).
Wat ik ook eerder aangaf... als Azie verkouden is.... (de inflatie gaat beteugelen d.m.v. renteverhogingen). Dan heeft de US een probleem. China gaat ook niet vrijuit, als de inkomensverschillen te groot worden (mede aangewakkerd door de inflatie, is het niet ondenkbaar dat daar een burgeroorlog uit breekt).
Het is een vrij precaire evenwicht.

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Op vrijdag 18 juli 2008 16:31 schreef Basp1 het volgende:
14.000 miljard /6.5 miljard mensen = 2154 dollar per hoofd van de wereld "verdampt". En de VN maar moeilijk doen om de armoede doelstellingen van 1 dollar per dag te halen voor de gehele wereld.

Simmu veel succes met je bevalling.

Nog even een vraag als over de gehele wereld de inflatie oploopt dan heft dat toch elkaar weer op, of zie ik dat toch fout. Onze lonen moet dan wel natuurlijk een inflatie correctie gaan krijgen.

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Er is wat rumoer ontstaan dat de Q2 results van een aantal Amerikaanse banken creatief gemanipuleerd is.

But if you look at how the banks “beat” their earnings the coincidence becomes clear. WFC took the unprecedented step of extending charge-off acknowledgment from 120 days to 160 days. This allowed the bank to move less capital to loan loss reserves and report better than expected horrible earnings. And JPM was even more aggressive. It actually lowered its loan loss reserves quarter to quarter.

The list of financial companies where shorting regulations are being enforced/enhanced is precisely the banks and dealers (and FNM/Freddie Mac (FRE)) that have access to the Fed's balance sheet (dealers through the PDCF and FNM/FRE through the recently-allowed access to the discount window). So we can speculate on the nature of the ''coincidence'': Perhaps the Fed is getting worried about the value of all that collateral these dealers have posted to the Fed balance sheet and must boost the capital of these companies to protect that value.

And now on cue FRE, a $5 billion market capitalization company wants/needs to issue $10 billion in new stock? Doesn’t that sound a little crazy? Well get ready for others to do the same because the banking system needs capital desperately and the government is there to help.

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Could the worst be over?

Hardly, said BMO Financial Markets analyst Peter Winter.

"Analysts are falling over themselves to lower earnings estimates," Winter said. Wells, Chase and Citigroup "beat very low expectations, and the quality of the earnings is not good."

Also, the economy shows signs of weakening, he said.

"The feeling is that credit problems are contained now in residential mortgage areas, but there are signs that the problem is spreading to auto loans, credit cards and commercial lending," Winter said.

By the end of the first quarter, many investors and analysts assumed banks had written off their bad loans and that profits would improve, said William Blair & Co. analyst David Long.

"That thesis proved wrong," Long said. "While second-quarter earnings have been better than expected in some cases, the bar was set pretty low."

And earnings could get worse.

"The peak for adjustable-rate-mortgage resets is the third quarter," he said. "So many consumers current on their mortgages today will experience an increase in their monthly mortgage payments of several hundred dollars, which may lead to additional mortgage delinquencies in the second half of the year and into 2009."

Another bank watcher also believes the uncertainty will continue into next year.

"The credit crunch will continue to be the significant wild card into 2009 and perhaps the most significant capital markets shock of the last two generations," said Stephen Wood, Russell Investments senior portfolio strategist.

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“Something Big is Happening” - Ron Paul, M.D.
Posted by sakerfa on July 17, 2008

I’m convinced the time is now upon us that some Big Events are about to occur. These fast-approaching events will not go unnoticed. They will affect all of us. They will not be limited to just some areas of our country. The world economy and political system will share in the chaos about to be unleashed.

“Something Big is Happening”

Statment - 9 July 2008

By Rep. Ron Paul, M.D.

16/07/08 “ICH” — - Madam Speaker, I have, for the past 35 years, expressed my grave concern for the future of America . The course we have taken over the past century has threatened our liberties, security and prosperity. In spite of these long-held concerns, I have days–growing more frequent all the time–when I’m convinced the time is now upon us that some Big Events are about to occur. These fast-approaching events will not go unnoticed. They will affect all of us. They will not be limited to just some areas of our country. The world economy and political system will share in the chaos about to be unleashed.

Though the world has long suffered from the senselessness of wars that should have been avoided, my greatest fear is that the course on which we find ourselves will bring even greater conflict and economic suffering to the innocent people of the world–unless we quickly change our ways.

America , with her traditions of free markets and property rights, led the way toward great wealth and progress throughout the world as well as at home. Since we have lost our confidence in the principles of liberty, self reliance, hard work and frugality, and instead took on empire building, financed through inflation and debt, all this has changed. This is indeed frightening and an historic event.

The problem we face is not new in history. Authoritarianism has been around a long time. For centuries, inflation and debt have been used by tyrants to hold power, promote aggression, and provide “bread and circuses” for the people. The notion that a country can afford “guns and butter” with no significant penalty existed even before the 1960s when it became a popular slogan. It was then, though, we were told the Vietnam War and the massive expansion of the welfare state were not problems. The seventies proved that assumption wrong.

Today things are different from even ancient times or the 1970s. There is something to the argument that we are now a global economy. The world has more people and is more integrated due to modern technology, communications, and travel. If modern technology had been used to promote the ideas of liberty, free markets, sound money and trade, it would have ushered in a new golden age–a globalism we could accept.

Instead, the wealth and freedom we now enjoy are shrinking and rest upon a fragile philosophic infrastructure. It is not unlike the levies and bridges in our own country that our system of war and welfare has caused us to ignore.

I’m fearful that my concerns have been legitimate and may even be worse than I first thought. They are now at our doorstep. Time is short for making a course correction before this grand experiment in liberty goes into deep hibernation.

There are reasons to believe this coming crisis is different and bigger than the world has ever experienced. Instead of using globalism in a positive fashion, it’s been used to globalize all of the mistakes of the politicians, bureaucrats and central bankers.

Being an unchallenged sole superpower was never accepted by us with a sense of humility and respect. Our arrogance and aggressiveness have been used to promote a world empire backed by the most powerful army of history. This type of globalist intervention creates problems for all citizens of the world and fails to contribute to the well-being of the world’s populations. Just think how our personal liberties have been trashed here at home in the last decade.

The financial crisis, still in its early stages, is apparent to everyone: gasoline prices over $4 a gallon; skyrocketing education and medical-care costs; the collapse of the housing bubble; the bursting of the NASDAQ bubble; stock markets plunging; unemployment rising; massive underemployment; excessive government debt; and unmanageable personal debt. Little doubt exists as to whether we’ll get stagflation. The question that will soon be asked is: When will the stagflation become an inflationary depression?

There are various reasons that the world economy has been globalized and the problems we face are worldwide. We cannot understand what we’re facing without understanding fiat money and the long-developing dollar bubble.

There were several stages. From the inception of the Federal Reserve System in 1913 to 1933, the Central Bank established itself as the official dollar manager. By 1933, Americans could no longer own gold, thus removing restraint on the Federal Reserve to inflate for war and welfare.

By 1945, further restraints were removed by creating the Bretton-Woods Monetary System making the dollar the reserve currency of the world. This system lasted up until 1971. During the period between 1945 and 1971, some restraints on the Fed remained in place. Foreigners, but not Americans, could convert dollars to gold at $35 an ounce. Due to the excessive dollars being created, that system came to an end in 1971.

It’s the post Bretton-Woods system that was responsible for globalizing inflation and markets and for generating a gigantic worldwide dollar bubble. That bubble is now bursting, and we’re seeing what it’s like to suffer the consequences of the many previous economic errors.

Ironically in these past 35 years, we have benefited from this very flawed system. Because the world accepted dollars as if they were gold, we only had to counterfeit more dollars, spend them overseas (indirectly encouraging our jobs to go overseas as well) and enjoy unearned prosperity. Those who took our dollars and gave us goods and services were only too anxious to loan those dollars back to us. This allowed us to export our inflation and delay the consequences we now are starting to see.

But it was never destined to last, and now we have to pay the piper. Our huge foreign debt must be paid or liquidated. Our entitlements are coming due just as the world has become more reluctant to hold dollars. The consequence of that decision is price inflation in this country–and that’s what we are witnessing today. Already price inflation overseas is even higher than here at home as a consequence of foreign central banks’ willingness to monetize our debt.

Printing dollars over long periods of time may not immediately push prices up–yet in time it always does. Now we’re seeing catch-up for past inflating of the monetary supply. As bad as it is today with $4 a gallon gasoline, this is just the beginning. It’s a gross distraction to hound away at “drill, drill, drill” as a solution to the dollar crisis and high gasoline prices. Its okay to let the market increase supplies and drill, but that issue is a gross distraction from the sins of deficits and Federal Reserve monetary shenanigans.

This bubble is different and bigger for another reason. The central banks of the world secretly collude to centrally plan the world economy. I’m convinced that agreements among central banks to “monetize” U.S. debt these past 15 years have existed, although secretly and out of the reach of any oversight of anyone–especially the U.S. Congress that doesn’t care, or just flat doesn’t understand. As this “gift” to us comes to an end, our problems worsen. The central banks and the various governments are very powerful, but eventually the markets overwhelm when the people who get stuck holding the bag (of bad dollars) catch on and spend the dollars into the economy with emotional zeal, thus igniting inflationary fever.

This time–since there are so many dollars and so many countries involved–the Fed has been able to “paper” over every approaching crisis for the past 15 years, especially with Alan Greenspan as Chairman of the Federal Reserve Board, which has allowed the bubble to become history’s greatest.

The mistakes made with excessive credit at artificially low rates are huge, and the market is demanding a correction. This involves excessive debt, misdirected investments, over-investments, and all the other problems caused by the government when spending the money they should never have had. Foreign militarism, welfare handouts and $80 trillion entitlement promises are all coming to an end. We don’t have the money or the wealth-creating capacity to catch up and care for all the needs that now exist because we rejected the market economy, sound money, self reliance and the principles of liberty.

Since the correction of all this misallocation of resources is necessary and must come, one can look for some good that may come as this “Big Event” unfolds.

There are two choices that people can make. The one choice that is unavailable to us is to limp along with the status quo and prop up the system with more debt, inflation and lies. That won’t happen.

One of the two choices, and the one chosen so often by government in the past is that of rejecting the principles of liberty and resorting to even bigger and more authoritarian government. Some argue that giving dictatorial powers to the President, just as we have allowed him to run the American empire, is what we should do. That’s the great danger, and in this post-911 atmosphere, too many Americans are seeking safety over freedom. We have already lost too many of our personal liberties already. Real fear of economic collapse could prompt central planners to act to such a degree that the New Deal of the 30’s might look like Jefferson ’s Declaration of Independence.

The more the government is allowed to do in taking over and running the economy, the deeper the depression gets and the longer it lasts. That was the story of the 30s and the early 40s, and the same mistakes are likely to be made again if we do not wake up.

But the good news is that it need not be so bad if we do the right thing. I saw “Something Big” happening in the past 18 months on the campaign trail. I was encouraged that we are capable of waking up and doing the right thing. I have literally met thousands of high school and college kids who are quite willing to accept the challenge and responsibility of a free society and reject the cradle-to-grave welfare that is promised them by so many do-good politicians.

If more hear the message of liberty, more will join in this effort. The failure of our foreign policy, welfare system, and monetary policies and virtually all government solutions are so readily apparent, it doesn’t take that much convincing. But the positive message of how freedom works and why it’s possible is what is urgently needed.

One of the best parts of accepting self reliance in a free society is that true personal satisfaction with one’s own life can be achieved. This doesn’t happen when the government assumes the role of guardian, parent or provider, because it eliminates a sense of pride. But the real problem is the government can’t provide the safety and economic security that it claims. The so called good that government claims it can deliver is always achieved at the expense of someone else’s freedom. It’s a failed system and the young people know it.

Restoring a free society doesn’t eliminate the need to get our house in order and to pay for the extravagant spending. But the pain would not be long-lasting if we did the right things, and best of all the empire would have to end for financial reasons. Our wars would stop, the attack on civil liberties would cease, and prosperity would return. The choices are clear: it shouldn’t be difficult, but the big event now unfolding gives us a great opportunity to reverse the tide and resume the truly great American Revolution started in 1776. Opportunity knocks in spite of the urgency and the dangers we face.

Let’s make “Something Big Is Happening” be the discovery that freedom works and is popular and the big economic and political event we’re witnessing is a blessing in disguise.

Ron Paul is a Republican Congressman from Texas. He was the 1988 Libertarian Party candidate for President.

http://www.house.gov/paul/congrec/congrec2008/cr070908h.htm

http://www.informationclearinghouse.info/article20290.htm

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Why No Outrage?
Through history, outrageous financial behavior has been met with outrage. But today Wall Street's damaging recklessness has been met with near-silence, from a too-tolerant populace, argues James Grant
By JAMES GRANT

_{Why No Outrage? From top to bottom: New York's Sub-Treasury Building in 1929; Angelo Mozilo, former CEO of mortgage lender Countrywide Financial; Unemployed men, circa 1935; Foreclosure sign, April 2008, Stockton, Calif. Strikers, 'scabs' battle, circa 1935; Bear Stearns executive arrested, June 2008; Hooverville shantytown; NYSE trader, 2008; Mary Lease}

"Raise less corn and more hell," Mary Elizabeth Lease harangued Kansas farmers during America's Populist era, but no such voice cries out today. America's 21st-century financial victims make no protest against the Federal Reserve's policy of showering dollars on the people who would seem to need them least.

Long ago and far away, a brilliant man of letters floated an idea. To stop a financial panic cold, he proposed, a central bank should lend freely, though at a high rate of interest. Nonsense, countered a certain hard-headed commercial banker. Such a policy would only instigate more crises by egging on lenders and borrowers to take more risks. The commercial banker wrote clumsily, the man of letters fluently. It was no contest.

The doctrine of activist central banking owes much to its progenitor, the Victorian genius Walter Bagehot. But Bagehot might not recognize his own idea in practice today. Late in the spring of 2007, American banks paid an average of 4.35% on three-month certificates of deposit. Then came the mortgage mess, and the Fed's crash program of interest-rate therapy. Today, a three-month CD yields just 2.65%, or little more than half the measured rate of inflation. It wasn't the nation's small savers who brought down Bear Stearns, or tried to fob off subprime mortgages as "triple-A." Yet it's the savers who took a pay cut -- and the savers who, today, in the heat of a presidential election year, are holding their tongues.

Possibly, there aren't enough thrifty voters in the 50 states to constitute a respectable quorum. But what about the rest of us, the uncounted improvident? Have we, too, not suffered at the hands of what used to be called The Interests? Have the stewards of other people's money not made a hash of high finance? Did they not enrich themselves in boom times, only to pass the cup to us, the taxpayers, in the bust? Where is the people's wrath?

Crowds at the New York Stock Exchange in 1929.

The American people are famously slow to anger, but they are outdoing themselves in long suffering today. In the wake of the "greatest failure of ratings and risk management ever," to quote the considered judgment of the mortgage-research department of UBS, Wall Street wears a political bullseye. Yet the politicians take no pot shots.

Barack Obama, the silver-tongued herald of change, forgettably told a crowd in Madison, Wis., some months back, that he will "listen to Main Street, not just to Wall Street." John McCain, the angrier of the two presumptive presidential contenders, has staked out a principled position against greed and obscene profits but has gone no further to call the errant bankers and brokers to account.

The most blistering attack on the ancient target of American populism was served up last October by the then president of the Federal Reserve Bank of St. Louis, William Poole. "We are going to take it out of the hides of Wall Street," muttered Mr. Poole into an open microphone, apparently much to his own chagrin.

If by "we," Mr. Poole meant his employer, he was off the mark, for the Fed has burnished Wall Street's hide more than skinned it. The shareholders of Bear Stearns were ruined, it's true, but Wall Street called the loss a bargain in view of the risks that an insolvent Bear would have presented to the derivatives-laced financial system. To facilitate the rescue of that system, the Fed has sacrificed the quality of its own balance sheet. In June 2007, Treasury securities constituted 92% of the Fed's earning assets. Nowadays, they amount to just 54%. In their place are, among other things, loans to the nation's banks and brokerage firms, the very institutions whose share prices have been in a tailspin. Such lending has risen from no part of the Fed's assets on the eve of the crisis to 22% today. Once upon a time, economists taught that a currency draws its strength from the balance sheet of the central bank that issues it. I expect that this doctrine, which went out with the gold standard, will have its day again.

Wall Street is off the political agenda in 2008 for reasons we may only guess about. Possibly, in this time of widespread public participation in the stock market, "Wall Street" is really "Main Street." Or maybe Wall Street, its old self, owns both major political parties and their candidates. Or, possibly, the $4.50 gasoline price has absorbed every available erg of populist anger, or -- yet another possibility -- today's financial failures are too complex to stick in everyman's craw.

I have another theory, and that is that the old populists actually won. This is their financial system. They had demanded paper money, federally insured bank deposits and a heavy governmental hand in the distribution of credit, and now they have them. The Populist Party might have lost the elections in the hard times of the 1890s. But it won the future.

Before the Great Depression of the 1930s, there was the Great Depression of the 1880s and 1890s. Then the price level sagged and the value of the gold-backed dollar increased. Debts denominated in dollars likewise appreciated. Historians still debate the source of deflation of that era, but human progress seems the likeliest culprit. Advances in communication, transportation and productive technology had made the world a cornucopia. Abundance drove down prices, hurting some but helping many others.

The winners and losers conducted a spirited debate about the character of the dollar and the nature of the monetary system. "We want the abolition of the national banks, and we want the power to make loans direct from the government," Mary Lease -- "Mary Yellin" to her fans -- said. "We want the accursed foreclosure system wiped out.... We will stand by our homes and stay by our firesides by force if necessary, and we will not pay our debts to the loan-shark companies until the government pays its debts to us."

By and by, the lefties carried the day. They got their government-controlled money (the Federal Reserve opened for business in 1914), and their government-directed credit (Fannie Mae and the Federal Home Loan Banks were creatures of Great Depression No. 2; Freddie Mac came along in 1970). In 1971, they got their pure paper dollar. So today, the Fed can print all the dollars it deems expedient and the unwell federal mortgage giants, Fannie Mae and Freddie Mac, combine for $1.5 trillion in on-balance sheet mortgage assets and dominate the business of mortgage origination (in the fourth quarter of last year, private lenders garnered all of a 19% market share).

Thus, the Wall Street of the Morgans and the Astors and the bloated bondholders is today an institution of the mixed economy. It is hand-in-glove with the government, while the government is, of course -- in theory -- by and for the people. But that does not quite explain the lack of popular anger at the well-paid people who seem not to be very good at their jobs.

Since the credit crisis burst out into the open in June 2007, inflation has risen and economic growth has faltered. The dollar exchange rate has weakened, the unemployment rate has increased and commodity prices have soared. The gold price, that running straw poll of the world's confidence in paper money, has jumped. House prices have dropped, mortgage foreclosures spiked and share prices of America's biggest financial institutions tumbled.

One might infer from the lack of popular anger that the credit crisis was God's fault rather than the doing of the bankers and the rating agencies and the government's snoozing watchdogs. And though greed and error bear much of the blame, so, once more, does human progress. At the turn of the 21st century, just as at the close of the 19th, the global supply curve prosperously shifted. Hundreds of millions of new hands and minds made the world a cornucopia again. And, once again, prices tended to weaken. This time around, however, the Fed intervened to prop them up. In 2002 and 2003, Ben S. Bernanke, then a Fed governor under Chairman Alan Greenspan, led a campaign to make dollars more plentiful. The object, he said, was to forestall any tendency toward what Wal-Mart shoppers call everyday low prices. Rather, the Fed would engineer a decent minimum of inflation.

In that vein, the central bank pushed the interest rate it controls, the so-called federal funds rate, all the way down to 1% and held it there for the 12 months ended June 2004. House prices levitated as mortgage underwriting standards collapsed. The credit markets went into speculative orbit, and an idea took hold. Risk, the bankers and brokers and professional investors decided, was yesteryear's problem.

Now began one of the wildest chapters in the history of lending and borrowing. In flush times, our financiers seemingly compete to do the craziest deal. They borrow to the eyes and pay themselves lordly bonuses. Naturally -- eventually -- they drive themselves, and the economy, into a crisis. And to the scene of this inevitable accident rush the government's first responders -- the Fed, the Treasury or the government-sponsored enterprises -- bearing the people's money. One might suppose that such a recurrent chain of blunders would gall a politically potent segment of the population. That it has evidently failed to do so in 2008 may be the only important unreported fact of this otherwise compulsively documented election season.

Mary Yellin would spit blood at the catalogue of the misdeeds of 21st-century Wall Street: the willful pretended ignorance over the triple-A ratings lavished on the flimsy contraptions of structured mortgage finance; the subsequent foreclosure blight; the refusal of Wall Street to honor its implied obligations to the holders of hundreds of billions of dollars worth of auction-rate securities, the auctions of which have stopped in their tracks; the government's attempt to prohibit short sales of the guilty institutions; and -- not least -- Wall Street's reckless love affair with heavy borrowing.

For every dollar of equity capital, a well-financed regional bank holds perhaps $10 in loans or securities. Wall Street's biggest broker-dealers could hardly bear to look themselves in the mirror if they didn't extend themselves three times further. At the end of 2007, Goldman Sachs had $26 of assets for every dollar of equity. Merrill Lynch had $32, Bear Stearns $34, Morgan Stanley $33 and Lehman Brothers $31. On average, then, about $3 in equity capital per $100 of assets. "Leverage," as the laying-on of debt is known in the trade, is the Hamburger Helper of finance. It makes a little capital go a long way, often much farther than it safely should. Managing balance sheets as highly leveraged as Wall Street's requires a keen eye and superb judgment. The rub is that human beings err.

Wall Street is usually described as an industry, but it shares precious few characteristics with the metal-fasteners business or the auto-parts trade. The big brokerage firms are not in business so much to make a product or even to earn a competitive return for their stockholders. Rather, they open their doors to pay their employees -- specifically, to maximize employee compensation in the short run. How best to do that? Why, to bear more risk by taking on more leverage.

"Wall Street is our bad example because it is so successful," charged the president of Notre Dame University, the Rev. John Cavanaugh, in the time of Mary Lease. He meant that young people, emulating J.P. Morgan or E.H. Harriman, would worship the wrong god. The more immediate risk today is that Wall Street, sweating to fill out this year's bonus pool, runs itself and the rest of the American financial system right over a cliff.

It's just happened, in fact, under the studiously averted gaze of the Street's risk managers. Today's bear market in financial assets is as nothing compared to the preceding crash in human judgment. Never was a disaster better advertised than the one now washing over us. House prices stopped going up in 2005, and cracks in mortgage credit started appearing in 2006. Yet the big, ostensibly sophisticated banks only pushed harder.

Bear Stearns is kaput and Lehman Brothers is reeling, but Morgan Stanley perhaps best illustrates the gluttonous ways of Wall Street. Having lost its competitive edge on account of an intramural political struggle, the firm, under Chief Executive John Mack, set out to catch up to the rest of the pack. In the spring of 2006, it unveiled a trillion-dollar balance sheet, Wall Street's first. It expanded in every faddish business line, not excluding, in August 2006, subprime-mortgage origination (the transaction, intoned a Morgan Stanley press release, "provides us with new origination capabilities in the non-prime market, which we can build upon to provide access to high-quality product flows across all market cycles"). Nor did it pull in its horns as the boom wore on but rather protruded them all the more, raising its ratio of assets to equity to the aforementioned 33 times at year-end 2007 from 26.5 times at the close of 2004. Naturally, it did not forget the help. Last year, Morgan Stanley paid out 59% of its revenues in employee compensation, up from 46% in 2004.

Huey Long, who rhetorically picked up where Lease left off, once compared John D. Rockefeller to the fat guy who ruins a good barbecue by taking too much. Wall Street habitually takes too much. It would not be so bad if the inevitable bout of indigestion were its alone to bear. The trouble is that, in a world so heavily leveraged as this one, we all get a stomach ache. Not that anyone seems to be complaining this election season.

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SCOUNDRELS ON THE STREET

There's a gripping story behind every financial scandal. Here's a roundup of movies that examine the money-making industry's dark side:

'Clancy in Wall Street' (1930)
Starring: Charles Murray, Lucien Littlefield, Aggie Herring and Eddie Nugent
An Irish-American plumber, Clancy (Murray), happens on some good stock-market bets , eventually making millions and elevating him in society. But once the market crashes and he's left with nothing, he returns to his roots in hopes that old friends will take him back.

'It's a Wonderful Life' (1946)
Starring: James Stewart, Donna Reed and Lionel Barrymore
Generally filed away in the holiday-favorite category, this film's run-on-the-bank scene and its fallout is a classic example of financial duress on the silver screen.

'Wall Street' (1987)
Starring: Michael Douglas, Charlie Sheen, Daryl Hannah and Martin Sheen
Oliver Stone's classic film centers on Gordon Gekko (Douglas, pictured right), a ruthless Wall Street corporate raider who takes an ambitious young stockbroker (Charlie Sheen) under his wing and exposes him to the perks and pitfalls that come with the high-stakes territory.

'Glengarry Glen Ross' (1992)
Starring: Al Pacino, Jack Lemmon, Alec Baldwin and Alan Arkin
In this film based on David Mamet's Pulitzer Prize-winning play, a group of tough real-estate salesmen struggle to deal with a downturning housing market -- or face the ax.

'Rogue Trader' (1999)
Starring: Ewan McGregor, Anna Friel, Yves Beneyton and Betsy Brantley
In this film, based on a true story, Ewan McGregor plays a trader working in Singapore who makes illegal trades to cover up his losses. He ends up in jail.

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A LIBRARY OF MARKET MAYHEM


Some classic nonfiction and fiction on financial troubles.

'L'Argent' by Émile Zola (1891)
First published as a newspaper serial, Zola's "L'Argent" ("Money") tells of Aristide Saccard, a down-and-out financier who founds a bank. As speculation flourishes, Saccard goes to great lengths to keep the stock rising, lying to investors and covering up schemes.
'Little Dorrit' by Charles Dickens (1855-57)
The novel features Mr. Merdle, a banker whose schemes lead to financial ruin for many.
'Extraordinary Popular Delusions & The Madness of Crowds' (1841)
Scottish writer Charles Mackay's classic examines the psychology of crowds, touching on everything from the popularity of beards to witch hunts. The last three chapters look at financial manias, such as the Dutch tulip bubble of the 17th century.
'The Great Crash 1929,' by John Kenneth Galbraith (1954)
A best seller when it was first published in 1954, this book by the noted Harvard economist details the U.S.'s most famous crash and the events that precipitated it.

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Is China's bubble bursting?

If I simply showed you the following graph of a stock market losing nearly 60% of its value in 9 months, you'd probably conclude that a bubble had burst, and that the country whose companies it represented was probably in for some big Hurting:

So why has China been immune from such analysis? Presumably because the "story" behind China's growth is so compelling. Just about everybody seems to agree that China is the emerging economic world superpower.
Well, it's difficult to imagine now what life would be like without the internet, and yet that didn't stop the dot-bomb crash of 2000-2002. And the Mississippi Land Bubble was based on the accurate belief that what is now the US midwest would someday be the breadbasket of the world. Unfortunately they were off by 150 or so years.

Recently I have written of China's Out of Control Inflationary Boom. I find it difficult to imagine anything other than a hard landing for that boom, and when that happens, China's demand will slow and the parabolic move in Oil may come crashing down to earth.

The authorized government business portal site to China is certainly not concerned about any imminent slowdown. In an article entitled "Will the Olympics become a watershed in China's economy?" they answer firmly in the negative, claiming the boom will continue. But the actual facts hardly seem so sanguine:

Lin Wenshui, the owner of a jade-processing workshop with four employees in South China's Guangdong Province, still couldn't believe his business had become so slack in just a few months.

At the beginning of this year, Lin had estimated that he might earn at least 200,000 yuan (29,325 U.S. dollars) for 2008.

Things, however, went awry. So far this year, his workshop could hardly make ends meet. He had to dismiss five employees over the months and gradually halved the monthly expenditure from 40,000 yuan to less than 20,000 yuan.

"Dealers tell me there are few jade buyers out there now. Many factories in Guangdong and other regions were closed and bosses went bankrupt. In addition, a lot of investors have lost on the stock trading since share prices tumbled," said the 31-year-old.

He was right. Guangdong, China's traditional export powerhouse, was seeing an unprecedented wave of factory closures owing to rising prices of raw materials, export tax rebate cut and the appreciation of the Chinese yuan.
....
Guangdong was not alone, however. In Zhejiang, the country's another major exporter, about 10,700 enterprises incurred losses in the first five months, accounting for nearly 20 percent of the province's total companies, according to figures by the Zhejiang Economic and Trade Commission.
....
Amid falling export growth and plummeting share prices, many in China were asking whether the country's economy would slip into recession after the August Olympic Games....
....

...[M]any Chinese companies had anticipated some changes to current policies since early this month when four senior Chinese leaders carried out field investigation tours to four major Chinese exporting regions, namely Guangdong, Jiangsu, Shanghai and Shandong.
....
Lin Wenshui, the workshop owner, read something positive from the news.

"When Xi came to Guangdong, there were many news reports. And Many people here felt that things would change for the better, sooner or later," Lin said. "I will try to hold on to the end of the year...."

So, are there signs that China's bubble may be getting ready to burst? In a word, Yes.

About half of China's exports are textiles, and their textile industry has taken a beating in the first half of 2008. The China National Garment Association reported in June that:

China saw quicker growth in textile exports but slower rise in foreign sales of garments in the first five months of this year, sources with the General Administration of Customs said on Saturday.
....
The growth rate for textile exports was higher than the level for the whole of last year, whereas that for garments was nine percentage points lower than the year-earlier level.

In May alone, the nation's garment exports increased by a record-low rate of 1.08 percent to 8.59 billion U.S. dollars worth.

Industry insiders accredited the substantial slowdown to weak demand abroad, expediated appreciation of Chinese currency and higher production cost.

They added that the weak demand had affected cotton sector in China. The country imported 240,200 tons of cotton in May, a decrease of 23,200 tons, or 8.81 percent, from the previous months.

And earlier in June that

Affected by multiple factors such as adjustment of China's foreign trade policy, decline in external demand, the appreciation of Renminbi and continuous rise in raw materials price, apparel exports in Guangdong has been droping since the beginning of the year. According to the latest statistics from Guangzhou Customs, export of apparels and clothing accessories for four months from January to April was 6.65 billion U.S. dollars, down 15.1% compared to the same period of last year, which also shows a sharp fall compared to the growth rate of 31.2% in the same period of last year. The worst-hit ones are private owned enterprises, whose total exports dropped 36%.

Meanwhile,

Hong Kong companies may shut 20,000 factories in neighboring Guangdong Province in the Chinese mainland this year due to increased costs from higher fuel prices and wages, an industry association said yesterday.

"At the end of this year, maybe only 50,000 Hong Kong-owned businesses will remain" of about 70,000 in the province, according to Danny Lau, chairman of Hong Kong Small and Medium Enterprises Association. "The increase in fuel costs comes on top of several other major issues firms have been grappling with recently," such as rising employee expenses related to a new labor law and the appreciation of the yuan, he said.
....

"China's export competitiveness is definitely declining fast," said Sun Mingchun, an economist with Lehman Brothers Holdings Inc in Hong Kong. The volume of goods and services sold overseas has declined to "single-digit" growth, he told Bloomberg News.

While garment manufacturers have been most hurt, the pain has spread to other portions of the economy as well. For example,

China Southern Airlines Co. and the nation's other carriers posted a 3.8 percent fall in combined passenger traffic last month, as an economic slowdown curbed demand for air-travel.
....
Inflation, near a 12-year high, coupled with a falling stock market has cut Chinese spending on leisure. A series of natural disasters including an earthquake that killed more than 69,000 people in China also hampered demand for tours.
....
Cargo traffic for the country's carriers fell 0.8 percent to 321,000 tons in June. It rose 8.1 percent in the first six months of the year.

Air travel may be impacted by restrictions surrounding the August Olympic games in Beijing, but in the last week we also learned that

China's stockpile of unsold new vehicles rose about 50 percent in the six months ended June, hitting a four-year high, as automakers expanded production and sales growth slowed.

The backlog reached 170,000 vehicles from about 110,000 at the end of last year....

.... Rising competition and slower economic growth caused average vehicle prices to fall about 3 percent in the first half from a year earlier, Cheng said.

``Automakers were too optimistic when planning their capacity expansion and didn't expect the slowdown,'' said Tang Jun, an analyst at Guangfa Securities Co. in Guangzhou. ``Dealers are hit the most by rising inventory and may have to slash prices further to help with liquidity.''

The stockpile represents about six days' worth of sales.

An article in the Australian publication Business Spectator strongly cautions that the conditions are indeed ripe for the bubble to burst [Note: I have chopped the material down as far as possible to get the point across and still comply with "fair usage", but I strongly encourage you to read the entire article at the website]:

While [an optimistic] view of China's prospects may prove correct in the long term, serious clouds are appearing on the horizon. ....[based on] the Austrian school of economics....

Austrians are obsessed with interest rates.... When interest rates are too low, they argue, credit expands too rapidly. This stimulates investment and fosters asset price bubbles. Eventually, credit "inflation" shows up in rising consumer prices. But by then, it's too late to stop the damage. ... After which, there follows a painful process as the economy is forced to adjust back to equilibrium.

.... These conditions held in the US in the 1920s.... The economy in the roaring twenties had much in common with that of modern China.
....
The result has been strong credit growth. This, in turn, has fuelled an extraordinary investment boom.... [T]his must have seemed like a virtuous cycle. Now it's turning vicious.

Chinese export growth is set to fall sharply.... Many claim that Chinese domestic consumption will take up the slack. This is unrealistic.... [T]he UK alone consumes more than China and India combined. China's economy has been driven by investment and exports, not by domestic consumption....

The report goes on to note that the credit binge has given rise to the "out of control inflationary boom", and that as a result, "China in some sectors is losing its position as the world's low-cost producer", citing a recent Stratfor report that the textile industry as a result of the stresses I have cited above is "clamouring for the reintroduction of export subsidies" and that "Chinese containerboard companies recently stopped shipping their products abroad." They conclude by citing

.... A report from Lehman Brothers last May points to "looming overcapacity" in an economy that has relied on exports to absorb new supply....The Wall Street broker predicted that "an export-led slowdown could trigger a chain reaction which, in the worst case, could threaten the stability of China's financial and economic system."

At the beginning of this year, I believed that the US recession would propogate sufficiently that the spike in the price of Oil would end, and bring inflation down beginning about late spring. Obviously that hasn't happened yet, and it is entirely dependent on the rate of growth first and foremost in China. While I continue to believe that China is not immune to the global credit contraction, Waiting for the Turn brings to mind one of little New Deal's favorite tunes:

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The result has been strong credit growth. This, in turn, has fuelled an extraordinary investment boom.... [T]his must have seemed like a virtuous cycle. Now it's turning vicious.

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'Herstel Amerikaanse economie duurt nog maanden'

'We gaan een periode in van vertraagde economische groei,' zo waarschuwt de Amerikaanse minister van Financiën Henry Paulson, die er verder op wijst dat de Amerikaanse bankensector nog steeds solide is.

Paulson deed zijn uitspraak gisteren tegenover de Amerikaanse nieuwszender CNN.

Volgens Paulson heeft '99 procent van de 8.500 Amerikaanse banken' geen problemen. Desondanks zullen er de komende tijd nog wel banken in moeilijkheden geraken.

Dure energie
'We beleven een uitdagende tijd met onze economie. Ik denk dat het maanden gaat duren voordat we hierdoor heen zijn,' verklaarde Paulson.

De hoge energieprijzen kunnen het herstel nog vertragen, denkt de minister, maar het belangrijkste is het stabiliseren van de huizenmarkt.

Overheidssteun
Paulson benadrukte daarom het belang van de beloofde overheidssteun voor hypotheekaanbieders Fannie Mae en Freddie Mac.

Deze twee grootste aanbieders zijn de afgelopen weken zwaar in de problemen gekomen en hebben dringend behoefte aan kapitaal om hun kredietwaardigheid op peil te houden.

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Welvaart lekt weg; accepteer het verlies

Lang konden beleidsmakers volhouden dat er niet veel aan de hand was met de welvaart in Nederland en Europa. Recente cijfers maken daar een einde aan, een economische inzinking lijkt zich aan te kondigen

Door Paul de Hen

Dan is er ook nog de wereldwijde prijsstijging van energie en grondstoffen die door begint te werken in andere prijzen: inflatie.

Ieder voor zich zijn beide problemen best op te lossen, de economische inzinking door het overheidstekort wat te laten oplopen, de inflatie door de officiële rente van de Europese Centrale Bank (ECB) te verhogen.

Maar als neergaande conjunctuur en oplopende inflatie zich tegelijk voordoen zitten de twee remedies elkaar dwars.

Energie
Om de zaken verder te compliceren is er een structureel probleem. Een groot deel van de prijsstijging waarmee Europa en andere industriegebieden geconfronteerd wordt, heeft niet met inflatie te maken, maar met veranderde economische verhoudingen in de wereld.

De productie van energie en grondstoffen houdt geen gelijke tred met de toenemende behoefte er aan. Daardoor stijgt hun prijs. Daardoor verschuift welvaart van de energie- en grondstoffenverbruikende landen (inclusief China) naar de landen die energie en grondstoffen produceren.

Antwoord
Het antwoord op dit weglekken van welvaart is: je verlies nemen en accepteren dat er momenteel weinig of misschien wel geen welvaartsgroei in zit. Dus bijvoorbeeld, geen compensatie voor hogere olieprijzen. Ook niet via belastingverlaging.

Tenzij de overheid bereid is om ter wille van lastenverlaging te bezuinigen op haar uitgaven. Door zo te handelen kan zij een deel van de druk op de lonen en de winsten wegnemen.

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Op maandag 21 juli 2008 00:38 schreef Drugshond het volgende:
Overigens... China heeft het ook moeilijk.
[..]

Oeps....!!!!

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Op maandag 21 juli 2008 18:29 schreef Lyrebird het volgende:
Ik begon die hosannah stemming rond China een beetje vermoeiend te vinden. Mijn Chinese collega's zijn veel minder positief over China dan mijn Amerikaanse en Europese collega's. Dat is een teken aan de wand. De twee problemen waarmee China heeft te maken: overbevolking en corruptie.

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Op maandag 21 juli 2008 18:29 schreef Lyrebird het volgende:

[..]

Eindelijk.

Ik begon die hosannah stemming rond China een beetje vermoeiend te vinden. Mijn Chinese collega's zijn veel minder positief over China dan mijn Amerikaanse en Europese collega's. Dat is een teken aan de wand. De twee problemen waarmee China heeft te maken: overbevolking en corruptie.

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After mixed earnings reports from regional lenders thus far, a flurry of banks with large portfolios of real-estate loans will report their second-quarter results on Tuesday, including SunTrust, Regions Financial, Fifth Third and KeyCorp, while National City will follow on Thursday.

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Op maandag 21 juli 2008 18:48 schreef elcastel het volgende:

[..]

De grote klap in China komt ook nog wel, vreemd genoeg hoor ik dat wel al maanden hier (ik heb dan weer geen Chinese collega's ter vergelijk). Ander probleem van China is de gigantische hoeveelheid dollars die ze hebben.

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Op maandag 21 juli 2008 19:16 schreef okee6 het volgende:

[..]

Corruptie is geen probleem,.

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Op maandag 21 juli 2008 22:29 schreef Lyrebird het volgende:
Je moet alles veertien keer uitleggen, omdat ze er vanuit gaan dat je nooit de waarheid spreekt en dat ze het zelf beter weten.

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Op maandag 21 juli 2008 22:29 schreef Lyrebird het volgende:
Waar zijn de Chinese Tata's en Mittal's? Ik geef India nog steeds een kans om echt te groeien, omdat ze in staat zijn om grote bedrijven te laten groeien. Maar in China hebben ze nog steeds geen echt grote bedrijven, of sterke merken. Noem me een Chinees bedrijf bij naam. Hayer, Lenovo... Dat zijn de enige twee Chinese merken die ik ken.

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Op maandag 21 juli 2008 22:51 schreef RonaldRegen het volgende:

[..]

In eerste instantie misschien niet. Maar als China echt op de lange termijn met de grote jongens mee wil doen, zal men die corruptie moeten inperken. Het is funest voor de economische efficiëntie en betrouwbaarheid als land.

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Op maandag 21 juli 2008 23:13 schreef ItaloDancer het volgende:
American Express (AXP) delivered some ugly news after the market closed Monday. The big charge card company missed second-quarter earnings estimates and withdrew its 2008 earnings guidance, saying the economic environment “has weakened significantly” since it offered up its financial projections back in January - “particularly during the month of June.”

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Median U.S. family income, adjusted for inflation, was $58,407 in 2006, according to the most recent Census Bureau data, down from $59,398 in 2000. Competition from low-wage countries such as China, combined with the waning power of organized labor, kept a lid on compensation during the latest expansion.

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Op maandag 21 juli 2008 23:16 schreef Drugshond het volgende:
WaMu min -7+ % .... en morgen de Q2 cijfers.

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Op maandag 21 juli 2008 23:00 schreef elcastel het volgende:

[..]

Wat hebben merken ermee te maken eigenlijk ? Ik snap je punt niet helemaal. Wij hebben in het Westen talloze merken die hun spullen in China laten maken en er ons labeltje op plakken, zodat we er A-merk prijzen voor kunnen vragen, meer is een merk niet.

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Op maandag 21 juli 2008 23:33 schreef Lyrebird het volgende:
Exactly. Het A-merk verdient het geld, want zij verdienen geld met het verkopen van gebakken lucht (marketing),

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Op maandag 21 juli 2008 22:51 schreef RonaldRegen het volgende:

[..]

In eerste instantie misschien niet. Maar als China echt op de lange termijn met de grote jongens mee wil doen, zal men die corruptie moeten inperken. Het is funest voor de economische efficiëntie en betrouwbaarheid als land.

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Op maandag 21 juli 2008 23:55 schreef okee6 het volgende:

[..]

Grote jongens? Er zijn straks geen grote jongens meer. De grote jongens waren gebaat bij een democratisch marktsysteem, dat tanende is. Hun eigen succes wordt hun ondergang. Wat Rusland kan, kunnen grootmachten als India, China eventueel Brazilie straks ook. De Europeanen die nu pimpen met hun 'zij maken simpel de producten en wij doen research' gaan straks van een koude kermis thuiskomen. Producenten- en consumentenmacht zal zich laten gelden. Milieuproblemen en interne conflicten heeft het huidig Rusland ook en dat kan toch rondkomen en daarbij haar macht doen gelden.

Wie met Chinezen handelt, weet dat westerse principes hanteren niet werkt. En waarom zou een meervoud zich toekomstig aan het enkelvoud aan willen passen? Corruptie wordt al wel bestreden, maar het is net als met Italie, het is diep geworteld en in zekere zin vertrouwd. Mijn verwachting is dat China de lakens uit zal delen, waar Amerika de veren laat. China en Rusland zijn elkaar meer en meer genaderd, een sterk pact.

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Op maandag 21 juli 2008 23:51 schreef Drugshond het volgende:

[..]

In tijden van hoog conjunctuur heb je wel een punt te pakken.... maar de marktfacts zijn een ietsje pietsie anders. Bij contractie gaan de A-branding merken snoeihard achteruit.

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Op dinsdag 22 juli 2008 00:53 schreef Lyrebird het volgende:
Het is IMHO onmogelijk om zonder grondstoffen een economie op poten te zetten, als je geen democratie hebt.

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Op dinsdag 22 juli 2008 00:55 schreef RonaldRegen het volgende:

[..]

Nouja, het kan wel, zolang je "grondstof" bestaat uit spotgoedkope arbeid. Maar dat houdt een keer op in China en dan is het echt gauw over met de pret.

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Op dinsdag 22 juli 2008 01:03 schreef Lyrebird het volgende:

[..]

Klopt. En als ik het goed begrijp zijn er al gebieden in China waar de spotgoedkope arbeid is uitgeput.

Iets dat in het voordeel van China spreekt is dat ze ook "dure" arbeid hebben: het aantal jongens en meisjes dat daar afstudeert met een wetenschappelijke graad (BS/MS/PhD) is uitzonderlijk hoog. Maar nogmaals, ze zijn enorm koppig. Verder zijn ze theoretisch erg goed, maar praktisch vaak erg minimaal. En zelfstandig een project leiden is alleen voor de besten weggelegd, terwijl ik ook een Amerikaanse ingenieur met een vierjarige BS opleiding kan huren die dat wel kan.

Volgens mij gaat het nog minstens 15 jaar duren voordat ze daar op hetzelfde niveau onderzoek doen als hier.

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Op dinsdag 22 juli 2008 01:53 schreef RonaldRegen het volgende:

[..]

Die Chinezen in de (toegepaste) wetenschap zijn inderdaad vaak zwaar vermoeiend. Ze werken zich suf, soms wel 20 uur per dag, maar er komt helemaal niks uit. En terugkoppelen, discussiëren homaar. Hier in Nederland klaagt men er ook over.

quote:

It feels like the summer of 1931. The world's two biggest financial institutions have had a heart attack. The global currency system is breaking down. The policy doctrines that got us into this mess are bankrupt. No world leader seems able to discern the problem, let alone forge a solution.

The International Monetary Fund has abdicated into schizophrenia. It has upgraded its 2008 world forecast from 3.7pc to 4.1pc growth, whilst warning of a "chance of a global recession". Plainly, the IMF cannot or will not offer any useful insights.

...

If we are lucky, America will start to stabilise before Asia goes down. Should our leaders mismanage affairs, almost every part of the global system will go down together. Then we are in trouble.

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Op maandag 21 juli 2008 23:33 schreef Lyrebird het volgende:
Exactly. Het A-merk verdient het geld, want zij verdienen geld met het verkopen van gebakken lucht (marketing), niet de Chinese fabriekjes die de producten maken. Wil je als Chinese producent zelf die A-merk premie opstrijken, dan zul je moeten groeien.

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Op maandag 21 juli 2008 22:59 schreef Drugshond het volgende:

[..]

, klinkt wel herkenbaar.
Maar e.e.a. heeft ook te maken met cultuur, was een paar weken terug een leuke uitzending op BNR hierover.
Als in China mensen ingezet worden voor een specifiek stukje productieproces doen ze precies dat ene stukje.... en als er ze daar mee klaar zijn gaan ze doodleuk wachten op de volgende order (eerst een order van de baas voordat de volgende move gemaakt wordt). Heel erg hokjesgeest. Hiërarchie is daar bijzonder belangrijk.
Hier in '' ollanda doen is weer een ander uiterste waarbij het werkvolk creatieve dingen gaat doen waarvoor helemaal geen opdracht voor is.

Ter vergelijking : Het Nederlandse leger is wel redelijk berucht als het gaat om out-of-the-box thinking bij militaire oefeningen. Soms 17 kapiteins op 1 schip.... soms teamplay wat voorbij de gezonde spelregels gaat.

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Op dinsdag 22 juli 2008 12:44 schreef elcastel het volgende:

[..]

Zoals Drughond al zei in hoogconjunctuur gaat dit op. Maar als de goedkope arbeidsbronnen op raken, dan moet de prijs omhoog, óf de marge omlaag (kijk bijvoorbeeld eens wat huismerken de laatste jaren doen in supermarkten).

Ik denk dat China gewoon meelift door nu de dingen te maken en te leren hoe dat moet. Straks kunnen ze dat zelf en dan kunnen ze ook zelfstandig de markt op, wij kunnen die kennis niet vasthouden, die nemen ze daar gewoon over, ik verwacht op een gegeven moment wel degelijk een spurt op Chinese produkten, zeker als de inflatie hoog blijft en de koopkracht onder druk staat.

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Op dinsdag 22 juli 2008 13:02 schreef icecreamfarmer_NL het volgende:
Klopt en ik snap dan ook niet dat bedrijven daar in blijven trappen, het is hetzelfde verhaal met shell en rusland

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Op dinsdag 22 juli 2008 13:27 schreef elcastel het volgende:

[..]

Als China zijn eigen afzet gaat ontplooien, ofwel de welvaart in China neemt toe, dan ontstaan denk ik de eerste echte problemen in China. De mensen worden mondiger en rijker en dat botst ongetwijfeld met het huidge beleid. Daar zit de grootste uitdaging voor China, het ontplooien van hun binnenlandse markt. Toch zal China die kant wel op moeten, want ze willen helemaal niet afhankelijk zijn van buitenlandse afzet.

quote:

Op dinsdag 22 juli 2008 13:27 schreef elcastel het volgende:

[..]

Niet gehele hetzelfde maar Shell zoekt iets in Rusland wat ze hard nodig hebben, grondstoffen. Rusland wil die velden zelf ontplooien maar mist de kennis, ze hebben elkaar nodig dus. Mrt produktie gaat het niet/minder om grondstoffen, mar heeft een lageloonland de lage lonen die wij zoeken om onze marges in stand te houden en hebben zij onze markt (nu nog) nodig voor de afzet.

Als China zijn eigen afzet gaat ontplooien, ofwel de welvaart in China neemt toe, dan ontstaan denk ik de eerste echte problemen in China. De mensen worden mondiger en rijker en dat botst ongetwijfeld met het huidge beleid. Daar zit de grootste uitdaging voor China, het ontplooien van hun binnenlandse markt. Toch zal China die kant wel op moeten, want ze willen helemaal niet afhankelijk zijn van buitenlandse afzet.

quote:

Op dinsdag 22 juli 2008 14:17 schreef icecreamfarmer_NL het volgende:
Echter telkens wanneer shell alles heeft aangelegd worden ze uit het project gedonderd.
En dat gaan we ook krijgen in china

quote:

Wachovia duwt financials verder omlaag

AMSTERDAM -

Fors tegenvallende resultaten van het Amerikaanse bankconcern Wachovia zetten de financials dinsdagmiddag zwaar onder druk. “Wachovia maakte vrij dramatische cijfers bekend. Alle financials moeten een veer laten”, zei handelaar Rik Zwaneveld van AFS Brokers.

quote:

Op maandag 21 juli 2008 23:28 schreef digitaLL het volgende:

[..]

American Express heeft veel last van defaulting loans. Oftwel cardhouders die hun schuld niet meer kunnen afbetalen. Het omzetten van huisoverwaarde in geld om je CC schuld mee af te lossen wordt steeds lastiger/onmogelijk omdat die overwaardes sneller verdampen dan vloeibare stikstof in een hoogoven. Bovendien bleek vandaag dat door de hoge inflatie en globale baanconcurentie de mensen er sinds het jaar 2000 op ACHTERUIT zijn gegaan.
[..]

Bron

quote:

Op dinsdag 22 juli 2008 14:46 schreef elcastel het volgende:

[..]

DFT

Tja, iedereen blij van de week meteen paar goeie meevallende cijfers, maar 'ergens' gaat de ellende gewoon door. Volgend kwartaal is het weer een ander.

quote:

Op dinsdag 22 juli 2008 18:13 schreef Drugshond het volgende:
http://finance.google.com/finance?q=WB&hl=en
8,9 miljard verlies en wat doen de aandelen + 8,4 %

quote:

Op dinsdag 22 juli 2008 18:16 schreef elcastel het volgende:

[..]

Echt bizar. En als het nou meevallende cijfers waren ?

quote:

Op dinsdag 22 juli 2008 19:49 schreef okee6 het volgende:
Ik vind het geloofwaardig. Immers had men waarschijnlijk veel erger verwacht. De onderliggende waarde is niet maatgevend, het beleggersentiment geeft de doorslag. Toezicht op sentiment is verder overbodig

quote:

Op dinsdag 22 juli 2008 19:58 schreef elcastel het volgende:

[..]

Als iets fors tegenvalt (wat ik toch over het algemeen las vanmiddag), dan had men niet erger verwacht, denk je wel ? Het kan welliswaar met het sentiment te maken hebben (dalingsmoeheid . ), de nieuwskoppen kloppen niet, of er wordt weer gigantisch gespeculeerd.

quote:

Death Spiral Financing at WaMu, Merrill Lynch, Citigroup

Even though hundreds of billions of dollars of capital have been raised by the financial sector over the past several months, which of the investors in a financial institution have made money since their initial investment? Answer: Zero.

We can’t think of one. They are all underwater. When Abu Dhabi first invested $7.5 billion in Citigroup last November, Citi’s stock was $35. Subsequently, when Citi did their $14.5 billion raise in January, the stock was trading at $30. Today Citigroup’s stock is under $20... and it keeps falling. Merrill Lynch did a combined raise of $12.8 billion in December and January at $48. Now the stock is under $35… and also falling. Warburg Pinkus made their now infamous $1 billion investment in MBIA at $31 per share. MBIA has fallen over 80% since and is now trading at under $5 per share.

Those who participated in Ambac’s $1.5 billion rights issue in March are down a similar amount, 80%, as the stock now hovers under $2. Bank of America made their initial investment in Countrywide Financial last August at $18 per share (rather surprising to us, given that Countrywide looked to be going bankrupt if BofA didn’t come to the rescue). Bank of America subsequently made a takeover offer in January. Today Countrywide shares can be got for under $5 per share.

TPG invested in Washington Mutual to the tune of $7 billion at $8.75 per share, a substantial discount at the time to WaMu’s stock price of $13. Today WaMu’s stock is $6. Last month AIG raised $20 billion when their stock was trading at $37 per share. Today AIG stock is just above $30 per share. Even those who participated in Lehman Brothers’ $6 billion equity offering last week at $28 per share are already underwater, with LEH currently trading below $24 (year-to-date Lehman’s stock is down over 60%).

Ironically, thanks to full ratchet provisions, this promises to lead to further dilution and even weaker stock performance going forward.

There were at least some smart investors who noted the downward trend and successfully negotiated for downside protection. We know of at least two cases (though there are doubtless others); namely, Merrill Lynch’s $12.8 billion investment from Temasek (the Singapore sovereign wealth fund) and Washington Mutual’s $7 billion raise from TPG (a private equity firm).

Quite unbeknownst to the general public at the time, downside protection was built into these equity raises to protect these investors. They are called “look back” provisions or “full ratchet” compensation.

We believe it is more accurate to call them “death spiral” securities. They work as follows. The investors in the equity raise would have their investment “protected” by a provision which states that should the bank afterwards raise money at a lower price than what they paid, these investors would be compensated retroactively by having their initial investment priced at this lower price, thereby being issued new shares for free. It doesn’t take a mathematician to see how these provisions can result in massive dilution should the bank subsequently raise even a paltry amount of capital. A new offering will trigger a lower price because of the dilution it would cause, which would trigger even more dilution because of the lower price, which would then trigger an even lower price because of the even higher dilution, etc. This is why we call such securities a death spiral.

However, unless the bank goes bankrupt, these investors can’t lose. And we already know to what lengths the Fed will go to prevent a banking bankruptcy. It’s heads I win, tails I win.

They can even short the stock in the expectation that it will go down and still not lose. At the next financing, which is sure to come, they will be made whole... even making money on the short!

quote:

Bush: 'Wall Street was dronken'

George W. Bush wilde eens zijn ongezouten mening geven over de huidige economische malaise. De waarheid kwam aan bod, en dus moesten de camera's uit. Dat gebeurde - op één camera na.

George W. Bush gaf flink af op wat hij de oorzaak van de kredietcrisis noemde, namelijk ongebreidelde hebzucht.

"Er is geen twijfel mogelijk... Wall Street raakte dronken. Het raakte dronken, en - dit is waarom ik de televisiecamera's uit wilde hebben... Het raakte dronken en nu heeft het een flinke kater. De vraag is nu hoe lang het nuchter zal blijven, en niet weer iets zal doen met allerlei opgepoetste financiële instrumenten", aldus Bush.

Hij sprak tijdens een poging om geld op te halen voor een lokale Republikeinse kandidaat voor het Congres van Afgevaardigden.

Wat hij zei, is wel even anders dan wat hij tijdens officiële bijeenkomsten zegt, als de camera's aan staan.

Afgelopen week nog meldde hij dat, hoewel de Amerikaanse economie "een deukje" had opgelopen, de economie "robuust" is, en dat er nog steeds een "gezonde groei" in zit.

Gelukkig wist hij zelf te melden dat hij in het Witte Huis al niet meer de lakens uitdeelt. Tot hilariteit van de aanwezigen.

"We schijnen nu een probleem te hebben met de huizenmarkt. Nou, niet in Houston, en zeker niet in Dallas, waar mijn vrouw nu een huis aan het uitzoeken is... Daarin heb ik geen zegje meer, ik neem thuis de beslissingen niet meer."

Bush mag in alle peilingen diepterecord na diepterecord breken (hij is nu volgens sommige peilingen nóg impopulairder dan Jimmy Carter), in de staat Texas is hij nog steeds populair. Hij gaat er regelmatig naartoe om geld op te halen voor de Republikeinse partij.

quote:

33 miljard dollar in dubieuze leningen

21/07/2008 16:22

De kapitaalproblemen bij de twee Amerikaanse hypotheekreuzen Freddie Mac (Federal Home Loan Mortgage Corporation - FHLMC) en Fannie Mae (Federal National Mortgage Association - FNMA) zorgen voor verstrekkende internationale verwikkelingen die de geloofwaardigheid van de Amerikaanse geldmarkten op de helling zetten.

De twee geraakten in de problemen door de Amerikaanse kredietcrisis. In december 2007 al kondigde Freddie Mac een verlies van 12 miljard dollar aan. Intussen geraakte bekend dat België de op vier na grootste schuldeiser is van de twee hypotheekherverpakkers.

Volgens recente verklaringen van o.m. de Amerikaanse minister van Financiën Henry M. Paulson Jr., opgetekend door The New York Times, staat België vijfde in de rij van schuldeisers met voor 33 miljard dollar (21 miljard euro) in dubieuze beleggingen.

Nummer één op de lijst met schuldeiser van Freddie Mac en Fannie Mae is China met een pakket leningen ten belope van 376 miljard dollar.

Het merendeel van al die obligaties is wellicht in handen van grote Belgische financiële instellingen en hun beleggingsfondsen die recent nog zware klappen kregen op de aandelenbeurzen.

Analisten die de voorbije dagen bij de Nationale Bank van België uitleg vroegen over de mogelijke implicaties van de problemen met Freddie Mac en Fannie Mae voor de Belgische financiële instellingen, stootten op de voice mails van afwezige kopstukken.

'Bij de centrale banken lijken ze alleen maar begaan met het inflatiegevaar,' zegt één van de vooraanstaande marktanalisten. 'Ze hebben kennelijk niet in de gaten dat stilaan alle boordtabellen naar rood gaan.'

R.V.C.

quote:

WaMu Falls 20% as Analysts See Need for More Capital (Update1)

By Ari Levy
Enlarge Image/Details

July 23 (Bloomberg) -- Washington Mutual Inc., the biggest U.S. savings and loan, fell 20 percent in New York trading after failing to convince some analysts that it has enough cash to weather more declines in the housing market.

quote:

``The housing market continues to deteriorate; we're seeing no stabilization out there at all,'' Friedman Billings Ramsey analyst Paul Miller said today in a Bloomberg Television interview.

quote:

Op donderdag 24 juli 2008 00:48 schreef zakjapannertje het volgende:

[..]

http://www.knack.be/nieuw(...)24-article20208.html

quote:

Vertrouwen economie neemt af

AMSTERDAM - Het vertrouwen in de Nederlandse economie neemt af. Bijna een kwart van de bevolking is van mening dat de economie er slecht voorstaat.

Dit bleek woensdag uit een peiling die onderzoeksbureau TNS-Nipo heeft gedaan in opdracht van RTL Nieuws.

Het aantal pessimisten is nu het hoogst sinds december 2005. In de afgelopen drie maanden is hun aantal met ruim 10 procent gestegen. Eind april was nog 13 procent van de Nederlanders van mening dat de economie er slecht voor stond.

Toekomst
Over de toekomstvooruitzichten zijn Nederlanders ronduit negatief. Meer dan de helft (52 procent) van de ondervraagden zei te verwachten dat de economische situatie de komende zes maanden zal verslechteren. Dit was het hoogste aantal sinds 2004, toen TNS-Nipo begon met het volgen van het vertrouwen in de economie.

Ook de verwachtingen van de werkgelegenheid zijn sinds begin dit jaar verslechterd. Er waren bijna evenveel mensen die zeiden te verwachten dat er banen bij zullen komen (27 procent) als mensen die verwachten dat er banen zullen verdwijnen (23 procent).

Kredietcrisis
Het vertrouwen in de economie neemt al langere tijd af door zorgen over de kredietcrisis op de financiële markten en dalende aandelenmarkten.

Volgens het Centraal Bureau voor de Statistiek (CBS) piekte het consumentenvertrouwen in begin 2007 en is het sindsdien alleen maar gedaald. Het CBS heeft becijferd dat er in juni 40 procent meer pessimisten waren dan optimisten.

quote:

Washington houdt banken overeind
De Amerikaanse president Bush zal zich niet langer verzetten tegen het plan om de banken Freddie Mac en Fannie Mae, die failliet dreigen te gaan, een geldinjectie van miljarden dollars te geven. Het moet in nood verkerende Amerikaanse huiseigenaren steunen zodat zij hun hypotheek kunnen aflossen.

In het noodplan dat de Amerikaanse minister van financiën Paulson ruim een week geleden aankondigde, staat dat de Amerikaanse overheid miljarden aandelen ’Fannie’ en ’Freddie’ koopt om de twee bedrijven van de ondergang te redden. Ook mogen de giganten ongelimiteerd geld lenen bij de overheid en de Federal Reserve (Fed), het stelsel van Amerikaanse centrale banken.

Critici reageren woedend op het plan van Paulson en beschuldigen de overheid ervan dat de belastingbetaler opdraait voor de geldinjectie. Het Amerikaanse Congres schat de kosten van het noodplan op 25 miljard dollar. Het gezaghebbende Britse tijdschrift The Economist merkte cynisch op dat Fannie en Freddie nu zelf in staat zijn biljetten bij te drukken, omdat ze onbeperkt geld mogen lenen bij de overheid en de Fed. Econoom bij ING Maarten Leen wil niet zo ver gaan en stelt dat de belastingbetaler uiteindelijk profiteert van de geldinjectie. Volgens Leen mag je aannemen dat er de afgelopen weken sterk is gespeculeerd op dalende koersen. In een maand tijd ging de koers van Fannie Mae met 45 procent onderuit. Die van Freddie Mac zakte zelfs met 60 procent. Leen: „Een geldinjectie kan die speculaties stoppen en zal het vertrouwen in de Amerikaanse economie weer enigszins herstellen. Voor zo lang het duurt natuurlijk.”

Leen ziet bovendien geen andere oplossing voor Fannie en Freddie. „Op dit moment zijn de twee hypotheekinstellingen essentieel voor de Amerikaanse economie.” De beursgenoteerde hypotheekgiganten, gesteund door de overheid, staan garant voor de helft van de hypotheken in de VS, in totaal 5000 miljard dollar. Bovendien leunen Amerikaanse banken sterk op Fannie en Freddie. De twee zijn opgezet om de huizenmarkt – waar de prijzen jarenlang spectaculair stegen maar nu in rap tempo dalen – van geld te voorzien door massaal hypotheken van banken te kopen. „Als deze instellingen wegvallen, dan komen banken in nog grotere problemen”, aldus Leen.

Dat kunnen de Amerikaanse banken er niet bij hebben. Wachovia, een van de grootste banken van de VS, maakte deze week bekend een kwartaalverlies van 8,5 miljard dollar te hebben geleden vanwege afschrijvingen op slechte hypotheken. Ook zakenbank Merill Lynch is er slecht aan toe. Dit kwartaal moest de zakenbank 9,4 miljard dollar afboeken waardoor het verlies uitkomt op 4,6 miljard dollar. Toch zijn er een paar lichtpuntjes. Zo krabbelde de dollar deze week langzaam op. Dat is onder meer toe te schrijven aan de toespeling die Fed-president van Philadelphia, Charles Plosser, maakte op renteverhoging. Belangrijk om nieuwe investeerders aan te trekken, aldus Plosser. Bovendien moet het de inflatie, in juni 5 procent, beteugelen.

De olieprijs, die onlangs een record van 147 dollar per vat bereikte, reageerde positief op de aantrekkende dollar, met een daling van twintig dollar in een week tijd. Volgens econoom Leen speelt de reddingsactie door Paulson bij Fannie en Freddie een cruciale rol bij de opleving van de dollar. „Een kwart van alle Amerikaanse effecten (obligaties, opties en aandelen, red.) gekocht door buitenlandse investeerders is afkomstig van Freddie Mac en Fannie Mae. Vertrouwen is voor deze investeerders essentieel. Dat het nu lijkt alsof de overheid de twee hypotheekgiganten nationaliseert, is slechts een herhaling van de geschiedenis.” Fannie Mae werd in 1938 opgericht als overheidsbedrijf om de Amerikaanse economie uit het slop te trekken.

quote:

July 24 (Bloomberg) -- Ford Motor Co., the world's third- biggest automaker, posted a record quarterly loss of $8.7 billion and accelerated a shift to fuel-efficient vehicles to wean itself from money-losing trucks.

quote:

http://finance.google.com/finance?q=NYSE%3AWM

Onder de 4..... beleggers laten het weer lopen... (laagste stand 3,23 14-juli).
De TT is best wel slim gekozen.

quote:

AFS

-In de VS wordt een dezer dagen een wet aangenomen die de problemen in de huizenmarkten mee moet helpen oplossen. Allemaal onzin. Die wet is maximaal een zeer kostbare PR-exercitie die de indruk moet wekken dat iedereen z'n stinkende best doet om iets aan de ontstane problemen te doen. Gaat niet helpen. De kern van alle problemen is de te ver opgelopen opgetelde schuldenpositie die niet meer betaald kan worden. En daar wordt niets aan gedaan. Deze wet vertraagt het noodzakelijke aanpassingsproces en zorgt voor een herverdeling van de financiele pijn die onvermijdelijk is.

quote:

Op donderdag 24 juli 2008 18:09 schreef Drugshond het volgende:

[..]

Hoezo behind the curve.

quote:

Op donderdag 24 juli 2008 09:31 schreef Aether het volgende:

[..]

Bron: Trouw.

quote:

Op donderdag 24 juli 2008 23:44 schreef agter het volgende:

[..]

Mooi artikel Aether.
Ik voorspel een nog zwakkere dollar...+ inflatie.
Vraag me tevens af hoelang de Aziaten nog dollars blijven kopen.

quote:

Lindsey Williams was on Jeff Rense the following night after Cliff High.

Lindsey said he received a phone call from a former oil executive who he knew from the trans-alaska pipeline. Lindsey has been ordered/threatened to stop selling his "Oil non crisis DVDs". As of now Lindsey has stopped selling his DVD's and has shut down his website.

The oil executive proceded to tell Lindsey what will happen in the world in the next 12 months. Lindsey said everything they have told him before has come to pass exactly as they said it would.

What follows are the notes I took of Lindseys report of the conversation he had with the oil exec:

Within 12 months Crude Oil will be $50 a barrel. $2 - $2.50 gallon.

2 Major Oil fields, in Indonesia and North of Russia are ready - They are going to Flood the world with Oil. There is More crude oil in these two oil fields than all of the middle east combined.

This will Bankrupt the Arab World, almost overnight. Destroy their economies.

They are going to build up the economies of Indonesia and Russia.

US will not be allowed to produce new oil fields. No significant amount of crude oil will be produced in the US.

Lindsey explains: When the Arab economies collapse they will No longer be able to buy US Treasury bills and Federal Reserve Issues to prop up the US national debt. The Arabs will dump their currency reserves of trillions of US dollars onto the market. Within 4 - 5 weeks of crude oil reaching $50 a barrel the US dollar will collapse - Leading to NAU - New currency.

John Mccain is their man.

Iran must be stopped. They would rather bankrupt Iran economically than invade it. Although they didn't say they wouldn't invade it.

Just before the election they are going to do something to ensure John Mccain is elected president. [False flag? Attack Iran? $50 Oil? Assassinate Obama?]

What can we expect in the US?

He (the oil executive) kept repeating over and over "America will see a financial collapse that it will take years to come out of. It will take years for America to come out of its financial condition."

quote:

Op vrijdag 25 juli 2008 00:25 schreef Drugshond het volgende:

[..]

Ik vraag me wel meer dingen af sinds de kickstart vanaf #01.
Qua momentum hebben de blogs het voordeel.... en binnen een maand/weken ga ik 40K in een kluisje stoppen.

quote:

Op vrijdag 25 juli 2008 08:26 schreef ItaloDancer het volgende:

[..]

In een kluisje?

quote:

2 Major Oil fields, in Indonesia and North of Russia are ready - They are going to Flood the world with Oil. There is More crude oil in these two oil fields than all of the middle east combined.

quote:

Op vrijdag 25 juli 2008 02:45 schreef Ali_Kannibali het volgende:
Ik kwam wel een HEEL aparte analyse/voorspelling tegen. Ben benieuwd of er iets van uit gaat komen.
[..]

quote:

Op vrijdag 25 juli 2008 08:43 schreef simmu het volgende:

[..]

heb je ook een bronvermelding?

quote:

The reserve requirements on savings accounts is zero. Every penny is immediately lent out. The money that people think is in their "savings account" simply isn't there.

quote:

Op vrijdag 25 juli 2008 08:36 schreef Basp1 het volgende:

[..]

Dan ben ik heel benieuwd welke velden men het over heeft.

Volgens mij je reinste onzin die analyse.

quote:

States Slammed by Tax Shortfalls
By CONOR DOUGHERTY, AMY MERRICK and ANTON TROIANOVSKI
July 24, 2008; Page A1

The stumbling U.S. economy is forcing states to slash spending and cut jobs in order to close a projected $40 billion shortfall in the current fiscal year.

That gap -- identified Wednesday in a survey by the National Conference of State Legislatures -- is more than triple the size of the previous year's. It is the result of broad economic weakness at the state and local levels that could cause pain throughout this year and into 2010. Sales-tax collections, for example, have been hurt by the housing slump and high gasoline prices, which are prompting cutbacks in consumer spending. Personal income-tax collections have been hit by rising unemployment, while corporate income-tax collections have been eroded by falling profits.

"We expect it to get worse before it gets better," said Corina Eckl, fiscal-program director of the National Conference of State Legislatures. The conference's new report describes the shortfalls states face in their budgeting process for the current fiscal year, which began in July.


Summaries of regional activity
A separate survey of economic conditions by the Federal Reserve's 12 regional banks -- the "beige book" -- said economic activity was sluggish across most of the U.S. Consumer spending was "mixed, weak, or slowing" in nearly all areas, despite the distribution of billions of dollars in economic-stimulus checks.

The beige-book survey also said companies are increasingly worried about growth prospects and inflation. Indeed, also on Wednesday, discount chain Costco Wholesale Corp. warned that its profits will fall "well below" Wall Street's expectations for its fiscal fourth quarter ending Aug. 31. It blamed the speed of manufacturers' price increases.

Unlike the federal government, most states are required to balance their budgets. Most have so far resisted tax increases, instead opting for raising prices on things like tolls and college tuition, and cutting back on services like education and health care. Some chose one-time measures such as tapping rainy-day funds that were built up in flusher times. That could lead to future cutbacks if the economy doesn't bounce back in coming months.

The spreading economic weakness also is affecting localities, which are being ravaged by falling property-tax collections and a decline in state aid. In Minnesota, the city of Duluth plans to stop operating its Fun Wagon -- a free trailer stuffed with games and cookout supplies for a neighborhood party. Other services, including a city pool and a fire hall, also are being eliminated.

RELATED


• Read the full report
• Fed Snapshot Isn't Pretty Picture
• Oil Retreat Takes Pressure Off Fed
• Costco's Profit Is Squeezed by Jump in Costs
• Video: Beige Book's Gloomy Picture Several state-university systems are being forced to raise tuition and tighten their belts. Regents at the University of California and California State University system have raised undergraduate fees 7.4% and 10% annually, respectively, to cope with rising enrollment and other costs. For a University of California student, it represents an increase of $490 to $7,126, excluding miscellaneous fees charged by individual campuses.

Virginia Tech is raising its tuition for in-state undergraduates by nearly 11%. "For us it was a matter of, 'Are we going to take professors out of the classroom, or are we going to raise tuition?'" said Lawrence G. Hincker, associate vice president for university relations.

States are also reducing their payrolls and programs. Vermont is cutting about 400 jobs through attrition, while Tennessee is using buyouts and possibly layoffs to eliminate about 3,000 government jobs.

Social services have been hit hard. Ten states have made targeted cuts in Medicaid, while three have cut contributions to the Temporary Assistance for Needy Families program.

Bonnie Laughlin, a 52-year-old resident of Hiram, Maine, who cares for four foster children, has seen her daily reimbursement from the state for caring for the children decline from $60 to $52.50 per child this year. The state has also eliminated money for "respite care" -- when foster parents can get away from their kids -- as well as reimbursement for recreation activities for the children.

For instance, Ms. Laughlin has been paying for dance lessons for her 10-year-old autistic foster daughter, but she's not sure she'll be able to keep it up. "It definitely puts hardships on families," Ms. Laughlin said.

The Primary Culprit

The housing slump, now well into its second year, is the primary culprit. The decline in home sales has cut into real-estate transfer taxes. Construction spending and employment have declined. Fewer home sales have resulted in lower sales of home furnishings and washing machines, eating into sales taxes.

Of course, for many states, today's budget woes stem at least partly from expanding their services during the good times and not planning enough for the inevitable downturn.

REAL TIME ECONOMICS



• Read the latest news and analysis on the economy at WSJ.com's Real Time Economics blog.
• Beige Book: Isolated Bright Spots May Be Dimming
• Summer Beige Book: Staycations and Higher PricesMeantime, states are dealing with shortfalls of many kinds. According to the report by the association of state legislatures, 22 states are reporting sales taxes that are below forecast. In nine of those states, the collections were below forecasts that had already been reduced downward. Seventeen states had a shortfall in corporate income tax, 11 states were behind on personal-income taxes, and 11 were also behind on miscellaneous taxes such as insurance-premium taxes.

At the same time, costs are rising. Over the past several years, many states have taken over more of their K-12 education funding from local governments, while many others have expanded Medicaid.

Many energy-producing states have been spared some of this pain, and have actually benefited from rising food and gasoline prices. Texas, Wyoming and Colorado have all seen job and income growth continue to rise, which has helped them avoid budget problems.

In Massachusetts, state officials are trying to close loopholes that let companies reduce their tax bills in part by shifting income out of state. "You couldn't afford to simply waste $500 million a year by allowing tax avoidance," says Noah Berger, executive director of Massachusetts Budget and Policy Center, a Boston think tank. The state says it expects to generate $291 million from its crackdown on corporate tax loopholes.

In Illinois, Gov. Rod Blagojevich unilaterally cut $1.4 billion from the $59 billion budget the legislature sent him in May. The state says it expects to save an additional $500 million through belt-tightening at state agencies.

Heavy Cuts

The governor's changes include heavy cuts in spending for education and health care. The state plans about $600 million in health-care cuts, including making hospitals and nursing homes wait longer for Medicaid reimbursements.

Health services, among states' fastest growing costs, are being cut across the country. Ohio is closing two mental-health facilities as state agencies look to shed $733 million. The state is also cutting a program that provides free nicotine patches to smokers.

Virginia's funding for hospitals and nursing homes to care for the poor and elderly was reduced by $76 million over the next two fiscal years, according to an analysis by the Commonwealth Institute for Fiscal Analysis in Richmond, Va. Maine is cutting money for foster care, mental-health services and "flexible funding," which social workers can spend on specific needs for clients.

"Our concern is the fact that the government has assumed responsibility for these things, and now they're basically saying, 'We can't do it anymore,'" says Richard Farnsworth, executive director of Portland, Maine-based Woodford Family Services. "Now the question is, 'Who's going to do it?'"

It's not just humans who are feeling the squeeze. Maine has already closed one fish hatchery, and the state isn't expected to offset the rising price of fuel and fish food, said fishery biologist Forrest Bonney. "In recent years we expanded our stocking program, however all of a sudden we're faced with the additional expense of feeding and transporting" fish, Mr. Bonney said.

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Op vrijdag 25 juli 2008 09:39 schreef simmu het volgende:

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bron

*krak* en daar gingen de staatsbudgetten. maar het valt heus mee hoor, met die recessie en werkeloosheid

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Op vrijdag 25 juli 2008 09:49 schreef Basp1 het volgende:

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Hier heb je nog een mooie.

CALIFORNIA GOVERNOR SCHWARZENEGGER TO CUT STATE WORKER PAY TO $6.55 AN HOUR

Werk je voor de overheid wordt opeens je loon verminderd omdat het buget niet meer uitkomt.

Even een berekening 6.55 /uur * 160 = 1048 bruto dollar per maand waarvan de werknemer dan moet gaan rondkomen.

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Op vrijdag 25 juli 2008 08:56 schreef Basp1 het volgende:

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Ik verwacht dat hij het bij http://www.rense.com/ vandaan heeft als ik de kop zo lees.
Dat is nu niet bepaald een betrouwbare bron gebleken in de loop der jaren.

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Op vrijdag 25 juli 2008 13:47 schreef Ali_Kannibali het volgende:

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Het kwam inderdaad van rense, indirect. De spreker is echter Lindsay Williams.

Hier is het tweede uur van het interview te downloaden.

http://www.mediafire.com/?exxwr7zjy9u