Depression - Stage 2 - Dead Cat Bounce, theres a good chance it will happen [Archive] - Page 2

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upside_umop

28-04-2012, 06:42 PM

The US is in great shape.....cheap energy and on the way up.
Warren Buffett is a huge bull on the US and I am too.
The gold standard is not coming.

Skol

28-04-2012, 07:09 PM

'Gold standard inevitable'.

Not sure why you believe this stuiff tricha, there's stloads of evidence on this site that you've been crying wolf for years.

POO $200
Aviation doomed. (going great actually)
Gold $10,000.
Great Depression 2.

DJIA doubled in the last 3 years, what's that mean to the trained mind?

Pumice

28-04-2012, 07:09 PM

The sky is falling!!!

a 2.3% annual GDP growth V 2.5% forecast is hardly reason for concern.
The US is fine.

Agree wit Upside Umop, the US has plenty of cheap energy in fact a surplus of the stuff. Just give it time.

drillfix

28-04-2012, 09:20 PM

Gold which would be round 68 feet(20m) solid cube(the silver,plat etc piles are even smaller)

No JB, silver would be much much extremely much larger than gold, you should have put gold next to the platinum pile :P

tricha

29-04-2012, 12:42 AM

[QUOTE=upside_umop;373103]The US is in great shape.....cheap energy and on the way up. Broke!

Warren Buffett is a huge bull on the US and I am too. Lost his marbles, a bit like Mr
Hubbard, it happenes when we get to 80
He has broken his own rules, now deals in derivatives ( lost the plot) and going down.

The gold standard is not coming. Ask Iran, want oil, pay in gold!

tricha

29-04-2012, 12:44 AM

tricha

29-04-2012, 12:46 AM

Skol

29-04-2012, 10:14 AM

Who cares that it's paper, nice profit though, let me know when you go to Woolworths and pay for your groceries in gold or silver.

You'll be laughed out of Mapua, won't take long for the rumours to spread in a one-horse town like that.

Pumice

29-04-2012, 12:53 PM

Yeah right Pumice, all pumped up with paper. Just paper.

I disagree, but as i said, time will prove either of us right or wrong.

How much of the gold price has been pumped up with paper? I assume you think none?

JBmurc

29-04-2012, 02:48 PM

No JB, silver would be much much extremely much larger than gold, you should have put gold next to the platinum pile :P
Maybe not all silver above ground but certainly bullion wise there's more gold then silver currently....

According to the World Gold Council (and others) there are between 4-5 billion
ounces of gold remaining in the world http://www.gold.
org/discover/knowledge/faqs/index.html. I say 'remaining' somewhat unnecessarily,
as it is estimated that 95% of all the gold mined in the history of the world is still
around. Quite simply, gold is not used up, rather, it is preserved. This also use to
be the case with silver, but times have changed dramatically since WWII.

According to the Silver Institute and GMS, there are only 671 million ounces left of
identifiable silver bullion left in the world http://www.silverinstitute.
org/publications/index.php (World Silver Survey 2004).

Skol

29-04-2012, 04:24 PM

The World Council and Silver Institute.

They're gonna tell you what you wanna hear. There's about 700,000,000 oz mined every year, so we won't run out.

There's no chance.

JBmurc

30-04-2012, 09:39 AM

The World Council and Silver Institute.

They're gonna tell you what you wanna hear. There's about 700,000,000 oz mined every year, so we won't run out.

There's no chance.

yes and demand is now over 1bill oz p.a

Skol

30-04-2012, 12:52 PM

From a report by ScotiaBank dated November 2011.

Conclusion and Forecast
The situation in Silver remains very interesting in that the market continues to be in a supply surplus and that is likely to be the case for the foreseeable future. Given the high level of stocks around in Silver it does take a leap of faith to be bullish, but we do feel that Silver is well positioned to follow in Gold’s footsteps as a hedge against uncertainty and an alternative to paper money, which if we are heading for a period of deflation might become all important.
Although there are new applications for Silver that are likely to become large consumers of the metal, we do not feel these new uses will cause the market to move into a supply deficit for a number of years still. This means that the investment boom currently driving prices higher is likely to run out of steam before the more bullish fundamentals take over. As such, we need to have contingency plans ready for when the investment bull-run ends. When it does, then disinvestment of Silver is likely to flood the market with metal and prices are likely to tumble.

macduffy

30-04-2012, 01:37 PM

Not being a trained economist - can you train an economist? - I hadn't heard of the Economic Policy Journal, nor of Robert Wenzel, until fairly recently.

Here is a link to his recent speech to the New York Federal Reserve, in the Federal Reserve, highly critical of Bernanke and the Federal Reserve!

Well worth the read.

http://www.economicpolicyjournal.com/2012/04/my-speech-delivered-at-new-york-federal.html

STRAT

30-04-2012, 02:09 PM

tricha

16-05-2012, 12:33 PM

Do we have QE4 or is it all over ????? Depression.

1 - Europe in a huge mess, with Greece to default and others to follow.

2 - Morgan Stanley Chase ready to fold, the biggest bank in the States, now no where to run ( remember they got MF Globals cash)

3 - China slowing rapidly.

4 - Oil still way to high, for growth to continue and indeed, peak conventional oil, now in decline.

5 - It's all lining up for a bad year, even with an election in the USA.

6 - Metal prices are getting smashed, which if you relate it to Australia and the ASX. It does not look good.! note - KZL already gone broke. More to follow real soon, if prices do not pick up.

Happy hunting folks!

My position is, mortgage now payed of, sold 50 % of my shares a few months ago to do so.
Sold one of my beloved shares yesterday, so 50% cash of what is left.
Hold one share, that is probably stupidity as well, given the current economical enviroment.

So off to the land of OZ, next week to go prospecting and forget about the ASX, for a few months.
There will be no cell phone coverage, or internet where we are going.

Skol

16-05-2012, 12:43 PM

Anyone who takes your advice tricha runs the risk of going bankrupt.

You were wrong about peak oil and catastrophically high oil prices.

You bought a petrol miser vehicle with panels that bend in the wind just as the POO crashed.

Wrong about gold.

And you'll be wrong about this.

miner

16-05-2012, 01:11 PM

tricha

16-05-2012, 06:01 PM

"So off to the land of OZ, next week to go prospecting and forget about the ASX, for a few months.
There will be no cell phone coverage, or internet where we are going."

What part of OZ are you going prospecting in tricha ?.

We are going north of Leonora. Do you have any clues on gold detecting, help would be much appreciated Miner.

Looking to get a minelab GXP 4800. Is there anything out there that compares.?

Hey Belgarion, we will watch with interest, at least if we are out, we can sleep at night.
Unlike some who will up, all all hours of the morning.

miner

16-05-2012, 07:08 PM

Hi tricha I was about 170km north of Laverton (east of Leonora)at Duketon 20 odd years ago(found a few bits up there and got bogged to the axles, laterite country from memory) when the SD2000 first came out then back west of it around Cue in the Murchison area.

Nothing beats a Minelab detector,sounds like your a wood duck (newbie) ,if so there is LOTS to learn,keep the old saying "gold is where you find it" in mind,and remember you cant drink sand :-).

Why are you heading north of Leonora ?,detecting gold is a real buzz,just don't get gold fever.

tricha

17-05-2012, 09:27 AM

Tricha, concur that its a good time to be out of the market for a bit ... but few months may be too long ... ;)

A bird in the hand or two in the bush Belgarion ? Yes a few months may be a bit long, but the aim of the game, perserving cash.

.The Recession of 2008 could look like a walk in the park. ( remembering it should has been the start of the next depression, except it got bailed with printed, phoney money and the system was not cleaned out )
Also a recession is generally announced six months after, it actually started.

And this is but one of the events that is lining up.

16 May 2012 Last updated at 16:09 GMT
Bank governor warns of eurozone crisis 'storm'

http://news.bbcimg.co.uk/media/images/60285000/jpg/_60285154_jex_1408027_de27-1.jpg

Sir Mervyn King: "Our biggest trading partner the euro area, is tearing itself apart"

Continue reading the main story (http://www.sharetrader.co.nz/#story_continues_1) Greece crisis (http://www.bbc.co.uk/news/business-18094883)

The Bank of England has cut its growth forecast for this year to 0.8% from 1.2%, saying the eurozone "storm" is still the main threat to UK recovery.
The eurozone was "tearing itself apart" and the UK would not be "unscathed", said its governor Sir Mervyn King.
He also confirmed that the Bank has been making contingency plans for the break-up of the euro.
The rate of inflation will remain above the government's 2% target "for the next year or so", the Bank said.
Sir Mervyn was presenting the Bank's quarterly inflation report (http://www.bankofengland.co.uk/publications/Pages/inflationreport/ir1202.aspx).
He told a news conference that the euro area posed the greatest threat to the UK recovery, and there was a "risk of a storm heading our way from the continent".
"We have been through a big global financial crisis, the biggest downturn in world output since the 1930s, the biggest banking crisis in this country's history, the biggest fiscal deficit in our peacetime history, and our biggest trading partner, the euro area, is tearing itself apart without any obvious solution.
"The idea that we could reasonably hope to sail serenely through this with growth close to the long-run average and inflation at 2% strikes me as wholly unrealistic," Sir Mervyn said.
Continue reading the main story (http://www.sharetrader.co.nz/#story_continues_2) “Start Quote
European policymakers, I suspect, will not rush to thank him for his kind and timely advice”
End Quote http://news.bbcimg.co.uk/media/images/53409000/jpg/_53409474_flanders-112x81.jpgStephanie FlandersEconomics editor

A 'mess' Andrew Balls, the managing director in London of global investment firm Pimco, said it was reasonable for Sir Mervyn and other policymakers to plan for a Greek exit.
"Yes, maybe they should plan for an exit, but the thing is, speculating about it can make the event more likely, so the Europeans really do have a mess there," he told the BBC.
"If Greece is to slide out of the euro and collapse, how are they going to protect Ireland, Portugal, Spain and Italy?"
Separately, Prime Minister David Cameron also spoke of the financial storm clouds across Europe, warning that eurozone leaders must act swiftly to solve its debt crisis or face the consequences of a potential break up.
He said during Prime Minister's Questions in the House of Commons: "The eurozone has to make a choice. If the eurozone wants to continue as it is, then it has got to build a proper firewall, it has got to take steps to secure the weakest members of the eurozone, or it's going to have to work out it has to go in a different direction,
"It either has to make up or it is looking at a potential break up. That is the choice they have to make, and it is a choice they cannot long put off."
The Bank's report said, however, that the eurozone crisis was not the only issue weighing on the UK economy, with volatile energy and commodity costs, and the squeeze on household earnings also having an impact.
http://news.bbcimg.co.uk/media/images/60283000/jpg/_60283632_012979599-1.jpg

Andrew Balls, of global investment firm Pimco says, "a disorderly outcome for Greece is going to be bad for the global economy".

It all meant that the UK economy would not return to pre-financial crisis levels before 2014, Sir Mervyn said.
Nevertheless, he remained optimistic about the longer term. "We don't know when the storm clouds will move away. But there are good reasons to believe that growth will recover and inflation will fall back," he said.
On quantitative easing, he said that no decisions had been made whether or not to continue pumping money into the economy. The last stimulus programme was still "working its way through the system".
'Outlook is probably better' Sir Mervyn's comments came on the day that official unemployment figures showed a fall in the jobless rate, underlining recent surveys that the private sector had become more confident about hiring labour.
He said the fall in joblessness was consistent with the expected gradual recovery in the UK economy.
But Graeme Leach, chief economist at the Institute of Directors, said of the Bank's report: "Talk about kicking an economy when it's down.
"On top of the euro crisis and a double-dip recession, the Bank of England is now saying inflation may not fall fast enough to permit more quantitative easing.
"Actually we think the inflation outlook is probably better than the Monetary Policy Committee (MPC) thinks, with the impact of the euro crisis, declining real incomes and weak money supply growth suggesting inflationary pressures may recede later this year and into 2013.
"After many years of underestimating inflationary pressure let's hope the MPC is now making the opposite mistake by overestimating it".
Ed Balls, Labour's shadow chancellor, said: "The Bank of England has once again slashed its growth forecast for Britain, but despite this the government says it will just plough on regardless with policies that are hurting but not working.
"The governor is right to warn of a coming storm from Europe. That is why we warned George Osborne not to rip up the foundations of the house and choke off Britain's recovery with spending cuts and tax rises that go too far and too fast.
"What happens in the eurozone in the coming weeks and months will have an impact on our weakened economy," Mr Balls added.

JBmurc

17-05-2012, 10:34 AM

ELYOB

17-05-2012, 11:17 AM

Dont worry , gold prospecting in the WA goldfields can be a lot of fun . Talk to the locals and you will get the latest info. Just dont tread on any toes as people are protective of their own ground . Best to ask if you can do etc.,. Good luck . [adice : It tends to get very cold this time of year in the early morning , so have appropiate gear ]

airedale

17-05-2012, 11:21 AM

G,day Tricha and good bye. Also good luck at the diggings. We will hear from you when you get back. :t_up:

CMo

17-05-2012, 01:46 PM

Once the posturing is out of the way, Greek leaders will realise that coming out of the Euro is a terrible option and Germans will realise that they are dealing with / handcuffed to, a desperate man with nothing to lose, standing on the edge of a cliff.

Peace will be made, stability will return and the can will be kicked further down the road. (probably with more money printed and greater bailouts from north to south).

http://www.nytimes.com/2012/05/17/world/europe/greek-stimulus-is-an-option-merkel-says.html?_r=1&hp

h2so4

17-05-2012, 07:54 PM

So off to the land of OZ, next week to go prospecting and forget about the ASX, for a few months.
There will be no cell phone coverage, or internet where we are going.

Crikey tricha, what about the flies mate?

miner

17-05-2012, 08:12 PM

Tricha sent you a PM :).

tricha

19-05-2012, 11:35 AM

Cheers folk for all your gold seeking support, lifes to short not to have adventures.

As to all the posturing CMo, I hope you are right, but I look at the bigger picture, Spain!

It's like a house of cards, one falls and it' all over for the Euro, and us.

Cut or be cut time for Spain

http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=10806702

With recent figures confirming that the Spanish economy has been in a double-dip recession since October and unemployment standing at 24.6 per cent, there is little doubt that Spain falls into that category.

tricha

19-05-2012, 11:39 AM

If you have done your homework, you will already know that in "the Great Depression" there were widespread trade wars.

They are well underway.

18 May 2012 Last updated at 01:18 GMT

http://www.bbc.co.uk/news/business-18112983
US imposes import tariffs on Chinese solar panels

CMo

19-05-2012, 03:15 PM

Nothing new, apart from it being a new battle front... the solar panels will come from elsewhere.

(https://www.uschina.org/public/documents/2011/09/issues_brief_421_tarrifs_on_chinese_tires.pdf)

Trade wars go on all the time and have existign numerous times since the Great Depressions in the 30's

"The US and China have sparred on many trade issues in the past, mainly stemming from US allegations that Chinese exports were being made more competitive by a currency that was being kept artificially cheap"

From under the picture... "In 2011, imports of solar cells from China into the US were valued at $3.1bn (£1.96bn)"... that's out of a total of $390 billion imports and growing (http://www.census.gov/foreign-trade/balance/c5700.html)... compare that with a static $103 Bil Exports (not growing) and its got more to do with the US trying to resolve it's woeful trade defeceit with China.

US will continue to print until it begins to export it's gas / drop it's imports of oil. Europe will continue to get around the issue of not being able to print for governments by printing and giving it to the banks and other 'institutions' / companies deemed too important to fail and germany will eventually accept that they will have to pay more to support Europe. (they already do and will continue to benefit from lower Euro for thier massive manufacturing output) but will need to offset this with greater handouts until Spain, Italy and Greece start to export their way out of trouble.

In the long run, why pay a worker in Germany to manufacture at $30 an hour when plenty in Spain will do it for $15 an hour? (if the govnm't are forced to cut welfare).

Anywho... best of luck in Oz. Rest assured, you'll be back before the world implodes!

P.S - World wars generally follow great depressions.

skid

20-05-2012, 09:39 AM

tricha

20-05-2012, 08:44 PM

We are getting dangerously close to some good old fashion bank runs starting in Greece and Spain.
If this happens its anyones guess how far the dominoes will tumble.
Getting rid of Mortgage next week -rest going into Kiwi bonds for the time being--the scenario could be postponed by another bailout but im covering my a-- just in case

Good skills Skid, debt could become extremely toxic. I've paid my mortgage as well, a few months ago, I had to sell half my beloved shares to do it.
Now I have just sold the rest, the heat in the kitchen is to hot.
Another bail out, hmm. They need to clean the system out.
Get Ready: We’re About To Have Another 2008-Style Crisis
http://www.chrismartenson.com/blog/get-ready-were-about-have-another-2008-style-crisis/75466?utm_source=newsletter_2012-05-19&utm_medium=email_newsletter&utm_content=node_title_75466&utm_campaign=weekly_newsletter_71

Wednesday, May 16, 2012, 8:30 am, by cmartenson

Greek Depositors Withdrew $898 Million From Banks MondayGreek depositors withdrew €700 million ($898 million) from the country's banks on Monday, fueling fears of a bank run amid the growing political disarray.
With deposits falling, Greek banks become even more dependent on the European Central Bank to meet their funding needs, exposing the central bank to potentially huge losses if Greece leaves the euro area.
Monday's deposit withdrawal far outpaced Greek banks' steady decline in deposits since the start of the country's debt crisis in 2009, as depositors withdraw cash and transfer funds overseas. In the past two years, deposit outflows have generally averaged between €2 billion and €3 billion a month, though in January they topped €5 billion.
The latest data from the Greece's central bank show that total deposits held by domestic residents and companies stood at €165.36 billion in March.

elZorro

20-05-2012, 10:18 PM

Thanks for the post Tricha. What a shambles. I note that Chris laid some of the blame for this lack of profit in the world's economies, to the rising price of energy. I think that has to be a fundamental reason for all this. If we can sort out cheap energy again, we'll be alright.

To Sum Up Part I
Given this environment of massive, rapidly-accelerating, and obfuscated risks, the prudent among us are undoubtedly wondering, How the heck is this going to play out? And how do I prepare for it?

In Part II: What To Do When the Central Banks Blink (http://www.chrismartenson.com/martensonreport/what-do-when-central-banks-blink), I lay out my forecast for how low asset prices will sink before the central banks once again attempt to ride to the rescue with gargantuan liquidity measures.
But this next time won't work as it did in 2008, in my estimation. I see central banks being near the end of their ability to influence developments at this point. More liquidity will affect different asset classes differently, and for the first time raise real (and valid) concerns about the widescale debasement we are witnessing across the world's major fiat currencies.
Putting your capital into those resources best positioned to appreciate most as the result of money printing and hold or increase their purchasing power in such an environment should be a top priority for every concerned investor.

He's talking about gold, PGM, or maybe goldie investments.

bermuda

21-05-2012, 10:20 AM

elZorro

21-05-2012, 10:41 AM

EZ,
If the world can turn to gas we will get out of this energy pickle where oil at $100/bbl is crippling the world's economy.

Gas is currently trading at about 1/6th of the price of oil on an energy basis.

The Golden Age of Gas is upon us.

Bermuda, do you have data for that pricing? I thought the bulk rate for gas might be low, but the consumer over here pays almost exactly the same amount for each kW of std heating, whether it be from petrol/diesel, gas or electricity. They get better output value from heat pumps, and less from petrol in cars, because of the inherent efficiencies involved. But it is priced on the kW of heat you'd get from burning it or running a heat element.

Hydro electricity is made for 2-3c per kWhr, sells for 20c. Gas might be a bit the same.

bermuda

21-05-2012, 10:21 PM

Bermuda, do you have data for that pricing? I thought the bulk rate for gas might be low, but the consumer over here pays almost exactly the same amount for each kW of std heating, whether it be from petrol/diesel, gas or electricity. They get better output value from heat pumps, and less from petrol in cars, because of the inherent efficiencies involved. But it is priced on the kW of heat you'd get from burning it or running a heat element.

Hydro electricity is made for 2-3c per kWhr, sells for 20c. Gas might be a bit the same.
EZ,
Have a look at " US natural gas looks irrestibly cheap versus oil" by Christopher Swann 5 March. He claims gas is 8 times cheaper.

The yanks are slow starters ( they have been burnt before chasing gas ) but this time it is different. Gas is gathering a huge momentum. The days of Detroit Deisels are over. It is now Detroit LNG....and coal is now on the back burner.

elZorro

21-05-2012, 10:38 PM

EZ,
Have a look at " US natural gas looks irrestibly cheap versus oil" by Christopher Swann 5 March. He claims gas is 8 times cheaper.

The yanks are slow starters ( they have been burnt before chasing gas ) but this time it is different. Gas is gathering a huge momentum. The days of Detroit Deisels are over. It is now Detroit LNG....and coal is now on the back burner.

Yep, got it, thanks.

http://www.slate.com/blogs/breakingviews/2012/03/05/natural_gas_in_the_u_s_is_a_bargain_compared_to_oi l_.html

Looks like gas could be in a slump at the moment, drill owners need a better return, so the price could go up with any demand. But still it's a lot cheaper. I did notice there was a big margin in CNG and LPG over here in the jump between wholesale and retail, not like oil, where it's very tight. Most of the Maui gas (CNG) was blown away at Huntly for electricity at 1/3 efficiency, because it had to be used to get at the more valuable oil in the giant reserve. It's harder to push around the place, lots of infrastructure.

lakedaemonian

21-05-2012, 10:58 PM

EZ,
Have a look at " US natural gas looks irrestibly cheap versus oil" by Christopher Swann 5 March. He claims gas is 8 times cheaper.

The yanks are slow starters ( they have been burnt before chasing gas ) but this time it is different. Gas is gathering a huge momentum. The days of Detroit Deisels are over. It is now Detroit LNG....and coal is now on the back burner.

US NG is cheap.

Surely it will bottom by the end of the year, but how to play it?

Lots of NG companies are going to be going under soon as hedging at previously higher prices ends.

Plus there's the issue of wall street investment pollution in the mix, much like the previius ethanol amd solar investment bubbles.

I'm not convinced the fracking basedNG investment bubble will result in sustainable production yields.

I think a lot of the increased production is far from sustainable and big chunks of it will have some ugly depletion curves.

And then there's the LNG conversion plants for import/export which should see prices normalize across markets.

So I think NG will skyrocket in the US. But how to invest, where to invest, and when?

Going to be a great opportunity I reckon along the lines of oil early 2009.

gazprom1

22-05-2012, 10:07 AM

CMo

22-05-2012, 11:26 AM

Certainly Shell are planing on higher prices in the next couple of years (given the report in the FT over the weekend).

http://www.ft.com/intl/cms/s/0/741d32c4-a012-11e1-90f3-00144feabdc0.html#axzz1vY5q5HM8

There's also been a few interesting posts on the seeking alpha site, here... http://seekingalpha.com/article/428041-why-unl-is-a-better-alternative-to-ung-for-natural-gas-exposure and also on the focus links in the left hand navigation.

lakedaemonian

22-05-2012, 12:47 PM

Agree with sentiments that US NG cannot stay at these depressed levels. However, I do note that US NG prices have risen from around $2.31 to $2.647 in the past couple of weeks....nearly a 15% jump.

Not sure how to play it but could buy forwards..???

Gazprom

One thing I caution folks who are looking to profit from the low NG price(and possible bottom) is that there's a very good chance a whole bunch of companies in the NG sector could fall over this year...much like all the ethanol and solar companies in recent years.

Caveat Emptor + Carpe Diem

gazprom1

26-05-2012, 07:47 AM

Interestingly CNBC were talking about NG this am. Has come off the boil the last couple of days (about 15-17 cents). CNBC were stating that a price of above $2.50 means that coal generators are back in the money and replacing the use of NG depressing the NG price. Just shows how much the NG producers get squeezed with a cheap substitute like coal around.

Gazprom

skid

26-05-2012, 09:52 AM

elZorro

26-05-2012, 11:13 AM

Many underestimate the amount of trade between China and Europe-If things go pear shaped in Europe some say a hard landing in China is on the cards--Europe is resisting printing money ATM unless austerity measures are adhered to-a few rouge politicians in Greece could keep that from happening-Anything can happen in the coming months so its a good idea to be as prepared as possible.
The growth vs austerity argument is relevant for people as well as countries

Skid- agree it's tough deciding whether to hold onto shares, or not, at the moment. But you have me a bit confused with your post, which politicians do you mean?

http://cache.jezebel.com/assets/images/39/2009/12/500x_going_rouge-dec2.jpg

elZorro

28-05-2012, 08:32 PM

Another big drop in the market between 2013 and 2025, and then we're off, apparently. It's a long time to wait.

http://www.ino.com/blog/2012/05/stocks-why-one-more-major-correction-still-lies-ahead/

skid

29-05-2012, 01:36 PM

Good ole Sara--She overestimated the dumbness of the American people-but who can blame her after Bush managed it.

ELYOB

30-05-2012, 08:56 AM

Sara is a product of voter apathy . Trivial power groups can reach out and have power . It is like dumb dumber etc.,. Trivia has snowballed into the stupidity of the USA political infrastructure . Great for solving GWB and GFC mess ..... which will be with us like the GD!

Hoop

30-05-2012, 01:38 PM

STRAT

30-05-2012, 01:56 PM

Tricha... have you overlooked this headline:confused: SAN FRANCISCO (MarketWatch) -- Bank of Spain governor Miguel Angel Fernández Ordóñez will step down a month ahead of schedule. It's always a bad omen when you see the first person to jump ship happens to be the CaptainYeah but did he jump or was he made to walk the plank?
The latter I reckon. :D

Hi Hoop. I guess that post tells some but Id be very keen to hear you opinion on current events from a TA perspective.

PS remember Im a simple fella. Dont overwhelm me now.:eek2:

drillfix

30-05-2012, 02:14 PM

SAN FRANCISCO (MarketWatch) -- Bank of Spain governor Miguel Angel Fernández Ordóñez will step down a month ahead of schedule.

It's always a bad omen when you see the first person to jump ship happens to be the Captain

Absolutely Hoop, or either that or they (ECB, World Bank etc) want "INSERT PUPPET CRONIE HERE" type of a move!

Good ole Sara--She overestimated the dumbness of the American people-but who can blame her after Bush managed it.

That is why there is a Movie called Iron Sky (http://www.imdb.com/title/tt1034314/) which depicts Sara Palin as the future US president...LOL :P

CMo

05-06-2012, 10:47 AM

It is getting to desperate measures times and it seems they may be prepared to take desperate measures... Next step towards USE.

http://online.wsj.com/article/SB10001424052702303506404577444670506067842.html?m od=WSJAsia_hpp_MIDDLETopStories

skid

05-06-2012, 11:24 AM

The paradox of coming deflation--As the chance of deflation[depression] gets ever more close -I feel another round of inflation coming[bail outs] Its the choice between a relatively hard landing now or an absolute crash later.
At some stage I fear that the solution will switch from economic to military.Another excuse will be made to go and take something. Where? Follow the money my friend-Im talkin Black gold -Texas Tea..

skid

16-06-2012, 09:31 AM

If Tricha was still actively posting Im sure he would be posting about the Greek elections and the danger they impose to Europe and us all--And he would be right

skid

21-06-2012, 08:00 AM

If anyones following HS Dent ,he is predicting a major market sell off later this week [short term]
You can google his june commentary

fungus pudding

21-06-2012, 09:51 AM

If anyones following HS Dent ,he is predicting a major market sell off later this week [short term]
You can google his june commentary

Yeah, but how do you access a free monthly commentary? Can you post the url?

Hoop

21-06-2012, 11:31 AM

Paul Krugman - The Economic Meltdown: What Have We Learned, if Anything? (http://www.youtube.com/watch?v=sOyX74kmjBY&feature=related)

A long (1hour 5min) video which unfortunately I haven't time to listen/watch in full. It was filmed at the beginning of 2012 in a lecture theatre.
It's a question and answer session so it covers a wide range of topics..one topic is that we have learn't from the mistakes but have been unable to avoid making those same mistakes again that created the 1930's depression and the 1937 situation.
Another topic... the Euro is mentioned (Greece and Spain) and it's 5 minutes of pure quality humour (44.0/105.15)... Quote.. "Eurocrates speak like Yes Minister ...They talk in English but underneath is subtitles of what they are really saying." He goes on to say that he has no answers to deal with the Euro problem as there are not enough economic mechanisms available.

Paul Krugman is an American economist (http://en.wikipedia.org/wiki/Economist), Professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs (http://en.wikipedia.org/wiki/Woodrow_Wilson_School_of_Public_and_International_ Affairs) at Princeton University (http://en.wikipedia.org/wiki/Princeton_University),

skid

22-06-2012, 09:24 AM

http://r20.rs6.net/tn.jsp?e=001mAhKlSrsWhaUMVSo6V5lsUbm-LwkLmf2zm_lSkw9Jau_OVIaw8onZSFSQdb69t4ynGd3MEuv4KK dOpiFNHSKlQ2K-GXkkOJnixTW8pU6buKxsrBTh7vaTw==

skid

22-06-2012, 09:27 AM

These come to my email for free

skid

23-06-2012, 08:50 AM

http://www.naturalnews.com/036257_Greece_economic_collapse_hospitals.html

slimwin

23-06-2012, 11:03 AM

Wow, and I see that magazine has a cure for any cancer advertised for just $5.15 per day. The Greek MOH should get onto that!

skid

26-06-2012, 08:13 AM

As long as not to many happen at once--Iceland is obviously much better set up than say greece where almost half the rich dont pay taxes--still a good case of ''when theres a will,theres a way''

skid

05-07-2012, 09:50 AM

http://www.bloomberg.com/news/2012-07-02/brics-priced-for-economic-meltdown.html If your a fan of the emerging markets BRICK ,have a look at this article

tricha

16-01-2013, 11:43 AM

Dead cat bounce, is it still on, you bet!:eek2:
Aftershock, something most people in NZ can relate to.
Interesting times ahead folks, we would all like to think that, we are back to normal. Most people think we are.
If you take a good hard look, are we?.
Does it really matter for me, not really, theres not much more I can do, basically debt free, own rentals and land.
Living the good life.

I'm buying a copy of this book, to keep me on my toes. Anyone read it yet?

Robert Wiedemer

http://www.peakprosperity.com/sites/default/files/imagecache/guest_photo/content/guest/photo/robert-wiedemer.jpg

Robert A. Wiedemer co-wrote the landmark book that predicted the current downturn in the economy in 2006,America's Bubble Economy (http://www.amazon.com/gp/product/047175367X/ref=as_li_ss_tl?ie=UTF8&camp=1789&creative=390957&creativeASIN=047175367X&linkCode=as2&tag=chrismartenso-20), published by John Wiley. As Paul Farrell, Senior Investment Columnist at Dow Jones MarketWatch recently said, “In short,America’s Bubble Economy'sprediction, though ignored, was accurate.” Kiplinger’s chose it as one of the best business books of 2006.
His following book, Aftershock (http://www.amazon.com/gp/product/0470918144/ref=as_li_ss_tl?ie=UTF8&camp=1789&creative=390957&creativeASIN=0470918144&linkCode=as2&tag=chrismartenso-20), was published by John Wiley in November 2009. It was chosen by Smart Money magazine as one of the five best investment books of 2009. Aftershock Second Edition was published in August 2011 and became a New York Times and Wall Street Journal Bestseller. Aftershock has also received widespread international interest. It has become a bestseller in Korea and has been translated into Chinese and Japanese. Aftershock and America’s Bubble Economy have been the subject of articles in the major press including the Wall Street Journal, Financial Times, The Hedge Fund Journal, Euromoney, Barrons, Reuters, AP, and others.
He speaks to groups of investors, financial analysts and economists including the New York Hedge Fund Roundtable, the World Bank, and the National Press Club. He is a frequent commentator on TV including CNBC and Fox Business News.
He graduated from the University of Texas with a BS in 1982 and from the University of Wisconsin with an MS in Marketing in 1988.

Skol

16-01-2013, 07:17 PM

skid

17-01-2013, 08:41 AM

Bank those profits Skol,but dont get to cocky about the new year.
There are still alot of reasons why things could
get nasty -gotta stay on your toes
Those dreamliners are causing a few worries ATM--I hope they get that worked out ,so we can still get relatively cheap tickets. Airlines going belly up would not be good for this traveler.

elZorro

17-01-2013, 09:36 PM

Who to believe?

Extract from a research brief by by C. Fred Bergsten and Joseph E. Gagnon, at Peterson Institute for International Economics, published December 2012:

More than 20 countries have increased their aggregate foreign exchange reserves and other official foreign assets by an annual average of nearly $1 trillion in recent years. This buildup — mainly through intervention in the foreign exchange markets — keeps the currencies of the interveners substantially undervalued, thus boosting their international competitiveness and trade surpluses. The corresponding trade deficits are spread around the world, but the largest share of the loss centers on the United States, whose trade deficit has increased by $200 billion to $500 billion per year. The United States has lost 1 million to 5 million jobs as a result of this foreign currency manipulation.

1 Comment » (http://www.sharetrader.co.nz/#postcomment)

http://0.gravatar.com/avatar/3ed0d51c06412b054f25cb26d254da88?s=32&d=identicon&r=GYou’ve got to be kiddin us. The US has manipulated its own currency with QE1,2,3, to make itself more competitive. Its problem is that by exporting its own industries to cheap labour countries it has lost not only jobs but its tax base. Of course some people benefit and its the 1% – the rest are floundering. Dumb smucks like Australia have been caught in the headlights and have foolishly allowed its currency to rise thus killing off important industries. The US leadership is so wedded to the one percent that it has forgotten to look after its own people and is now paying the price with a debt it can’t reduce. That little tax hike for the rich ain’t worth an economic bumper in the scheme of things and would barely pay a months installment on an interest only loan. If it was to reign in spending – or face interest rates like it has forced on countries like Greece, Italy and France it would be just as bankrupt as them and face almost certain economic disintegration. Or have I missed something?
Comment by mdelmege — January 4, 2013

skid

18-01-2013, 11:17 AM

Youve seen SURVIVOR--Dont worry about the rest-just look after yourself-go for the money--rags to riches at the expense of others--the American way?

tricha

18-01-2013, 10:37 PM

tricha,

I like the part that says ;

"He graduated in from the University of Texas with a BS in 1982".

Stockmarkets up 13-28% in the last year, you stick with Bobby and his BS. lol

It doesn't get any better than this atm for me.

Neither me Skol, but I've got life insurance and its called gold! And I'm reading the book, because like Skid suggests, I do not want to get to cocky.

skid

19-01-2013, 08:29 AM

tricha

19-01-2013, 12:19 PM

Is the sharemarket in a bubble??
Well,theres alot of money around from bailouts and quantitative easing--interest rates[especially on Bonds]are practically zero-so everyone has flocked to equities.
What will happen if one of those variables changes --an interest rate rise [making bonds more attractive]or no more money injections from the big governments[Europe and Japan have jumped on board lately with QEs of their own.[and share markets have responded]
but of course there are so so many out of work still,everywhere,and more and more debt.
Every measure that gets taken is more or less for the reason of preventing some economic calamity,and the share market motors on -things are great?
Does anyone really believe it can go on forever like this and if not how much longer ?
Another 13-28% this year?

All I can say Skid, keep a close eye on the oil price. This thread and the peak oil thread are basically the same thing.
Happy hunting!
Oil Price Shocks and the Recession of 2011? Ten of the last 11 recessions were preceded by oil price hikes.Ronald Bailey (http://reason.com/people/ronald-bailey/all) | March 8, 2011

Oil prices surged to near $107 per barrel yesterday and regular gasoline is going for $3.51 per gallon. Last March oil sold for around $80 per barrel and gas cost about $2.79 per gallon. The uprisings throughout the Middle East are in part responsible for the recent uptick in prices. For example, the fighting in Libya has reduced global oil production by about one million barrels per day. On the other hand, members of the Organization of Petroleum Exporting Countries (OPEC) are boosting their output (http://www.lebanonews.net/mainhl2.asp?hlid=6330) by a similar amount to make up for the shortfall. Democrats in Congress are calling upon President Barack Obama to damp down prices by selling off oil from the Strategic Petroleum Reserve.
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Of course, the global oil market is pricing in worries that production could be disrupted if protesters in other major OPEC producers such as Saudi Arabia, Kuwait, and Iran began to demand greater freedom. What would happen to the U.S. economy if petroleum prices continue their rapid rise? University of California, San Diego, economist James Hamilton noted in a recent study that 10 out of 11 post-World War II recessions (http://weber.ucsd.edu/~jhamilto/#working) [PDF] in the United States were preceded by a sharp increase in the price of crude petroleum. The only exception was the mild recession of 1960-61 for which there was no preceding rise in oil prices.
Hamilton has also written a fascinating short history (http://weber.ucsd.edu/~jhamilto/#working) [PDF] of U.S. and global oil price shocks. Until 1974 the United States was both the world’s biggest consumer and producer of crude oil. Although domestic oil production has recently upticked, the U.S. today produces about half the oil it did in 1971. It still is the biggest consumer.
It turns out that boom/bust price shocks have been a feature of oil production ever since Edwin Drake drilled his first well in Pennsylvania in 1859. Before Drake’s well crude oil was being sold for the equivalent of $2,000 per barrel (2009 dollars). After Drake’s discovery, the price of oil collapsed by 1861 to about $2.50 per barrel. In those days, the products of crude oil chiefly competed against ethanol as illuminants. Oil became increasingly important to the U.S. economy as it took over as the chief transport fuel. In 1900, there were 0.1 internal combustion-engine vehicles per 1,000 residents, rising to 87 by 1920, and reaching 816 in 2008.
Between 1915 and 1920 oil consumption in the U.S. nearly doubled. A gasoline “famine” broke out in 1920 on the West Coast, provoking state governments to issue ration cards and prosecute“joyriders.” The famine preceded the recession that began in January 1920. The giant oil fields in Texas, California, and Oklahoma came online and oil prices fell 40 percent between 1920 and 1926. By 1931, oil prices had fallen an additional 66 percent. To prevent overproduction, states began to set pumping quotas and Depression-era federal legislation prohibited interstate shipments of oil produced in violation of state regulatory limits. These restrictions did prevent waste, but also boosted prices for producers.
The price shocks after the World War II were generally associated with geopolitical events that significantly disrupted global production. For example, Iran nationalized oil production in 1951 and during the Korean War the U.S. Office of Price Stabilization froze oil prices. In 1956 war broke out when Egypt nationalized the Suez Canal, disrupting oil imports. The biggest geopolitical event for oil prices was the 1973 OPEC oil embargo, which was imposed to punish countries that had supported Israel after it had been attacked by Egypt and Syria. The price of oil doubled. In 1979, the Iranian Revolution resulted in supply disruptions that were then made even worse by the outbreak of the Iran/Iraq War in 1980. Still, in the 1980s, global oil prices collapsed to $12 per barrel.
The next run up in price was associated with Iraq’s invasion of Kuwait and the First Persian Gulf War in 1990. While oil prices slowly rose through most of the 1990s, the U.S. and global economy both continued to expand. The 1997 East Asian Financial Crisis led to another collapse during which oil prices once again fell to $12 per barrel by the end of 1998. “A price that perhaps never will be seen again,” writes Hamilton. After 2001, Hamilton argues that oil production did not keep up with global economic growth. The result was that the price of oil eventually reached its highest level in modern history, about $142 per barrel in the summer of 2008. Interestingly, the U.S. economy entered what would become the Great Recession in December 2007. By December 2008, the price of oil had dropped to just over $30 per barrel.
Hamilton is not arguing that oil price shocks are the sole cause of recessions, but that they tip an already vulnerable economy into contraction. A 2010 study (http://search.stlouisfed.org/search?q=cache:p8If3NjoVjUJ:research.stlouisfed.or g/wp/2010/2010-007.pdf+oil+price+business+cycle&client=stlfed&output=xml_no_dtd&proxystylesheet=stlfed&ie=UTF-8&site=stlfed&access=p&oe=UTF-8) by economists at the St. Louis Federal Reserve Bank agrees: “For most countries, oil shocks do affect the likelihood of entering a recession. In particular, an average-sized shock to WTI [West Texas Intermediate crude] oil prices increases the probability of recession in the U.S. by nearly 50 percentage points after one year and nearly 90 percentage points after two years.” On the other hand, a 2005 study (http://emf.stanford.edu/publications/emf_sr_9_the_economic_consequences_of_higher_crude _oil_prices/) by the Stanford Energy Modeling Forum found that “when oil prices move gradually higher (perhaps somewhat erratically), as they have done over the last several years, they do not directly result in economic recessions, even though the economy may grow modestly slower.” Gradual price increases do not derail economic growth because consumers and entrepreneurs are able to adjust smoothly to them.
So how do oil shocks cause recessions? Hamilton and many other analysts note that the actual amount spent on oil relative to the overall size of the economy initially suggests that the effect of a price increase should be relatively small. For example, as a result of the 1973 oil embargo, the world spent an extra $5.1 billion ($23 billion in 2009 dollars) on oil. Yet, U.S. real GDP declined by 2.5 percent, which is about $38 billion ($164 billion).
One of the key ways oil price hikes negatively affect the U.S. economy is by provoking a decline in demand for new automobiles. Unemployed autoworkers and idled factories can’t be rapidly deployed to other sectors. In addition, uncertainty over oil prices also leads people and firms to postpone purchases of capital and durable goods. While higher oil prices contribute to recessions, lower oil prices do not appear to have much effect on economic expansions. People may postpone buying a new car when gas prices are high, but they don’t rush out to buy one just because pump prices are low.
So will the recent run up in the price of crude push the U.S. economy back into recession? The good news is that the U.S. economy grew at a rate of 3.2 percent (http://online.wsj.com/article/SB10001424052748703956604576109772560128768.html) in the most recent quarter, and gross domestic product has returned to the level it reached in 2007. On March 1, Federal Reserve Chairman Ben Bernanke testified (http://www.federalreserve.gov/newsevents/testimony/bernanke20110301a.htm) before the Senate’s Committee on Banking, Housing, and Urban Affairs that “sustained rises in the prices of oil or other commodities would represent a threat both to economic growth and to overall price stability, particularly if they were to cause inflation expectations to become less well anchored.”
The price of oil spiked briefly in 2003 as the result of a strike in Venezuela and the launching of the Second Persian Gulf War. Hamilton points out that actual oil production didn’t decline that much and he believes that strong economic growth rode out that short-term price increase. More worryingly, back in 1973 commodity prices also surged dramatically, which coupled with a doubling in the price of oil, resulted in a deep recession. So, is this 1973 or 2003?
Reason's Science Correspondent Ronald Bailey (rbailey@reason.com) is author of Liberation Biology: The Scientific and Moral Case for the Biotech Revolution (http://reason.com/admin/lb/) (Prometheus Books).

tricha

19-01-2013, 01:16 PM

Gails numbers make sense, where does it leave me. Slowly out of the market. it started yesterday, from 100% in , to 80% in and 20% cash., I dropped my OZ minerals, copper stocks are climbing at a huge rate of knots.

"In gold we trust"
2013: Beginning of Long-Term Recession?By Gail Tverberg (http://www.financialsense.com/contributors/gail-tverberg)01/08/2013

We have been hearing a lot about escaping the fiscal cliff, but our problem isn’t solved. The fixes to date have been partial and temporary. There are many painful decisions ahead. Based on what I can see, the most likely outcome is that the US economy will enter a severe recession by the end of 2013.
My expectation is that credit markets are likely see increased defaults, as workers find their wages squeezed by higher Social Security taxes, and as government programs are cut back. Credit is likely to decrease in availability and become higher-priced. It is quite possible that credit problems will adversely affect the international trade system. Stock markets will tend to perform poorly. The Federal Reserve will try to intervene in credit markets, but if the US government is one of the defaulters (at least temporarily), it may not be able to completely fix the situation.
Less credit will tend to hold down prices of goods and services. Fewer people will be working, though, so even at reduced prices, many people will find discretionary items such as larger homes, new cars, and restaurant meals to be unaffordable. Thus, once the recession is in force, car sales are likely to drop, and prices of resale homes will again decline.
Oil prices may temporarily drop. This price decrease, together with a drop in credit availability, is likely to lead to a reduction in drilling in high-priced locations, such as US oil shale (tight oil) plays.
Other energy sources are also likely to be affected. Demand for electricity is likely to drop. Renewable energy investment is likely to decline because of less electricity demand and less credit availability. By 2014 and 2015, less government funding may also play a role.
This recession is likely be very long term. In fact, based on my view of the reasons for the recession, it may never be possible to exit from it completely.
I base the foregoing views on several observations:
1. High oil prices are a major cause of the United States Federal Government’s current financial problems. The financial difficulties occur because high oil prices tend to lead to unemployment, and high unemployment tends to lead to higher government expenditures and lower government revenue. This is especially true for oil importers.

http://imagesize.financialsense.com/http://www.financialsense.com/sites/default/files/users/u673/images/2013/0108/us-government-income-and-outlay-e1348000967757.jpg (http://www.sharetrader.co.nz/sites/default/files/users/u673/images/2013/0108/us-government-income-and-outlay-e1348000967757.jpg)
Figure 1. US Government Income and Outlay, based on historical tables from the White House Office of Management and Budget (Table 1.1). *2012 is estimated by OMB. http://www.whitehouse.gov/omb/budget/Historicals2. The United States and world’s oil problems have not been solved. While there are new sources of oil, they tend to be sources of expensive oil, so they don’t solve the problem of high-priced oil. Furthermore, if our real economic problem is high-priced oil (http://ourfiniteworld.com/2012/09/26/high-priced-fuel-syndrome/), and we have no way of permanently reducing oil prices, high oil prices can be expected to cause a long-term drag on economic growth.
3. A cutback in discretionary spending is likely. US workers are already struggling with wages that are not rising as fast as GDP (Figure 2). Starting in January, 2013, US workers have the additional problem of rising Social Security taxes, and later this year, a likely cutback in government expenditures. The combination is likely to lead to a cutback in discretionary spending.

http://imagesize.financialsense.com/http://www.financialsense.com/sites/default/files/users/u673/images/2013/0108/wage-base-divided-by-gdp.jpg (http://www.sharetrader.co.nz/sites/default/files/users/u673/images/2013/0108/wage-base-divided-by-gdp.jpg)
Figure 2. Wage Base (sum of “Wage and Salary Disbursements” plus “Employer Contributions for Social Insurance” plus “Proprietors’ Income” from Table 2.1. Personal Income and its Distribution) as Percentage of GDP, based on US Bureau of Economic Analysis data. *2012 amounts estimated based on part-year data.4. The size of our current financial problems, both in terms of US government income/outgo imbalance and debt level, is extremely large. If high oil prices present a permanent drag on the economy, we cannot expect economic growth to resume in a way that would fix these problems.
5. The financial symptoms that the US and many other oil importers are experiencing bear striking similarities to the problems that many civilizations experienced prior to collapse, based on my reading of Peter Turchin and Sergey Nefedov’s book Secular Cycles (http://www.amazon.com/exec/obidos/ASIN/0691136963/financialsenseon). According to this analysis of eight collapses over the last 2000 years, the collapses did not take place overnight. Instead, economies moved from an Expansion Phase, to a Stagflation Phase, to a Crisis Phase, to a Depression/Intercycle Phase. Timing varies, but typically totals around 300 years for the four phases combined.
It appears to me that the corresponding secular cycle for the US began in roughly 1800, with the ramp up of coal use. Later other modern fuels, including oil, were added. Since the 1970s, the US has mostly been experiencing the Stagflation Phase. The Crisis Phase appears to be not far away.
The Turkin analysis started with a model. This model was verified based on the experiences of eight agricultural civilization (beginning dates between 350 BCE and 1620 CE). While the situation is different today, there may be lessons that can be learned.
Below the fold, I discuss these observations further.
Issue 1. High oil prices tend to lead to government financial problems.
Food prices tend to rise at the same time as oil prices, partly because oil is used in the production of food (for example, plowing, irrigation, herbicides and insecticides, harvesting, transport to market). Also, because oil is in short supply, corn is now being grown for use as ethanol to be used as a gasoline-extender. Growing additional corn puts pressure on food prices, because it drives up the price of land and encourages farmers to put more land into corn production, and less into other crops.
The reason governments are affected by high oil and food prices is as follows. When oil and food prices rise, buyers cut back in discretionary spending, so as to have enough for “basics,” including food and commuting expenses. Workers are laid off in discretionary industries, such as vacation travel and restaurants. These laid off-workers pay less taxes, and sometimes default on loans. Governments are quickly drawn into these problems, for two reasons:

Their tax revenue is lower, because of layoffs in discretionary sectors.
Their expenditures are higher, because of the need to pay more unemployment benefits, provide economic stimulus, and bail out banks.

Oil importers are especially affected, because they are also paying out funds to oil exporters. The countries with well-publicized financial problems (including several European countries, the United States, and Japan) tend to be major oil importers.
Oil exporters are not adversely affected to the same extent, because they have additional revenue from higher prices on oil they are exporting. They may still be somewhat affected because of rising food prices, and the fact that higher oil revenues do not necessarily go to those buying food. A recent study shows that food shortages helped trigger the Arab Spring protests (http://www.voanews.com/content/article-2011-food-price-spikes-helped-trigger-arab-spring-135576278/149523.html).
Part of the reason that the impact of high oil prices is as severe as it is, is because there are many follow-on effects. For example, if oil prices rise, the price of shipping goods of all types rises. If businesses are able to pass through these higher costs, discretionary income of buyers for other goods falls. If not, businesses find that their higher costs lead to lower profits. To bring profit margins back up to an acceptable level, businesses may lay off workers.
As another example, prices of homes are likely to be adversely affected by high oil prices, because a family with inadequate discretionary income will forgo moving to a larger home, and may even default on a mortgage.
It should be noted that the impact of high oil prices doesn’t completely go away unless oil prices go down and stay down. Businesses can partly mitigate the impact of high oil prices by laying off workers in discretionary segments. Some businesses will fail completely, however. Replacement may be by an overseas company, with a lower cost structure that uses less oil. See my post on energy leveraging (http://ourfiniteworld.com/2012/12/06/energy-leveraging-an-explanation-for-chinas-success-and-the-worlds-unemployment/).
Workers generally must permanently adjust their budgets to higher food and oil prices. This is often difficult to do. The lack of jobs is a particular problem–something that workers cannot fix by themselves. Government programs can mitigate the job shortfall, by paying benefits to unemployed workers and by reducing interest rates, so that businesses can more easily make investments that will lead to more employment. These programs are costly, though, and are a major cause of the current mismatch between government income and expense.
Issue 2. World oil problems have not been solved.
There have been a number of reports this years, such as one by the International Energy Agency (http://ourfiniteworld.com/2012/11/13/iea-oil-forecast-unrealistically-high-misses-diminishing-returns/), seeming to suggest that the world oil problem has been solved. These analyses are incomplete. They do not recognize that our real problem is a financial problem. Our economy (everything from interstate highways to electric transmission to Social Security programs) was put in place using cheap ($10 or $20 barrel) oil. Shifting to today’s high cost of oil (up near $100 barrel) causes severe economic dislocations. There is no more cheap oil to be found, however, because oil companies extracted the cheapest to extract oil first and now the “easy oil” is gone. (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aH57.uZe.sAI)
The impression one gets from reading the papers (http://www.bloomberg.com/news/2012-12-19/american-oil-most-since-first-well-in-1859-signals-independence.html) is that US oil production is having a huge impact on world oil production. If a person looks at the numbers, world oil production is close to flat. Rising US production makes up for falling European production, but doesn’t do a whole lot more.

http://imagesize.financialsense.com/http://www.financialsense.com/sites/default/files/users/u673/images/2013/0108/world-crude-oil-production-through-2012.jpg (http://www.sharetrader.co.nz/sites/default/files/users/u673/images/2013/0108/world-crude-oil-production-through-2012.jpg)
Figure 3. World crude (http://www.sharetrader.co.nz/#) oil production, based on EIA data. *2012 estimated based on partial year data.The rise in United States oil production is indeed somewhat helpful, but we are still many years away from being “energy independent” and even farther from becoming “oil independent.” The real issue is high oil prices, and these are not being fixed.

http://imagesize.financialsense.com/http://www.financialsense.com/sites/default/files/users/u673/images/2013/0108/us-crude-oil-prices-in-2012-dollars.jpg (http://www.sharetrader.co.nz/sites/default/files/users/u673/images/2013/0108/us-crude-oil-prices-in-2012-dollars.jpg)
Figure 4. US crude oil prices (based on average prices paid by US refiners for all grades of oil based on EIA data) converted to 2012$ using CPI-Urban data from the US Bureau of Labor Statistics.Our financial problems are here and now, in 2013. Promises of hoped-for higher oil production in several years at a still very high price don’t fix today’s financial problems. In fact, they will likely continue to contribute to financial problems in the future.
Issue 3. Declining wages and increased taxes can be expected to lead to a decline in discretionary spending.
As indicated at the beginning of the post, wages (including earnings of businesses owners considered as “proprietors,” but not including “transfer payments” such as Social Security and unemployment insurance) have not been growing as fast as GDP since 2000. Below is a repeat of Figure 2 shown at top of post.

http://imagesize.financialsense.com/http://www.financialsense.com/sites/default/files/users/u673/images/2013/0108/wage-base-divided-by-gdp.jpg (http://www.sharetrader.co.nz/sites/default/files/users/u673/images/2013/0108/wage-base-divided-by-gdp.jpg)
Figure 2. Wage Base (sum of “Wage and Salary Disbursements” plus “Employer Contributions for Social Insurance” plus “Proprietors’ Income” from Table 2.1. Personal Income and its Distribution) as Percentage of GDP, based on US Bureau of Economic Analysis data. *2012 amounts estimated based on part-year data.There seem to be several reasons behind this decline. One reason, already mentioned, is high oil prices leading to US layoffs, because of decreased discretionary expenditures.
Another reason for the decline is increased automation. Electricity can often be substituted for human labor, reducing costs, but also reducing jobs. Economists seem to term this change higher labor productivity (http://www.investopedia.com/terms/l/labor-productivity.asp#axzz2HPHxo900). They also seem to believe that new jobs will appear from somewhere, but in practice, this is not happening. Instead, lack of jobs is part of what is leading to recessionary influences.
Another reason for the decline is increased competition from countries with lower labor costs and lower fuel costs. China joined the World Trade Organization (https://www.wto.org/english/thewto_e/countries_e/china_e.htm) in December 2001, and its manufacturing (and thus use of fuels) increased dramatically shortly thereafter.

http://imagesize.financialsense.com/http://www.financialsense.com/sites/default/files/users/u673/images/2013/0108/china-energy-consumption-by-source-e1347409856398.jpg (http://www.sharetrader.co.nz/sites/default/files/users/u673/images/2013/0108/china-energy-consumption-by-source-e1347409856398.jpg)
Figure 5. China’s energy consumption by source, based on BP’s Statistical Review of World Energy data.Another reason is demographic. Baby boomers are reaching retirement age. This has already begun affecting the number of individuals who retire each year. In the future, the number of retirees can be expected to increase further.
In total, we see a very large drop in the percentage of US citizens with jobs, starting about 2000 (Figure 6). This is very close to the time that China ramped up its growth (Figure 5).

http://imagesize.financialsense.com/http://www.financialsense.com/sites/default/files/users/u673/images/2013/0108/us-employment-as-pct-of-population-v2-e1347841089253.jpg (http://www.sharetrader.co.nz/sites/default/files/users/u673/images/2013/0108/us-employment-as-pct-of-population-v2-e1347841089253.jpg)
Figure 6. US Number Employed / Population, where US Number Employed is Total Non_Farm Workers from Current Employment Statistics of the Bureau of Labor Statistics and Population is US Resident Population from the US Census (http://www.census.gov/compendia/statab/cats/population.html). 2012 is partial year estimate.In calendar years 2011 and 2012, workers’ contributions for Social Security funding were temporarily reduced by 2% of wages, as a way of stimulating the economy. As of January 1, 2013, this temporary reduction was removed. For a couple with combined wages of $100,000, take-home pay is thus being decreased by $2,000 per year. With less disposable income, workers can be expected to cut back somewhere–buying a larger home, buying a new car, or going out to eat.
So far, only a small amount of other tax increases have been put in place, and only a few cuts have been made. More tax increases or benefit cuts will be needed later this year to bring revenue and expense into better alignment. Any such change will tend to have a recessionary impact, because citizens’ discretionary incomes will be affected.
Issue 4. The spending gap (http://www.sharetrader.co.nz/#) and the amount of debt look too big to be fixable without excellent economic growth.
As noted above, wages have not been keeping up with GDP. The majority of federal taxes are based on wages, so in my comparisons, I use wages, rather than GDP, as a base.
If we use the wage base from Figure 2, the amount of government outgo vs income (all levels, not just federal) is as follows:

http://imagesize.financialsense.com/http://www.financialsense.com/sites/default/files/users/u673/images/2013/0108/us-government-spending-as-pct-of-wage-base.jpg (http://www.sharetrader.co.nz/sites/default/files/users/u673/images/2013/0108/us-government-spending-as-pct-of-wage-base.jpg)
Figure 7. US Government Spending (all levels) as percentage of Wage Base, as defined in Figure 2, above, based on US Bureau of Economic Analysis data.Based on Figure 7, the issue in recent years has been primarily rising expenditures. These higher expenditures would seem to be partly because of high-priced oil, but also because of other influences noted above that are leading to declining employment. The amount of the gap is close to 15% of wages–something that is very hard to fix. Even the current increase in Social Security taxes (“only” 2% of wages) will exert downward pressure on discretionary spending.
A related issue is that compared to wages (using the same wage base as in Figure 2), debt of all kinds is extremely high.

http://imagesize.financialsense.com/http://www.financialsense.com/sites/default/files/users/u673/images/2013/0108/us-debt-as-percentage-of-wage-base.jpg (http://www.sharetrader.co.nz/sites/default/files/users/u673/images/2013/0108/us-debt-as-percentage-of-wage-base.jpg)
Figure 8. US Debt as a Percentage of the Wage Base, where the Wage Base is as defined in Figure 2, and Federal Debt is from Treasury Direct (http://www.treasurydirect.gov/govt/reports/pd/mspd/mspd.htm), and other types of debt are from the Federal Reserve Z.1 report.Government debt is in now more than household debt of all kinds, including mortgage, credit card, auto, and student loans. It is close to two times the wage base used in this analysis.
One issue with paying down debt is that during the pay-down period, the government (or individual) reducing the debt “feels poorer,” because funds available for spending on goods and services needed today is lower. This happens because some current tax revenue, or some current wages, must be used to pay down debt, and thus is not available for today’s spending. This is a turn-around from the increasing debt situation experienced many times in the past. For example, part of the reason times seemed good in the 2002-2006 period was because people were able to refinance their homes and use the funds to buy a new car or add on a family room. If we are forced to pay down debt, we have the reverse effect.
Issue 5. Similarity to “Secular Cycles” of Peter Turchin and Sergey Nefedov.
Throughout the ages, many economies that have experienced long-term expansion. Eventually, they reached limits of some sort and collapsed. The book Secular Cycles (http://www.amazon.com/exec/obidos/ASIN/0691136963/financialsenseon) by Peter Turchin and Sergey Nefedov takes an analytical approach to looking such past cycle. They developed a fairly complex model of what they would expect over time, in terms of trends in wages, prices, population, income inequality, and other variables. They then examine historical records (relating to eight civilizations in four countries, with “start dates” between 350 BCE and 1620 CE) to see whether this predicted pattern was born out in practice. In general, the authors found good agreement with the predicted model.
Typically, civilizations analyzed were reaching upper limits in population growth because of limits on food availability, but sometimes limits on water or fuel also were important. The model predicted four phases (expansion, stagflation, crisis, and depression/intercycle). The typical length of the entire cycle was 300 years. The length of the various segments was fairly variable. The stagflation stage often lasted 50 or 60 years. The crisis stage tended to be shorter, more often in the 20 to 50 year range. There often was overlap between phases, with a civilization seeming to cycle back and forth between, say, expansion and stagflation.
In the model, there are various feedback loops. For example, as the number of workers rises relative to the amount of land, the price of land and food tends to rise. Jobs outside of agriculture do not rise proportionately, so wages of common workers tend to fall in inflation adjusted terms. With lower wages for common workers, nutrition declines. Eventually, the population becomes weakened, and population declines. There are also other players–the elite and the state itself.
Some characteristics of the four phases are as follows:

Expansion phase (growth) – Increasing population, relatively low taxes, political stability, low grain prices, and high real (inflation-adjusted) wages.
Stagflation phase (compression) – Slowing population growth, much heavier taxes needed to support a growing elite class, low but increasing political instability, rising grain prices, declining real wages for most workers, increasing indebtedness, and increasing urbanization.
Crisis phase (state breakdown) – Population declining from the peak (typically by disease or by deaths from warfare), high income inequality, political instability increasing to a peak, high but very variable grain prices, high urbanization, tax system in a state of crisis, peasant uprisings.
Depression/intercycle – Low population, attempts to restore state, declining economic inequality, grain prices decreasing but variable.

It seems to me that the United States and much of the world are going through a cycle much as described by Turchin. The Growth Phase of our current cycle seems to have begun around 1800, with the rise of coal use. Stagflation in the United States seems to have started with the drop in US oil production in 1970. All of the government budget and debt problems now seem to suggest that we are reaching the Crisis Phase.
Obviously, there are differences from the civilizations modeled, because we now live in a much more integrated world. Furthermore, earlier societies did not depend on oil and other modern fuels the way we do today. We do not know how the current situation will play out, but the comparison is concerning.

About Gail Tverberg (http://www.financialsense.com/contributors/gail-tverberg)http://www.sharetrader.co.nz/sites/default/files/pictures/picture-673.jpg
Gail Tverberg (http://www.financialsense.com/contributors/gail-tverberg)
Actuary
Other Tel: 407.443.0505
GailTverberg @ comcast.net
http://ourfiniteworld.com/

skid

20-01-2013, 09:45 AM

In my opinion it will taqke quite a while for the American Empire to crumble[but it will inevitably will]
The main reason:-the American Military[the worlds largest employer]
With the most sophisticated weapons ever produced,America will increasingly invent reasons to take other peoples oil to prolong its survival.
This wont do much for the world economy [or the environment]but it will help the US [in the short to medium term]
After all,its the American way to look after no 1 isnt it?[by no1,I mean the elite]the normal joe lunch box will continue to suffer.
The article refers to a reduction in workers wages causing a weakend work force due to degrading nutrition.
Well,they have already done a pretty good job of that even for the wealthy. Its a fat culture that is getting sicker by the day--health bills will skyrocket.
Its just an extension of the psychology of wanting the next new shiny toy,with disregard to the environment,except this time its the taste buds with disregard to the body.
At some stage you have got to pay the piper though.
Even though you have drones to do youir dirty work for you sooner or later the house of cards will fall--unless of course there is fundamental change in thinking.

skid

21-01-2013, 12:45 PM

''The shadow effect''
http://www.marketwatch.com/story/time-bomb-to-market-meltdown-ticks-louder-2013-01-18?Link=obnetwork

elZorro

22-01-2013, 07:27 AM

''The shadow effect''
http://www.marketwatch.com/story/time-bomb-to-market-meltdown-ticks-louder-2013-01-18?Link=obnetwork

Good articles, Skid and Tricha. Here's one about deflation from INO.

http://www.ino.com/blog/2013/01/the-secret-word-deflation-and-the-next-five-years-of-financial-turmoil/

skid

22-01-2013, 05:58 PM

Deflation would be the ugliest outcome of all[for me at least]
Heres the quandary--If we get big time Deflation then ''cash is king''[and assets are trashed] But if assets are turned into cash before it hits the fan[sell property.gold,other assets and put money in the bank]--then you are open to a good ole fashion run on the bank or bank failure.
Outside of getting a large amount of physical cash[property could be a million bucks][can you even do that?]--your screwed.

tricha

22-01-2013, 11:28 PM

Good articles, Skid and Tricha. Here's one about deflation from INO.

http://www.ino.com/blog/2013/01/the-secret-word-deflation-and-the-next-five-years-of-financial-turmoil/

Dam, two sides to the coin elZerro, what makes life interesting. How does one cover for both :confused:
Deflation is still not obvious to the majority. Even now, most economists expect continued recovery, mild inflation
and a rising stock market. But the essays on deflation.com are 180 degrees apart from conventional thinking. It may be too late for you to get out at the top, but there's still
time to learn how to sidestep the worst of the crunch.
People will be using the secret "d" word much more often over the next five years. By the end of that time, they will
also be using its cousin "d" word, depression.
By Elliott Wave International

skid

24-01-2013, 07:41 AM

They have kicked the can down the road on the debt ceiling[allowing the US gov.to pay its bills for another 3 months]
They are sure not very good at making decisions over there

janner

26-01-2013, 06:52 PM

And the ratings agencies will be taking note and responding accordingly ... All a cunning ploy to devalue the USD ... Shame about those on the recieving end (e.g. NZ inc!)

With all of these currency wars going on. Would it not be a good time to invest in Pulp and Paper ??..

Nah !!.. To many fires around at present..

Printing Ink then !!..

Makes NPX look good..

Disc.. Not holding..

skid

28-01-2013, 09:54 AM

And if a currency war doesn't get results...well,theres always a real war[not by that name of course]

pietrade

28-01-2013, 11:32 AM

And if a currency war doesn't get results...well, there's always a real war[not by that name of course]

for example - http://www.youtube.com/watch?v=a6BlloLf02Y

It really does seem that 'The mad men are running the show'

elZorro

28-01-2013, 03:30 PM

for example - http://www.youtube.com/watch?v=a6BlloLf02Y

It really does seem that 'The mad men are running the show'

Wow, I will transfer this to the gold thread too.

tricha

28-01-2013, 10:36 PM

And if a currency war doesn't get results...well,theres always a real war[not by that name of course]

Currency wars, followed by trade wars!

Who knows, but one does have to try and protect ones self\family. The goverment is not going to help.

Remember the crash of 1929, the day before it happened, the market was exuberant.

skid

29-01-2013, 07:57 AM

Followed by real wars--The people may even think the gov. is helping as they still have the warm fuzzy feeling of cheap petrol in their car-but at what human cost?
If your in a country like the states [and all developed counties]the choice is to cut back on your expectations[or at least try to limit waste]or to carry on at the expense of some less fortunate[and less powerful]group of humanity.
I would imagine those that have adapted [at least to some extent]to this way of thinking would be better suited to weather the economic storm [if it comes]anyway. Little by little

skid

29-01-2013, 08:06 AM

I know,I know-easy for me to say as i go book my ticket for southeast Asia this winter..but in most other ways i keep consumption and waste probably alot lower than most...little by little..I suppose just thinking about it is a start

tricha

30-01-2013, 10:38 PM

skid

31-01-2013, 07:57 AM

So they can finance more of these....

According to the Air Force, each of the sleek, diamond-winged aircraft cost $143 million. Counting upgrades, research and development costs, the U.S. Government Accountability Office estimates that each F-22 cost U.S. taxpayers $412 million.

elZorro

04-02-2013, 08:35 PM

Found this article about European banks. Maybe we're on the luckier side of the world.

A Putrid Smell Is Suddenly Emanating From European BanksWolf Richter (http://www.sharetrader.co.nz/author/wolf-richter), Testosterone Pit (http://www.testosteronepit.com/)|Feb. 2, 2013

By now we should have gotten used to the odor emanating from banks—bailouts, money laundering, Libor rate-rigging, the other misdeeds. But in Europe over the last few days, it was particularly dense.

A nauseating whiff came from Barclays Friday, when it leaked out (http://www.reuters.com/article/2013/02/01/us-barclays-probe-idUSBRE9100E420130201) that it has been under investigation by the Financial Services Authority and the Serious Fraud Office in Britain for illegal fundraising in 2008.

Allegedly, the bank secretly loaned £5.3 billion ($8.4 billion) to one of Qatar’s sovereign wealth funds, which then turned around and with great public fanfare pumped that money back into Barclays—a scheme to raise capital on paper to escape a government takeover during the financial crisis.

Then Crédit Agricole, France’s third largest bank, announced €3.8 billion ($5 billion) in write-downs (http://www.bloomberg.com/news/2013-02-01/credit-agricole-to-book-eu2-68-billion-in-goodwill-writedowns.html), mostly of “Goodwill” due to the “present macro-economic and financial environment.” Goodwill reflects money paid out for certain items in excess of their value—an expense that, by a quirk of accounting, is temporarily parked as an asset on the balance sheet to be expensed eventually. After the write-off, the bank will still have about €14 billion of Goodwill clogging up its balance sheet, and more write-offs are to come. It already wrote off €2.5 billion last year, when it agreed to sell its stake in the Greek bank Emporiki for €1, which it had acquired with impeccable timing in 2006 for €2.2 billion.

Greek banks... oh my! They’re being investigated by Greek financial crime prosecutors (http://www.reuters.com/article/2013/02/01/us-greece-parties-idUSBRE91010O20130201) for €232 million in loans that they handed out to the ruling parties, Prime Minister Antonis Samaras’ New Democracy and the Socialist PASOK. “Suspected crimes against the state,” a court official called it.

The state funds political parties based on their share of the vote, and both parties pledged hoped-for state funding as collateral for these loans. But during the election last June, New Democracy’s share of the vote dropped from 33% to 29% and PASOK’s from 43% to 12%. With it, state funding suddenly collapsed, and some of the loans are turning sour.

Bitter irony: teetering Greek banks, hoping at the time to get bailed out by taxpayers in other countries, funded Greek political parties that then negotiated the bank bailouts with the EU for the benefit of bank investors [likewise, Proton Bank got bailed out in 2011 though it engaged in fraud, embezzlement, and money laundering, when a bomb exploded.... European Bailout Fund For Greek Money Laundering And Fraud (http://www.testosteronepit.com/home/2011/11/17/european-bailout-fund-for-greek-money-laundering-and-fraud.html)]

Still on Friday, SNS Reaal, fourth largest bank in the Netherlands, was bailed out again (http://www.reuters.com/article/2013/02/01/dutchfinance-cenbank-idUSL5N0B11LP20130201)—after already having been bailed out in 2008. This time, it was nationalized. The €10 billion package would cost taxpayers initially €3.7 billion. Stockholders and junior debt holders lost out too, but holders of senior debt and covered bonds were made whole.

There is never an alternative to bailouts. A collapse “would have unacceptably large and undesirable consequences,” according to Finance Minister Jeroen Dijsselbloemsaid. As brand-spanking new President of the Eurogroup, he thus confirmed: bank bailouts will be the norm in the Eurozone.
They’re worried that letting even a smallish bank fail could take down the electron-thin confidence in the entire financial system—just when the debt crisis has been officially declared “over.” And so, based on the operative set of rules, the Dutch government shanghaied its strung-out taxpayers, whose belts are already being tightened by austerity, into paying, once again, for the misdeeds of the bankers.

In Italy, a billowing scandal got new fuel. It kicked off with a criminal investigation (http://www.bloomberg.com/news/2013-01-31/monte-paschi-rating-cut-by-s-p-on-concern-losses-may-increase.html) into Monte dei Paschi di Siena, Italy’s third largest bank, for alleged market manipulation, false accounting, obstructing regulators, and fraud. The bank used derivatives to hide losses during the financial crisis, but these losses are now seeping from the woodwork. So Standard & Poor’s just cut the bank’s credit rating, fearing that the announced losses may just be the tip of the iceberg. That form of financial engineering came to light when new management took a gander at the books. Now a government bailout is in the works. Because there is never an alternative. Taxpayers tighten your belts!

And on Thursday, Deutsche Bank waded deeper into its quagmire of “matters,” among them the Libor rate-rigging scandal, which might cost it €2.5 billion, and the carbon-trading tax-fraud scandal that broke with a televised raid by police on its headquarters. So, more write-downs are due, and the bank announced a €2.2 billion loss for the fourth quarter. “In 2013,” said (http://www.spiegel.de/wirtschaft/unternehmen/ursachenanalyse-des-quartalsverlusts-der-deutsche-bank-a-880821.html) co-CEO Jürgen Fitschen reassuringly, “we will be confronted with more developments in these and other matters.”

And other matters! More revelations to come. Already, there are estimates that these misdeeds would eventually amount to €10 billion. Now suddenly: “Building capital is our top priority,” said (http://www.spiegel.de/wirtschaft/unternehmen/ursachenanalyse-des-quartalsverlusts-der-deutsche-bank-a-880821.html) the other co-CEO Anshu Jain. He wants to do it without diluting current stockholders. “But in this uncertain world, I cannot exclude anything,” he mollified his audience. Turns out, the bank intends to get rid of (http://www.ifre.com/deutsche-plans-credit-asset-sale-to-boost-capital/21066549.article) €16 billion in high-risk credit default swaps by end of March. It might boost its core Tier 1 capital ratio from 8% to 8.5%. More such sales are planned—a wholesale dumping of its credit correlation book, an outgrowth of the financial engineering it used to hide whatever needed to be hidden.

The bitter irony of the financial crisis is just how common the putrid smell has become since. And how routine it has become for these inscrutable institutions with their opaque financial statements to transfer risks and losses to the people. In the US, too, the smell refuses to evaporate (http://dealbook.nytimes.com/2013/01/31/doubt-is-cast-on-firms-hired-to-help-banks/?hp). And nothing indicates that this will change anytime soon.

Weary of all this, the French—whose economy is spiraling deeper into crisis—expressed disdain for their political class; they’re dreaming of authoritarian leadership, a “real leader” who would clean up the mess and “reestablish order.” Read.... Could 87% of the French Really Want A Strongman To Reestablish Order? (http://www.testosteronepit.com/home/2013/1/27/could-87-of-the-french-really-want-a-strongman-to-reestablis.html)

Read more: http://www.testosteronepit.com/home/2013/2/1/the-putrid-smell-suddenly-emanating-from-european-banks.html#ixzz2JugZuuXF

skid

05-02-2013, 03:18 PM

Yep,you want to stay well away from merchant banks like Barclays and HSBC--Very fortunate down under to have some regulations on banks

pietrade

05-02-2013, 04:06 PM

It's all just grist for the mill really. "As long as the matrix exists, humanity cannot be free. The whole truth must be faced: Globalization is centralized tyranny; capitalism has outlasted its sell-by date; matrix "democracy" is elite rule; and "market forces" are imperialism."
see- http://www.cyberjournal.org/200006Matrix.html for some big picture cage-rattling.

skid

07-02-2013, 08:23 AM

http://www.kitco.com/reports/KitcoNews20130206DeC_interview.html

tricha

08-02-2013, 11:47 PM

Just recieved my book, " AFTERSHOCK"

Seen the petrol price lately, can u imagine if the NZ $ goes back to 75 cents. It willl be aftershock to boot .

I'll update u all on this book, in the mean time happy hunting folks.!

tricha

11-02-2013, 10:27 PM

Trade wars are well underway.

US backs washing machine duties US trade authorities approve imposing duties on washing machines from Korea and Mexico that it believes are subsidised or sold too cheaply.

Trade wars and currency wars. Where does this lead to ? Worthless paper money or hard assets.

February 2013 Last updated at 01:37 GMT

Venezuela devalues currency by 32% against the dollar http://news.bbcimg.co.uk/media/images/65792000/jpg/_65792845_bolivar.jpg The devaluation of the bolivar is expected to have an impact on an already rising inflation
Continue reading the main story (http://www.bbc.co.uk/news/world-latin-america-21391984#story_continues_1)

Venezuela has cut the value of its currency against the US dollar by 32%, in an effort to boost its economy.
The widely expected measure ramps up the official exchange rate of the bolivar from 4.3 to 6.3 per US dollar.
It was announced after Vice-President Nicolas Maduro's return from Cuba, where he said President Hugo Chavez gave him instructions on the economy.
The leader has not been seen or heard in public since December, when he went to Havana for cancer treatment.
This is the fifth devaluation of the bolivar since Hugo Chavez' administration started controlling the exchange rate, in 2003.
The previous devaluation was in 2010.
Continue reading the main story (http://www.bbc.co.uk/news/world-latin-america-21391984#story_continues_2) Analysis Yolanda Valery BBC Mundo
Venezuelan economics are not a straightforward business. For a typical housewife, for instance, this devaluation might not make a big difference to everyday life. Not immediately, that is.
She probably does not need to buy US dollars, but she will need to buy food and medicines from an importer as Venezuela relies largely on imports. The combination of exchange and price controls, imposed since 2003, have meant that many of those are difficult to find.
To get even basic products she already has to go on a tour of several stores and be alert and ready to buy when products turn up on the shelves. Or she must rely on a network of friends to alert her when milk, rice, flour, oil and others arrive at a particular shop. And when they do, she will only be allowed to buy a kilo or two. She will have no chance to stock up for herself or for others.
Even with government controls, the capital Caracas is among the most expensive cities in the world. Analysts hope devaluation will bring prices back to reality and stop the exhausting routine of product hunting. The distortions might still go on for a while. But some believe they cannot last forever.

Experts have long considered the bolivar overvalued and the move came as no surprise in the oil-based economy.
As oil exports are calculated in US dollars, a weaker bolivar should mean more cash for the government.
Strict controls to prevent currency going out of the country mean that dollars are normally hard to get in Venezuela, but in recent times this situation had become acute, says the BBC's Sarah Grainger, in Caracas.
Dollars have been trading at four times the official rate on the black market.
'Campaign money' In a country that largely depends on food imports, the scarcity of dollars also led to shortages of products such as sugar and flour.
The new exchange rate is expected to address this situation.
But the measure is also expected to have an impact on the inflation, which has already been climbing.
The leader of the opposition, Henrique Caprilles, criticised on Twitter the fact that the government announced the devaluation on Carnival Friday in South America.
The opposition says the government has waited until after the elections to take the necessary steps in the economy.
"They've spent the money on the campaign, corruption and presents overseas," wrote Mr Caprilles, who lost the presidential elections to Mr Chavez last year.
Mr Chavez went to Cuba on 8 December to treat an undisclosed cancer and has not been seen or heard from since.
Mr Maduro recently said the president was "battling on" and had entered a new stage of treatment, after successfully finishing the post-operative phase.

tricha

27-09-2013, 02:17 PM

R we out of the woods yet?

Who knows? All I know is mankind is pretty stupid. How many people like to live in illusion? you?

Sometimes I do, I think everything will come good again. But then history repeats and shows the stupidity. Anyone seen "The Great Gatsby", great film, nothing like illusion. http://www.youtube.com/watch?v=8ud6haTTfFY
Is Something Ominous in the Cards?By Richard Russell (http://www.financialsense.com/contributors/richard-russell)09/26/2013

The following is an excerpt from Richard Russell's Dow Theory Letters (http://www.dowtheoryletters.com/)
For the first time in history, ALL the major central banks (http://www.financialsense.com/contributors/richard-russell/is-something-ominous-in-cards#) are printing money. One of two things will occur. If they continue to print, their respective currencies will lose their purchasing power, and we'll have inflation or even hyper-inflation. If the central banks pull back on their printing, we'll have crashing markets and a world depression. This is the problem with creating ever more debt. Ultimately, the debt owns you, and the compounding process renders the debt situation (http://www.financialsense.com/contributors/richard-russell/is-something-ominous-in-cards#) unsustainable, which is what the CBO has just warned us about.
The underlying problem is the common man's desire for profits -- his insatiable greed. Eventually, greed becomes its own worst enemy. To "grow" the economy, you must have expanding credit. Eventually, credit, when compounded, becomes unsustainable -- particularly when a nation can print all the money it wants out of thin air. Thus, the acceptance of fiat money spells the eventual death of an economy.
Below I show a chart of JP Morgan, the biggest bank in the US. Here we see a textbook head-and-shoulders pattern that I think should break down. JPM was just hit with a huge $900 million fine, based on its notorious trader, known as the "London Whale."

http://www.financialsense.com/sites/default/files/imagecache/desktop/users/u491/images/2013/jpm-23-sep-2013.jpg (http://www.financialsense.com/sites/default/files/users/u491/images/2013/jpm-23-sep-2013.jpg)Another choice place I'm watching is the US dollar. The US dollar has dropped three boxes on the P&F chart. If the dollar hits the 79 box, it will have issued a clarion sell signal. So at any rate, I've got my eye on the dollar.

http://www.financialsense.com/sites/default/files/imagecache/desktop/users/u491/images/2013/usd-23-sep-2013.jpg (http://www.financialsense.com/sites/default/files/users/u491/images/2013/usd-23-sep-2013.jpg)Here's something that bothers me. Below we see the D-J Industrial Average. As you can see on the chart, over the last four trading sessions, the Dow has declined each day. Is this the sign of a market top that is subtly breaking down? If this declining action continues, I'll really begin to wonder whether something ominous is in the cards.

http://www.financialsense.com/sites/default/files/imagecache/desktop/users/u491/images/2013/indu-24-sep-2013.jpg (http://www.financialsense.com/sites/default/files/users/u491/images/2013/indu-24-sep-2013.jpg)To read the rest of Richard Russell’s Dow Theory Letters and receive daily updates, click here (http://www.dowtheoryletters.com/) to subscribe.

KiwiGreen

27-09-2013, 04:32 PM

Thanks for taking the time to post that tricha, interesting stuff.

JBmurc

27-09-2013, 05:12 PM

Yeah personal will be shifting some money towards BEAR:asx once the US actually does TAPER .(which will be followed by the Market crash).the bear fund is currently making new lows $18.50 ps this time last year high 22's

BetaShares Australian Equities Bear Hedge Fund (BEA), also known as Bear Fund, is the managed fund in Australia that provides investors to profit from, or protect against, a decline of the Australian share market. The Fund seeks to generate returns that are negatively correlated to the returns of the Australian share market (as measured by the S&P/ASX 200 index). The Fund is managed by BetaShares Capital Ltd.

Skol

27-09-2013, 08:42 PM

JBmurc

27-09-2013, 10:22 PM

thanks for that JB, will add it to my watchlist in case we see a sudden turn of events. good to see we have an option other than shorts in case of a market downturn. always money to be made atcevery twist and turn :)

Yeah a pretty simple way to hedge your other ASX positions or make a few dollars on a downturn...will certainly be using it going forward

JBmurc

27-09-2013, 11:39 PM

tricha,

The peak oil thread's been going for years and they keep finding more oil, you started this thread nearly 3 years ago and everything looks pretty good to me, there won't be a depression, time to give up crying wolf.

Thats because you listen to B.S Media and the rich to make up the view all is good///well if I had no-limit credit card with zero interest I'd also be bullish as I wouldn't live in a true value reality,, ...you like many can't even comprehend the issues facing much of the world's economy's it can alway be fixed by creating more money right ? who cares

Right now the US is on the verge of not being able to pay it's bills (as they have for a very long time but hey just raise the debt ceiling problem fixed right >>>)

Gross US debt 16,745,000,000,000

.$1,000,000 a day was spent it would take over 2,000 years to reach $1 trillion.

-Global GDP is round 60 trillion

the ONLY WAY the above will be fixed will be a USD COLLASPE in value or very High INflation .....

If not then please O skol how will it all play out in your rose-tinted glass view... as if they ever do TAPER (unlikely) then BOND/debt costs will increase that will mean even more money must be created etc

tricha

30-09-2013, 12:13 AM

Thats because you listen to B.S Media and the rich to make up the view all is good///well if I had no-limit credit card with zero interest I'd also be bullish as I wouldn't live in a true value reality,, ...you like many can't even comprehend the issues facing much of the world's economy's it can alway be fixed by creating more money right ? who cares

Right now the US is on the verge of not being able to pay it's bills (as they have for a very long time but hey just raise the debt ceiling problem fixed right >>>)

Gross US debt 16,745,000,000,000

.$1,000,000 a day was spent it would take over 2,000 years to reach $1 trillion.

-Global GDP is round 60 trillion

the ONLY WAY the above will be fixed will be a USD COLLASPE in value or very High INflation .....

If not then please O skol how will it all play out in your rose-tinted glass view... as if they ever do TAPER (unlikely) then BOND/debt costs will increase that will mean even more money must be created etc

Great reply JB, most people pick illusion, they just do not want to know the truth.
It's pretty obvious. We all read it, but illusion is better for the masses. Stick to your rose tinted glasses Skol, most sheep do.

Fact - The US self imposed debt limit is nearly reached again.
They will raise it again and not be able to solve the problem. They spend far more than they earn.

29 September 2013 Last updated at 07:16 GMT
US shutdown looms amid political rifts over health law

http://www.bbc.co.uk/news/world-us-canada-24320793

P.S I agree with you JB, there are two out comes. 1924 Germany did the same, history will repeat.

Skol

30-09-2013, 03:11 AM

Great reply JB, most people pick illusion, they just do not want to know the truth.
It's pretty obvious. We all read it, but illusion is better for the masses. Stick to your rose tinted glasses Skol, most sheep do.

Fact - The US self imposed debt limit is nearly reached again.
They will raise it again and not be able to solve the problem. They spend far more than they earn.

29 September 2013 Last updated at 07:16 GMT
US shutdown looms amid political rifts over health law

http://www.bbc.co.uk/news/world-us-canada-24320793

P.S I agree with you JB, there are two out comes. 1924 Germany did the same, history will repeat.

The goldbugs have been promising us financial Armageddon for years, they're the only ones that worry about it, hope you read the article in the NZ Herald the other day tricha, titled 'Shine turns to gloom'.

The great depression was mostly caused by the gold standard, read this.

http://www.economist.com/blogs/freeexchange/2013/09/great-crash-4

Read the para. on the Weimar Republic, since goldbugs like you are so keen on quoting it.
----------------
In Germany the government of Chancellor Heinrich Brüning refused to expand the money supply even after effectively going off gold, in the process helping to bring the Weimar Republic to an end.

----------------

The Weimar Republic collapsed because of unemployment and deflation, something Bernanke is keen to avoid, the result was the ascent of the Nazi Party, Adolf Hitler and finally WW2.

You're recycling the same old stuff, just like you promised us economic mayhem because of 'peak oil', seen that hackneyed phrase in the papers lately?

The USA had more debt/GDP twice in the 20th century than it does now, so what's the problem?

Time to dig out those schoolboy history books tricha, and of course the proof of the pudding's in the eating, who's been losing money for the last couple of years? Not me.

JBmurc

30-09-2013, 10:36 AM

Well we couldn't even have a "gold standard" no where enough Gold to back the amount of fiat floating in the world monetary system...that's how you get those crazy $7000 etc type numbers when to start doing that...No Gold's future is purely Insurance that doesn't go belly up like many Insurance companies can If SHTF...
The truth is the US having a reserve currency they can just keep printing till Inflation comes about even if it means sending the people money...
Janet Yellen the soon to be new FED chairman was not long ago pushing for banks to have negative rates so your lose money per year in the bank...brillant

There are, however, reasons to doubt that Yellen will get the nod.

The first is that Obama's inner circle waged a campaign to keep her out of the position. They painted her as someone who wasn't a team player. They described her as someone who couldn't think on her feet. On policy, they said she wasn't concerned enough about financial bubbles.

tricha

30-09-2013, 11:43 PM

Thats because you listen to B.S Media and the rich to make up the view all is good///well if I had no-limit credit card with zero interest I'd also be bullish as I wouldn't live in a true value reality,, ...you like many can't even comprehend the issues facing much of the world's economy's it can alway be fixed by creating more money right ? who cares

Right now the US is on the verge of not being able to pay it's bills (as they have for a very long time but hey just raise the debt ceiling problem fixed right >>>)

Gross US debt 16,745,000,000,000

.$1,000,000 a day was spent it would take over 2,000 years to reach $1 trillion.

-Global GDP is round 60 trillion

the ONLY WAY the above will be fixed will be a USD COLLASPE in value or very High INflation .....

If not then please O skol how will it all play out in your rose-tinted glass view... as if they ever do TAPER (unlikely) then BOND/debt costs will increase that will mean even more money must be created etc

Too many sheep with rose tinted glasses ( bang on JB) that can not count past 1. Nothing like living in an illusion. As long as the sun comes up and today is the same as yesterday, everything will be fine.

Will they get past the debt limit, most likely. Will judgement day come, one day.

September 2013 Last updated at 10:19 GMT
Markets hit by political upheavalhttp://news.bbcimg.co.uk/media/images/70184000/jpg/_70184877_dollar.bills.jpg (http://www.sharetrader.co.nz/news/business-24328353)

tricha

30-09-2013, 11:56 PM

Interesting times a head folks, trick or treat, take your pick.

Everything Still Looks Bullish – In the Rear-View MirrorBy Sy Harding (http://www.financialsense.com/contributors/sy-harding)09/27/2013

In his 1999 warning that the stock market over the next 17 years “will not perform anything like it performed in the past 17 years”, Warren Buffett made several other interesting observations.
He said , “Investors in stocks these days are expecting far too much. . . . . . Once a bull market gets under way, and once you reach the point where everybody has made money no matter what system he or she followed, a crowd is attracted into the game that is responding not to interest rates and profits, but simply to the fact that it seems a mistake to be out of stocks. In effect, these people superimpose an I-can't-miss-the-party factor on top of the fundamental factors that drive the market. . . . . . . Investors project out into the future what they’ve been seeing. That's their unshakable habit: looking into the rear-view mirror instead of through the windshield. . . . Staring back at the road just traveled [this was in 1999] most investors (http://www.financialsense.com/contributors/sy-harding/everything-still-looks-bullish-in-rear-view-mirror#) have rosy expectations.”
If we do that now, we sure see no problems.
There’s a super impressive bull market stretching back for more than four and a half years. We see there were some bumps in the road that needlessly made investors nervous. The economy slowed in the summer of each of the last four years. But the Fed solved those situations by jumping in with more stimulus each time. There was a debt-ceiling fight in Washington in 2011 that resulted in a 20% plunge by the S&P 500. But that was obviously just a buying opportunity once Congress came out of its funk at the last minute and took care of the problem. In the mirror we can also see that markets in Asia and elsewhere plunged, and the eurozone debt crisis kept popping up. But for the U.S. market, those were clearly just bullish bricks in the wall of worry that stock markets climb. And look at that. Investors who were previously seeing only the 2008 crash and its aftermath in the rear view mirror, and as a result were pulling money out of mutual funds all through the bull market, finally turned the corner, like what they now see in the mirror, and have been pouring money back in at a record pace for almost a year now.
More recently in the rear-view mirror, the Federal Reserve threatened to taper back its QE stimulus. But when markets showed their displeasure, the Fed changed its mind.
So, all is still looking great in the rear-view mirror, rosy in fact.
But Buffett has been right, at least so far, with his 1999 prediction that the next 17 years wouldn’t look anything like the previous 17.
I mean, looking further back in the rear-view mirror than just the last five years – maybe you shouldn’t – prior to the current bull market there have been two severe bear markets (http://www.financialsense.com/contributors/sy-harding/everything-still-looks-bullish-in-rear-view-mirror#) since 1999, which until recently have had the market significantly underwater for 13 years, in fact by as much as 50%.

http://www.financialsense.com/sites/default/files/imagecache/desktop/users/u248/images/2013/sp500-27-sep-2013.jpg (http://www.financialsense.com/sites/default/files/users/u248/images/2013/sp500-27-sep-2013.jpg)So let’s humor Warren and look through the windshield.
Whoa. Okay, so it takes a little adjustment to look ahead rather than back. Everything is so clear looking back.
Buffett said in 1999 that we should be looking at the direction of interest rates, profits, and valuation levels, not through the rear-view mirror, but through the windshield. Interest rates because “they act on financial valuations the way gravity acts on matter: The higher the rate the greater the downward pull. If government rates rise, the prices of all other investments must adjust downward.” Corporate profits because the value of a company’s stock ultimately rests on its earnings.
Okay, so interest rates that had plunged to near zero over the last five years, are beginning to rise, enough so that it’s apparently spooking the housing market.
And corporate earnings growth has been slowing significantly over the last year or so.

http://www.financialsense.com/sites/default/files/imagecache/desktop/users/u248/images/2013/modest-earnings-growth.jpg (http://www.financialsense.com/sites/default/files/users/u248/images/2013/modest-earnings-growth.jpg)And in the last few weeks, Buffett, Carl Icahn, and Stanley Druckenmiller, three billionaire investing titans, all came out with concerns that the market is getting rich and fully valued.
And what’s that in the road just ahead?
Why, it’s Congress, playing their debt-ceiling game again.
And just beyond them is the Fed, ready, just as soon as Congress gets its road block out of the way, to dial back the stimulus the economy has needed to keep its head above water.
So okay, maybe the view is not so rosy through the windshield.
Maybe it is time for investors to pull their eyes and hopes away from the rear-view mirror, and focus on what lies ahead for a while.

[I] CLICK HERE (http://visitor.r20.constantcontact.com/manage/optin/ea?v=001huosoi0q9QYjaEBXEmsaSS_GrQ3OpSTKUEi5Vq6pWb EJfUKMJvogb1a5SKx69L5mVdf3-zDQDStU6dSCqBqdQWi8c3PBLFpD) to subscribe to the free weekly Best of Financial Sense Newsletter (http://visitor.r20.constantcontact.com/manage/optin/ea?v=001huosoi0q9QYjaEBXEmsaSS_GrQ3OpSTKUEi5Vq6pWb EJfUKMJvogb1a5SKx69L5mVdf3-zDQDStU6dSCqBqdQWi8c3PBLFpD).

About Sy Harding (http://www.financialsense.com/contributors/sy-harding) http://www.financialsense.com/sites/default/files/pictures/picture-248.jpg
Sy Harding (http://www.financialsense.com/contributors/sy-harding)
Editor at Street Smart Report
Florida USA
editorialdept @ streetsmartreport.com
http://www.StreetSmartReport (http://www.streetsmartreport.com/)

skid

03-10-2013, 09:25 AM

Is it time to batten down the hatches and prepare nfor the ''crash season''?
http://www.kitco.com/ind/Thomson/2013-10-01-The-Dow-Faces-Hurricane-Winds.html

skid

03-10-2013, 11:26 AM

Well,lets hope your right Moosie.
I certainly dont want to see a major sharemarket plunge and panic--but dont you ever feel that in light of the economic backdrop,thats somethings not quite right with the sharemarket reaching new highs.
Have the basic problems been sorted?
Were you around in the last crash--
I sincerely hope we dont start seeing the ''blood on the floor posts daily again'',but Im being much more careful this time around.
(went to the forest and all the trees had been cut down)
In my opinion its a 2 part series. You need to keep one eye on your particular share,and the other on the market in general.
Even your PEB could get fleeced if the market tanks .
I reckon this is a good time to keep an open mind and try to have a defensive plan if your not playing it conservative already. A stop loss is good but last time i checked I was only able to do it on Australian shares
with DB but not Kiwi shares (how silly is that)
Its still possible to protect yourself as much as possible without getting all paranoid

skid

04-10-2013, 09:37 AM

http://www.bloomberg.com/news/2013-10-02/australian-futures-rise-while-yen-holds-gains-oil-slips.html

skid

04-10-2013, 01:44 PM

Apparently the ''smart money'' is doing nothing as they are looking at this whole thing as ''theatrics'',but if this things plays out to long ,it could easily turn into a crisis.

JBmurc

04-10-2013, 03:06 PM

And they want take on more debt and raise the debt ceiling>>>Generations will be paying for Obama's CHANGE

4887

skid

05-10-2013, 10:34 AM

https://www.upworthy.com/the-cartoonish-joke-that-is-the-government-shutdown-explained-in-less-than-4-minutes?c=upw1

skid

05-10-2013, 10:38 AM

https://www.facebook.com/photo.php?v=442376592507280&set=vb.100002048290682&type=2&theater

tricha

05-10-2013, 10:46 AM

And they want take on more debt and raise the debt ceiling>>>Generations will be paying for Obama's CHANGE

4887

Great post JB, its very clear theres a massive problem.

However, if they do not raise the debt limit, depression. Worldwide.

It's catch 22.

However, as the script suggests, raise the ceiling to new heights as the **** rises, causes the walls to collapse.
Back to depression as you float in a mountain of ****.

End game, prepare for the worst and hope for the best! ( debt will end up being toxic :scared:)

skid

07-10-2013, 10:10 AM

could fill in the blanks with either debt or s--t take your choice

skid

09-10-2013, 03:42 PM

http://www.thedailybeast.com/articles/2013/10/07/house-gop-won-t-budge-on-clean-cr.html

surely not..

skid

10-10-2013, 08:57 AM

http://www.stuff.co.nz/world/americas/9257395/Shutdown-or-shakedown-The-US-crisis-explained

Is this just theatrics--bluffs--or are these crazies really serious?

skid

11-10-2013, 09:36 AM

Looks like they have kicked the can down the road for another 6 weeks.
Not an ideal outcome but at least it shows that with even the most radical elements in play,that they were not prepared to actually let the US default to get their way.9at least not now)
In that sense it has called their bluff--The republicans were claiming that they had no control over their ''Tea party'' members who would gladly ride into the valley of doom to get what they want

Aaron

11-10-2013, 11:31 AM

At first I thought its the crazy republicans not wanting affordable healthcare for everyone in the states but as it drags on you realise the democrats will be looking pretty crazy as they will bankrupt the US with their out of control spending. Sadly neither party can suggest cutting back on military spending or closing overseas bases without losing an election.

JBmurc

16-03-2014, 10:34 PM

The following are 20 facts about the great U.S. retail apocalypse that will blow your mind...

#1 As you read this article, approximately a billion square feet of retail space is sitting vacant in the United States.

#2 Last week, Radio Shack announced that it was going to close more than a thousand stores.

#3 Last week, Staples announced that it was going to close 225 stores.

#4 Same-store sales at Office Depot have declined for 13 quarters in a row.

#5 J.C. Penney has been dying for years, and it recently announced plans to close 33 more stores.

#6 J.C. Penney lost 586 million dollars during the second quarter of 2013 alone.

#7 Sears has closed about 300 stores since 2010, and CNN is reporting that Sears is "expected to shutter another 500 Sears and Kmart locations soon".

#8 Overall, sales numbers have declined at Sears for 27 quarters in a row.

#9 Target has announced that it is going to eliminate 475 jobs and not fill 700 positions that are currently empty.

#10 It is being projected that Aéropostale will close about 175 stores over the next couple of years.

#11 Macy's has announced that it is going to be closing five stores and eliminating 2,500 jobs.

#12 The Children’s Place has announced that it will be closing down 125 of its "weakest" stores by 2016.

#13 Best Buy recently shut down about 50 stores up in Canada.

#14 Video rental giant Blockbuster has completely shut down all of their stores.

#15 It is being projected that sales at U.S. supermarkets will decline by 1.7 percent this year even as the overall population continues to grow.

#16 McDonald's has reported that sales at established U.S. locations were down 3.3 percent in January.

#17 A home appliance chain known as "American TV" in the Midwest is going to be shutting down all 11 stores.

#18 Even Wal-Mart is struggling right now. Just check out what one very prominent Wal-Mart executive recently admitted...

David Cheesewright, CEO of Walmart International was speaking at the same presentation, and he pointed out that Walmart would try to protect its market share in the US – where the company had just issued an earnings warning. But most of the growth would have to come from its units outside the US. I mean, via these share buybacks?

Alas, outside the US too, economies were limping along at best, and consumers were struggling and the operating environment was tough. "We're seeing economies under stress pretty much everywhere we operate," Cheesewright admitted.

#19 In a recent CNBC article entitled "Time to close Wal-Mart stores? Analysts think so", it was recommended that Wal-Mart should close approximately 100 "underperforming" supercenters in rural locations across America.

#20 Retail consultant Howard Davidowitz is projecting that up to half of all shopping malls in America may shut down within the next 15 to 20 years...

tosspot

17-03-2014, 07:31 AM

Bit of a misleading article, Its like writing an article that focuses on Blackberry and Nokia in the mobile phone market, which we all know would be very contrast with the reality. Its not that the retail industry is dying but changing. were is amazon and all the E-commerce businesses on this list, nowhere because there doing great

Skol

17-03-2014, 11:58 AM

Retail sales inthe USA were up .3% in Feb., despite the cold weather.

skid

17-03-2014, 05:25 PM

But where are the GOOD jobs
I could be wrong but the trend seems to be towards stink jobs and away from good jobs---Walmarts is hiring---Yippee!

KiwiGreen

24-03-2014, 03:52 PM

http://www.fuw.ch/article/equity-markets-are-overvalued/

"By some measures, you can say we are in a bubble, for example in U.S. equities. But it doesn’t feel like a mania yet. Today we experience something like a near-rational bubble, based on overconfidence and myopia by investors. It’s a policy-driven, cynical kind of bubble. Not a mania."

KiwiGreen

24-03-2014, 03:57 PM

Skol

24-03-2014, 04:52 PM

Depends who you talk to. If you're talking to Peter Schiff then I'm afraid it's all over, goldbugs are going to be rich and the rest of us poor. Many other analysts say the US recovery is powering ahead and earnings will increase accordingly.

I know this:

Goldbugs have been telling anyone who'll listen that the Great Armageddon is upon is. But it's crap.

Busts are followed by booms and the biggest bust since the Great Depression is more than likely going to be followed by the biggest boom. That seems to be what Warren Buffett espouses, he says the best days for the USA are ahead of it.

skid

24-03-2014, 06:24 PM

I think he said ''every piece of valuation I do says the market is to expensive'' but i guess you would have to ask him.

tricha

05-08-2014, 10:17 PM

"What is the fair value of the S&P 500 right now?
Several valuation measures suggest that the S&P is overvalued by 50 to 70%. Every piece of valuation I do says this market is too expensive. The only U.S. equities we currently own are high quality names like Microsoft (MSFT (http://marktdaten.fuw.ch/detail/stocks?ID_NOTATION=273978) 40.16 -0.42%), Procter & Gamble or Johnson & Johnson."

Bubble time: Friends and relatives act as if we've returned to business-as-usual
by Kurt Cobb (http://www.resilience.org/author-detail/1007107-kurt-cobb), originally published by Resource Insights (http://resourceinsights.blogspot.com/2014/08/bubble-time-friends-and-relatives-act.html) | Aug 3, 2014

http://www.resilience.org/stories/2014-08-03/bubble-time-friends-and-relatives-act-as-if-we-ve-returned-to-business-as-usual

tricha

05-08-2014, 10:32 PM

Bubble time: Friends and relatives act as if we've returned to business-as-usual
by Kurt Cobb (http://www.resilience.org/author-detail/1007107-kurt-cobb), originally published by Resource Insights (http://resourceinsights.blogspot.com/2014/08/bubble-time-friends-and-relatives-act.html) | Aug 3, 2014

http://www.resilience.org/stories/2014-08-03/bubble-time-friends-and-relatives-act-as-if-we-ve-returned-to-business-as-usual

Especially me.

Am I knapping on the railways :confused:

Friday, July 06, 2007 Napping on the railroad tracks (http://resourceinsights.blogspot.co.nz/2007/07/napping-on-railroad-tracks.html)

Napping on the railroad tracks sounds risky on its face. But it may not feel that way if you don't know you're napping on the tracks.

Humans seem programmed to believe that the future will look pretty much like the past. But the narrative of history is the narrative of unexpected events. And, so it is surprising that when it comes to resource depletion, cornucopian thinkers love to refer to history. Daniel Yergin, chairman of Cambridge Energy Research Associates, likes to say, "This is not the first time the world has run out of oil. It is more like the fifth." (http://www.cera.com/aspx/cda/public1/news/articles/newsArticleDetails.aspx?CID=8248) But even though Yergin admits that oil is a finite resource (and that therefore its total quantity is declining), he invites us to snooze with him on the railroad tracks because history has shown that so far it's been safe to do so.

Yergin's faith (and that of many others) is founded on the forecasts of his own firm (http://www.cera.com/aspx/cda/public1/news/pressReleases/pressReleaseDetails.aspx?CID=8444) and that of the U. S. Energy Information Administration (http://www.eia.doe.gov/pub/oil_gas/petroleum/feature_articles/2004/worldoilsupply/oilsupply04.html) (which takes its data from the U. S. Geological Survey's World Petroleum Assessment (http://pubs.usgs.gov/dds/dds-060/)). But what drives us to make such forecasts? Even create a whole forecasting industry? In his latest book, The Black Swan: The Impact of the Highly Improbable (http://www.amazon.com/exec/obidos/ASIN/1400063515/nassimtalebsfavo/002-8533486-7104820), Nassim Nicholas Taleb (http://www.fooledbyrandomness.com/) believes that we do so because we are planning animals. This behavior may be a successful evolutionary adaptation. We are able to imagine situations that might risk injury or death rather than simply experiment and see what happens. "Used correctly and in place of more visceral reactions, the ability to project effectively frees us from immediate, first-order natural selection....," he writes.

But, imagining the future is not the same as correctly predicting it. Taleb outlines the problems with forecasts as follows. First, variability matters. Most forecasts don't include an error rate, often indicated as a range of possibilities. In other words, how wide of the mark might a forecast be? (The U. S. EIA forecast is an exception, but it is not clear how the error rate is calculated and whether the data upon which it is based can be justified.) Very often, the "error rate is so large that it is far more significant than the projection itself!" (The EIA doesn't seem to understand this point.) Taleb gives this example: If you knew the place you are flying to is expected to be 70 degrees, you would pack much differently if you also knew that the range was plus or minus 40 degrees rather than plus or minus 5 degrees.

Second, forecasts degrade quickly as the forecast period lengthens. There are so many imponderables including technological developments; individual, corporate and government decisions; and unforeseen events such as wars, revolutions, and economic busts and booms, each essentially unknowable and each compounding upon the others with every passing year. "Our forecast errors have traditionally been enormous, and there may be no reasons for us to believe that we are suddenly in a more privileged position to see into the future compared to our blind predecessors," Taleb writes.

Third, there is often a failure to grasp "the random character of the variables being forecast." Taleb doesn't address resource depletion in his book. But, when it comes to oil supplies, those confidently making optimistic forecasts assume substantial new discoveries. However, discoveries can in no way be determined ahead of time; otherwise, they would be classed as reserves and not discoveries. Future consumption rates for oil depend on the economy which depends on so many individual and collective decisions that one cannot tally them all. And, even if we could, how would we know what numbers to use for 2017 or 2026?

When it comes to technology, it has always seemed to be a one-way street, ever improving. There can be no dispute that technology has put into the hands of human societies great power to learn about the world and to manipulate it. But, even here there have been long stretches of only small, incremental improvements in, for example, our ground transportation system which relies on the same basic internal combustion engine technology first produced more than 100 years ago. There have also been notable failures--no commercially feasible fusion energy and no miracle cures for genetic diseases. Technological development moves unevenly through various sectors, sometimes by fits and starts and sometimes not at all.

All of this implies that we have no way of determining whether we should prefer pessimistic or optimistic forecasts for world oil production. What is more perplexing is that both forecasts depend on certain kinds of extrapolations from the past. The pessimists focus on the peak in world oil discovery back in the 1960s and the optimists point to reserve growth through additions to existing fields and to advancing technology for both exploration and extraction. While the pessimists and optimists emphasize certain data, both accept the historical data, but then draw vastly different conclusions, i.e., an imminent peak in world oil supplies versus a distant peak followed in some cases by a long plateau. When it comes to technology, for example, the pessimists argue that technology has done pretty much all it is going to do for oil recovery while the optimists believe that vast increases in the percentage of the oil recovered from existing and undiscovered reservoirs lie ahead.

Taleb suggests a way to look at the problem as follows: "Even if you agree with a given forecast, you have to worry about the real possibility of significant divergence from it," he writes. How might he apply this to the peak oil issue? He gives us a pretty clear idea. "t is the lower bound of estimates (i.e., the worst case) that matters when engaging in a policy--the worst case is far more consequential than the forecast itself. This is particularly true if the bad scenario is not acceptable."

While it's possible that Daniel Yergin and other cornucopians may continue to nap on the railroad tracks without any harm for many years to come, it is faulty logic that leads them to believe that there is very little risk in doing so. And, because of their influence, they are doing a great disservice to society by pretending that their oracular pronouncements are somehow based on something other than conjecture. (Such an admission might cut into demand for their forecasts, but it would be better for policymakers and society as a whole if they admit to uncertainty.)

On the other side of the argument, the pessimists would be wise to attach wide error bars to their forecasts as well. They can do this without abandoning their basic premise, namely, that preparing for a decline in oil supplies will be a monumental task that is better begun early rather than late [I]precisely because we cannot predict when the decline will begin. Moreover, the use of generous error bars will have the added benefit of removing the "Chicken Little" aura which now surrounds so many peak oil theorists.

Taleb has strong words for the unctuous forecaster who won't admit the uncertainty in his or her work:
Anyone who causes harm by forecasting should be treated as either a fool or a liar. Some forecasters cause more damage to society than criminals. Please, don't drive the school bus blindfolded.

http://s7.addthis.com/static/btn/sm-share-en.gif

Posted by Kurt Cobb at 4:07 PM

Daytr

06-08-2014, 07:45 AM

I put it out 10 days ago on the gold thread that US equities were done & the correction had just started & they have basically been dumped since. And these are the main reasons why.
1) The end of QE & the rally in the USD as consequence.
2) 30 year low employment participation rate & the jobs that have been created are in large low paid or part time even, net I would suggest there could actually be less income being earned as high paid workers move into retirement.
3) P.E. ratios are too high for an economy that is still on life support, i.e. 0% interest rates. The main indices are high enough, but no one talks about the Russell 2000 that has a P.E. of 75ish! IMO there was only one way the US markets are heading.
4) The only thing keeping equities up in the last 6 months were share buybacks & M&A. There is a hell of a lot of cash on the sidelines & this also said to me the hedge funds knew the market was too rich & I have been impressed by their discipline. Even Warren Buffett sold more equities that he bought in Q2. I am expecting a 20% drop or something in that order.

Skol

06-08-2014, 08:10 AM

This means Daytr expects the Dow to drop to 13,720.

Daytr

06-08-2014, 09:02 PM

I thought this was a very interesting read on capex spend in the US & underlines why the US recovery is so narrow & it is lowland jobs that are making up the employment numbers rather than skilled jobs. I particularly like this bit ' Productivity growth in the United States - the rate of growth in the level of output per worker - is near its lowest in 30 years, according to Bridgewater Associates. Spending on research, development and technology, would surely improve this trend.'

http://www.reuters.com/article/2014/08/06/us-markets-investment-capex-analysis-idUSKBN0G60CC20140806

Daytr

07-08-2014, 10:55 AM

True dat Moosie, perhaps a better title would be ball on inflated by QE pump!

Just on the wires although I had to dig around for it. Although I'm sure the story will gather momentum. Not great for Wall Street!

http://online.wsj.com/articles/bank-of-america-near-16-billion-to-17-billion-settlement-1407355290

Daytr

08-08-2014, 10:58 AM

I just received my TA report that analyses the DJI & SPI futures & virtually all indicators have turned negative. If correct we should now see the correction pick up steam as momentum traders strap on shorts.

Daytr

08-08-2014, 04:25 PM

Nikkei down 2.6% !

tricha

08-08-2014, 05:34 PM

Nikkei down 2.6% !

Italy back in recession .

Trade wars are a factor in depressions. Russia now in trade wars.

in Europe - interest rates.
Are negative. there's no more room to move.

Is this the beginning of the dead cat bounce.?

Daytr

08-08-2014, 06:23 PM

Personally I think this will just be a sharp correction of around 20% in the US anyway, the Russell 2000 perhaps a bit more. There is a record amount of cash sitting on the sidelines that will want to come & play at some point. Also the US economy is in patches very strong & others very weak, however corporate earnings have been pretty good, although they may weaken some going forward. Corporate balance sheets are also in pretty good shape with plenty of cash. The problem is the main stream economy is weak. Europe & Japan are different kettles of fish & may not bounce like US markets when they bottom out.

ynot

08-08-2014, 06:53 PM

With a 20% US dip scenario , if it happened this way, what type of US stock for would you consider a "must buy".

Daytr

08-08-2014, 08:10 PM

To be honest I'm not close enough to it to pick an individual stock, but I would look to buy the index, probably the DOW.

ynot

08-08-2014, 08:30 PM

I was thinking more in terms what sector of the market, what would be example of a stock or sector capable of outperforming on the recovery.

Daytr

08-08-2014, 09:01 PM

One area you would think that would perform in the coming years is health care or suppliers to medical with Obama's Obamacare making healthcare more widely available you would think there will be increased demand. One area that has been underfunded is business capex so again at some point you would think this has to increase. Other areas are alternative energy as I think Obama is going to pump money into greener sources of energy as part of his legacy. Both Obama, Kerry & Lydon have already said as much. The risk is that the Republicans get in next & change tack & if so military spending will go through the roof. I also think inflation is about to hit the States particularly as their labour market tightens & there is already signs of cost pressures in the labor market, so I think that's something to be aware of & if it does happen some sectors, or companies particularly those sensitive to rising interest rates such as the housing sector will suffer.

Daytr

08-08-2014, 09:05 PM

Not if inflation kicks in Moosie & interest rates move higher. One reason equities have benefitted so much & corporate are making good earnings is that money is free & even still large hedge funds have sat on cash earning nothing, what does that tell you. So yes I think markets will rebound after the correction, but to what level will depend I think on sustaining or improved corporate earnings.

ynot

08-08-2014, 10:56 PM

High risk - biotech and technology. After it has truly bottomed out though ;)

yes, after its truly bottomed out is the key, then it does not matter what you buy, its all going up. providing its still breathing.

biker

09-08-2014, 07:29 AM

High risk - biotech and technology. After it has truly bottomed out though ;)
ArborGen via Rubicon.

Just saying :-)

Daytr

09-08-2014, 07:53 AM

Ynot, what sectors would you look at?

ynot

09-08-2014, 08:12 AM

Not high risk. What sector, not sure. Safe utility? Priority would be to protect capital. Then you also have to consider currency effect on investment. USD up-down?

winner69

09-08-2014, 10:31 AM

ArborGen via Rubicon.

Just saying :-)

Wasn't ArborGen David Darling's (of PEB fame) little baby years ago

Still not making any money is it (ArborGen that is) ?

biker

09-08-2014, 12:34 PM

Wasn't ArborGen David Darling's (of PEB fame) little baby years ago? ...............

The very same.
International Paper and MeadWestVaco obviously playing the long game, as is Rubicon.
Monsanto anyone? :-)

Disc. Hold far too many RBC so I'm biased, - and patient.

David Darling

Graduating from Massey and Canterbury Universities in NZ, David Darling has gained considerable experience and success in the development of start-up companies/technologies through to commercialisation. Involved in the entrepreneurial development of biomedical devices/technology, nutraceuticals, herbal medicines, forestry and horticulture. David’s roles include the development and management of an integrated biotechnology and manufacturing operation, and intellectual property platforms/large patent portfolios. As a scientist and science manager, David also led the development and management of Fletcher Challenge Ltd’s tree breeding and biotechnology business, and was actively involved in the development and start-up of ArborGen, a USA-based biotechnology joint venture business between Rubicon and two North American forestry giants, International Paper and MeadWestVaco.

Daytr

12-08-2014, 10:13 AM

How's the returns on the major US indices this year Moose? Other than the NASDAQ they are decidedly average & I think you will see within a week or two they are somewhat worse again.

Daytr

19-08-2014, 01:43 PM

When I first started reading your post above Moose I assumed you were talking about St Louis!