The Coming Economic Collapse, Currency Induced Cost Push Inflation/Hyperinflation, Weimar Germany, Euro Collapse,
Zimbabwe Hyperinflation, Survival in Economic Collapse, World Economic Collapse, Dollar Collapse,
What Would Happen If the Economy Collapsed,The Coming Economic Depression.
Gold and Silver Will Protect Your Wealth.
A few days ago we presented an analysis by ConvergEx showing that due to the very close historical correlation between home prices and employment, it is the Fed's view that the only way
to stimulate employment (aside from such BLS shennanigans as
pretending that despite the natural growth of the labor force by 90k a
month to keep up with population, those willing to work are in fact
declining) is to raise home prices. Raising home prices be definition
means either reducing supply - an event which is proving impossible
with shadow inventory in the millions and rising, even as thousands of
new delinquent mortgages appear each day while homebuilders keep on
chugging out new homes that remain vacant for years, or increasing
demand. It is the latter that the Fed targets, by attempting to make
mortgage rates ever cheaper via LSAP, Operation Twist or other Treasury
curve interventions that attempt to push down long-dated yields ever
lower. This works in theory. In practice, however, as the chart
below demonstrates, the Fed's entire ZIRP-targeting policy over the
past several years has been one abysmal failure (for everyone
expect those with immediate access to the Fed's zero interest rate
capital - i.e., the Primary Dealers). As proof of this we present the
following chart, which maps the SAAR in New Home Sales against the 30
Year Fannie Cash Mortgage. What appears very clearly on this chart is
that despite ever declining mortgage rates, there is simply no interest
in home turnover, and sales are at record low levels due to lack of
demand, and lack of desire to sell into a bidless market, in essence
causing the entire housing market to halt.
The
onslaught of 2012-Outlooks continues to unmercilessly suggest bullish
biases in most risk assets, particularly higher quality equities and
credit, and while almost as ubiquitously noting the binary nature of
outcomes in the medium-term and significant downside potential. Most of
the upside/downside biases reflect heavily on Europe's outcome which
in turn seems to have the majority forecasting recessionary contraction
being 'stabilized' by a round of quantitative easing by the ECB. BofA's
Global Asset Allocation group notes, however, as the Fed has recently
discovered, QE alone may be enough to stabilize a situation but a
credible plan for growth is harder to achieve. Furthermore, in a
topsy-turvy potentially chaotic manner, they point out that the market's expectation of QE has been enough to calm waters (or more aptly levitate markets) leaving policy makers with little choice now for fear of the instability created by not delivering what Mr.Market (as we have been noting for weeks - pressure for a 'crash' from the likes of Deutsche Bank) demands or expects. But away
from European disunity, if that is possible, BofA's key global risks
include a worse-than-feared-EU-recession, Mid-East unrest, US fiscal
tightening, and a China hard landing but given their perspective on the extreme levels of bearishness, they prefer to hedge upside risk from their correctly cautious view.
It appears the GOP candidates are dropping like flies: first that one
crazy guy, then Cain, and now... Mitt Romney? According to a Boston
Globe article, paraphrased by Reuters,
the GOP frontrunner (or is that second after Gingrich now: nobody
really knows any more), spent $100,000, not of his own money but state
funds, to "replace computers in his office at the end of his term as
governor of Massachusetts in 2007 as part of an unprecedented effort to
keep his records secret. When Romney left the governorship of
Massachusetts, 11 of his aides bought the hard drives of their
state-issued computers to keep for themselves. Also before he left
office, the governor's staff had emails and other electronic
communications by Romney's administration wiped from state servers,
state officials say. Those actions erased much of the internal
documentation of Romney's four-year tenure as governor, which ended in
January 2007. Precisely what information was erased is unclear."
Odd: almost as if he had something to hide... Yet something tells us
the other side of those emailed correspondences will still be there:
alive and kicking, somewhere on the archived servers of Bain Capital,
and a few prominent health insurance companies (and of course Goldman
Sachs, because Goldman Sachs is everywhere). Naturally, one would need a
subpoena to get those. And for that one would need a reason to assume
something is illegal. Luckily, wiping your hard disks while a servant
of the people is perfectly normal in a banana republic. Now just who
does Ron Paul have to murder in broad daylight while having sex with
Snooki before the general media finally decides he is worthy of a shot
at this whole farce?
Special Notice December 5, 2011 Treasury Delays Release of Government’s GAAP-Based Financial Statements Until Christmas Eve A Christmas Present from Uncle Sam. I called the U.S. Treasury,
today (December 5th), to confirm the scheduled December 15th release of
the 2011 Financial Statements of the U.S. Government, the GAAP-based
(generally accepted accounting principles) accounting of the
government’s financial operations for the 2011 fiscal year ended
September 30th. The advice received was that the release has been delayed until
Friday, December 23rd, which is as close to Christmas Eve as the
government can get. Given the way prior releases of these statements
have been handled, though, the 23rd still has to be considered as a
tentative release date, and I offer no comment as to any implications of
the new timing and the potential for burying unhappy political news.
Beyond an initial analysis of the GAAP financial statements, once
released, I shall include an assessment of the key elements of the
government’s finances as part of the updated Hyperinflation Report. The
timing of that report will be discussed in the next regular Commentary. PLEASE NOTE: The next regular Commentary is scheduled for Friday, December 9th, covering the October trade deficit. —Best wishes to all, John Williams www.ShadowStats.com
Jim Sinclair’s Commentary
"QE to infinity" of both the Republicans and Democrats is going, relatively speaking, out of business.
God only knows what fills that political vacuum.
Study documents desperate conditions facing the unemployed in America By Andre Damon and Barry Grey 5 December 2011 A study published Friday by Rutgers University documents the
desperate situation facing millions of American workers who lost their
jobs in the recession that began four years ago. The survey of laid-off
workers, conducted by the John J. Heldrich Center for Workforce
Development at Rutgers, found that only 22 percent of those who lost
their jobs between August 2008 and August 2009 were working full-time as
of August 2011. Just 7 percent of the unemployed initially contacted by the
Heldrich Center in the summer of 2009 say they have regained their
previous income level. Another 23 percent say they are on their way
back, having experienced a minor downward change in their quality of
life that they believe to be temporary. But a full 36 percent speak of “cataclysmic effects” of the
recession and prolonged unemployment, including 21 percent whom the
report’s authors consider to have been “devastated” and another 15
percent “who appear to have been wrecked by the recession.” (Emphasis in
the original). The former category includes those in poor financial
shape who have suffered a major decline in their standard of living,
even if they believe it to be temporary. The latter comprises workers
who are in poor financial shape, have suffered a major decline in
lifestyle and believe the new state of affairs to be permanent. Forty-seven percent of those surveyed say their personal financial
situation is in “poor shape,” 58 percent say the economic crisis has
had a “major impact” on themselves and their families, and 41 percent
believe that the impact on their standard or living will be permanent. The study found that the crisis has taken its biggest toll on
those with no college education, 46 percent of whom have been
“devastated” or “wrecked.” However, nearly a quarter (24 percent) of
college graduates in the survey have likewise been “devastated” by the
jobs crisis. More…
Jim Sinclair’s Commentary
It appears they have issued a blanket downgrade of all Euro nations which includes, of course, Germany.
S&P ratings warning to top euro nations By FT reporters December 5, 2011 8:10 pm Standard and Poor’s has warned Germany and the five other triple A
members of the eurozone that they risk having their top-notch ratings
downgraded as a result of deepening economic and political turmoil in
the single currency bloc. The US ratings agency is poised to announce later on Monday that
it is putting Germany, France, the Netherlands, Austria, Finland, and
Luxembourg on “creditwatch negative”, meaning there is a one-in-two
chance of a downgrade within 90 days. It warned all six governments that their ratings could be lowered
to AA+ if the creditwatch review failed to convince its experts. Markets
have been braced for a potential downgrade of France but few expected
Germany’s top rating to be called into question. With regard to Germany, S&P said it was worried about “the
potential impact (…) of what we view as deepening political, financial,
and monetary problems with the European economic and monetary union.” The agency is moving as eurozone governments make further progress
towards a comprehensive deal to contain the region’s sovereign debate
crisis ahead of a crucial EU summit on December 9. Berlin and Paris want
the eurozone to sign up to tougher fiscal rules to calm investors’
worries. More…
Jim Sinclair’s Commentary
You know there is a real physical resemblance between these two key world leading players, and Laurel and Hardy.
Sarkozy and Merkel Push for Changes to Europe Treaty The New York Times Monday, December 5, 2011 — 10:30 AM EST The two primary leaders of the euro zone, Chancellor Angela Merkel
of Germany and President Nicolas Sarkozy of France, issued their first
joint call on Monday for amendments to Europe’s governing treaties to
provide better economic governance for the 17 countries of the euro
zone. The leaders met over lunch at the Élysée Palace to prepare joint
proposals to offer the full membership the European Union in Brussels on
Thursday night. They agreed to propose automatic penalties for
countries that exceed European deficit limits as well as the creation of
a monetary fund for Europe. They also backed monthly meetings of
European leaders. More…
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A few days ago we presented an analysis by ConvergEx showing that due to the very close historical correlation between home prices and employment, it is the Fed's view that the only way
to stimulate employment (aside from such BLS shennanigans as
pretending that despite the natural growth of the labor force by 90k a
month to keep up with population, those willing to work are in fact
declining) is to raise home prices. Raising home prices be definition
means either reducing supply - an event which is proving impossible
with shadow inventory in the millions and rising, even as thousands of
new delinquent mortgages appear each day while homebuilders keep on
chugging out new homes that remain vacant for years, or increasing
demand. It is the latter that the Fed targets, by attempting to make
mortgage rates ever cheaper via LSAP, Operation Twist or other Treasury
curve interventions that attempt to push down long-dated yields ever
lower. This works in theory. In practice, however, as the chart
below demonstrates, the Fed's entire ZIRP-targeting policy over the
past several years has been one abysmal failure (for everyone
expect those with immediate access to the Fed's zero interest rate
capital - i.e., the Primary Dealers). As proof of this we present the
following chart, which maps the SAAR in New Home Sales against the 30
Year Fannie Cash Mortgage. What appears very clearly on this chart is
that despite ever declining mortgage rates, there is simply no interest
in home turnover, and sales are at record low levels due to lack of
demand, and lack of desire to sell into a bidless market, in essence
causing the entire housing market to halt.
The
onslaught of 2012-Outlooks continues to unmercilessly suggest bullish
biases in most risk assets, particularly higher quality equities and
credit, and while almost as ubiquitously noting the binary nature of
outcomes in the medium-term and significant downside potential. Most of
the upside/downside biases reflect heavily on Europe's outcome which
in turn seems to have the majority forecasting recessionary contraction
being 'stabilized' by a round of quantitative easing by the ECB. BofA's
Global Asset Allocation group notes, however, as the Fed has recently
discovered, QE alone may be enough to stabilize a situation but a
credible plan for growth is harder to achieve. Furthermore, in a
topsy-turvy potentially chaotic manner, they point out that the market's expectation of QE has been enough to calm waters (or more aptly levitate markets) leaving policy makers with little choice now for fear of the instability created by not delivering what Mr.Market (as we have been noting for weeks - pressure for a 'crash' from the likes of Deutsche Bank) demands or expects. But away
from European disunity, if that is possible, BofA's key global risks
include a worse-than-feared-EU-recession, Mid-East unrest, US fiscal
tightening, and a China hard landing but given their perspective on the extreme levels of bearishness, they prefer to hedge upside risk from their correctly cautious view.
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