from The Economic Collapse Blog:
Yes, it is officially time to start freaking out about the global
economy. The European financial system is falling apart and it is going
to go down hard. If Europe was going to be saved it would have
happened by now. The big money insiders have already pulled their funds
from vulnerable positions and they are ready to ride the coming chaos
out. Over the next few months the slow motion train wreck currently
unfolding in Europe will continue to play out and things will likely
really start really heating up in the fall once summer vacations are
over. Most Americans greatly underestimate how much Europe can affect
the global economy. Europe actually has a larger population than the
United States does. Europe also has a significantly larger economy and a
much larger banking system. The world is more interconnected today
than ever before, and a collapse of the financial system in Europe will
cause a massive global recession. Once the global economy slides into
another major recession, it is going to take years to recover. The pain
is going to be immense. Yes, that is going to include the United
States. Sadly, we never recovered from the last recession, and it is
frightening to think about how much farther this next recession is going
to knock us down.
Read More @ TheEconomicCollpaseBlog.com
Yes, it is officially time to start freaking out about the global
economy. The European financial system is falling apart and it is going
to go down hard. If Europe was going to be saved it would have
happened by now. The big money insiders have already pulled their funds
from vulnerable positions and they are ready to ride the coming chaos
out. Over the next few months the slow motion train wreck currently
unfolding in Europe will continue to play out and things will likely
really start really heating up in the fall once summer vacations are
over. Most Americans greatly underestimate how much Europe can affect
the global economy. Europe actually has a larger population than the
United States does. Europe also has a significantly larger economy and a
much larger banking system. The world is more interconnected today
than ever before, and a collapse of the financial system in Europe will
cause a massive global recession. Once the global economy slides into
another major recession, it is going to take years to recover. The pain
is going to be immense. Yes, that is going to include the United
States. Sadly, we never recovered from the last recession, and it is
frightening to think about how much farther this next recession is going
to knock us down.Read More @ TheEconomicCollpaseBlog.com
Grauniad Rejected - Germany Denies All Rumors
Nobody could have possibly foreseen that the Guardian was literally pulling BS out of its ass:- GERMAN GOVERNMENT OFFICIAL SAYS THERE WAS NO DISCUSSION TO BUY BONDS OF CRISIS HIT MEMBERS AT THE G-20 MEETING - RTRS
As Job Openings Plunge By Most Since May 2010, Beveridge Curve Goes Berserk
The BLS April JOLTS survey was released earlier and it was ugly - of particular attention was the number of "job opening" which collapsed from 3.741MM to 3.416MM, a drop of 325,000, which just happens to be the biggest decline since May 2010. It is also the 6th largest drop in history as the second chart below from John Lohman shows. Adding to the dire jobs picture was the New Hires number which dropped by 160,000, the biggest sequential drop since April 2011, and finally separations, which after months of increases (remember: more separations is a good thing supposedly, meaning people are confident they can find better paying jobs elsewhere), had their biggest drop by 81,000, also the most since April 2011.
Pay Attention To What Everyone Else Neglects
Admin at Jim Rogers Blog - 3 hours ago
Pay attention to what everyone else neglects. - *a famous Jim Rogers quote
on investing*
*Jim Rogers is an author, financial commentator and successful
international investor. He has been frequently featured in Time, The New
York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The
Financial Times and is a regular guest on Bloomberg and CNBC.*
The Germans May Lose Patient And Leave The Euro
Admin at Marc Faber Blog - 4 hours ago
It`s quite possible that at some stage the germans will lose patient and
they will exit the eurozone. - *in CNBC*
*
*
Related: Dax Index, EURUSD;
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*
The Message From The Euro Market
Eric De Groot at Eric De Groot - 4 hours ago
The message from the Euro market is one of increasing downside force. 2010
support, 125.71, was tested and broken on January and May 2012,
respectively. Each event occurred on increasing volume. This suggests a
down trend with increasing force and likely test of the June 2010 gap
support (blue circle) when TIME is right (chart 1). Chart 1: Euro ETF (FXE)
REV(E), a measure of...
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Net worth implosion: It's not just housing
Eric De Groot at Eric De Groot - 7 hours ago
The Great Recession which only massive liquidity inject hide the effects of
another deflationary depression wiped out nearly 30 years of net worth
gains (housing, stocks, jobs, etc) for the typical household. It's not over
yet. Headline: Net worth implosion: It's not just housing Americans' net
worth collapsed in recent years, but don't blame the housing market for it
all. New Census...
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content, and more! ]]
Jim Rogers' Latest Investment Interview Shows Him Turning Into A China Bear
Eric De Groot at Eric De Groot - 7 hours ago
Jim Rogers represents boots on the ground in China and the surrounding
area, so I follow his assessment of timing closely. "I expect the U.S. and
Europe to slowdown in 2013 and 2014," says Rogers. "You have two of the
largest economic blocks slowing down, so most of China — especially those
dealing with Europe and the U.S. — will have problems." Rogers goes on to
state that if the Chinese...
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content, and more! ]]
Greek leaders seek coalition, want to ease bailout
Eric De Groot at Eric De Groot - 7 hours ago
The old English idiom to have one's cake and eat too describes the European
bailout. Cake or liquidity to infinity will be provided to anyone with an
empty plate. Due to the quantity of cake being served and consumed,
someone's bound to choke soon. Headline: Greek leaders seek coalition, want
to ease bailout ATHENS (Reuters) - Greece's conservative leader pushed on
Monday for...
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content, and more! ]]
Funding gap for state retirement benefits rises to $1.4 trillion
Eric De Groot at Eric De Groot - 7 hours ago
Continued deterioration in unfunded liabilities reflects the world’s
growing financial crisis and self-reinforcing, vicious cycle already
established the US Federal and State Budgets (Jim's Formula). Headline:
Funding gap for state retirement benefits rises to $1.4 trillion By Allison
Linn State governments face a gap of more than $1 trillion between what
they say they will provide...
[[ This is a content summary only. Visit my website for full links, other
content, and more! ]]Springtime For The Military-Industrial Complex
America is spending more today drone-striking American citizens in Yemen, drone-surveilling Mexican drug lords and “turning our attention to the vast potential of the Asia-Pacific region“ than she was during the cold war when a hostile superpower had thousands of nukes pointing at her. Military contractors have nothing to fear. Whether it is the Pacific buildup to contain Chinese ambition, or drone strikes in the horn of Africa or Pakistan, or the completely-failed drug war, or using the ghost of Kony to establish a toehold in Africa to compete with China for African minerals, or an attempted deposition of Bashar Assad or Egypt’s new Islamist regime, or bombing Iran’s uranium-enrichment facilities, or a conflict over mineral rights in the Arctic, or (as Paul Krugman desires — and what the heck, it’s 2012, why not?) an alien invasion, or a new global conflict arising out of a global economic reset, it’s springtime for the military contractors. It’s everyone else who should be worried.
Mapping The Deepening Political Divide Within The Eurozone
Is
a fiscal union possible? Is it possible to credibly remove risk from
the market and enforce budgetary and deficit targets? As Barclays notes,
it appears that, given the apparently deepening divide among euro area
politicians, any credible solution will be difficult to attain.Summarizing Jamie Dimon's Congressional Testimony
As expected, absolutely nothing new was disclosed in today's latest Jamie Dimon dog and pony show. To summarize what we did learn:- "JPM is not too big to fail, but it is not at risk of failing unless the earth is hit by the moon"
- "We make CDS for the benefit of veterans, retirees, orphans and widows"
- "We only bought Bear's assets in a firesale while the Fed backstopped its liabilities, because the US government made us"
- "VaR can be made to show anything. We have a closet full of models"
- "Gambling is not investing"
Is VIX-Gold Divergence Pricing In Too Much QE3 Hope (Or Not Enough)?
The
relationship between two measures of risk-aversion, VIX (forward
expectations of equity volatility) and Gold (forward expectations of
central bank largesse), are diverging in a very pro-printing manner over
the last few days. Emprically, it appears we see a rotation through three phases:
a perfectly anti-correlated 'liquidation' plunge in gold prices on
dramatic rises in VIX (or risk); a highly correlated period of VIX and
Gold movements (as uncertainty over the binary print-and-be-saved or
don't-print-and-peril process evolves); and a hopeful period of
anti-correlation where Gold rises and VIX plunges on the back of further
printing to the rescue. We find ourselves in the latter phase
currently. It appears that VIX at a 17 handle is pricing rather
notably more QE (and its implied vol compression) relative to Gold at
only $1620.LCH Raises Margins Costs For Most Spanish Bonds
And from pure rumor, whereby the ECB's SMP which is not used due to Germany's stern disapproval, gets somehow replaced with the ESM, which does not exist, we go to fact, whereby we find that LCH, just as expected earlier, has hiked Spanish margins.- LCH SAYS CHANGE IN SPANISH MARGINS EFFECTIVE FROM CLOSE JUNE 21
- LCH RAISES MARGIN COSTS FOR TRADING MOST SPANISH BONDS
And For Today's Market Ramp Rumor Du Jour We Have...
It has been a while since the Guardian came up with a European "bailout" rumor. Time to change that. In a nutshell: Germany will somehow allow a fund, the ESM, which does not yet even exist, overturn the primary principle of the Eurozone, the no sovereign bailout clause, and use money which has not been funded, to subordinate bondholders across the entire continent (because ESM is priming) and serve as an additional secured lender in addition to the ECB... In other words, the ESM will take place of the ECB's SMP. With the only difference that the ECB can print money, while the unfunded ESM will at best rely on the murky details of repo lending. Same subordination either way, of course.Is TARGET2 A Less Than Thinly Veiled Bailout For Europe's Periphery?
Recently,
there has been an intense debate in Europe on the TARGET2 system
(Trans-European Automated Real-time Gross Settlement Express Transfer
System 2), which is the joint gross clearing system of the eurozone the
interpretation of this system and its balances has provoked divergent
opinions. Some economists, most prominently Hans-Werner Sinn, have argued that TARGET2 amounts to a bailout system. Others have vehemently denied that. Philipp Bagus adresses the question of whether this 'mysterious' system, that we have been so vociferously discussing, simply amounts to an undercover bailout system for unsustainable living standards in the periphery?
Concluding by comparing TARGET2, Eurobonds, and the ESM, he notes that
all three 'devices' serve as a bailout system and form a tranfer union
but governments prefer to hide the losses on taxpayers as long as possible and prefer the ECB to aliment deficits in the meantime.I Come Not To Praise Rating Agencies, But To Bury Them
The
rating agencies have lots of problems, but they are not to blame for
the financial crisis. The regulators and investors are the ones who
deserve the blame. The agencies have too much influence,
but it’s been given to them by the regulators. Clearly Europe is
trying to get rid of rating agencies to be aggressive, but the
situation has to change. For too long, laziness has driven regulatory
policy. Too much emphasis has been put on ratings, and the safety at the high end has been dramatically exaggerated.
One thing virtually every banking crisis has in common, is when a
previously “safe” or AAA asset, that carried minimal capital charges
deteriorates. The sub-prime mortgage market and European Sovereign
debt are just two of the most recent examples. We need a realistic
regulatory framework like the one we discuss in regulatory-capital-size-and-how-you-use-it-both-matter. What
the EU is doing is probably even worse than the existing framework,
but the idea of diminishing the role of rating agencies is a good one.Greek Theater Double-Feature: A Farce And A Tragi-Comedy
Imagine a ship with 100 passengers and crew drifting down a river that eventually cascades over a 1,000 foot waterfall. It's easy to plot the ship's course and the waterfall ahead. You might think 100% of those onboard would agree that something drastic must be done to either reverse course or abandon ship, but before we jump to any conclusion we must first identify what each of the 100 people perceive as serving their self-interest. If life onboard is good for 55 of the 100, they may well rationalize away the waterfall dead ahead. Indeed, they might vote to maintain the current course, thus dooming the 45 others who can hear the thundering cascade ahead but who are powerless to change course in a democracy. This is the "tyranny of the majority" feared by some of the American Founding Fathers. I cannot locate reliable statistics on what percentage of the Greek population is dependent on the State for a paycheck, entitlement, retirement, disability, unemployment, etc., but I suspect the number exceeds the full-time private payroll of that nation. It seems likely that the number of voters in Greece who draw a check or benefit from the State exceeds the number of privately employed voters whose perception of self-interest is radically at odds with continuing State borrowing to fund the Status Quo. If 55% of the voting public is dependent on government spending, then they will vote to continue that spending regardless of its unsustainability.
You Call This A "Union"?
As
Michael Cembalest of JPMorgan notes, Spanish unemployment is 24%
despite the highest levels of labor shortages in Germany in 25 years - what kind of monetary union is this?Europe Launches Ban On All Policy Criticism By Scrapping Use Of Rating Agencies
Why are we not surprised? The EU has just voted to scrap the use of ratings agencies in the next step on the road to a ban of all policy criticism. Via Bloomberg,- *EU LAWMAKERS APPROVE AMENDMENT TO END USE OF CREDIT RATINGS
And in the most bizarre of twists, they would prefer if they were allowed to rate themselves:
- *LAWMAKERS CALL FOR EU TO ISSUE SOVEREIGN CREDIT RATINGS :MCO US
Jim Sinclair’s Commentary
Euroland’s pot is empty, cutting short the normal European tradition of trying to talk problems to death.
The end is not near, it is here.
‘The Two Men Barely Looked at Each Other’ 8:12 AM, Jun 19, 2012 • By DANIEL HALPER
CBS reports that when Barack Obama and Vladimir Putin met with the press after their long private discussion, "The two men barely looked at each other. You could just feel, sort of, the tension between them. And the body language really represented how far apart the two leaders remain on the issue of Syria."
"And interestingly," CBS adds, "Apparently President Obama got a bit of a lecture from Putin about some other failed transitions that are going on around the world."
More…
Jim Sinclair’s Commentary
What has come will really come under crisis conditions
Fed Will Ease Monetary Policy This Week: Goldman By Jean Chua | CNBC
The U.S. central bank will most likely ease monetary policy when it meets this week as recent data point to a worsening labor market and the crisis in Europe intensifies, Goldman Sachs said.
The Federal Open Market Committee will likely say it would buy assets such as mortgage-backed securities and U.S. Treasurys when it meets for a two-day meeting starting Tuesday, Jan Hatzius, the investment bank’s Chief U.S. Economist said in a report on Monday.
"We would be quite surprised if we saw no easing this week," Hatzius wrote in the report.
The Federal Reserve may also extend Operation Twist, he added, although he does not find the "strategy very attractive." The program – which involves the Fed selling medium-term bonds and using the proceeds to buy longer-term ones, such as 10-year Treasurys, effectively driving down longer-term interest rates – runs out at the end of June.
"We believe that an extension of Operation Twist could well be insufficient on its own and could thus be followed by additional easing action before long," Hatzius said.
Instead, a "sufficiently large program" that involves mortgage-backed securities would help, he said, adding that while "it is unlikely to be very powerful, that doesn’t mean Fed officials shouldn’t do it."
More…
Jim Sinclair’s Commentary
This is why you need a subscription to wwww.shadowstats.com
You need to understand what is behind the number, not just what the correct number is.
COMMENTARY NUMBER 449 May Housing Starts June 19, 2012
Housing Starts Bouncing at Slightly Higher Plateau __________
PLEASE NOTE: The next regular Commentary is scheduled for Wednesday, June 27th, covering May existing and new home sales, and May new orders for durable goods. That will be followed on Thursday, June 28th, by a Commentary on the third estimate of first-quarter 2012 GDP.
Best wishes to all — John Williams
Opening Comments and Executive Summary. Consistent with other major economic reporting in May, the headline May housing starts number was weaker than market expectations (see Commentary No. 448). At such point as the Federal Reserve moves to put forth its next effort at a bank-propping easing (domestic or global liquidity issues could trigger action at any time), the economic data are in place to provide the political cover of an “action to prop the economy.”
Public pressure for some action to support the economy likely will follow the July 27th annual revisions to the GDP, where there is a fair chance that the economy suddenly will appear to have been weaker than previously reported. There is nothing meaningful the Fed can do to help the economy, other than what likely is unthinkable to Mr. Bernanke, at the moment: raising interest rates. Higher interest rates actually tend to encourage bank lending, but the banks still appear to be impaired financially and on the Fed’s life support system.
More…
June 19, 2012, at 10:39 am
by Jim Sinclair in the category Jim's Mailbox |
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by Jim Sinclair in the category Jim's Mailbox |
Print This Post | Email This PostJim,
"FedEx said its freight division would increase shipping rates by 6.9%."
Click here to read full article…
Result of a currency induced cost push inflation?
Also, FedEx Signals Freightload of Economic Woe (article bellow).
Best regards,
CIGA Christopher
FedEx Signals Freightload of Economic Woe By SPENCER JAKAB
Updated June 18, 2012, 8:17 p.m. ET
FedEx Corp. recently received media coverage for a corporate act of kindness that underscored its logistical prowess. Personal items lost 15 months earlier during Japan’s tsunami that had washed up on Alaskan beaches were delivered back across the ocean and reunited with their owners on one of its daily flights between Anchorage and Tokyo.
A container is unloaded from a FedEx cargo plane at the FedEx hub at Los Angeles International Airport.
Unfortunately for FedEx, there may have been plenty of spare room on those planes. Air-freight competitor UTi Worldwide, which recently reported results, sounded a note of caution about business in coming months. And April data on volumes from FedEx, the latest available, suggest a 9% drop in international cargo through its main hub in Memphis.
All this hints that fourth-quarter results for the period ended in May, due Tuesday, could be accompanied by cautious guidance for the next fiscal year. Analysts’ consensus estimate calls for earnings of $1.89 a share for the fourth quarter, versus $1.75 a year earlier. The estimate has slipped by about five cents a share since March.
More…
Net worth implosion: It’s not just housing
CIGA Eric
The Great Recession which only massive liquidity inject hide the effects of another deflationary depression wiped out nearly 30 years of net worth gains (housing, stocks, jobs, etc) for the typical household. It’s not over yet.
Headline: Net worth implosion: It’s not just housing
Americans’ net worth collapsed in recent years, but don’t blame the housing market for it all. New Census Bureau data shows that median household net worth, excluding home equity, fell by 25% between 2005 and 2010. That decline was driven largely by the plummeting stock market, which devastated Americans’ portfolios and retirement accounts. Overall, median household net worth declined 35% to $66,740 in 2010. The median worth of stock and mutual fund portfolios fell 33%, while the median home equity value dropped 28%. "One of the significant factors is housing, of course, but it’s not that alone" said Alfred Gottschalck, an economist with the Census Bureau. "It’s how business conditions affect stock and retirement accounts." The estimates are generally in line with what other government reports have found. Last week, the Federal Reserve released its triennial study that showed median family net worth overall dropped nearly 40%, between 2007 and 2010. The Fed study surveys a smaller number of people. The Great Recession — including the housing and stock market collapses — wiped out nearly 30 years of net worth gains for the typical household.
Source: finance.yahoo.com
More…
Funding gap for state retirement benefits rises to $1.4 trillion CIGA Eric
Continued deterioration in unfunded liabilities reflects the world’s growing financial crisis and
self-reinforcing, vicious cycle already established the US Federal and State Budgets (Jim’s Formula).
Headline: Funding gap for state retirement benefits rises to $1.4 trillion
By Allison Linn State governments face a gap of more than $1 trillion between what they say they will provide public workers in retirement benefits and what they actually have in their coffers, according to a study released Monday. The report, from Pew Center on the States, finds that the gap has widened considerably in recent years, as states have been slammed by investment losses stemming from the 2008 financial crisis and budget crunches caused by the recession. As of the 2010 fiscal year, the study found that states have about $757 billion less than they need for pension obligations. The states have about $2.31 trillion set aside, the report found, but their liability is about $3.07 trillion. Advertise | AdChoices In addition, the report found that states have a health care liability of about $660 billion, but have set aside only $33.1 billion for those benefits. That leaves a $627 billion gap. The two shortfalls add up to $1.38 trillion for the 2010 fiscal year, the most recent data available. That’s an increase of $120 billion, or 9 percent, from the 2009 fiscal year.
Source: msnbc.msn.com
More…
Dear Jim,
Tax wars and protectionism are on the rise worldwide. There is no cooperation among nations for curbing the crisis. Looks like a critical event MUST happen before western politicians think and act on what may be global solutions.
CIGA Christopher.
UK’s Cameron: Britain will “roll out red carpet” for French businesses if govt taxes them more By Associated Press, Updated: Tuesday, June 19, 10:25 AM
PARIS — As if it’s not enough that England and France are battling for Europe’s soccer championship this week — now their leaders are sniping over taxes, too.
While their teams face decisive matches in Ukraine, British Prime Minister David Cameron ignited a stir while in Mexico at the G-20 summit with a swipe at new French President Francois Hollande’s plan to raise taxes on the wealthy and large corporations to help France tackle its deficit and pay for new public spending intended to lift growth.
Cameron slammed Hollande’s tax-and-spend approach to resolving the eurozone crisis in remarks before business leaders widely reported in the press but so-far unconfirmed by Downing Street officials.
“I think it’s wrong to have a completely uncompetitive top rate of tax,” Cameron said ahead of a Group of 20 meeting of leaders of the world’s largest economies in Los Cabos, Mexico.
Cameron promised to “roll out the red carpet” for France’s wealthy and businesses if Hollande’s government goes ahead with a campaign pledge to increase the tax rate on earnings above €1 million ($1.26 million) to 75 percent.
Cameron said he’ll “welcome more French businesses to Britain and they can pay tax in Britain and pay for our health service and schools and everything else.”
More…
Jim,
I am sure it is starting to become clearer all the time to the EU elite as time starts to run out. As you have continually pointed out, the only “solution” is QE to infinity as outright defaults are complete political and financial suicide, and not just for the EU.
Regards,
CIGA Dustin
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