We, just like everyone else, have grown quite tired of all phrases containing some variant of "Pain in Spain." Which is why instead we are focusing on its Misery. As in Misery Index, defined as the combination of inflation and unemployment. Following today's announcement of a surge in Spanish inflation which soared from 2.7% to 3.5%, trouncing expectations of a modest rise to 2.8%, it is clear to see that the Misery in Spain has never been higher.
The Student Loan Bubble In 19 Simple Charts
A
picture paints a thousand words but in the case of the world of
college education (and its surrounding income, unemployment, debt
burden, and pricing implications), we decided 19 charts was the simplest
way to explain the path to debt servitude that an increasing share of
the US population is taking - despite record delinquencies, falling
real incomes for graduates, stagnant graduate employment, and rising
college costs. As BofAML notes, the cost of higher education has continued to climb, fueled by debt and government aid.
Over the past twenty years, tuition growth exceeded the average rate
of inflation by nearly 3% annually, while both grant aid and Federal
loans per full-time undergraduate exceeded by about 5% annually. This trend is not sustainable, in our view.
The challenging labor market, which has left the youth population
underemployed and underpaid, has put the spotlight on the burden of
student debt. We expect a correction in the price of tuition and
reduction in debt. There will likely be lasting effects on the economy
from the high cost of education and large debt burden. Graduating during a recession leads to permanently lower earnings growth, making it that much harder to service the debt burden.Cue Stagflationary Recession: Chicago PMI Huge Sub-50 Miss, Back To September 2009 Levels; Prices Paid Spikes
QE1,
QE2, Operation Twist 1, Operation Twist 2, a Fed balance sheet that is
now expected to be $5 trillion in 2 years, and all we get is a lousy
manufacturing economy that according to the Chicago PMI just
dipped into contraction, or for all intents and purposes, recession,
printing its first sub-50 print, 49.7 specifically, on expectations of a
52.8, and down from 53. This was the lowest since September 2009 and
the biggest miss in 4 months. Specifically, the employment index came at
a two and a half year low, New Orders, Backlogs and Deliveries had
their 3 month moving averages at the lowest since Mid 2009, and Capital
Equipment printed at a 17 month low. But not all hope is lost: at least
prices paid soared for the third consecutive month to 63.2 from 57.
Cue not just recession, but stagflationary recession. It also means
that both the Manufacturing ISM and Q3 GDP will be a total disaster.
Time to start pricing in QE X to be followed 24 hours later by QE X+1.
The central bank cartel is starting to loseOnce 'Still Ok', Now 'Getting Scary', Next 'Save Me'
Eric De Groot at Eric De Groot - 10 minutes ago
We suggested that the economy was transforming from ‘still ok’ to 'getting
scary' this summer (chart). It will get worse; cries of "save me" are
coming. Normally, lots of money has already been made by the time the
headlines recognize the transformation. At this point, I will say that the
intermarket message, money flow analysis, and most important of all
cycles...
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content, and more! ]]
Money Is Not Flowing Into Economic Activity, It`s Flowing Into Asset Prices
Admin at Marc Faber Blog - 1 hour ago
The money (from monetary easing) does not flow into economic activity, it
flows essentially into asset prices, into speculation. -* in a recent FNN
Australia interview*
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*
Farming Will Be Great In The Next 20 years
Admin at Jim Rogers Blog - 1 hour ago
Farming is going to be one of the best professions of the next 20 years. - *in
a recent CNN interview*
*
*Related stocks: John Deere (DE), Potash (POT), Mosaic (MOS)
*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.*
Up Is Down In Election Years
Eric De Groot at Eric De Groot - 2 hours ago
I'll present the following trends below for those not averse to independent
thinking. The trend towards service producing jobs (food service or
"hamburger flipping", bartending, food, hospitality jobs, etc) over
good-producing jobs has been in place since 1953. Who cares if the BLS
found some extra jobs while cleaning out the garage this weekend. Don't
expect...
[[ This is a content summary only. Visit my website for full links, other
content, and more! ]]40 Deutsche Bank Employees Injured After Inhaling "Dangerous" Substance In Schkeuditz, Germany
It appears banker popularity is low to quite low not only in the US but virtually everywhere. According to Lepizig-Fernsehen, a toxin alert has been issued at a Deutsche Bank branch in Schkeuditz, a suburb town of Leipzig, where 40 people have been "injured" after inhaling a white powdery substance delivered hours before, and which spread via the building's air conditioning system.Netanyahu’s Red Line
Iran is not blameless, and continues to provoke Israel through its support for Hamas and Hezbollah and through eliminationist rhetoric. But given the level of provocation from the Israeli and American side, it is astonishing that Iran remains free of nuclear weapons. Yet it is a fact that Iran is not armed with nuclear weapons, and it remains a fact that Iran has not attacked nor occupied any foreign lands since World War 2. Iran is not an expansionistic country. As neocon provocateur Patrick Clawson essentially admitted in advocating for a false flag attack to get America to war, Iran is not likely to attack either the United States or Israel. So when it comes to drawing red lines, we in the West would do well to draw a red line around our behaviour — because right now, we in the West are the ones who are stirring up trouble by threatening to strike first.
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Real Disposable Income Has First Drop Since November 2011, Savings Rate Tumbles
There were no surprises in the August Personal Income and Spending numbers, which came at 0.1% and 0.5%, respectively, on expectations of a 0.2% and 0.5% rise. Summarized: less income, more spending. This however, did not make the consumer income statement data any better: the bottom line is that adjusted for inflation, Real Disposable Income slid 0.3% in August, after a tiny 0.1% increase in July, the first such decline since November 2011, and as Bloomberg's Joseph Brusuelas says this is "another rough report for the consumer which doesn’t bode well for household spending going forward." Which means Bernanke knew precisely what he was doing when he launched QE3, which all advocated of QE3 will now say was fully justified. There is one problem with that logic however: for QE3 to be justified, it would mean QE1 and 2 were. Well, last we checked the US is still in a major depression, and neither QE1, 2, nor Twist 1 or 2 have done anything to prevent today's ugly data. Surely, this time it will be different. Finally, and as a result of the ongoing contraction in income, as expected the savings rate dropped from 4.1% to 3.7%: the lowest since May.
China Delivers Crude Supertanker To Iran
The US takes... and China makes. With the Western world doing all it can to cripple the Iranian regime with embargo after embargo, desperate to provoke the country into an offensive move that would be promptly retaliated as a move of "liberation", Iran, which in a few short months has achieved just what all the Western central banks have been desperate to do and see its currency collapse to record lows, continues to find eager allies in the unlikeliest of places. Namely China, which today delivered the first of 12 crudesupertankers to Iran " giving Tehran extra capacity to transport its oil to Asia as it struggles against Western sanctions, but it is unclear if the ship has the permits necessary to call at global ports." What is most amusing is the glaring override of the western isolation of Iran by China, which together with India and Russia, have now become critical trading and strategic partners of Iran, a consideration which any offensive moves by Israel or the US will most likely need to factor in.
The Operatic Grandeur Of "More Europe"
Europe is becoming quite strange. The World is becoming quite strange. A
politician gets up and speaks and says nothing, no one listens to what
he said, then he is roundly congratulated for his bold words that were
heard by no one and then everyone disagrees with what they think he
might have said. The Continent seems to be in a dream-state
where the worse it gets; the better it is because the ECB will be drawn
in and provide liquidity like the ever-after will provide Redemption. I
am not sure America is any better actually. In the United States we
admit we are printing money while in Europe they “print and deny” but
the outcome is about the same. Economic and fiscal reality is a thing of the past as the world’s Central Banks will provide manna, sustenance and well-being.Daily US Opening News And Market Re-Cap: September 28
The "mañana" approach to fiscal management, that Spain is known for, presented what is generally perceived as overly optimistic growth forecasts for 2013 and lacked details on structural reform resulted in another risk off session. As a result, Spanish stocks continued to underperform (IBEX seen lower by over 5% on the week), with 10y bond yield spread wider by around 12bps as market participants adjusted to higher risk premia. The state is due to sell 2s and 5s next week, which may also have contributed to higher yields. As a reminder, Moody’s review on Spain is set to end today, however there is a chance that the ratings agency may extend the review for another couple of months or wait until the stress test results are published to make an announcement. In other news, according to sources, Greece could return to its European partners for a Spanish-style rescue of its banking sector, as the country is looking to ease the burden via another writedown of its debts or a strong recapitalisation of its banks (no official response as yet). Going forward, the second half of the session sees the release of the latest PCE data, as well as the Chicago PMI report for the month of September.Euro And Swiss Franc Fall To New Record Lows Against Gold
Gold reached highs in euros and Swiss francs yesterday, in London trading it hit EUR 1,379.60/oz compared to EUR 1,375/oz last September. In Swiss Francs gold traded at CHF 1,666/oz. Europeans have been viewing scenes of violence and riots from protestors in Madrid and Athens over the past few days. Barclays Plc. announced yesterday it was opening its own London vault to store gold and other precious metals due to demand from their clients. Investment banks have readjusted price targets upward in the past few days with some calling for gold at $2,000 and higher in the next few months. This signals that the recent rally of the euro against the dollar was largely due to the poor US monetary and fiscal situation and the greenback’s weakness and not due to any great confidence in the single currency per se.Frontrunning: September 28
- China accuses Bo Xilai of multiple crimes, expels him from communist party (Reuters), China seals Bo's fate ahead of November 8 leadership congress (Reuters)
- "Dozens of phone calls on days, nights and weekends" - How Bernanke Pulled the Fed His Way - Hilsenrath (WSJ)
- Fed won't "enable" irresponsible fiscal policy-Bullard (Reuters)
- PBOC Adviser Says Easing Restrained by Concerns on Homes (Bloomberg)
- Data Point to Euro-Zone Recession (WSJ)
- Fiscal cliff dims business mood (FT)
- FSA to Oversee Libor in Streamlining of Tarnished Rates (Bloomberg)
- Monti Says ECB Conditions, IMF Role Hinder Bond Requests (Bloomberg)
- Japan Heads for GDP Contraction as South Korea Weakens (Bloomberg)
- Moody’s downgrades South Africa (FT)
- Madrid Struggles With Homage to Catalonia (WSJ)
Overnight Sentiment: Spanish Budget Hangover And Month End Window Dressing
Those confused by yesterday's rapid move higher in stocks, which fizzled by day's end, which was catalyzed by the non-event of the Spanish budget declaration which will prove to be a major disappointment as all such announcement are fated to be, can take solace in the following summary by DB's Jim Reid: "Yesterday's risk rally on the back of the 2013 budget announcement coincided with a trend seen over the last couple of years of rallies into month and quarter ends. We'll probably get a clearer picture of underlying sentiment by early next week with the new quarter starting, especially as it commences with a bang with the Global PMI numbers on Monday." In this vein, tonight's overnight sentiment showing weakness confirms yesterday's move was one which merely used Spain as a buying catalyst without reading anything into it. Because an even cursory read through shows major cracks. Sure enough the sellside readthroughs appeared this morning: "In our view the Spanish 2013 budget is based on a too optimistic GDP growth assumption" from Citi. Once again, the market shot first, and asks questions later, as the weakness in the futures confirms, EURUSD retracing all overnight gains, and Spain now 1.6% lower on this, as well as uncertainty of today's latest non-event - the local bank stress test vers 304.2b - whose results will be announce at noon NY time, and which just may find Bankia (and its Spiderman towel collection) is quite solvent once again.How Crony Capitalism (Or The 'Undiluted Lunacy' Of The Fed) Corrupts The Free Markets
"This
is the final abomination" is how David Stockman begins his epic rant
on the Federal Reserve and crony capitalism in this clip. The "undiluted lunacy" of their actions prompted him to address the Fed's decision to "print ourselves to death"
by saying "this has gone too far, it's street-fighting time" as he
decides, instead of the erudite philosophical view of how capitalism is
being destroyed by statist philosophies of one type or another, to
launch into a full-strength tirade about The Fed. For starters, "The Fed is being run by the single most-dangerous man ever to hold high office in the history of the United States, "as he opines that Bernanke is more dangerous than Geithner, Greenspan, Summers, Hank Paulson all put together. Must watch... Today’s Items:
Spanish Ministers meet to discuss the 2013
budget that will cut their deficit by at least 18 billion euros.
Needless to say, the increased cuts will impose more unneeded austerity;
which in turn, will deflate the Spanish economy even more. Spanish bond
yields, which rose by the most in two months, are above 6 percent.
This means that borrowing, by Spain, gets more expensive as Germany, the Netherlands, and Finland fight for austerity in Spain. All this, as Spanish bank outflow continues, at a record 5%, in August.
Who would have guessed that our allies, Al Qaeda,
were responsible for the September 11th attacks on the US consulate in
Libya. That is what was suggested by Hillary Clinton. She did not
offer any new evidence since the FBI still has been doing their investigation state-side of the attack in Africa. Like Nixon, what did Obama, Clinton, and Susan Rice know and when did they know it?
According to Lawrence Lindsey, if
quantitative easing, by the FED, has become the new normal, then what
happens when a another crisis hits? The central bank’s recently
announced bid to stimulate the economy has also has taken some pressure
off of politicians, in both parties, to deal with the U.S. fiscal cliff
that starts in January. The latest round of extraordinary Federal
Reserve stimulus is risky and leaves little room to maneuver when the
next disaster hits. Speaking of disasters….
The fourth quarter GDP of 2011 was 4.1%
and the first quarter GDP was 2 percent. Now for the second quarter
of 2012, it is coming in at a ridiculously low 1.25%. Add to this,
the fact that durable goods orders crashed 13.2%
and one wonders… How anyone can say, with a straight face that we
are on the road to recovery is amazing. Yet, we have both Obama and Romney saying the economy is improving. Yep, these two buffoons apparently want us to stay the course.
Gold may have more prestige and a broader
fan base, but experts say, silver is where the real action is. Gold
and silver are becoming a foundation investment; thus, the demand will
become the “Must Have” investment to survive. Coupling this with
emerging market demand and silver, because it is cheaper to get now, is
more in demand than gold. Just a warning, do not invest in ETF’s
believing that you are getting the physical without the storage
problems.
Next…
US Bank Run Imminent As FDIC Expanded Deposit Insurance Ends December
http://www.silverdoctors.com
US Bank Run Imminent As FDIC Expanded Deposit Insurance Ends December
http://www.silverdoctors.com
As of January 2013 the FDIC stops offering
100% coverage for all insured deposits. That amounts to $1.6
trillion in deposits. This could lead to bank runs much larger than
the Euro banks flight to safety.
Atwater, California to join 4 other
counties to become the 4th Muni bankruptcy is up for vote on October
3rd. This cash starved city is in need of Obama money. Anyway, one
can only imagine what will happen right after the elections in early
November for other cities, and counties,
across the nation.
across the nation.
Total Donations over the last 3 1/2 years. approx $165.00 (Thank You).
Donations will help defray the operational costs. Paypal, a leading provider of secure online money transfers, will handle the donations. Thank you for your contribution.
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