September 11 – Eleven Years Later (Selected Statistics)

 
On the anniversary of the most emotional day in our collective memory,  here are some key statistics in the interest of truth, justice and the American way:

America’s AAA Rating Could Collapse

by Richard Blackden, The Telegraph:

The credit rating agency delivered a stark warning that it will follow its rival, Standard & Poor’s, and strip the US of its top rating unless Republicans and Democrats reach an agreement that has proved beyond them over the last four years.
The ratio of America’s debt compared to the size of its economy will balloon to 73pc by the end of the current fiscal year on September 30, the Congressional Budget Office (CBO) has forecast. The CBO has warned it could spiral to 90pc by 2022 and higher still after that unless spending is cut and the amount raised in taxes is increased. The ratio averaged about 40pc for most of the period after World War Two.
Many analysts believe that a mix of cuts to mandatory spending programmes, such as Medicare and Medicaid, will be required alongside a jump in tax revenues. However, President Barack Obama’s first term has been marked by bitter disagreement between Republicans and Democrats over the issue.
Mr Obama’s latest budget offered little in the way of reform of such programmes, while Congressional Republicans ruled out tax increases in their proposal.
Read More @ Telegraph.co.uk

Financial alert: Germany’s Constitutional Court decision either means a rapid Eurozone financial collapse, or inevitable hyperinflation

by Mike Adams, Natural News:

The financial collapse of the Eurozone may be upon us. This Wednesday, September 12, the Federal Constitutional Court of Germany must decide whether it is legal for Germany to participate in the financial bailouts of other nations in the Eurozone.
The court has been inundated with tens of thousands of petitions (not just petition signers, but tens of thousands of individual petitions) demanding the court say NO to the bailouts and stop draining Germany’s economy to rescue the failed debt spending of other nations.
If Germany votes NO, then Germany stops bailing out Greece, Spain and other nations on the brink of financial disaster. Sometime in the coming days, weeks or, in the best case, a few months, European nations start collapsing, complete with bank holidays, riots in the streets and almost certainly martial law.
Read More @ NaturalNews.com

China records big drop in oil imports/Japanese Finance Minister commits suicide/More turmoil in South Africa Mines/ USA budgetary deficit rises 192 billion last month/USA trade deficit last month big at 42 billion dollars/

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 8 hours ago

Good evening Ladies and Gentlemen: Gold closed up today by $ 3.10 dollars closing the comex session at $1731.80 Silver however fell marginally by 6 cents to $33.51. We had a plethora of data to go over day.  First from Asia, China reported a huge drop in oil imports signaling that this nation is heading into a serious recession. The from Japan, we heard that the Japanese Finance Minister,

Spot The Odd (Unsustainable) Economic Indicator Out?

Presented for your viewing pleasure are ten of the most prescient indicators of the resilience of the consumer and his largest asset (liability) since the 'supposed' end of the recession. We thought the subtle hint at which of these trends is not like the others would help; but, just in case you missed it, it's the part of the economy that is government-backed, subprime-funded, over-inventoried, and entirely channel-stuffed. Aside from all that, entirely sustainable, we are sure.


 

 

Financial Crisis & The Bullish Case For Gold

from KingWorldNews:

The Godfather of newsletter writers, Richard Russell, believes the ongoing financial crisis remains very bullish for gold. Here is what Russell had to say: “The nation is approaching the ‘fiscal cliff.’ This is a negative for the market. On January 13, Congress will have to vote on whether to increase the national debt, which is now over $16 trillion and counting. Fiscal cliff and debt ceiling are both momentous decisions for Congress, problems that they’d rather not face.
The stock market also has its problems. Last week the Industrial Average closed above its May 1st peak — the Industrial move was not confirmed by the Transports. This leaves the stock market in limbo, and it leaves investors in a quandary.”
Russell continues @ KingWorldNews.com

 

De-Industrialisation And Male Jobs

A whole lot of pundits are spending column inches trying to explain the cruel reality of the last forty years — stagnant wages for full-time male workers, falling wages for men as a whole, and a huge outgrowth of men who aren’t in the labour force. The question is why. Mainstream media pundits are suggesting that men are unsuited to the present economic landscape. It’s not at all the case that the United States is cutting back on industrial jobs because industry is less in demand. The United States still has plenty of demand for industry. America has cut back on industrial jobs because it has the ability to run huge trade deficits, through the dollar’s role as global reserve currency, and shipped its manufacturing industry abroad. Yet the present paradigm has severely damaged the prospects of young men, for whom a generation ago jobs in industry and manufacturing were once plentiful. Quantitative easing led to a jobs boom — in China, for Chinese industrial workers. And it seems unlikely that the industrial jobs are coming back any time soon.

In Response To Japanese "Antagonism" Over Senkaku Islands, China Dispatches Two Patrol Ships

Yesterday, in a rather paradoxical development, the Japanese Cabinet formally announced that the government will purchase several disputed islands that China also claims — a move that Beijing said would bring "serious consequences." The issue at hand is that China and Taiwan also claim the islands, which are part of what Japan calls the Senkakus and China the Diaoyu group. It is paradoxical because the last thing Japan, and its statutory deflationary and demographic collapse needs right now is to "antagonize" the world's fastest growing economy, and its neighbor to the west with whom it had a rather violent give or take as recently as 1945. Japan spin was naive: Chief Cabinet Secretary Osamu Fujimura repeated that the islands are part of Japan's territory and should not cause any friction with other countries or regions. "We certainly do not wish the issue to affect our diplomatic relations with China and it is important to resolve any misunderstanding or miscommunication." Turns out quite a bit of friction was caused as a result, as well as a substantial amount of misunderstanding and miscommunication. As Globe and Mail reports, "China has dispatched two patrol ships to the East China Sea in a show of naval strength and antagonism toward Japan after Tokyo said it had purchased a group of disputed islands from their private owners. China’s aggressive response ratcheted up tensions in a long-standing conflict between the two countries over claims to the territory."

Who Moved My Recession?

Lakshman Achutan, ECRI (Economic Cycle Research Institute) made a recession call for the US on September 30, 2011 (and confirmed it multiple times since then). Gary Shilling, titling his August letter “Global Recession”, says “We are already in a global recession.” However, equity markets don’t think so, with the S&P 500 trading less than 10% away from a new all-time high. Only one side can be right. Could this be a repeat of October 2007, when the S&P 500 hit new all-time highs mere six weeks before the “Great Recession” began? Are so-called leading indicators, as used by the Conference Board, still reliable? Established leading indicators incorporate questionable input. While there is no perfect indicator, a combination of the ones tested here, weighed by accuracy, confidence and timeliness should produce a good reading. The higher-confidence indicators say that 2011 was a “close call”, but we are currently not in a recession. However, a lot of lower-confidence indicators are showing readings consistent with a severe recession.

Firm That Brought You Holo-Tupac Dies Less Than A Year After IPOing, Taking Millions In Taxpayer Subsidies With It

Most people know that during this year's Coachella festival, Tupac made a surprising appearance, if not in the flesh for obvious reasons, then in hologram form. What fewer people know is that the firm that created Holo-Tupac is special effects producer Digital Domain Media, which after years of failed attempts to do so, finally went public in November with Roth Capital as underwriter (there is now an Urban Dictionary definition for 'Rothed') at a price of $8.50 (well below the preliminary range of $10-12/share) and at a time when its burn rate was well above 50% of revenues, and which filed for bankruptcy hours ago. In other words, the company destroyed over $400 million in market cap in under 10 months. What is known by very few is that this is yet another public equity disaster of this administration: as filed in the bankruptcy Affidavit, "the Company has worked closely with State and local government authorities in Florida to execute economic stimulus contracts designed to create jobs and stimulate Florida’s economy. As of the Petition Date, the Company had contracted to receive a total of approximately $135 million in such government stimulus financing, including $19.9 million in tax credits. This financing consists of cash grants, land grants, low-interest financing, and tax incentives." In other words, in addition to the government's remarkable track record in the alternative energy field, public equity is now in the digital movie studio subsidization business. End result: bankruptcy, of a publicly funded company, shortly after IPO and sadly the realization that US capital markets are now so broken that the combination of private and public funding can sustain a company for less than one year.

Gundlach's Chart-Porn And Buy China, Sell US

Double-Line's Jeff Gundlach presented 66 pages of chart-pr0n covering everything from Government Spending to Consumer Spending; from eating-out costs to food inflation; from future economic growth slowdown indicators to housing recovery hopes and reality; and from foreign stocks to Treasuries, MBS, and metals. Between a lack of surprise if 10Y rates were 100bps higher by year-end; and his call to 'sell the S&P 500 against a long in the Shanghai Composite', there's a little here for everyone (and his funds are killing it).

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Dow Closes At Highest Since 2007 As High Yield Outperforms

Retirement must be on again as the Dow creeps up to close at its highest since 12/28/2007 - no more reassuring sign that we need QE stat!! The high-yield bond ETF (HYG) also pushed to new highs - amid heavy volume - as it left its credit-spread and equity risk reality in the dust (as well as its intrinsic value) but who cares - QE/ESM/OMT/WTF - it's on like donkey kong. At least VIX kept some sense of rationality as it closed near its highs on the day, pricing in somewhat the binary concerns of the next 24-36 hours. Volume was nothing to write home about - nor was average trade size - as S&P futures rolled well off their highs to fall back below VWAP into the close and after-hours (when volume picked up). Commodities were mixed with Oil and Copper up, Gold flat and Silver down as the USD dropped (down 0.3% on the week) and stabilized after Europe's close. Treasuries leaked higher in yield (despite a record-breaking 3Y) but remain below Friday's peak-yield levels.

Crossing The Fiscal-Cliff Chasm, And Why Boehner May Be Right 

 
Between Boehner and Reid's comments today, the dial on the politicization-of-the-fiscal-cliff amplifier just got turned to 11. This is no surprise to regular ZH readers who know the record levels of polarization that remain among our politicians (and citizens). While some (cough Insana cough) believe the magical faeries are at work behind the scenes to solve the fiscal-cliff; we present, via Citi, the best visualization of the changing face of hands-across-the-aisle compromise 'change' in the last 45 years is presented below. Sigh...

South African Miners "Playing Dangerous Game" As Tensions Rise Again

While it appears the mainstream media has forgotten about the ongoing drama in South Africa, the tensions are rising rather dramatically around the Marikana mines (owned by LonMin mining). As Al Jazeera reports, thousands of miners (along with wives and supporters) have defied an extended deadline (brokered by the government) and decide to remain on strike. The following clip provides some rather concerning color on what is occurring as Julius Malema, the expelled ANC leader, has already been charged with inciting violence - and is "playing a rather dangerous game." He is calling for a national strike as he addresses the people: "they have been stealing this gold from you. Now it is your turn, you want your piece of the gold." The tough reality is that as extraction costs rise (energy/depth) and now miners' costs rise, then the end-product's cost must rise, or - as Melema suggests - supply goes offline.  Must see clip.

Big Banks Hide Risk Transforming Collateral for Traders

by The Doc, Silver Doctors:

Regulators require new capital requirements in an effort (far too little, too late) to protect the financial system from derivatives, and the TBTF banksters mark b***s*** to fantasy to meet the new capital requirements by allowing customers to swap junk bonds in return for qualifying collateral such as T-bonds.
Meanwhile, the CME has begun accepting accepting as collateral bonds rated merely 4 levels above junk as acceptable collateral for derivatives.
You just can’t make this stuff up!
What do you expect when there hasn’t been a single criminal charge filed against a real bankster in 15 years?
JPMorgan Chase & Co. (JPM) and Bank of America Corp. are helping clients find an extra $2.6 trillion to back derivatives trades amid signs that a shortage of quality collateral will erode efforts to safeguard the financial system.
Read More @ Silver Doctors

Presidential Myths, Lies and Campaign Promises Along With Retail Cos. We Look To Short

by Reggie Middleton, BoomBustBlog.com:

The presidential elections are coming up again. The last 4 years went by very quickly, and as always, we are confronted with BS blown all over the mainstream media. This time (like last time) the focus is on the POTUS and the economy. I fear many lay persons and even some who should know better fail to realize that the president has very little willful control over the economy – at least to the upside. Now, it is possible for a president to wreck the economy. For instance, we had one not too long ago who took it upon himself to start several concurrent wars while cutting taxes at the apex of a cyclical economic peak (aka, bubble about to burst), but that rarely occurs, right?
Generally, the POTUS is either blamed or glorified for things that are largely out of his control. Prominent examples have been:

• Reagan, whose policies actually sucked but rode a cyclical bull to acclaim…
• Clinton, whose policies sucked less, but still rode a cyclical bull to acclaim.
• Carter, the poor bastard… Wrong place at the wrong stagflationary time.
• And last but not least, Obama – there was no way in hell anyone, regardless of who it was other Read More @ BoomBustBlog.com
  

Both Italy & Sweden Bow to NWO Plans For a Cashless Society

by Patrick Henningsen, 21st Century Wire:
Another 9/11, and the elites’ dream of a One World Order will move even closer to reality. Enter the cashless society, which is likely to sneak in through the back door of our credit-based culture much faster than people think.
This recent IBM TV spot promotes the use of RFID chips in order to “make checkout lines easier”. Watch this latest creation from IBM – hoping to mold the future into a sexy, paranoid, (& hellish) Dystopia.
As Silver Doctors has reported, Italy Plans to Ban Any Cash Transactions Over 50 Euros.
You won’t even be able to fill up your car without a credit or debit card in Italy beginning in 2013, as the Italian Council of Ministers has voted to increase the current capital controls banning the use of cash on transactions over €1,000, down to any transaction over €50!
As we stated when Italy first announced capital controls and caps on cash transactions several months ago, expect bans on cash transactions to be coming to a neighborhood near you in the next 2-3 years.

Read More @ 21st Century Wire.com

China And Russia Are Ruthlessly Cutting The Legs Out From Under The U.S. Dollar

from Investment Watch Blog:
The mainstream media in the United States is almost totally ignoring one of the most important trends in global economics. This trend is going to cause the value of the U.S. dollar to fall dramatically and it is going to cause the cost of living in the United States to go way up. Right now, the U.S. dollar is the primary reserve currency of the world. Even though that status has been chipped away at in recent years, U.S. dollars still make up more than 60 percent of all foreign currency reserves in the world. Most international trade (including the buying and selling of oil) is conducted in U.S. dollars, and this gives the United States a tremendous economic advantage. Since so much trade is done in dollars, there is a constant demand for more dollars all over the globe from countries that need them for trading purposes. So the Federal Reserve is able to flood our financial system with dollars without it causing a tremendous amount of inflation because the rest of the world ends up soaking up a lot of those dollars. But now that is changing. China and Russia have been spearheading a movement to shift away from using the U.S. dollar in international trade. At the moment, the shift is happening gradually, but at some point a tipping point will come (for example if Saudi Arabia were to declare that it will no longer take U.S. dollars for oil) and the entire global financial system is going to change. When that tipping point comes the global demand for U.S. dollars is going to absolutely plummet and nightmarish inflation will come to the United States. If such a scenario sounds far out to you, then you have not been paying attention. In fact, China and Russia have been working very hard to move us toward exactly such a scenario.
Read More @ Investmentwatchblog.com

Fiscal cliff. Market crash. Depression: A way out

Commentary: A 12-step program for investors’ peace of mind
by Paul B, Farrell, Market Watch:
Psst, don’t bother reading this if you’re certain you’re not addicted to money, investing, credit-card debt or overspending. Yes, addicted. But how do you know? Put on a behavioral-economics thinking cap and try this self-diagnosis:
Do you crave it … gotta have it … but never have enough … you think of it often … it consumes you … work at a dull job just for the money … live for vacations, weekends … bet on lotto, sports, slots … delay buying a new car … constantly worried about price of gas, paying kids college, hospital bills, taxes … Social Security … half of Americans don’t have enough to retire … will work till you drop.
Maybe it’s the economy, markets, bad luck, government, politicians, whatever, you’re on the edge of a money addiction.
Admit it, money runs your life. You’re trapped. Yes, you really are addicted to money. I get it. Been there. Years ago I was chasing a dream, obsessed, passionate about a new venture, jockeying balances on $75,000 in debt. Eleven credit cards, high-stress, relentless anxiety. So admit it, you’re a money addict.
Read More @ Market Watch

ALERT – MUST READ Article for Our Friends in Asia: Paper Gold & Gold Passbook Scams

[Ed. Note: I just received a note from our friend James Anderson over at GoldSilver.com who is trying hard to alert gullible Asian investors to the myriad of PAPER gold scams offered by Asian banks. Posting his new article here & now for the benefit of all.]
from GoldSilver.com
What if you thought you were saving gold, only to learn too late in this gold bull market, that you were merely saving counter-party risks with a bank? If you have a passbook gold account, also known as paper gold, it is highly likely a risk filled exposure to the spot gold price is all you own.
Over the last few years, we have had the opportunity to speak to a myriad of gold investors in Asia, particularly when establishing our segregated gold vault options in Hong Kong and our upcoming Singapore location.
When speaking about gold investments with Asian investors, one has to always clarify the specific type of gold investment vehicle in question. Throughout Asia, although gold investing is seemingly prevalent and a culturally accepted phenomenon, one must always ask the direct question…
Do you own paper gold OR physical gold ?!
You see in Asia, many large banks offer what are popularly referred to as paper gold accounts or passbook gold accounts.
Unlike outright physical gold bullion ownership, paper gold accounts and passbook gold accounts are anything but bullion.
Read More @ GoldSilver.com

Gold Stocks: History Argues for More Upside

by Jordan Roy-Byrne, Gold Seek:

Gold and silver stocks are not only the most volatile sector but the highest beta sector. Therefore the percentage moves can be quite exaggerated relative to the market. Currently, the shares have emerged from a W bottoming pattern. They have gained substantially (in percentage terms) in just the past month. I wanted to consult history and in particular the rebounds following the bottoms in 2000, 2005 and 2008 to get a sense of the reasonable upside potential over the coming months. Judging from history, one should not be alarmed about the recent gains because these rebounds tend to run much longer and higher.
Below we chart the HUI in weekly form dating back to 2000. We also plot the HUI’s rate of change for 18 weeks and 26 weeks (equivalent to four and six months) and we note the length of time it took the HUI to break to a new high following the start of the cyclical bears. The market typically rebounds 50%-70% four months following a bottom and roughly 75% six months after a bottom.
Read More @ GoldSeek.com

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