Archive for the ‘USA’ Category
Hussman takes on Wall Street insanity and horrific governmental interventionist policies.
Read More Click Here Dec 4, 2011 Have We Avoided A Recession?
Frankly, I am concerned that Wall Street is becoming little more than a glorified crack house. Day after day, the sole focus of Wall Street is on more sugar, stronger sugar, Big Bazookas of sugar, unlimited sugar, and anything that will get somebody to deliver the sugar faster. This is like offering a lollipop to quiet down a 2-year old throwing a tantrum, and expecting that the result will be fewer tantrums.
What we have increasingly observed over the past decade is nothing but the gradual destruction of the ability of the financial markets to allocate capital for the benefit of future growth. By preventing the natural discipline of the markets to impose losses on poor stewards of capital, and to impose interest rates high enough to force debtors to allocate the capital usefully, the world’s policy makers are increasingly wrecking the prospects for long-term economic growth. The world’s standard of living (what we can consume for the work we do) is intimately tied to its productivity (what we can produce for the work we do). That productivity requires our scarce savings to be allocated to productive physical capital, and to productive human capital (primarily education).
Nietzsche famously said “What does not kill me makes me stronger.” The corollary is “What constantly rescues me makes me weaker.” The world will only stop looking for bailouts when policy makers stop handing them out.
Wall Street’s pattern of dependency foreshadows the inevitable. Between China’s real estate bubble, Japan’s debt and European bankrupt nations the writing is on the wall. The silver lining is that mankind is much more resilient than our leaders give us credit. The recovery can begin as soon as we allow markets instead of bureaucrats to allocate capital.
China’s true debt crisis is starting to reveal itself as its real estate market cools. Any prolonged downturn in real estate will have serious global ramifications.
“The land market is cooling down so quickly — it’s as if all the property developers vanished overnight,” said an official at the department that handles government land sales for Changsha, a central Chinese city of 7 million.
“Without income from land sales, where can we get enough money to build roads, schools, hospitals and other projects that Beijing ordered us to do?” asked a man surnamed Wang who works at Changsha’s land auction centre.
To read more visit: www.moneycontrol.com
China’s economic and credit explosion of the last five years appears to be imploding. The ramifications for the rest of the world are huge, in particular, resource dependent nations. Europeans can also forget about depending on China’s relatively poor population to support massive purchases of Euro bonds.
BOSTON (MarketWatch) — Forget Greece. Forget Italy. Forget “Occupy Wall Street.”
The really ominous news right now?
China.
It’s been the juggernaut carrying us all year. But Albert Edwards at SG Securities says the world’s second biggest economy is a “freak” and it’s starting to go berzerk.
Bad news.
What’s going wrong? How? Here are some troubling signs:
The housing bubble is finally bursting.
To read more visit: www.marketwatch.com
Much has been made of CO2 emissions contributing to global warming by trapping greenhouse gasses. New NASA figures are running counter to that assumption.
The satellite observations suggest there is much more energy lost to space during and after warming than the climate models show,” Spencer said in a July 26 University of Alabama press release. “There is a huge discrepancy between the data and the forecasts that is especially big over the oceans.”
In addition to finding that far less heat is being trapped than alarmist computer models have predicted, the NASA satellite data show the atmosphere begins shedding heat into space long before United Nations computer models predicted.
The new findings are extremely important and should dramatically alter the global warming debate.
Publicly traded Chinese companies appear to be having some serious reporting issues. Instances of fraudulent reporting have been popping up as of late and the fraud risks for Chinese stocks on US exchanges is becoming clear.
That’s what’s so depressing, disturbing and disorienting about the fraud recently uncovered at Longtop Financial Technologies (LFT, news). The company’s books were audited by Deloitte, and Longtop still managed to lie about the $332 million in cash it claimed on its balance sheet.
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And it gets worse. Since March, more than two dozen companies based in China have disclosed auditor resignations or accounting problems, according to the U.S. Securities and Exchange Commission. The SEC has launched a task force charged with examining accounting at overseas companies listed in the United States.
To read more visit: www.money.msn.com
Home prices in the US are still falling years after the real estate/credit bubble burst. When house prices correct under a government and bank industry sponsored boom it takes a generation before values recover. Canadians should take note since our own government relaxed lending rules, reduced risk to banks, and all at a time of emergency low interest rates.
Prices are back to their 2002 levels, according to the Case-Shiller National House Price Index out yesterday. “The national index fell 4.2 per cent over the first quarter alone, and is down 5.1 per cent compared to its year-ago level,” David Blitzer, the chairman of the Index Committee at S&P Indices, said. “Home prices continue on their downward spiral with no relief in sight.”
To read more visit: www.independent.co.uk
