GFC 2

[Julia]

Stocks soar.

Bullrush begins.

GFC2 a fantasy...

Are you actually serious?

 

[CanOz]

Are you actually serious?

Pssssst, Julia....i think he's referring tongue in cheek, to the short term change in sentiment and the inevitable 'kicking of the can down the road'....

CanOz

 

[Glen48]

[FONT=verdana, geneva]Other than this it is all ok:

Date: June 29, 2012
[FONT=verdana, geneva]Reporting From:[FONT=verdana,geneva] [/FONT][/FONT][FONT=verdana, geneva]Tel Aviv, Israel
[/FONT][FONT=verdana, geneva][/FONT][/FONT]
This week may very well go down as 'connect the dots' week. Things have been moving so quickly, so let's step back briefly and review the big picture from the week's events:
1) After weeks... months... even years of posturing and denial, Spain and Cyprus became the fourth and fifth countries to formally request aid from Europe's bailout funds on Monday.
In doing so, these governments have officially confessed to their own insolvency and the insolvency of their respective banking systems.
Meanwhile, Slovenia's prime minister said that his country may soon ask for a bailout. (Humorously, Slovenia's Finance Minister denied any such plans.)
Spain's 10-year bond yield jumped to over 7% again in response, and many Spanish banks were downgraded to junk status by Moodys.
2) Over in the US, the city of Stockton, California filed for bankruptcy this week... the largest so far, but certainly a mere drop in the proverbial bucket.
3) JP Morgan, considered to be among the few 'good' banks remaining in the US, conceded that the $2 billion loss they announced several weeks ago might actually be more like $9 billion.
4) The Federal Reserve reported yesterday that foreigners are reducing their holdings of US Treasuries.
5) Countries from Ukraine to Kazakstan to Turkey announced that they have purchased gold in recent months to bolster their growing reserves.
6) Chile has joined a growing list of countries that has agreed to bypass the US dollar and settle all of its trade with China in renminbi.
7) China has further announced plans to create a special zone in Shenzhen, one of its wealthiest cities, to allow full exchange and convertibility of the renminbi.
8) World banking regulators from the Bank of International Settlements to the FDIC are proposing that gold bullion be treated as a risk-free cash equivalent by commercial banks.
So... what we can see from this week's events is:
- European governments are insolvent
- European banks are insolvent
- US governments are heading in that direction
- Even the best US banks are not as strong as believed
- Foreigners are abandoning the US dollar and seeking alternatives
- Gold is money
These events are all connected, and the trend is becoming so clear that even the most casual observers are starting to wake up.
When you connect the dots, the next steps lead to what may soon be regarded as an obvious conclusion: the system, as it exists right now, is crumbling.
No amount of self-delusion can make this go away.
Rational thinking and measured action, on the other hand, can make the consequences go away... turning people from victims into spectators of the greatest bubble burst in modern times.

[FONT=verdana, geneva]Until tomorrow,



[/FONT]​

 

[young-gun]

Pssssst, Julia....i think he's referring tongue in cheek, to the short term change in sentiment and the inevitable 'kicking of the can down the road'....

CanOz

Is anyone able to give an in depth analysis of the latest developments in Europe?(if you anybody is feeling upto it). Or is it as simple as what is read in the papers.

I am just trying to work out why markets are rallying. Is it just simply a massive overreaction to the news that has come out? It doesn't appear as though anything has actually been addressed. In fact from what I gather all that has happened is that it's now easier to bail out banks and crumbling economies.

Won't this lead to the bailout fund deteriorating even faster?

 

[Julia]

Pssssst, Julia....i think he's referring tongue in cheek, to the short term change in sentiment and the inevitable 'kicking of the can down the road'....

CanOz

Well, I hoped it was facetious. But, given the sudden, disproportionate imo, rally yesterday, I thought it's possible he was serious.

 

[Tyler Durden]

Is it just simply a massive overreaction to the news that has come out? It doesn't appear as though anything has actually been addressed.

I think this is it. It's like the headline came out "EUROZONE LEADERS AGREE TO DEAL", everyone reads it and thinks "wow problems solved! Let's buy into the good news!!!"

But then no one really actually reads the contents of the article, which, if they did, would reveal that details of any 'deals' are quite vague, if they exist at all.

 

[young-gun]

I think this is it. It's like the headline came out "EUROZONE LEADERS AGREE TO DEAL", everyone reads it and thinks "wow problems solved! Let's buy into the good news!!!"

But then no one really actually reads the contents of the article, which, if they did, would reveal that details of any 'deals' are quite vague, if they exist at all.

As suspected...

http://www.cnbc.com/id/48008281

Markets seem to rally off the smell of an oily rag these days. Rogers is of the opinion nothing has really been achieved also.

And this:

http://www.cnbc.com/id/48013560

4. One Word: Debt

At its core, the global economic crisis is about debt. The balance sheet-driven slowdown has thwarted the efforts of central bankers who have tried to resuscitate the economy by levitating equity markets.

In short: One day's headlines will not cure years' worth of economic damage inflicted by soaring global debt.

 

[young-gun]

China still slowing....faster:

http://www.cnbc.com/id/48038077

 

[young-gun]

Is Australia on the same path as Spain? swanny doesn't think so.

http://www.cnbc.com/id/48143819

 

[Tyler Durden]

Is Australia on the same path as Spain? swanny doesn't think so.

http://www.cnbc.com/id/48143819

Spain didn't think so either

Btw, how can Swan say our economy is "very strong", we have "low unemployment" and "strong job creation" when the states recently announced like a total of 30,000 job cuts and job advertisements have been low as of recent times?!??!

 

[Glen48]

OZ will be 3rd world once China goes under big cleaning process and a new way of looking at life, generating an income for workers and the country.
A USA city has just dropped wages by 70% for all or risk going under so it is starting to take shape.

 

[Smurf1976]

Which US city are we talking about? A big one? Or some tiny place that nobody outside the region has ever heard of?

 

[Glen48]

THIS ONE:
Public workers in the hard-up US city of Scranton, Pennsylvania have had their pay slashed to minimum wage-levels as a budget fight between the mayor and city council comes to a head.

About 400 municipal workers in the city ”” including police officers, firefighters and construction workers &mdsah; are being subjected to steep pay cuts that have sparked a string of lawsuits.The city, which is the birthplace of Vice President Joe Biden and has become synonymous with industrial decline, is facing bankruptcy and the mayor has refused to borrow more money to pay wages.For police officers with two years on the job that now means a pay cut from $26 an hour to $7.25 an hour, a drop of more than 70 percent.Construction workers who earn between $18 and $20 under union contracts will also get $7.25 per hour."All the vendors are getting 100 cents on the dollar, but the people keeping the buildings from burning down have seen their pay slashed by 75 percent," Stephen Holroyd, an attorney representing three of the city's workers' unions, told AFP.Roger Leonard, a heavy equipment operator for the city told National Public Radio last week that he typically gets a $900 check for two weeks of work. After the pay cut, it dropped to only $340."I have two children and a wife, and my wife is a stay-at-home mom," said Leonard. "If the savings gets drained, we won't be okay, but I'm hoping before that happens, that they come to a resolution," he told reporters.The city, about 190 kilometers north of Philadelphia is one of a number of so-called rust belt cities that have seen manufacturing and heavy industry flee over past several decades, leaving behind empty downtown storefronts.But the cause of the immediate problem stems from mayor Chris Doherty and the city council's inability to agree on a budget.The Scranton Times-Tribune reported that the town had just $133,000 in the bank on Monday, but owed $3.4 million.Holroyd said the town has the money to pay, because it has the ability to borrow money for salaries as it has done in the past."It's not because the city's broke, it's because they are in a political squabble," Holroyd said. "They've just decided not to go to the ATM."The mayor did not return a call for comment.Unions representing the employees have also sought to hold the town's mayor in contempt of court, saying he violated a judge's order to reverse his decision to slash wages."He's just ignoring the court's order," said Holroyd.Many US municipalities have seen their finances decimated by a flight of businesses and residents to the suburbs and beyond, leading to an ever-dwindling tax base and predictions of a wave of municipal defaults.
​

 

[Buckfont]

Hi glen, have you a link to your last post? I have some folks over there that may be interested. Thanks BF

 

[Glen48]

http://finance.ninemsn.com.au/newsbusiness/8497467/us-city-cuts-worker-pay-by-70-percent
All yours.

 

[Buckfont]

Thanx

 

[DB008]

From Bloomberg Business

China Econ Data Questioned, Power Usage Slows

The figures that go into China’s gross domestic product are “man-made” and “for reference only,” Li Keqiang, then a regional Communist Party head, said in 2007.

The comments by Li, now a vice premier who’s expected to become premier next spring, were revealed in a diplomatic cable published by WikiLeaks in late 2010. Li’s remarks are especially relevant as China announced today that the economy expanded 7.6 percent last quarter from a year earlier, the slowest pace in three years.

Investors, bankers and economists face a host of difficulties in interpreting the numbers from China’s statistics bureau, Bloomberg Businessweek reports in its July 16 issue. Combining all officially reported provincial GDP numbers for last year produces a total exceeding national GDP by about 10 percent, Ma Jiantang, head of the National Bureau of Statistics, said in February. Ma said that is due partly to double counting of items including factory production and that his bureau was trying to correct the issue.

China’s registered urban unemployment has moved between just under 4 percent and 4.3 percent for the last decade, while electricity consumption has slowed much faster than growth in official GDP when it normally should move more in tandem. That has stirred speculation GDP figures are being skewed upward in the run-up to a leadership transition this fall.

Link - http://www.businessweek.com/news/2012-07-12/china-economic-data-questioned-as-electricity-use-slows

 

[Aussiejeff]

Stocks soar again.

Bullrush continues...

GFC2 still a fantasy....?

 

[young-gun]

Author of book "the new depression" seems to have a very grim outlook. Puts into perspective where all this credit growth/creation has landed us though.

http://video.cnbc.com/gallery/?video=3000103083&play=1

 

[DB008]

Berlin, IMF To Refuse Fresh Aid for Greece

Interesting...

Berlin, IMF To Refuse Fresh Aid for Greece

Greece has fallen behind with its budget cuts and is asking lenders for more time to meet the conditions of the 130 billion euro aid package. But that would require fresh help of up to 50 billion euros, SPIEGEL has learned. Neither Berlin nor the IMF are prepared to make that money available.


Germany and other important international creditors are not prepared to extend further loans to Greece beyond what has already been agreed, German newspaper Süddeutsche Zeitung reported on Monday. In addition, SPIEGEL has learned that the International Monetary Fund (IMF) too has signalled it won't take part in any additional financing for Greece.

The Süddeutsche Zeitung cited an unnamed German government source as saying it was "inconceivable that Chancellor Angela Merkel would again ask German parliament for approval for a third Greece bailout package."
Merkel has had difficulty uniting her center-right coalition behind recent bailout decisions in parliamentary votes and would be unwilling to risk a rebellion in a another rescue for Greece, the newspaper reported.