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Who thinks there will be a slump?
- Thread starter sptrawler
- Start date
Glen48
Money can't buy Poverty
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So lets hope we do have a slump the other avenues are not to good.
Unless you want to place bet's on when the DOW will tank ad QE3 starts good to be short on every thing.
Unless you want to place bet's on when the DOW will tank ad QE3 starts good to be short on every thing.
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Well Glen, it is going to require some really good news i.e everyone gets $5,000 to spend.
If this isn't forthcoming and we go below 5,500 strap yourself in, it will be an exciting ride.
If this isn't forthcoming and we go below 5,500 strap yourself in, it will be an exciting ride.
Glen48
Money can't buy Poverty
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All uncharted waters at least we can say we saw and myaube survived the big one.
Paying 5 k is the same as Big Ben and his chopper will do nothing but help the overseas companies and Hardly Normal etc.
Paying 5 k is the same as Big Ben and his chopper will do nothing but help the overseas companies and Hardly Normal etc.
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Euro on rack as Angela Merkel and Nicolas Sarkozy meet. If the Euro goes pear shaped another GFC will not be far behind.
http://www.theaustralian.com.au/new...las-sarkozy-meet/story-e6frg6so-1226077305286
http://www.theaustralian.com.au/new...las-sarkozy-meet/story-e6frg6so-1226077305286
God I hope the Euro gets blown up. The EU is the scariest political body since the politburo. There isn't a single leader in Europe that could not be classified as socialist.
IFocus
You are arguing with a Galah
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It going to get real scary when not if the extreme nationalist types get in and start banging the war drums.
History doesn't repeat but often rhymes.
Something I have been saying for a while. Its going to be one bad bunch after another.
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Forget about Europe and the UK (they don't think they are part of Europe) as Australia is a Far East Country. Only be involved in Asia and The Far East and to hell with Europe, Greece and America.
Some Aussie banks have piled money into Europe, even the English/French Channel Tunnel. The money should have stayed in Asia and The Far East.
A slump could occur if the labor Government, QLD and NSW try to stop or reduce the mining sector. Australia = selling resources --- selling less resources = slump --- putting off Chinese investment (note Shenhua's NSW coal mine reversal) = QLD, NSW, Gillard led slump.
Some Aussie banks have piled money into Europe, even the English/French Channel Tunnel. The money should have stayed in Asia and The Far East.
A slump could occur if the labor Government, QLD and NSW try to stop or reduce the mining sector. Australia = selling resources --- selling less resources = slump --- putting off Chinese investment (note Shenhua's NSW coal mine reversal) = QLD, NSW, Gillard led slump.
The very public public versus private battle in the US (and other countries like in Greece) is potentially going to elevate the global financial crisis to a higher, but less predictable, level. Compromise will eventually come at every stage, but the decisions may be too little too late (especially too late). Well, too little will be an issue too.
There will be way too much grandstanding in congress from both or all sides. A lot of the problems have been reinforced by congress (over the years) and it is amazing to find that the system as it stands only allows congress to 'solve' the current and future economic problems. Turn on the TV and I bet it won't take long before some reporter is interviewing some congressman on the economy. The delays themselves will likely cause more economic problems.
I still believe that the US will not be as harmed as other nations if a default (in the future) occurs. It will be devastating for (nearly) all people, but other creditor nations will suffer the most. All countries will suffer of course, but there will be those that will (and will look to) benefit from such a default; your short sellers and those betting on inverse models/trades are some. So will some US banks (one in particular!). Maybe two if you consider the Federal Reserve.
Perhaps the biggest issue in the coming few years onwards will be the sheer fact that a reissuance of new debt (dressed-up to look like something else perhaps) will NO LONGER be a viable and meaningful option to pay for all of the layers of past and future debt obligations. The financial crisis of 2008 wasn't solved. It was washed-over with more (perhaps unpayable) debt. The next few rounds of this will not make any sense whatsoever. Nor does the Federal Reserve's actions of continuing to buy-up US debt over the coming years. This might mean that the US will never be in a position to challenge the Federal Reserve in any way as the Federal Reserve, as a powerful and very influential institution, would have diluted itself in more parts of the US economy than was intended. As for those that think that the Federal Reserve can easily be abolished; the answer is clearly NO.
Can order really come out of (a goal-posts-shifted, not-on-the-same-page and disorganized) congress? Well you're not going to get a long-term, sustainable and meaningful set of solutions from a system that lacks order and uniformity. Not blaming individuals or sides here. The system as it stands just won't allow for all the necessary and timely changes that need to occur.
One reason why we are unique is because we are able to reverse disorder (that naturally occurs in the universe) for a period of time. We take this for granted but they are perhaps the biggest sets of skills we possess and congress and co. can use, especially in this day and age. Without using these skills you may as well get my cat and all of her alley-cat friends to organize things for you.
There will be way too much grandstanding in congress from both or all sides. A lot of the problems have been reinforced by congress (over the years) and it is amazing to find that the system as it stands only allows congress to 'solve' the current and future economic problems. Turn on the TV and I bet it won't take long before some reporter is interviewing some congressman on the economy. The delays themselves will likely cause more economic problems.
I still believe that the US will not be as harmed as other nations if a default (in the future) occurs. It will be devastating for (nearly) all people, but other creditor nations will suffer the most. All countries will suffer of course, but there will be those that will (and will look to) benefit from such a default; your short sellers and those betting on inverse models/trades are some. So will some US banks (one in particular!). Maybe two if you consider the Federal Reserve.
Perhaps the biggest issue in the coming few years onwards will be the sheer fact that a reissuance of new debt (dressed-up to look like something else perhaps) will NO LONGER be a viable and meaningful option to pay for all of the layers of past and future debt obligations. The financial crisis of 2008 wasn't solved. It was washed-over with more (perhaps unpayable) debt. The next few rounds of this will not make any sense whatsoever. Nor does the Federal Reserve's actions of continuing to buy-up US debt over the coming years. This might mean that the US will never be in a position to challenge the Federal Reserve in any way as the Federal Reserve, as a powerful and very influential institution, would have diluted itself in more parts of the US economy than was intended. As for those that think that the Federal Reserve can easily be abolished; the answer is clearly NO.
Can order really come out of (a goal-posts-shifted, not-on-the-same-page and disorganized) congress? Well you're not going to get a long-term, sustainable and meaningful set of solutions from a system that lacks order and uniformity. Not blaming individuals or sides here. The system as it stands just won't allow for all the necessary and timely changes that need to occur.
One reason why we are unique is because we are able to reverse disorder (that naturally occurs in the universe) for a period of time. We take this for granted but they are perhaps the biggest sets of skills we possess and congress and co. can use, especially in this day and age. Without using these skills you may as well get my cat and all of her alley-cat friends to organize things for you.
Glen48
Money can't buy Poverty
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Another disaster :
By Porter Stansberry
Saturday, July 2, 2011
Yesterday, I left you with a question…
Over the past few days, I've described what I call New American Socialism. As I've shown you, it's a kind of legal corruption whereby the risks of doing business are assumed by the taxpayers… but the profits still accrue to private enterprise.
The corruption has infected one industry after another. And it's weighing down our economy… But I've actually preferred having it in many of the stocks I've recommended over the years. It tends to be good for investors.
So the question now is, am I still interested in buying into New American Socialism? It's a difficult question… and the answer is complicated. So bear with me…
----------Advertisement----------
A Stunning Power Shift – Back to the USA
If this video is any indication, we're about to see one of the greatest power shifts in geopolitical history.
A move that would have been simply unimaginable a decade ago.
And for investors on the right side of this trend, it could mean a windfall.
Click here for the full story.
---------------------------------
In yesterday's essay, I described a tragedy unfolding in the education sector. If you missed the essay, I suggest you go back and give it a read. You'll find the numbers disturbing.
Essentially, the for-profit education industry is selling a product its customers cannot afford.
This industry games the rules of the government and spends a fortune on lobbying – more than $12 million in the last year. This industry would literally not exist without government-guarantees standing behind 90% of its revenues.
And Wall Street experts estimate this industry will rack up around $250 billion in credit losses over the next decade – an amount of money that exceeds the losses from Fannie Mae and Freddie Mac so far.
All these risks will eventually cost the U.S. Treasury billions of dollars. You see, this industry overwhelmingly targets women and minorities – people who are often up against a wall financially. These students will never be able to repay these debts.
While these students have no financial skin in the game (many borrow 100% of their tuition), they face enormous consequences down the road from this scheme… Student loans are notoriously difficult to discharge, and many borrowers will be crippled financially by the obligations they cannot afford.
The facts of this situation are incontrovertible and well known – even inside the current president's administration. And yet… even when all of these facts were studied and reviewed… what did the president do?
Critics had demanded so-called "gainful employment" regulations that would limit how much a student could borrow to an amount of money he would likely be able to repay based on the current employment and income track record of other alumni. Obviously, such sensible regulation was never likely to be implemented by Washington… especially not by a minority president when the funding in question goes overwhelmingly to poor, minority students.
Instead, in early June, Obama's administration promulgated a new set of rules that were supposed to address the abuses and the risks of the government's generous funding rules for for-profit education.
The new rules actually loosen the funding requirements – substantially.
Colleges will be eligible for federal support as long as at least 35% of their students are repaying their loans over the first three years. Now, up to 65% of the students can default. And what about limiting loan amounts to ability to repay? Loan amounts may not exceed 30% of anticipated discretionary income.
How will students pay for food, housing, transportation, insurance, etc. if they're spending 30% of their incomes on student loans?
Rather than tightening the standards, the new rules actually loosen the standards. They also go further in guaranteeing continued federal support. Under the new rules, no schools will lose funding until 2015 at the soonest, to give them time to adapt to the new "standards," which were trumpeted as a major reform.
Only in Washington D.C.
The for-profit education "business" is one of the most obvious frauds ever foisted on the American people. The industry has been structured to take advantage of the least sophisticated members of society. It promises benefits the average student is unlikely to achieve: a better job and a better life. Instead, these students are saddled with unpayable debts and enjoy no corresponding increase in wages.
Assuming the government should not do anything to protect the students from this fraud, shouldn't the risks of perpetrating this fraud be left with the companies themselves? Let for-profit education companies guarantee these loans. Let them take the risk that these debts will never be repaid.
But that's not how New American Socialism works. What happens is, all the profits of this scam go to the executives and the shareholders. The risk goes to the government.
Our leaders are now so corrupted by New American Socialism they can't even stop the for-profit education scheme I describe above.
The facts, by the way, aren't even in dispute. This is the obvious stuff – the stuff no one can really dispute. If our leaders let this industry rack up $250 billion in bad debts over the next decade, how can we expect them to do anything to stop our massive annual deficits and our runaway federal debt?
If the administration can't stop the for-profit education industry from getting its hands into the U.S. Treasury, whom will it stop? Nobody.
So the only real question is: Do I want to be buying stocks – any stocks – right now?
When I consider the unsustainable debts and unfunded liabilities the government has taken on… and the upcoming credit crisis New American Socialism has created… I arrive at the answer: "No."
Regards,
Porter Stansberry
By Porter Stansberry
Saturday, July 2, 2011
Yesterday, I left you with a question…
Over the past few days, I've described what I call New American Socialism. As I've shown you, it's a kind of legal corruption whereby the risks of doing business are assumed by the taxpayers… but the profits still accrue to private enterprise.
The corruption has infected one industry after another. And it's weighing down our economy… But I've actually preferred having it in many of the stocks I've recommended over the years. It tends to be good for investors.
So the question now is, am I still interested in buying into New American Socialism? It's a difficult question… and the answer is complicated. So bear with me…
----------Advertisement----------
A Stunning Power Shift – Back to the USA
If this video is any indication, we're about to see one of the greatest power shifts in geopolitical history.
A move that would have been simply unimaginable a decade ago.
And for investors on the right side of this trend, it could mean a windfall.
Click here for the full story.
---------------------------------
In yesterday's essay, I described a tragedy unfolding in the education sector. If you missed the essay, I suggest you go back and give it a read. You'll find the numbers disturbing.
Essentially, the for-profit education industry is selling a product its customers cannot afford.
This industry games the rules of the government and spends a fortune on lobbying – more than $12 million in the last year. This industry would literally not exist without government-guarantees standing behind 90% of its revenues.
And Wall Street experts estimate this industry will rack up around $250 billion in credit losses over the next decade – an amount of money that exceeds the losses from Fannie Mae and Freddie Mac so far.
All these risks will eventually cost the U.S. Treasury billions of dollars. You see, this industry overwhelmingly targets women and minorities – people who are often up against a wall financially. These students will never be able to repay these debts.
While these students have no financial skin in the game (many borrow 100% of their tuition), they face enormous consequences down the road from this scheme… Student loans are notoriously difficult to discharge, and many borrowers will be crippled financially by the obligations they cannot afford.
The facts of this situation are incontrovertible and well known – even inside the current president's administration. And yet… even when all of these facts were studied and reviewed… what did the president do?
Critics had demanded so-called "gainful employment" regulations that would limit how much a student could borrow to an amount of money he would likely be able to repay based on the current employment and income track record of other alumni. Obviously, such sensible regulation was never likely to be implemented by Washington… especially not by a minority president when the funding in question goes overwhelmingly to poor, minority students.
Instead, in early June, Obama's administration promulgated a new set of rules that were supposed to address the abuses and the risks of the government's generous funding rules for for-profit education.
The new rules actually loosen the funding requirements – substantially.
Colleges will be eligible for federal support as long as at least 35% of their students are repaying their loans over the first three years. Now, up to 65% of the students can default. And what about limiting loan amounts to ability to repay? Loan amounts may not exceed 30% of anticipated discretionary income.
How will students pay for food, housing, transportation, insurance, etc. if they're spending 30% of their incomes on student loans?
Rather than tightening the standards, the new rules actually loosen the standards. They also go further in guaranteeing continued federal support. Under the new rules, no schools will lose funding until 2015 at the soonest, to give them time to adapt to the new "standards," which were trumpeted as a major reform.
Only in Washington D.C.
The for-profit education "business" is one of the most obvious frauds ever foisted on the American people. The industry has been structured to take advantage of the least sophisticated members of society. It promises benefits the average student is unlikely to achieve: a better job and a better life. Instead, these students are saddled with unpayable debts and enjoy no corresponding increase in wages.
Assuming the government should not do anything to protect the students from this fraud, shouldn't the risks of perpetrating this fraud be left with the companies themselves? Let for-profit education companies guarantee these loans. Let them take the risk that these debts will never be repaid.
But that's not how New American Socialism works. What happens is, all the profits of this scam go to the executives and the shareholders. The risk goes to the government.
Our leaders are now so corrupted by New American Socialism they can't even stop the for-profit education scheme I describe above.
The facts, by the way, aren't even in dispute. This is the obvious stuff – the stuff no one can really dispute. If our leaders let this industry rack up $250 billion in bad debts over the next decade, how can we expect them to do anything to stop our massive annual deficits and our runaway federal debt?
If the administration can't stop the for-profit education industry from getting its hands into the U.S. Treasury, whom will it stop? Nobody.
So the only real question is: Do I want to be buying stocks – any stocks – right now?
When I consider the unsustainable debts and unfunded liabilities the government has taken on… and the upcoming credit crisis New American Socialism has created… I arrive at the answer: "No."
Regards,
Porter Stansberry
Wysiwyg
Everyone wants money
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Yeah buddy. I have invested in a Manilla taxi so hope to see you on the rounds over there soon. Will bring over cans of baked beans, Sui Min and toilet rolls in preparation for the impending obliteration of the world.
All the best and see you soon, Wizz.
Glen48
Money can't buy Poverty
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Ok good will pick you up at airport fly Tiger Airways ok!
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That 5500 support level is being tested again.
What with Julia and our crazy carbon tax, the U.S stating that it is going to be quite some time before things pick up (thats an understatement) and Europe trying to work out how to give money to the pigs when there is no chance of it being paid back.
It is really hard to find anything that will drive up consumer confidence. Noni B first cab off the rank with a profit downgrade, $3.9m last year $600-800thou this year, that is one hell of a profit downgrade.
How long before major job losses in retail given the added down side of the carbon tax. Some say the carbon cash handout will stimulate retail spending before the election. However "Joe" average is still smarting from the last one, I don't think they will be as keen to runout and spend it this time.
The indicators say we will be testing the next support level very soon, I for one am supprised the All Ords has stayed above 5500 untill now.
What with Julia and our crazy carbon tax, the U.S stating that it is going to be quite some time before things pick up (thats an understatement) and Europe trying to work out how to give money to the pigs when there is no chance of it being paid back.
It is really hard to find anything that will drive up consumer confidence. Noni B first cab off the rank with a profit downgrade, $3.9m last year $600-800thou this year, that is one hell of a profit downgrade.
How long before major job losses in retail given the added down side of the carbon tax. Some say the carbon cash handout will stimulate retail spending before the election. However "Joe" average is still smarting from the last one, I don't think they will be as keen to runout and spend it this time.
The indicators say we will be testing the next support level very soon, I for one am supprised the All Ords has stayed above 5500 untill now.
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The All very Ordinaries has only managed to stay above 5500 with the assistance of
(a) a vast array of smoke and mirrors from innumerable sources,
(b) a bad batch of Chines Fortune Cookies containing an overdose of gumint spin.
A slight *whiff* of an ill-wind has wafted in from the PIIGS ar$e and just parted the cloud of magic smoke in the den of in-equitie$ for a brief moment. Expect a HUGE blast of pollywaffle before the week is done in an effort to subdue the rising bile & panic....
LOL
aj
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Many may have already seen this site but in case you havn't it is a good education.
It offers a running set of figures on the American debt levels at all levels. Federal, State local Trade deficits the lot.
It explains what each category means. It offers a picture of the situation from 2000 onwards and projections to 2015.
I just cannot see how this won't end in tears.
http://www.usdebtclock.org/index.html
It offers a running set of figures on the American debt levels at all levels. Federal, State local Trade deficits the lot.
It explains what each category means. It offers a picture of the situation from 2000 onwards and projections to 2015.
I just cannot see how this won't end in tears.
http://www.usdebtclock.org/index.html
Logique
Investor
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Rome is Burning
Jon Nadler, Senior Metals Analyst – Kitco Metals: http://www.kitco.com/ind/Nadler/jul122011.html
Tuesday July 12, 2011 (my bolds)
"..Marketwatch’s Robert Powell tenders the opinion that the failure to raise the US’ debt ceiling by the August 2nd deadline would have a truly devastating effect on ALL markets: bonds, stocks, money markets, commodities, etc. Mr. Powell cites CFA Greg McBride who argues that the meltdown of 2007-2008 could be labeled as a mere hors d’oeuvre for the feast of the bears that might come in the wake of a no-deal debt deal in America.
Mr. McBride minces no words and declares that the event would prompt a ““rapid re-pricing” of all financial assets, not just Treasuries. In other words, the value of your 401(k) plans, IRAs, 529 plans, gold and real estate will all collapse.
And the reason for that is this: What is fundamental to the pricing of financial assets is the notion that U.S. Treasuries are risk-free. All financial assets are priced based on this assumption (or hope). If Treasuries are no longer risk-free, then all financial assets have to be re-priced against another a benchmark.
And this time, investors won’t have a safe haven to which they can flock as they did during collapse of 2008. “There will be no place to hide,” said McBride. “Treasuries will no longer be safe in the event of a default.” Ditto real estate, gold, and farm land. In short, there will be no flight to safety because no asset will be safe. “Even cash might not be a safe haven.” No exit. No safety net. None.."
Jon Nadler, Senior Metals Analyst – Kitco Metals: http://www.kitco.com/ind/Nadler/jul122011.html
Tuesday July 12, 2011 (my bolds)
"..Marketwatch’s Robert Powell tenders the opinion that the failure to raise the US’ debt ceiling by the August 2nd deadline would have a truly devastating effect on ALL markets: bonds, stocks, money markets, commodities, etc. Mr. Powell cites CFA Greg McBride who argues that the meltdown of 2007-2008 could be labeled as a mere hors d’oeuvre for the feast of the bears that might come in the wake of a no-deal debt deal in America.
Mr. McBride minces no words and declares that the event would prompt a ““rapid re-pricing” of all financial assets, not just Treasuries. In other words, the value of your 401(k) plans, IRAs, 529 plans, gold and real estate will all collapse.
And the reason for that is this: What is fundamental to the pricing of financial assets is the notion that U.S. Treasuries are risk-free. All financial assets are priced based on this assumption (or hope). If Treasuries are no longer risk-free, then all financial assets have to be re-priced against another a benchmark.
And this time, investors won’t have a safe haven to which they can flock as they did during collapse of 2008. “There will be no place to hide,” said McBride. “Treasuries will no longer be safe in the event of a default.” Ditto real estate, gold, and farm land. In short, there will be no flight to safety because no asset will be safe. “Even cash might not be a safe haven.” No exit. No safety net. None.."
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Very elegant indeed AJ
But remember, PIIGS have been flying for 4 years now. All is, um, 'contained', if I could borrow a word from B Bernankes Concise Dictionary of Market Calming Words & Phrases.
Just trying to work out how to come up with an acronym for the UK, Japan, China & the USA?? PIIGS R Them Too?
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obviously the institutions are worried and propping up the index. I am sure it is not the mum and dad investors buying at the moment.
Consumer confidence is at its lowest in 2 years, that must be pretty low because going off retail sales people haven't had much confidence for the last 2 years. LOL
Anyway its good to see the superfunds pumping our money into a dud market. I just wish the super funds were only paid as a percentage of the profits they make. As opposed to a percentage of funds under management, then you wouldn't see them throwing good money after bad.
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obviously the institutions are worried and propping up the index. I am sure it is not the mum and dad investors buying at the moment.
Consumer confidence is at its lowest in 2 years, that must be pretty low because going off retail sales people haven't had much confidence for the last 2 years. LOL
Anyway its good to see the superfunds pumping our money into a dud market. I just wish the super funds were only paid as a percentage of the profits they make. As opposed to a percentage of funds under management, then you wouldn't see them throwing good money after bad.
Today's big "prop" comes courtesy of
http://www.abc.net.au/news/2011-07-13/china-economy-boost-market/2793324?section=business
Apparently this was a "smaller than expected decline in the Chinese GDP growth" and therefore "good". Once upon a time in the short term past, ANY suggestion that China's GDP growth rate was going backwards AT ALL would have caused a share slump! Now, "smaller than expected" declines cause a big jump! LOL. I love how Mr Market & his tru$ty henchmen will try to turn a buck on any slant of the bamboo curtain....
The other larf about this is that 99% of "economists" appear to take the bait offered by Chinese officials without question with regard to GDP growth or any other economic data for that matter. Owing to the fact they have amassed oodles of luvly $$$$$$$$$$$$$$$$$$$$$$$$$$$$, they have flipped from an "untrustworthy communist sworn enemy" (where EVERYTHING positive they had to say was not to be trusted) to a "100% trustworthy economic partner" (where EVERYTHING they say is to be trusted implicitly) - all in a handful of years. Double-LOL.
I love how $$$$$$$$$$$$$$$$ can warp people's judgement.
