Wikinvest Wire

Obnoxious wealth now a turn-off

Sunday, November 30, 2008

Remember Robin Leach's Lifestyles of the Rich and Famous? The odd fascination of the Filipino public with Imelda Marcos' shoes? The prime-time soap opera Dallas?

It looks like the world just might be starting to lose its obsession with wealth, especially the obnoxious variety.

Admittedly, I've never seen the TV show Wall Street Warriors, the subject of this report in the Los Angeles Time, and I'm probably better off as a result.

The times they are a' changin'.

It had the makings of reality-television gold.

The third season of "Wall Street Warriors" started filming this spring, as the financial sector's meltdown accelerated. The show's camera crews captured the pain and anger of the biggest stock market crash in decades.

But right now, the show doesn't have an audience.
IMAGE
"Wall Street Warriors" was shot for Mojo HD, a high-definition cable channel that's shutting down Monday, leaving the reality series without a home. Its producers are shopping the show to other networks, with no takers so far.

Its problem: Americans are too depressed about their own finances to entertain themselves by watching shows about money, according to industry executives and academics.
The show will not be missed.

ooo

This week's cartoon from The Economist:

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This guy may not survive the recession

From Canada's Globe & Mail comes this image from their Economy, in Photos series. IMAGE

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Sunday morning links

TOP STORIES
China GDP May Expand 10% in 2009, State Analyst Says - Bloomberg
OPEC ends Cairo meeting without new output cuts - AP
Local Pillars, Auto Dealerships Teeter as Big Three Decline - NY Times
Rubin says not to blame for Citi's troubles - Reuters
Americans Have Lost Their Appetite for Spending - NY Times
Poverty spreading in suburbs: study - Reuters

MARKETS/INVESTING
The Investors Who Can’t Come in From the Cold - NY Times
Gas above $2 a gallon in only 3 states - CNN/Money
Currencies fail to hold firm in the crisis - Financial Times
Resist the Urge to Use Your Retirement Savings to Live Off - Associated Content

ECONOMY
Preview: Job Cuts, Factory Slump Probably Worsened - Bloomberg
Early data shows strong Black Friday shopping - AP
Hard Times Are Hitting Santa, Too - Washington Post
Black Friday shoppers spend -- with caution - LA Times

INTERNATIONAL
Chinese leader says China losing competitive edge - AP
We’re still worse off than in 1997 - Times Online
Saudi index soars after king's comments on economy - AP
UK house prices 'to plunge like US' - Guardian
Nine Perplexing Phenomena About China’s Economy - Epoch Times
Taxpayer left with £2.4bn paper loss in RBS takeover - Guardian

HOUSING
A Dispatch From Housing’s Front Lines - NY Times
The Condo Crunch - Washington Post
O.C. house prices seen rising in 2013 - OC Register

FED/TREASURY/BANKING
Bank of Zimbabwe Commends US and UK for Following Its Lead - Naked Capitalism
Was the Great Depression a monetary phenomenon? - NY Times
After General Bernanke Destroys The Deflationary Threat - Fallstreet
Economic rescue could cost $8.5 trillion - LA Times

INTERESTING
Candy cane lawn ornament is used to subdue attacker - LA Times
Obnoxious displays of wealth on TV a turn-off for many - LA Times

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The ownership society takes another hit

Saturday, November 29, 2008

It is not at all clear how (or if) the investing public is going to recover from the 2008 plunge in equity markets following the ongoing plunge in home prices that began in 2006. Many were led to believe that, in a worst case scenario, stock appreciation and real estate appreciation would alternate indefinitely into the future.

If one went down, the other would go up.

If they both went up, well, that was a bonus.

No one thought too much about what it would feel like if they both went down.

About every other day now, another story comes my way about a friend or relative who says, "Yeah, I sold everything in October. I couldn't take it anymore".

It's not difficult to understand that decision making process. There are enough things in life for ordinary citizens to worry about that overcoming the "fight or flight" instinct that makes us all such lousy investors doesn't rise very high on the list.

You have to wonder how they're handling it over at Money Magazine. The perma-bull staff has toned down their rhetoric in recent months as it became clear that no quick reversal was forthcoming. Last month's cover story was about keeping your money "safe" while you're waiting for the rebound.

Unless somehow we see Dow 14,000 again sometime soon (or at least Dow 10,000), the mainstream financial media and Wall Street firms are going to have a lot to answer for as it becomes increasingly clear that the ownership society that has been thrust upon Americans has not produced the results that were expected.

This well-done piece in the Wall Street Journal tells the story of how Wall Street has failed the individual investor, a concept that more and more people are beginning to realize.

With retirement accounts tumbling and millions of homeowners struggling to pay their mortgages, a realization is dawning on many Americans: The banks, brokerage firms, insurance companies and other players in the financial-services industry have failed them.

Thirty years ago, a typical consumer had a fixed-rate mortgage, a life-insurance policy, a bank account and an employer-paid pension plan. Nowadays, that same consumer may have a payment option adjustable-rate mortgage, a 401(k) retirement-savings plan, a home-equity line of credit and perhaps even a health-savings account instead of traditional employer-sponsored health insurance.

In the process, risks previously borne by big banks and employers have been placed squarely on the shoulders of consumers. Individuals increasingly bear the risk of interest-rate fluctuations, rising health-care costs, stock-market gyrations and outliving their retirement savings.
IMAGE Adam Gamradt, 31 years old, of Bloomington, Minn., believes the market slide has created a great opportunity to buy stocks, but he contributes only enough to his employer's retirement-savings plan to get the full company match. That's because he is dismayed by the plan's pricey investment options and lack of information on total plan costs.

"If I'm going to buy a BMW for anybody, it should be me," says Mr. Gamradt, an information-technology worker. "I wouldn't exactly say the financial-services industry is at war with your average American consumer, but it's d- close."
Adam is not alone. There are a lot of really mad people out there.

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Oil and gold contest update #3

Friday, November 28, 2008

There's just enough time for a quick update to the chart for the "Guess the Price of Oil and Gold" contest after having an internet outage most of the afternoon.IMAGE That's Bear Tracks right up next to today's prices, followed by News, Inscrutible Chicken, LM, and Tom C. - I'll try to do a more thorough update next week.

I've gotta start packin' my bags for San Francisco.

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No fireworks in precious metals markets

Depending upon which closing price you look at, gold either ended the Thanksgiving holiday flat or up a percent or so - not what many were expecting, but not bad.

According to Jon Nadler at Kitco, most of the holders of December futures contracts who did show up at work today rolled them over to the February contract. I'll be on a panel with Jon on Monday morning at the San Francisco Hard Assets Investment Conference, so I'll be sure to ask him for more thoughts on the subject.

I think I already know what he's going to say...
IMAGE As it was though, November looks like it was a much better month than September or October for all kinds of investments.

Marketwatch reports that gold turned in its best monthly performance since 1999, rising 3.1 percent for the week and 14 percent for the month. It's still down about two percent for the year, but that's pretty good against most things in 2008.

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Bailouts hit $8.5 trillion

There seems to be something of a "cottage industry" developing around trying to account for the U.S. government's many and varied bailout programs, most of these efforts attempting to add up the current and potential costs, each one coming up with yet a higher total.

This report at the San Francisco Chronicle is two days old, so it may already be out of date, but it has a very nice chart that is well worth sharing which happens to include the highest potential cost of the bailouts to have crossed my desk - a whopping $8.5 trillion.

There's been over a trillion dollars committed during this holiday shortened week alone and the week isn't over yet - surely someone has already calculated an even higher total.

Here's the chart:
IMAGE Pretty amazing...

How's this all going to be paid for again???

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Watching and waiting for gold

Precious metals markets have been quiet today, that is, up until the last few minutes when that little line on Kitco's live gold chart went vertical for what amounted to about a $7 gain for gold.

It could be an interesting day ... we'll see.

Citigroup's report the other day will certainly add some fuel to the fire when it comes to the debate over the future of gold prices. They figure the yellow metal could rocket as high as $2,000 an ounce sometime within the next two years, possibly before the end of next year, as all the government stimulus money works its way into the system.

Ambrose Evans-Pritchard filed this report on the Citigroup paper and GATA has hosted the document that is full of charts, but, more importantly, ends with the following:

While we believe that Gold could very well head above $2,000 we do not think that is today, tomorrow next week or next month.

We do however believe that it will happen over time as this financial / economic backdrop heads to “the wings”

What do we mean? The excesses of the last 10 to 25 years have come to fruition in the U.S. and across the World with severe repercussions for financial markets and the Global economy. There is an increasing recognition of this at official levels and the monetary and fiscal floodgates are starting to open.

We doubt, as a consequence, that we are just going to muddle through here. Our bias is that when the dust settles on all this action the authorities will have been very successful or very unsuccessful.

In the very successful arena is the idea that “throwing the kitchen sink” at this has worked and we see signs that the Global economy is reflating / inflating. As a consequence debt will get devalued and the wash of money in the system would suggest a greater likelihood of an inflationary outlook, which will benefit Gold.

In the very unsuccessful area is that too much damage has been done to the patient and as a consequence we continue to have financial instability. This will breed further economic instability, which could lead to political instability in some nations and possibly even domestic / regional unrest or worse. This deteriorating picture would also likely be a catalyst for Gold to perform well with a status of “safe haven”

Considered opinion is that all the Gold in the World can fit in a 25 square metre cube so even a relatively modest a change in the supply / demand dynamics could result in an outsize move in price. Gold has been used as a monetary instrument as far back as you can look. The same cannot be said about precious art or wine or fine cars etc. In times of extreme concern it is highly likely that it will regain that “luster”

As a consequence we remain of the view that Gold will continue to perform well and will do particularly well as the consensus grows as to how we will come out of this mess (or not). Compared to just about every other asset class in the last 5 to 7 years holders of Gold likely look mellow…it is the holders of other assets that are looking a bit “yellow”.
It's not hard to tell who's winning the epic battle being waged right now between asset deflation and government reflation - the former clearly has the upper hand.

But, the government effort is just ramping up with momentum now set to begin swinging the other way. And one thing is sure - governments and central banks know how to finish the job.

One look at monetary policy in the U.S., when asset deflation last threatened life as we know it, reveals that the Greenspan Fed kept asset deflation on the mat for what seemed like an eternity, continuing to pummel its adversary even after the opponent was completely knocked out.

Better to err on the side of caution they said.

If policymakers are successful, they will be sure to not let up until their opponent is incapable of rising again anytime soon, by which time, another gargantuan asset bubble of some sort will already be inflating rapidly.

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Friday morning links

TOP STORIES
Japan industry: 'Unprecedented' decline - CNN/Money
Retailers Offer Big Discounts, and Then Pray - NY Times
Shares up as India market reopens - BBC
'Shadow ECB' calls for immediate and drastic rates cuts - Telegraph
Property market detox quashes investor appetite - Reuters
Top Chinese official warns on downturn - Financial Times
Government bailout hits $8.5 trillion - SF Gate

MARKETS/INVESTING
Oil falls below $54 ahead of OPEC meeting - AP
Gold little changed; traders eye OPEC meeting - Reuters
‘Structural deficit’ in gold supply could send prices higher - Mineweb
4 double-digit gains in a row for the Dow, but ... - MarketWatch
As Oil Prices Fall, Tensions Among OPEC Members Seem to Deepen - NY Times
Citigroup says gold could rise above $2,000 next year as world unravels - Telegraph

ECONOMY
Lest We Forget - Krugman, NY Times
Too many cooks in Obama’s economics kitchen - Financial Times
Frugal families learn how to cope with soaring food costs - USA Today
Food Prices Expected to Keep Going Up - NY Times
The year of holiday thrift - Christian Science Monitor
Consumers can find good deals beyond Black Friday - USA Today

INTERNATIONAL
Ruble Collapse Prompts Russia to Raise Rate on Currency Plight - Bloomberg
European unemployment soars - CNN/Money
Japan’s Recession Deepens as Factory Output Slumps - Bloomberg
Taxpayer now owns nearly 60% of Royal Bank of Scotland - TimesOnline
If you only read one thing on China this fall … - CFR
China downturn deepens - Reuters
Siberian oil town hit by downturn - BBC

HOUSING
New York home prices seen plunging as crisis bites - Reuters
Meltdown far from over, new mortgage crisis looms - AP
Local Home Prices Slide to 34 Percent Below Peak - Voice of San Diego
Home shoppers rush in as mortgage rates fall - USA Today

FED/TREASURY/BANKING
Plan C: Unorthodox economic policies - Economist
Anatomy of a Meltdown - New Yorker
Why Fed can easily offer money help - AP
Treasury's financial rescue program reportedly understaffed - MarketWatch

INTERESTING
GM asks government to block public tracking of jet - Reuters
Scientists Find Clues to Aging in a Red Wine Ingredient’s Protein Role - NY Times

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Planes, Trains, and Automobiles

Thursday, November 27, 2008

All that Neal Page wants to do is to get home for Thanksgiving. His flight has been canceled due to bad weather so he decides on other means of transport.

As well as bad luck, Neal is blessed with the presence of Del Griffith, "Shower Curtain Ring Salesman" and all-around blabbermouth, who is never short of advice, conversation, bad jokes, or company.

And when he decides that he is going the same direction as Neal...

This morning, a brief departure from the normal fare is in order to recall the 1987 John Hughes classic Planes, Trains, and Automobiles starring Steve Martin and John Candy. Over the years, the viewing of this film on Thanksgiving eve has become a family tradition here - this summary is provided to readers courtesy of IMDb (Internet Movie Database) and various fan sites.

Owen: I'm to drive you to Wichita to catch a train?
Del: Yeah, we'd appreciate it.
Owen: Train don't run out of Wichita... unlessin' you're a hog or a cattle.
[Clears his throat]
Owen: People train runs out of Stubbville.
Cue the music - doooo, doooo, doooo.

Planes, Trains and Automobiles is the story of two very different men who wind up traveling together from New York to Chicago in the day and a half before Thanksgiving. Due to bad weather and various other mishaps, it turns into a worst-case travel scenario.

Neal Page is stuck in a meeting in New York, desperate to get home. He glances at his watch to see that he has less than two hours to get to the airport. He tries desperately to hail a cab, and when he finally gets one, Del Griffith steals it, accidentally. This is the first of many encounters between Neil and Del.

When Neil finally gets to the airport, he is horrified to find that his flight is cancelled due to weather. Neil recognizes Del, who is sitting across from him at the gate.

Neil finally boards the plane only to discover that he’s been bumped to coach. No sooner than he can say, “I can’t wait to see what happens next!” he finds out he’s sitting next to Del.
Neal: Eh, look, I don't want to be rude, but I'm not much of a conversationalist, and I really want to finish this article, a friend of mine wrote it, so...
Del: Don't let me stand in your way, please don't let me stand in your way. The last thing I want to be remembered as is an annoying blabbermouth... You know, nothing grinds my gears worse than some chowderhead that doesn't know when to keep his big trap shut... If you catch me running off with my mouth, just give me a poke on the chubbs...
The plane is diverted to Wichita, where Del offers to share a hotel room with Neil for the night when Neil has no luck finding one himself. Waking up after sharing the same bed (.wav file):
Neal: Del... Why did you kiss my ear?
Del: Why are you holding my hand?
Neal: Where's your other hand?
Del: Between two pillows...
Neal: Those aren't pillows!
[They both stand up and awkwardly walk around the room]
Neal: Did you see that Bears game last week?
Del: Yeah, hell of a game, hell of a game. The Bears have a great team this year - they're going go all the way.
From here, they embark on a desperate journey to get home in time for Thanksgiving. After being unable to find his rental car in the remote lot and barely surviving the three-mile hike back to the rental office, Neal has this now-famous exchange with a too-cheerful rental car agent played by Edi McClurg:
Car Rental Agent: Welcome to Marathon, may I help you?
Neal: Yes.
Car Rental Agent: How may I help you?
Neal: You can start by wiping that f**king dumbass smile off your rosy f**cking cheeks! Then you can give me a f**king automobile: a f**king Datsun, a f**king Toyota, a f**king Mustang, a f**king Buick! Four f**king wheels and a seat!
Car Rental Agent: I really don't care for the way you're speaking to me.
Neal: And I really don't care for the way your company left me in the middle of f**king nowhere with f**king keys to a f**king car that isn't f**king there. And I really didn't care to f**king walk down a f**king highway and across a f**king runway to get back here to have you smile at my f**king face. I want a f**king car RIGHT F**KING NOW!
Car Rental Agent: May I see your rental agreement.
Neal: I threw it away.
Car Rental Agent: Oh boy.
Neal: Oh boy what?
Car Rental Agent: You're f**ked!
After Del manages to rent a car for the two of them, they find themselves driving the wrong way on a divided highway late at night. Another motorist, driving in the proper direction on the other side of the highway, tries to tell them that they are going the wrong way, toward oncoming traffic, as Neal awakens from a nap:
Neal: He says we're going the wrong way...
Del: Oh, he's drunk. How would he know where we're going?
After barely surviving the encounter with two tractor-trailers, they accidentally set their rental car ablaze. It remains drivable (barely), until they are pulled over:
State Trooper: What the hell are you driving here?
Del: We had a small fire last night, but we caught it in the nick of time.
State Trooper: Do you have any idea how fast you were going?
Del: Funny enough, I was just talking to my friend about that. Our speedometer has melted and as a result it's very hard to see with any degree of accuracy exactly how fast we were going.
With the rental car impounded, they are left with no alternative than to seek bus transportation:
Del: You're in a pretty lousy mood, huh?
Neal: To say the least.
Del: You ever travel by bus before?
[Neal shakes his head]
Del: Hmm. Your mood's probably not going to improve much.
After more tumult, they finally make it back to Chicago, both having learned a lot about themselves and each other.

Planes, Trains and Automobiles is a wonderful film - very funny, with great performances from the entire cast, especially John Candy, who may have given the best performance of his career, which was tragically cut short by his untimely death in 1994.

Highly recommended.

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Ten-year Treasury yield dips below 3 percent

Wednesday, November 26, 2008

You don't see this happen everyday. Actually, you dont' see this happen ever. Earlier today, the yield on the ten-year U.S. Treasury dipped below three percent for the first time ever.
IMAGE Pretty amazing...

Investors are so terrified of what they see all around them that they've bid up the price of super-safe U.S. debt to levels that will only pay them 3 percent per year for the next 10 years.

[Note: The term "super-safe" as used above implies that you'll be sure to get your money back after ten years, but there's no telling what (if anything) that money will buy.]

Sure, there were a bevy of bad economic reports again today - durable goods orders plunged, new home sales tanked, jobless claims remained firmly in recession territory, and there is nothing to be thankful for in the manufacturing sector - but it's not the end of the world.

Is it?

In the entire 46-year history of the 10-year note, the yield has never been lower.
IMAGE Now might be a good time to get into one of those short-Treasury funds like they have over at Rydex and ProShares.

The only way that Treasury yields can go any lower than they are now is if investors become even more terrified than they already are and that just doesn't seem possible.

Does it?

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New home sales plunge

Well, this shouldn't come as a surprise - the Commerce Department reported new home sales plunged to levels last seen in 1991, down 5.3 percent from September to October.
IMAGE There's more at Bloomberg where Steven Wood, president of Insight Economics in Danville, California stated the obvious, "“The new home market remains extremely weak".

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Julie on the prospects for "Black Friday"

Julie Alexandria of Wallstrip encourages Americans to due their civic duty in support of the U.S. economy, while demonstrating what is surely an unhealthy fascination with squirrels.

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Summers to replace Bernanke?

At the end of Steven Pearlstein's excellent commentary on the world-wide bailout juggernaut that he aptly labels "Keynes on steroids" can be found this little gem.

What wasn't particularly helpful this week was the published leak from the Obama camp that former Treasury Secretary Larry Summers would be named the next chairman of the Federal Reserve when the term of Bernanke, the current chairman, expires at the end of January 2010.

A Category 4 financial crisis is hardly the time to undermine confidence in -- or confidence of -- the Fed chairman. Nor is it the time to create unneeded tension between the Fed and the White House, where Summers will be the president's closest and most powerful economic adviser. Whatever his original intentions, Obama would do well to announce publicly that there will be no change at the Fed until the crisis has passed -- and maybe not even then.
This does not appear to have been widely reported, but it is rather significant - January of 2010 is just over a year away. This also prompts the question, if this is a Category 4 financial crisis, what would a Category 5 possibly look like?

ooo

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"Bailout" is 2008 word of the year

The word "bailout" has been named the 2008 Word of the Year, besting all others by a wide margin in look ups at Merriam-Webster's online dictionary.
IMAGE With global financial markets taking on water like a once sea worthy, but now badly damaged, ship and governments around the world all too eager to try to keep the ship from sinking, "bailout" should not be a surprising selection.

But, perhaps a better analogy to describe what is currently going on around the world would be "festering open sore" and "band-aid".

Other contenders for this honor were the politically inspired "vet", "maverick", and "rogue", along with the more economically oriented and much more ominous "trepidation," "precipice", "turmoil", and "socialism" .

There still appears to be some lingering controversy after the American Dialect Society chose "subprime" as its word of the year in 2007, but Merriem-Webster chose "W00t", a popular expression in gaming circles.

The American Dialect Society's 2008 Word of the Year will be selected in January, and "bailout" is said to be a top contender.

According to this AP story, the previous Merriam-Websters Word of the Year winners were:

2007: W00t — "Expression of joy or triumph, or an obvious victory; abbreviation of 'We Owned the Other Team,' originating from computer-gaming subculture."

Selected as representative of new words, often whimsical and clever, emerging from new technology.

2006: Truthiness — "Truth that comes from the gut, not books." Coined by Comedy Central satirist Stephen Colbert; selected as Word of the Year by Merriam-Webster's online users.

Picked as national political debates questioned what constitutes "truth," and whether it is subjective. Deemed by Merriam-Webster as a playful term for an important issue.

2005: Integrity — "Firm adherence to a code; incorruptibility."

Picked as national political discourse centered on integrity, and lack thereof, in public servants on national and local levels.

2004: Blog — "A Web site that contains an online personal journal with reflections, comments, and often hyperlinks provided by the writer. Short for Weblog."

Selected as it rocketed to prominence in midyear, driven by growth and popularity of blogs.

2003: Democracy — "Government by the people, especially: rule of the majority, or: a government in which the supreme power is vested in the people and exercised by them directly or indirectly through a system of representation usually involving periodically held free elections."
Previous winners "truthiness" and "blog" make a good deal of sense as do "democracy" and "integrity", though they are far less exciting.

But "W00t"? With zeros and not "o"s?

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Wednesday morning links

TOP STORIES
China cuts key interest rate - CNN/Money
Three new reports reveal battered economy - AP
Fed's $800 billion package aims to unlock lending - USA Today
Obama picks Volcker to head economic group - CNN/Money
Banks lining up to sell FDIC-backed debt - MarketWatch
Beyond the Ivied Halls, Endowments Suffer - NY Times
Russian expert: U.S. headed for collapse - UPI
Keynes on Steroids - Washington Post

MARKETS/INVESTING
Oil steady near $51 - CNN/Money
Gold Falls in London as Stronger Dollar Reduces Demand - Bloomberg
Dividends Cut Fastest Since 1950s as Citigroup Conserves Cash - Bloomberg
Universities retrench as endowments suffer from financial crisis - IHT
New Jersey pension funds lost $23B so far this year - NJ Star Ledger
Bulls still stubborn when it comes to gold - MarketWatc

ECONOMY
Consumer spending plunges in October - Reuters
Americans' Food Stamp Use Nears All-Time High - Washintgon Post
Durable orders down 6.2%, transportation orders fall - MarketWatch
Frugal Santas find ways to stretch gift budgets - LA Times
As debt grows, collections boom - CNN/Money

INTERNATIONAL
Economic woes hit Ireland hard - LA Times
Giant Stimulus Plan Proposed for Europe - NY Times
Brazil Inflation Quickens to Highest Since July 2005 - Bloomberg
Emerging-Market Debt Trading Tumbles to Lowest in 5 1/2 Years - Bloomberg
China slashes rates to kick-start slowing economy - MarketWatch
Northern Rock defies Government to raise rates - Times Online
A Global Downturn Puts the Brakes on China’s Industry - NY Times
Toyota debt rating cut, Suzuki holds out hope for GM - AP

HOUSING
As mortgages went bad, executives cashed out - LA Times
U.S. Mortgage Rates Drop Most in Seven Years on Fed Debt Plan - Bloomberg
Home prices keep plunging; L.A. sees some of the sharpest declines - LA Times
Seattle home prices fall nearly 10% in third quarter - Seattle Times
Outlook Grows More Dire for Housing Market - LA Times

FED/TREASURY/BANKING
First Audit Said to Cite Some Snags With Bailout - NY Times
Fed Risks `Spitting in the Wind' With New Aid Pledges - Bloomberg
Lakota Launches Private Bank for Only Silver and Gold Currencies - Abolish the Fed
‘Problem’ Banks Rose 46% in Third Quarter, FDIC Says - Bloomberg
Where Was Geithner in Turmoil? - NY Times

INTERESTING
Mystery of dolphins' speed solved - BBC
'Bailout' is 2008 word of the year - CNN/Money

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Your tab for the bailouts

Tuesday, November 25, 2008

From EconomPicData comes this summary of what the last year's worth of bailouts would cost each and every taxpayer, if we ever had to pay for it all.
IMAGE Of course, the good news is that we won't ever have to pay for it - at least not in actual taxes. We'll surely pay for it through higher inflation and our foreign creditors might ultimately realize that their dollar holdings have far less purchasing power over time, but don't worry about getting a tax bill for $90,000.

ooo

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Fermented grape juice languishes

Anyone living in California over the last ten years or so has surely noticed the explosive growth in the state's wine industry. Having developed something of a taste for red wine over the years, we've felt fortunate to have lived in an area where you can get such decent wine for such a low price.

We are reminded of how spoiled we've become every time we travel and this will surely be one of the few downsides to leaving the Golden State.

What's been funny to watch over the last three or four years, however, is the sheer number of wineries and wine tasting rooms that have sprung up like mushrooms. Not far from where we live, there used to be 4 or 5 wine tasting rooms on Main Street - now there are 17.

It's not uncommon to see what appears to be a dilapidated farmhouse out on the back roads with a Wine Tasting sign out in front next to a few wine barrels stacked on top of each other.

You have to wonder how business is these days.

Given the current trajectory of the nation's economy and how hard California is being hit by the slowdown, they can't all survive.

It's one thing to go to Costco and pay $8 or $10 for a bottle of wine you'd pay three times that much for at a restaurant, but it's quite another to pay $25 or $30 for the obligatory purchase after sampling a glass or so in a tasting room.

When home prices were rising at the rate of $100K per year and jobs were plentiful, wine tasting trips made sense. With home prices now falling by that same amount and unemployment rising sharply, this has got to be one of the first discretionary expenses that will be cut.

This story in the LA Times is one of the first reports that I've seen on the developing slowdown in the industry. It will surely not be the last.

People are still drinking wine. They are just spending less.

"I still drink wine with my wife every night, but before I might have bought Santa Barbara County Pinot Noirs for $20 to $30; now I am paying $9.99 for a Castle Rock Pinot from Mendocino County," said Pablo Urquiza, a freelance television producer who lives in Marina del Rey.

He's not alone.

Sales of wine for $9 or less make up the fastest-growing segment of the wine market and sales above that price are starting to trend down, said Jon Fredrikson, a Woodside, Calif., industry analyst.
IMAGE Consumers are trading down to wine they consider "values," Fredrikson said.
...
Wine retailers aren't the only ones feeling the pain: Consumers are dining out less, slashing wine sales by as much as 15% in restaurants, Fredrikson said. All of this translates to lower sales for California's wineries, which sell wine with a retail value of $19 billion annually. Americans drink $30 billion worth of wine each year.

"Our sales are down about 10%, and I am surprised they are only down by that amount," said Ron Melville, owner of Melville Vineyards and Winery in the Santa Rita Hills in Santa Barbara County.
We recently saw that Two-Buck Chuck at Trader Joes now goes for three dollars. That could be a real problem for their marketing department.

ooo


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The gold price over Thanksgiving

For years now, the Thanksgiving holiday in the U.S. has been a very favorable two-day period for the gold price as shown below - this year is not likely to be an exception.
IMAGE While anything could happen later this week, a number of conditions have developed that would favor a higher gold price by the weekend, perhaps much higher.

First, due to the closure of the Comex in New York on Thursday and light trading on both Wednesday and Friday, there will be less selling than usual coming from New York bullion banks - this has probably played a big role in the steady gains over this two-day period in recent years as shown above.

Second, the gold price has surged recently, up almost a hundred dollars an ounce in just the last week, and this has undoubtedly caught the fancy of "momentum traders" around the world who may now set out to push the price higher.

[Note: If you go back to the day or two before Thanksgiving last year, you'll see that the price of gold has actually risen since then - from about $795 last year to about $815 as this is written for a modest 3 percent gain. Are there any other assets (aside from the U.S. dollar) that sport a year-over-year gain today?]

Lastly, there are those shrinking short positions for both gold and silver and the unknown number of holders of December futures contracts who, on Friday, will announce their desire to take delivery of the metal next month rather than having the contracts settled in cash.

Over the last eight years, the biggest moves have come on Friday, so try not to go into the day with too big of a Turkey-hangover.

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The fundamental value of real estate

When will you know that home prices are likely to stop their decline?

When people stop talking about real estate as an investment, the chief offenders being the staff at the National Association of Realtors who continue to stand by the party line that housing is the typical American's best and most important asset.

While home prices may have appreciated a percentage point or two over the rate of inflation over very long periods of time, like stocks, there are no guarantees over shorter time frames, a reality that is hitting home for an increasing number of homeowners.

Plus, real estate has huge upkeep costs and tax liabilities that are too easily forgotten when prices are going up. When home prices go down, these costs just make a bad situation worse.

The real value in real estate is in its function as shelter - a place to live, a place to raise a family - a point nicely made by Steve Kersch in this column at MarketWatch today.

For most Americans, their home is their biggest investment. So when we read about record declines in U.S. home values, we naturally think our investment is in the tank.

But just because buying a house represents the biggest financial commitment most of us will ever make does not mean that its value is in its price and that if that price does not go up year after year we are somehow an investment failure.
...
At its core, a house is a shelter. Unless the roof caves in, there is always some economic value in that.

But most people when they dream about a house or start looking for a house or actually buy one think about value in a whole different way: they think about the fireplace they can gather around with their families, the kitchen where they can show off their culinary skills, the bathroom that they won't have to share, the schools they will be able to send their kids to, the neighbors they will be able to entertain in the backyard, the parks they can bike and hike and the community events they will be able to attend.

Yes, you have to make a price decision. And that can come back to haunt you if you're forced to sell in a market like this. But that doesn't mean you value any of those other things any less.
That's a nice holiday sentiment for all the struggling homeowners around the world, for whom things look decidedly different today than they did just a year or two ago.

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Phoenix-Las Vegas death match continues

The September report(.pdf) for the S&P Case-Shiller Home Price Indices shows the 10-City and 20-City Composite Home Price Indices at new record annual declines of 18.6 percent and 17.4 percent, respectively. Price indices for all 20 cities are shown below.
To aid in viewing this graphic, the order of the legend (upper left) reflects the top-to-bottom position of all 20 cities for the current month (far right). As such, the legend order indicates which cities have managed to hold onto the largest real estate price gains since 2000.

Congratulations New York!

You've just surpassed Washington D.C. as the metro area that has held onto home price gains the best in this decade. The bad news is that, with all the recent troubles on Wall Street, this may not last that long.

Not surprisingly, Phoenix and Las Vegas continue to lead the way down, year-over-year home price declines in both areas pushing past 31 percent in September as indicated in red in the table below - the death match continues.

A few other areas are also threatening to crack the 30+ percent annual decline threshold as indicated in blue, notably, San Francisco, an area where the annual price decline worsened to 29.5 percent.
IMAGE Two areas showed month-to-month improvement - Cleveland and Boston - while home prices in Dallas were unchanged from August. Cleveland was the only region where the annual home price decline improved from a year ago, from -6.6 percent in August to -6.4 percent in September.

David M. Blitzer, Chairman of the Index Committee at Standard & Poor's, noted:

The turmoil in the financial markets is placing further downward pressure on a housing market already weakened by its own fundamentals.

All three aggregate indices and 13 of the 20 metro areas are reporting new record rates of decline. Looking at the returns of the U.S. National Index, prices are back to where they were in early 2004. As of September 2008, the 10-City Composite is down 23.4% from its peak, the 20-City Composite is down 21.8% and the National Composite is down 21.0%
You'd think that things couldn't get any worse for home prices, but they probably will.

ooo

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Tuesday morning links

TOP STORIES
Home prices plunge record 17.4 percent in September - Reuters
Fed unveils $200 billion plan to bolster consumer lending - MarketWatch
Without bailout, carmakers' road ahead is full of potholes - LA Times
This Fed Challenge Readies New Class of Leaders - Bloomberg
Rogers Says Dollar to Be `Devalued,' Buys Commodities - Bloomberg
U.S. average gasoline price drops below $2 a gallon - LA Times
Anatomy of a Meltdown - New Yorker

MARKETS/INVESTING
Oil dips after rally - CNN/Money
Gold rises for fifth day on falling dollar, GDP data - MarketWatch
Philosopher editor bucks worst of all markets - MarketWatch
Workers cautious about 401(k) investment: study - Reuters
After 'GD2' in 2011, a 100-year bear market? - MarketWatch

ECONOMY
Obama promotes fiscal restraint, big spending - AP
U.S. Q3 GDP revised down to - 0.5% - MarketWatch
Holiday spending slashed - survey - CNN/Money
Zombie Economics - Kunstler, CFN

INTERNATIONAL
UK to suffer 'severe' recession - BBC
Canada retail sales soar past expectations - Globe & Mail
China Needs to ‘Rebalance’ Economy, World Bank Says - Bloomberg
Australian, N.Z. Dollars Pare Gains Amid U.S. Recession Concern - Bloomberg
BHP Abandons $66 Billion Rio Bid as Commodities Slump - Bloomberg
In China, a bitter reckoning - Globe & Mail
Is Britain going bankrupt? - Telegraph

HOUSING
Home prices in record decline - CNN/Money
Mass. home sales rise, but prices fall - Boston.com
Weaker housing market, incomes dog Santa Cruz County residents - Mercury News
Foreclosures, delinquencies skyrocketing among 'prime' borrowers - LA Times
ING DIRECT Suspends Foreclosures - HousingWire

FED/TREASURY/BANKING
Time for the Fed to start manipulating mortgage rates? - LA Times
Fed Commits $800 Billion More to Unfreeze Lending (Update1) - Bloomberg
At this rate, the government will need a bailout too - MarketWatch
Another Crisis, Another Guarantee - NY Times

INTERESTING
GM ends 9-year endorsement relationship with Tiger Woods - USA Today
People Said to Believe in Aliens and Ghosts More Than God - LiveScience

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Fast forward a decade or two and ...

Monday, November 24, 2008

Another fine submission by Tom Tolles at the Washington Post:
IMAGE

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Deflation dementia

Saner heads are definitely not prevailing in the increasingly dark and damp discussion of one of the hottest economic topics of the day - deflation.

In fact, a sort of dementia now seems to be manifesting itself in some of those individuals who utter the word "deflation" - a condition where the utterer undergo changes in their brain function, sometimes becoming disoriented about time and people, oftentimes believing they have been transported back to an era of sound money when deflation really mattered.

Nowhere was this dementia more noticeable than with Senator Dick Chuck Schumer (D-New York) when he appeared on ABC's This Week yesterday.

The following comments were made when discussing the danger of providing too small of an economic stimulus package with deflation already at our doorstep:

I believe we need a pretty big package here. First I think that Congress will work with the President-Elect starting now and we'll have a major stimulus package on his desk by inauguration day. I think it has to be deep. In my view it has to be between $500 and $700-billion dollars and that's because our economy's in serious, serious trouble. You look at unemployment, you look at consumer confidence, you look at the stock market.

We're on the edge of deflation. Once you get into deflation you almost never get out of it. That's what the Great Depression taught us, that's what Japan taught us.

So a strong shot in the arm, just the way Barrack Obama has conceived it - infrastructure, green jobs is what is needed and most economists say, to make this work, you need about five percent of GDP which would be $700 billion. It's a little like having a new New Deal, but you do it before the Depression, not after.
The dementia was plain to see as Schumer delivered these lines, moving one flat, extended hand horizontally in front of the camera to depict being on the "edge" of deflation, then making sharp downward movements with that hand to demonstrate "getting into" deflation.

The screenshots below from the video at ABC demonstrate this sequence.

First, on the "edge" of deflation...
IMAGEAnd then falling "into deflation", a development that would apparently be so painful that the Senator had to close his eyes and grimace just to get through it.
IMAGEHe may have mumbled something about Irving Fisher as well, but it was too faint to be accurately transcribed.

The dementia has apparently spread to the U.K. as well, this item from the Times Online showing how a seller of "with-profit" bonds has somehow been transformed into some sort of a cartoon character as a result of deflation.
IMAGESomeone should probably crank up the microfiche machine to see if there were any similar occurrences of deflation dementia back in the 1930s.

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Existing home sales clunk along the bottom

The NAR (National Association of Realtors) reported a setback in existing home sales during October in what increasingly appears to be an extended period of "clunking along a bottom" that began forming last year. Home prices are another matter entirely.
IMAGEThe median price for existing homes dropped to $183,300 in October, down a whopping 11.3 percent from a year ago, taking home prices back to levels last seen in 2004.

Of course, the NAR blames distressed sales and the unusually large number of lower-end homes being sold for the big price decline, citing "distortion" in the data. While these factors surely played a big role, it's not like you can just dismiss them either and go on thinking that home prices, in the aggregate, are not tumbling in a big way.

Many sellers will be comforted to learn of this "distortion" in the price data and blithely go on attempting to sell their homes for unrealistic prices.

Oh well...

Interestingly, NAR cheif economist Lawrence Yun cites the stock market and the economy as the proximate causes for weakness in the housing market:

Many potential home buyers appear to have withdrawn from the market due to the stock market collapse and deteriorating economic conditions. We have favorable affordability conditions, but we need more than that to give buyers with jobs the confidence they need. This is why a housing stimulus is so critical now to encourage more buyers to draw down the inventory and stabilize home prices. Without home price stabilization, there will not be an economic recovery.
Maybe, just maybe, plunging home prices are also playing a role in the reluctance of potential buyers to ... errrrr ... take the plunge.

ooo

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Another call for a gold standard in the WSJ

It does seem rather obvious, doesn't it?

The fallout from another burst asset bubble following years of virtually unlimited creation of money and credit aided by the complete failure of regulation of financial industry could have been avoided if only there were inherent limits on the creation of money and credit.

Without such restraint, greedy financiers aided by dimwitted economists and naive politicians, most of whom seek only short-term solutions to complex problems in order to ensure their re-election, will always produce the same result.

Is there any hope for a longer lasting solution to our current problems?

Well, the sharply increased volume of editorials in the Wall Street Journal calling for a new monetary order is a hopeful sign that the message is getting out.

Whether or not anyone is listening is another question, but you gotta start somewhere.

To wit, another WSJ editorial calling for a new gold standard, this one by Christoper Wood,
the author of "The Bubble Economy: Japan's Extraordinary Speculative Boom of the '80s and the Dramatic Bust of the '90s":

There are no easy policy answers to the current credit convulsion and intensifying financial panic -- not as long as politicians and central bankers are determined not to let financial institutions fail, and so prevent the market from correcting the excesses.
...
What happens next? With a fed-funds rate at 0.5% or lower in coming months, it is fast becoming time for investors to read again Mr. Bernanke's speeches in 2002 and 2003 on the subject of combating falling inflation. In these speeches, the Fed chairman outlined how policy could evolve once short-term interest rates get to near zero. A key focus in such an environment will be to bring down long-term interest rates, which help determine the rates of mortgages and other debt instruments. This would likely involve in practice the Fed buying longer-term Treasury bonds.

It would seem fair to conclude that a Bernanke-led Fed will follow through on such policies in coming months if, as is likely, the U.S. economy continues to suffer and if inflationary pressures continue to collapse. Such actions will not solve the problem but will merely compound it, by adding debt to debt.

In this respect the present crisis in the West will ultimately end up discrediting mechanical monetarism -- and with it the fiat paper-money system in general -- as the U.S. paper-dollar standard, in place since Richard Nixon broke the link with gold in 1971, finally disintegrates.

The catalyst will be foreign creditors fleeing the dollar for gold. That will in turn lead to global recognition of the need for a vastly more disciplined global financial system and one where gold, the "barbarous relic" scorned by most modern central bankers, may well play a part.
The flight to gold appears to already be underway with the some of the largest international dollar holders - the Saudis and the Chinese - either talking about buying lots more gold or already doing so.

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Thoughts on the recent spike in jobless claims

The intrepid staffers at The Onion take the pulse of the public regarding the recent spike in new claims for unemployment insurance, submitting this summary of their findings:IMAGE

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Monday morning links

TOP STORIES
U.S. Approves Plan to Help Citigroup Cope With Losses - NY Times
Democrats' Stimulus Plan May Reach $700 Billion - Washington Post
Bring back the link between gold and the dollar - Financial Times
Recession’s Grip Forces U.S. to Flood World With More Dollars - Bloomberg
Fed Pledges Top $7.4 Trillion to Ease Frozen Credit - Bloomberg
Why Gold Is Down, But You Can't Get Your Hands on Any - Fox Business
China addresses stimulus doubts with proposal list - AP
The meddlers can't tame the market - MSN Money

MARKETS/INVESTING
Oil prices rise back above $50 - AP
Gold hits 5-wk high, financial crisis fuels demand - Reuters
COMEX Commercial Short Positions Still Low For Gold, Silver - Resource Investor
Deflation, Monetary Velocity, and Why Gold's a Buy - Seeking Alpha
The Cornerstone of Capitalism - Hussman Funds

ECONOMY
Schumer: $500 billion to $700 billion stimulus - AP
FDR saved capitalism – now it's Obama's turn - CSM
More customers resume using old-fashioned cash - SF Gate
Monster in Closet Is Recession, Not Deflation - Bloomberg
Don't Get Depressed, It's Not 1929 - Slate

INTERNATIONAL
UAE to bail out lenders, to cut state spending - Reuters
Darling to unveil 45p tax on rich to fund recession package - Guardian
Dutch Home Sellers Cut Prices in Market That Would ‘Never Fall’ - Bloomberg
Treasury reveals biggest growth forecast cut since records began - Telegraph
Pacific Rim Leaders Vow Further ‘Extraordinary’ Steps on Crisis - Bloomberg
US influence to decline, NIC intelligence report predicts - Telegraph
China should increase dollar reserves, economist says - Reuters
Saudi Arabia cuts interest rate - BBC

HOUSING
World's house values fall for the first time - Guardian
Assured, FSA Lose AAA Ratings at Moody’s - Housing Wire
Calling for Fed Intervention in the Housing Market - Seeking Alpha
Falling prices a bitter pill for homeowners - SF Gate

FED/TREASURY/BANKING
The Fed Is Out of Ammunition - Wall Street Journal
Fed's Role in Crisis Is Giant, if Opaque - Washington Post
Bernanke says he erred in gauging mortgage fallout - CNN/Money
Economist blames Fed for downturn - Kansas.com

INTERESTING
Ben Stein Watch: November 23, 2008 - Portfolio.com
Dig It: These People Are Burying Their Cash - SmartMoney

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$300 billion doesn't seem like a lot anymore

Sunday, November 23, 2008

The Wall Street Journal reports that Citibank has become the latest recipient of a government bailout - this one to the tune of $300 billion, or thereabouts, depending upon how you do the math which, in this case, appears to be quite complicated.

Somehow, $300 billion doesn't sound like a lot of money anymore ... it should.

Earlier today they were talking about a $500 to $700 billion stimulus package that will be on President Obama's desk, ready to sign, on inauguration day.

That must be a new record - a cool trillion in government commitments in a single day.

The federal government agreed Sunday to take unprecedented steps to stabilize Citigroup Inc. by moving to guarantee close to $300 billion in troubled assets weighing on the bank's books, according to people familiar with details of the plan.

Treasury has agreed to inject an additional $20 billion in capital into Citigroup under terms of the deal hashed out between the bank, the Treasury Department, the Federal Reserve, and the Federal Deposit Insurance Corp. Treasury officials will charge a higher interest rate for the capital injection -- 8% for the first few years -- than it has charged to dozens of other banks now borrowing money under the government's the $700 billion rescue package approved by Congress last month.

In addition to the capital, Citigroup will have an extremely unusual arrangement in which the government agrees to backstop a roughly $300 billion pool of its assets, containing mortgage-backed securities among other things. Citigroup must absorb the first $37 billion to $40 billion in losses from these assets. If losses extend beyond that level, Treasury will absorb the next $5 billion in losses, followed by the FDIC taking on the next $10 billion in losses. Any losses on these assets beyond that level would be taken by the Fed.
Well it's a good thing we have the Fed to bat cleanup.

Later in the report they mention $1.23 trillion in "entities" that are still being kept "off the books" at Citibank. Based on their current $2 trillion in "entities" that are "on the books", even more government help may yet be needed.

This video might help to explain why big banks keep getting bailed out. The late Mr. Carlin starts out talking about education but quickly turns his attention to Wall Street.


Favorite line: "It's a big club, and you ain't in it. You and I are not in the big club"

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Big Three bailout videos

Last night's hilarious SNL parody of the early return of automaker executives to testify before Congress has yet to be posted on YouTube. Until then, there's this:

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The ongoing dream of prosperity without work

As President-Elect Barrack Obama continues to lower expectations for change by appointing Clinton-era advisor Larry Summers to direct the White House's National Economic Council and long-time New York Fed Chairman Timothy Geithner as Treasury Secretary, Congressman Ron Paul (R-Texas) continues to try to explain how the entire system is flawed and that doing more of the same just isn't going to make things any better over the long run.

In ratcheting up his 2009 economic stimulus plan that will end up costing untold hundreds of billions of dollars, the new president is sure to be comforted by his new top economic advisor who, according to this Bloomberg report, noted less than a week ago that "ballooning debt isn’t a major issue for now because there’s 'excess demand' for Treasuries rather than excess supply, as investors flock to government debt as a haven".

Yes, Mr. President-Elect, as long as the financial world remains in a state of perpetual terror, the U.S. will always have an accommodative funding source for whatever it is that we decide we want to spend money on.

That's a good long-term plan.

Meanwhile, Ron Paul continues to press the case for real change beginning with the type of economists that the new administration might employ, describing in this speech last week the differences between Keynesians and Austrians and once again prompting the whimsical fantasy of what a Ron Paul White House might look like if tens of millions of voters would have had a clue what he was talking about when he sought the Republican Party nomination for President last summer.

Madame Speaker, many Americans are hoping the new administration will solve the economic problems we face. That’s not likely to happen, because the economic advisors to the new President have no more understanding of how to get us out of this mess than previous administrations and Congresses understood how the crisis was brought about in the first place.
Except for a rare few, Members of Congress are unaware of Austrian Free Market economics. For the last 80 years, the legislative, judiciary and executive branches of our government have been totally influenced by Keynesian economics. If they had had any understanding of the Austrian economic explanation of the business cycle, they would have never permitted the dangerous bubbles that always lead to painful corrections.
...
At least 90% of the cause for the financial crisis can be laid at the doorstep of the Federal Reserve. It is the manipulation of credit, the money supply, and interest rates that caused the various bubbles to form.
...
Although it is obvious that the Keynesians were all wrong and interventionism and central economic planning don’t work, whom are we listening to for advice on getting us out of this mess? Unfortunately, it’s the Keynesians, the socialists, and big-government proponents.

Who’s being ignored? The Austrian free-market economists—the very ones who predicted not only the Great Depression, but the calamity we’re dealing with today. If the crisis was predictable and is explainable, why did no one listen? It’s because too many politicians believed that a free lunch was possible and a new economic paradigm had arrived. But we’ve heard that one before--like the philosopher’s stone that could turn lead into gold. Prosperity without work is a dream of the ages.
Dr. Paul goes on to talk about how governments need central banks so that they can tax the public through the sneakiest of all means - inflation - in order that they be able to remain "large and in charge" (my words not his) and that we'd be much better off with sound money and smaller government.

Of course, Keynesian economists would probably note that we face de-flation at the moment, not in-flation (happens every time a bubble bursts), and that the idea of abolishing the Federal Reserve as proposed by Ron Paul is about the stupidest thing a government could do.

What would a Ron Paul White House look like...

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What's hot, what's not - 52 week edition

Curious to see what those little numbers next to the bars in the Wall Street Journal's weekly tally of What's Hot...What's Not would look like if given their own set of bars, the graphic below was promptly whipped up.
IMAGECash (the U.S. dollar variety) and gold were clearly the place to be this year and that's probably not going to change all that much over the next five weeks.

Then, mercifully, the books will be closed on the year 2008.

ooo

This week's cartoon from The Economist:

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Sunday morning links

TOP STORIES
The Austrians Were Right - Ron Paul
Obama intensifies focus with economy in free fall - AP
GM says board doesn't see bankruptcy as option - CNN/Money
Geithner Is Said to Be Obama’s Pick for U.S. Treasury Secretary - Bloomberg
Three banks in California, Georgia fail - CNN/Money
Citigroup Pays for a Rush to Risk - NY Times
Just the facts... - Noland, Prudent Bear

MARKETS/INVESTING
Major Damage - Barrons
Market mess explained (as best we can) - Globe & Mail
Scrupulous savers want to safeguard their nest egg - LA Times
UAE gold sales increase by 56% In Q3 2008 to reach Dhs4.3bn - AMEInfo
Investor fear remains deep despite 1-day rally - SF Gate
The big mo - Economist

ECONOMY
Obama outlines plan to create 2.5M jobs - CNN/Money
Dramatic downturn seen for economic data - MarketWatch
Surge in unemployment puts California's Inland Empire in tailspin - LA Times
Obama Vows Swift Action on Vast Economic Stimulus Plan - NY Times
Hard times and long lines for Southern Californians - LA Times

INTERNATIONAL
Goodbye G7, hello G20 - Economist
Gulf shares lower after Saudi slump - AP
Individual investors allowed to trade Au99.95-category gold - CHINADaily
Bank will stamp down on future house price booms, says deputy governor - Telegraph
China must be cautious in raising consumption - CHINADaily
Insurers cash in on deflation fears - Times Online
Darling to slash VAT and spark Xmas spree - Guardian

HOUSING
Banks becoming landlords? - LA Land
What goes down must come up - Milwaukee Journal Sentinal
Slow housing market means more hours, more expenses for agents - Seattle Times
Housing market near big military bases doing fine - SF Gate

FED/TREASURY/BANKING
That Money Isn’t Leaving the Vault - NY Times
Credit market freeze may claim local governments as victims - LA Times
Banking Regulator Played Advocate Over Enforcer - Washington Post

INTERESTING
US officials flunk test of Amerian history, economics, civics - AFP
Wine buyers are sobered by Wall Street meltdown - LA Times

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