Wither Wikipedia?

The Wall Street Journal reports($) that Wikipedia is losing volunteers at a quickening pace, casting some doubt on the future of the world's most popular encyclopedia.

Wikipedia.org is the fifth-most-popular Web site in the world, with roughly 325 million monthly visitors. But unprecedented numbers of the millions of online volunteers who write, edit and police it are quitting.

That could have significant implications for the brand of democratization that Wikipedia helped to unleash over the Internet -- the empowerment of the amateur.

Volunteers have been departing the project that bills itself as "the free encyclopedia that anyone can edit" faster than new ones have been joining, and the net losses have accelerated over the past year. In the first three months of 2009, the English-language Wikipedia suffered a net loss of more than 49,000 editors, compared to a net loss of 4,900 during the same period a year earlier, according to Spanish researcher Felipe Ortega, who analyzed Wikipedia's data on the editing histories of its more than three million active contributors in 10 languages.

Wow - three million active contributors. They could probably stand to lose a few more and not be impacted too much. As for the reason for the decline, one commonly heard explanation is that nearly everything has already been written about and now it just needs to be maintained.

Read more...

Existing home sales on a sugar high

For years, I've been saying to watch for a convergence of the blue bars and the red curve in the chart below as an indication that it might be safe to think about buying property again. Well, they've now crossed paths in the latest report on existing home sales from the National Association of Realtors.
Does that mean it's safe to buy a house at current prices?

Sure, if you think that Congress is going to continue to write $6,000 to $8,000 checks for home buyers indefinitely, that the central bank will keep mortgage rates at freakishly low levels indefinitely, that the FHA will continue to guarantee what are essentially no-money-down loans indefinitely, and that the tsunami of foreclosures that are now working their way through the system will somehow be forestalled indefinitely.

If any of these artificial supports are removed, a very different housing market will appear.

Read more...

Who does the Fed work for?

Obviously, Tim Duy has never read The Creature from Jekyll Island, otherwise he might not be so quick to write passages like the one below in what is an otherwise fine analysis of the dilemmas faced by the nation's central bank in The Fed in a Corner.

Worse now for the Fed is the impression that monetary authorities work first and foremost for Wall Street. Of course, Fed officials see this a bit differently - they see supporting Wall Street as their mechanism for supporting Main Street. Ultimately, without the former, the latter is locked out of capital markets, and economic chaos follows. The purpose of Wall Street is supposed to be to channel investment funds into Main Street. But most Americans no longer view Wall Street as ultimately working in their best interests - maybe correctly. This is the same Wall Street that aggressively pushed garbage loans onto the American people as policymakers praised the wonders of financial innovation. When did the purpose of finance evolve into simply a mechanism to enrich the relative few at the expense of many? And when did policymakers embrace this view? As Paul Krugman has noted, the Fed cannot envision a world not dominated by the magic of structured finance. Yet this is a world that failed us completely.

It all seemed to have worked so well for almost 100 years, since the Fed was founded in 1913 with the unspoken promise of using public money to bail out the big banks.

It's all there in Chapter 2 - The Name of the Game is Bailout.

Chapter 1 is worth a look as well as it contains a detailed description of the 1910 gathering of some of the nation's most powerful bankers along with a few elected officials at Jekyll Island Georgia that led to the formation of the Federal Reserve System.

Read more...

Obama - Hu joint press conference

From Saturday Night Live (hat tip DK).

Read more...

Monday morning links

TOP STORIES
Dimon seen as successor to Geithner - Reuters
FHA looking for ways to pump up its reserves - SF Gate
Wave of Debt Payments Facing U.S. Government - Washington Post
CFTC chief Gary Gensler is out to police financial Wild West - USA Today
Bills Yielding Zero as Stocks Soar Make 1938 Moment - Bloomberg
Executives Kept Wealth as Firms Failed, Study Says - NY Times
Community banks forced to curtail commercial lending - NorthJersey.com
Obama jobs forum to seek growth boost on the cheap - Reuters
Small Florida bank shuttered, 124th this year - AP
Reflation Issues Heat Up - Noland, Prudent Bear

Get these links delivered to your inbox every day.

MARKETS/INVESTING
Oil rises above $78 amid Iranian war games - AP
Gold Hits Record High Over 1,167 Dollars an Ounce - Globe Investor
Dollar Slump Persisting as Top Analysts See No Bottom - Bloomberg
How much longer can gold rise? - MSN Money
Natural gas plunges 12% this month - AP
Alert for Tanks - Hussman Funds

ECONOMY
Do weaker data show recovery is stalling? - MarketWatch
Economists Predict Job Losses Will Stop In Early 2010 - Huffington Post
Why The "Output Gap" Inflation Model May Be Fatally Flawed - Zero Hedge
Poor California: No money and no leadership - LA Times
What if a Recovery Is All in Your Head? - NY Times

INTERNATIONAL
China Asks Its Banks to Slow Down - NY Times
Europe Manufacturing, Services Expansion Accelerates - Bloomberg
Emerging markets try to manage flood of foreign capital - USA Today
British Would-Be Borrowers Resist Approved Bank Loans - Bloomberg
Greece tests the limit of sovereign debt as it grinds towards slump - Telegraph
East Europe Proving Too Good as Debt Erodes 50% Gain - Bloomberg
Canada retail sales top expectations - Globe and Mail
IMF chief: Global economy still fragile - AP

REAL ESTATE
FDIC on REO Sales: Keep'em in the Dark! - Zero Hedge
The Week Ahead: Housing Data to Drive the Market - Mortgage News Daily
Why owners are willing to 'strategically default' on loans - LA Times
Renters becoming latest victims as foreclosure crisis widens - Washington Post

FED/TREASURY/BANKING
The Fed in a Corner - Economists View
Bullard: Fed Should Keep Asset Purchase Program Past March - Bloomberg
Geithner’s Crisis Sleepwalk Is Reason He Must Go - Bloomberg
How our currency became an instrument of debt - Nashua Telegraph

INTERESTING
Dirty Secrets of Black Friday 'Doorbusters' - CNN/Money
Emergency room bill is enough to make you sick - LA Times
Golf courses suffer as recession deals a bogey - LA Times
Atheist student groups flower on college campuses - AP

###

Read more...

Oil and gold contest - the fun begins

Entries for the 2009 edition of the "Guess the Year-End Price of Oil and Gold" contest have been tabulated and they now appear in the chart and tables below.
There were a total of 70 entries with average guesses of $80 for a barrel of oil and $1,144 for an ounce of gold (this compares to average guesses of $81 and $918 for the last contest).

For oil, the high/low range was $100/$50 and, for gold, the range was $1,450/$620.

All individual guesses appear in the tables below - if something looks amiss, please let me know (this is a manual process, prone to error). All entries received via email use the sender's initials unless directed otherwise - you should be able locate your guess based on when and how it was made:

From the November 10th post:

From the November 17th post:
From the November 19th post:
From Yahoo! Mail:

From Iacono Research mail:
The graphic at the top of this post will be updated every week, usually on Fridays, until the contest concludes on New Years Eve.

Good luck to all!

###

To learn more about investing in natural resources using commonly traded ETFs,
stocks, and mutual funds, see this description at Iacono Research.
To begin a subscription, click here.

Read more...

Congress and the Fed - addict and enabler

Jim Summers, an organizer for End the Fed, files this report in the Nashua Telegraph about, among other things, the symbiotic relationship between Congress and the Federal Reserve.

The effects of our financial house-of-cards collapsing are everywhere: home foreclosures, unemployment, stock values cut in half, retirement savings lost. The cause, however, is a bit harder to discern as we are distracted by false leads (Fannie Mae and mortgage brokers) and side shows (Bernie Madoff and AIG bonuses).
To solve this case, we must remember to always ask the next question: What enables all of these sideshows? What economic force allowed for the housing bubble, too-big-to-fail financial firms, the trillions of bailout dollars and endless government deficit spending?

If the boom-bust cycle is ever to be stopped, we must walk past the sideshows, go inside the big-top and observe the main event. That event is a magic show called money creation, where, like pulling a rabbit out of a hat, the Federal Reserve creates money out of thin air.

This is a very good high-level summary of the situation that is relatively easy to understand, even for the uninitiated.

Particularly in light of last week's bold action by the House Financial Services committee to adopt the much stronger Paul/Grayson amendment to audit the Fed, it's natural to wonder how many supporters in Congress fully understand how the Fed "enables" them.

To wit:

All politicians know that raising taxes is a career-ender, but more handouts for their constituents is a career-extender. As legislators become addicted to spending, they know the money well will never run dry. Can’t balance the budget? Need a monetary fix? No problem, the Fed is a licensed counterfeiter always ready to deliver the goods.

This is why Congress allows the Fed to carry on in secret with its unfettered expansion of the money supply. Congress is a money addict and the Fed is its enabler.

Injecting liquidity into the market would be one thing if this credit were backed by capital, but just the opposite is true.

With no gold reserves, all of our money is created out of debt. This is why every bill in your wallet says “Federal Reserve Note,” not “silver certificate” or “gold certificate.”

Modern dollar bills are instruments of debt, not of capital. Ben Bernanke is unquestionably a learned individual, but he must have been absent the day his professor discussed the definition of capital.

The discussion then turns to the nature of capital and of today's gathering of protesters at Federal Reserve offices around the country.


Here's a report from yesterday about protests in Mineeapolis today - more timely news can be found at this Google news search.

Read more...

Inside the UCLA student protests

Although the cost of higher education in California still probably compares favorably to other states (this data from 2004 shows there was a good deal of room to raise tuition costs back then), students are understandably not too happy about big increases as part of the state's never-ending effort to balance its budget.

Of course, the millennials would probably be a lot less peeved if more of the pain in California was shared by more of the Baby Boomers, particularly from this list of over 6,000 retired government workers that pull down $100,000 or more every year.

Surely Bruce Malkenhorst of Vernon could share some of his $499,674.84 pension to help out a couple dozen college kids.

Read more...