Important News - Oct. 11
By Daniel at 11 October, 2009, 12:01 am
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1) Robert Fisk reveals truth behind ‘dollar demise’ report (Video)
3) This would be a nice idea
4) 10,000 apply for 90 factory jobs (Vinny A.)
In the latest sign of weakness in Louisville-area employment, about 10,000 people applied over three days for 90 jobs building washing machines at General Electric for about $27,000 per year and hefty benefits.
5) New billion-dollar hole in California’s budget
State revenue has already fallen more than $1 billion short of assumptions in the budget lawmakers passed less than three months ago, according to a new report from the state controller. Disappointing income tax receipts are the main culprit, falling 11% below what lawmakers and Gov. Arnold Schwarzenegger expected when they agreed on a patchwork budget during the summer, halting the state’s issuance of IOUs. Sales and corporate taxes have also slid below projections.
6) The Morality of Walking Away From a Mortgage
Self-assigned guardians of financial ethics see the willingness of borrowers to abandon their mortgage debts as a sign of the “erosion of social and moral standards.” The aim of these critics is to shame debtors into sticking with their mortgages. That’s something debtors should take with a grain of salt. There are many good reasons to keep paying your mortgage and avoid the black mark of foreclosure, but the immorality of sticking the bank with a loss isn’t one of them.
7) U.S. banks are reducing their lending at the fastest rate on record.
Warning signs everywhere in this article. Small businesses can’t find loans. Commercial real estate and leveraged loans need to get rolled over or will get steamrolled. Across the board explosion in bad loan write-offs.
This translates to U-3 and U-6 continuing upward. I can’t wait for when U-6 equals the Great Depression I mark of 25%. A second wave of residential mortgages will be blowing up along side the $4.3t of commercial and leveraged loans, also in the blow-up process, when this number does come our way. Washington will be dumbfounded by how every economic forecasting model they use never had this on the table.
Accounting’s Role in Financial Crisis
9) Some experts worry results may be much more negative than investors expect
“Third-quarter earnings for most banks, particularly the regional lenders, will be extraordinarily negative,” Bove said.
He estimates that about 60% of banks will report losses in the period as nonperforming assets continue to grow and charge-offs remain very high. Lenders will also have to increase reserves because they didn’t bolster them enough during the second quarter, Bove added.
Loan growth will likely remain sluggish and net interest margins won’t increase much, partly because funding costs have already dropped so much that they can’t fall much further, the analyst explained.
10) Bob Prechter says stock market is now so over-valued right now by P/E’s
The crash could be in the order of the South Sea bubble bursting in 1700s combined with the economic factors of 1930s with a great similarity from the false rally of 1929 to 1930 . That’s when the biggest crash ever occurred with the entire market crashing from 1930 to 1932 and the Great Depression.
11) Worst stock market crashes in history
12) Statements made by leaders during the Wall Street crash and Great Depression
13) FEDERAL RESERVE FIXING TO ROB MONEY MARKET FUNDS
“The Federal Reserve is considering accessing money market funds through clearing banks or creating a facility to drain the record amount of cash added to the financial system, according to people familiar with the plans.
Those methods may help conserve the capital of the 18 primary dealers that act as counterparties for open market transactions as the Fed removes some of the more than $1 trillion the central bank pumped the economy, said the people, who declined to be identified…”
Well, Karl Denninger is digging again and what he found is really interesting. There are a couple short videos to set the stage on some FED purchases that are verified by the CUSP numbers as monetizing debt.
In the first case, last week’s 7 yr bond sale has already seen the FED buy it back. Think of that. In less than a week they buy back about 1/2 of it. But, it gets worse with “agency” debt.
Thirty minutes after Fannie debt was sold, the FED bought it back.
Now, If Karl can dig this out, you can bet foreign governments that lend to us can, as well. This is total insanity. The full article is well worth the read.
15)Steep Losses Pose Crisis for Pensions
16) Why It’s Time to Retire the 401(k)
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