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by Charles Hugh-Smith There is no way the pensions and benefits promised in an era of financialized abundance can be paid once the wheels of financialization fall off. Yesterday I described the destructive effect of abundance on decision-making:An Abundance of Bad Decisions. One aspect of this dynamic is the tendency to extrapolate prosperity into the future as a permanent state of affairs. One example of this is state/local government pensions: during the past [...] TheDailySheeple The collapse that’s going to occur here is going to be a trifecta of bonds, stocks and real estate combined. The Fed over here has ordered – and I want everybody to listen because this is insider information – the Fed has ordered the U.S. pension funds to begin to acquire U.S. debt. That is coming down the pike, it’s going to start happening, the states are going to start carrying [...] “The failure of the EU Commission with the saving program for Europe marks the end of the EU as we know it. In addition, however, the euro-opponents can not rejoice. For now it goes to the numbers: debt, derivatives, overburdened pension funds will take their toll.” http://deutsche-wirtschafts-nachrichten.de/2013/05/30/der-fiskalpakt-ist-tot-das-ende-der-eu-hat-begonnen/ http://translate.google.de/translate?hl=de&sl=de&tl=en&u=http://deutsche-wirtschafts-nachrichten.de/2013/05/30/der-fiskalpakt-ist-tot-das-ende-der-eu-hat-begonnen/ EU Sets Deficit Targets as Brussels Softens Austerity Message http://online.wsj.com/article/BT-CO-20130529-705146.html Austerity About-Face: German Government to Gamble on Stimulus “With the euro crisis refusing to relent, the German government [...] WASHINGTON – Treasury Secretary Jacob Lew said late Monday he will begin tapping into two government employee retirement funds to buy more time before the U.S. Treasury is faced with the prospect of defaulting on the national debt. In a letter to congressional leaders, Lew said that he would tap the civil service retirement and disability fund and a similar fund that covers retired postal workers. The law allows him to [...] Loose Central Bank Policies Looking Increasingly Dangerous, BIS Official Warns The latest to take up the refrain is Jaime Caruana, general manager of the Bank for International Settlements, who warned in an unusually frank speech in London that, while the ultra-low interest rates and ultra-easy monetary policy adopted by advanced economy central banks might have been the right response to the crisis when it broke, they are looking increasingly dangerous the longer they [...] Canadian news agency interview bankers from Canada, the US and Europe. They admitted that the bankers meet in secret and control the governments of the world. The interviewer suggests that our money is no longer safe in the banks. A Canadian documentary explores the repercussions of globally-coordinated quantitative easing (aka, printing gobs of thin-air money): They stated in the interview that we will see a crash unlike any other and there will [...] from MarketWatch: Bonds are “a terrible investment” right now, Berkshire Hathaway BRK.A +1.27% Chairman and Chief Executive Warren Buffett told CNBC Monday. He recommended holding a comfortable amount of cash but otherwise investing in “productive assets”, and called having a set asset-allocation strategy “silly.” Bond prices are artificial right now given the Federal Reserve’s purchases of $85 billion a month, “and when that changes, people could lose a lot of money.” http://www.marketwatch.com/story/buffett-on-cnbc-warns-of-looming-big-bond-losses-2013-05-06?dist=beforebell Telegraph Excerpt and Link, by [...] zerohedge.com / By Tyler Durden / 04/16/2013 23:09 It is no surprise that pension funds in the US are significantly underfunded (median 72% funded). California Public Employees’ Retirement System (CALPERS), specifically, is about 26% short of meeting its long-term commitments. Like most major pension funds, it uses smoke-and-mirrors to avoid this yawning gap by smoothing over a long enough timeframe where ’hope’ for growth in assets triumphs over the reality of liabilities (through a ‘rolling’ [...] Guys. This is the opinion of some “gurus”. Yes, broke governments like the USA may try to confiscate your savings. Just a part of this article: “…With respect to which assets governments will likely be coming for next, Jim said, ”401k plans, IRA’s, and pensions plans which the government knows about [may be next]…They’re rationale would be, ‘Well most people [...] Mac Slavo
By all accounts, the mainstream media and corporate leaders would have us believe that the world is in a new bull market. They’ll point us to the stock market as evidence of their claims that the economy is growing and life for the average citizen is returning to normal. Few will discuss the fundamental issues facing financial markets, the least of which is continued unemployment and less consumer spending. [...] Economists See No Crisis With U.S. Debt as Economy Gains “Three years after a government spending surge in response to the recession drove the U.S. past that red line — the nation’s $16.7 trillion total debt is now 106 percent of the $15.8 trillion economy” =======================================================
Federal Debt: Total Public Debt as Percent of Gross Domestic Product (GFDEGDQ188S) Federal Debt: Total Public Debt as Percent of Gross Domestic Product (GFDEGDQ188S) 2012:Q4: 103.66867 Percent of GDP Last 5 [...] I say official because as we know the government can’t provide anything that is official, and we all now are dependent on intelligent people who can do 4th grade level math to actually figure out what the real deficits are. 222 trillion dollars in unfunded liabilities. over a million dollars per working tax payer. This number doesn’t take into account the derivatives bubble “How 9 Banks Are Exposed To $200 Trillion Worth Of Derivatives” http://articles.businessinsider.com/2012-04-24/wall_street/31390709_1_pension-funds-derivative-exposure-bailout so let’s [...] WHALEN: ‘The Fed Is Creating ANOTHER Housing Bubble’ Deja Popped. ‘Bernanke is just making it up as he goes along. The Fed is acting more like the Marx Brothers than serious regulators. The Fed and the Treasury are the biggest source of systemic risks in the market today, creating another bubble in housing and perhaps also in stocks.” Lauren Lyster with Chris Whalen on Tech Ticker last Friday.
Belkin – We’re Facing A 1987 Selloff & [...] by GoldCore Gold Bullion Today’s AM fix was USD 1,663.50, EUR 1,272.37 and GBP 1,035.35 per ounce. Silver is trading at $30.40/oz, €23.39/oz and £19.04/oz. Platinum is trading at $1,591.50/oz, palladium at $679.00/oz and rhodium at $1,150/oz. Gold climbed $11.80 or 0.72% in New York yesterday and closed at $1,658.20/oz. Silver surged to a high of $30.534 and finished with a [...] State and local governments are in desperate need of cash for all manner of road, building and bridge repair, and are increasingly turning to private money for funding. But the involvement of private investors is raising concerns over how much control the public may lose over its roadways. Companies putting up the money include construction and engineering firms like Bechtel and Samsung, and big banks like Goldman Sachs (GS, Fortune 500) and Merrill Lynch that aim [...] from Zerohedge:
Just one more QE-episode… growth will come in two quarters, we promise… housing has bottomed… stocks ‘signal’ all is well. We have heard these ‘meme’s a thousand times and yet still what is borrowed is given to shareholders and animal spirits (judging by the dismal confidence among small business leaders) remain mired in the quagmire of uncertainty and risk aversion. Nowhere is this more evident than the roll-over (and now falling) demand [...] London Gold Market Report from Ben Traynor BullionVault Tuesday 6 November 2012, 07:00 EST
US Monetary Policy “Unlikely to Change” Whoever Wins Election, Fiscal Cliff “Could Propel Gold Higher”
WHOLESALE MARKET gold prices extended their gains from a day earlier Tuesday, rising above $1690 an ounce in London this morning – 1% up on yesterday’s two-month low – while stocks and commodities also ticked higher and US Treasury bonds fell, as voters head to the polls [...] Bill Gross of PIMCO spoke to Bloomberg Television’s Stephanie Ruhle, Adam Johnson and Alix Steel on “Lunch Money” today, reiterating comments in his monthly outlook that the age of credit expansion that led to double digit returns is over. Gross said, “Those days are over…Pension funds and individuals and investors that expect 10% consistent returns to pay those bills are going to be disappointed.” Gross also said that the price of [...] Though the Postal Service now has more than $45 billion in prepaid retiree health benefits funding, the law requires an additional $5.6 billion payment by Sept. 30…there are also $11 billion in overpayments into their retirement fund & they have to pay healthcare for employees that havent been hired yet…if congress mandated that for corporations, they’d all be bankrupt: Pension Plans Increasingly Underfunded at Largest Companies…AFTER years of poor investment returns, the [...] KWN Today Egon von Greyerz told King World News, “The world is simply drowning in debt.” Greyerz, who is founder and managing partner at Matterhorn Asset Management out of Switzerland, also said, “This is why it is guaranteed that governments will print money,” and that “Prices of hard assets will go into the stratosphere.”
But first, here is what Greyerz had to say about the ongoing financial crisis and where we are [...]
Spanish banks saw a further reduction in their pool of deposits in May. According to new data, total deposits from the private sector shrank by 5.75% from a year earlier, to 1.327 trillion euros ($1.629 trillion). WSJ’s Santiago Perez reports. Spanish Withdraw More Deposits From Banks Robin Hood robbed the rich to pay the poor; now Uncle Sam is robbing the old to pay the young — raiding pension funds to keep student-loan rates artificially low. President Obama’s much-touted plan to put a one-year freeze on student interest rates was signed into law with great fanfare this month. But the bill’s supporters hadn’t said where the money to subsidize the lower rates would come from. Columnist [...] by Charles Hugh Smith from Of Two Minds Organized Financial Crime Is Now the New Normal Today we publish the second half of an important essay by C.D., a correspondent in law enforcement. Part one is here It’s up to us to refuse to participate in a criminal financial system: we should not be doing business with businesses that are repeat offenders. We could expand this example of vested interests suppressing prosecution of white collar crime [...] From Zero Hedge: “Thank you ZIRP, may we have another.” This is what the 1.6 million workers who have invested their retirement money with America’s largest pension fund, California’s CALPERS, may want to ask Chairman Ben following the firm’s just-announced results for Fiscal 2012 (ended June 30). The end result: +1% nominal return, which means a negative real return. And this is even including the now-traditional end of June ramp, which this year [...] Some argue for immediate action, while others argued for a warranted action when “…the recovery lost momentum, if risks became more pronounced or inflation seemed likely to run below the committee’s target.” When the minutes were released, the investors expressed their lack of confidence in the Federal Reserve by sinking the stock prices by an additional 112 points. |
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Top manager John Hussman: Stock market bears are throwing in the towel
From John Hussman’s Weekly Market Commentary:
“Even the intelligent investor is likely to need considerable will power to keep from following the crowd.” – Benjamin Graham
“Human beings desperately want to belong, but, they also desperately want to understand the environment around them. Often, the desire to belong and the desire to know the truth conflict. The idea of the majority view or the ‘mainstream,’ gives people the sense that they are a [...]