10-13-10

GEO-POLITICAL TENSIONS - ISRAEL / KOREA / IRAN

IRAN

ISREAL

KOREA

 

SOVEREIGNS

 

GREECE Greek bonds put on star turn in eurozone  FT Confidence grows that Athens can spur economy   Greece's Borrowing Costs Fall  WSJ Greece's deficit-reduction efforts are bearing some fruit in the debt markets, where the nation sold a batch of short-term bills at a yield lower than a previous, similar auction.   SPAIN   GERMANY   FRANCE French Unions Threaten Open-Ended Strikes Over Pensions BL   Sarkozy stands firm as pension protests escalate Inde   UK   IRELAND JAPAN Bank of Japan May Buy More Assets  WSJ   Japan's Central Bank Threatens To Buy Up Even More Stocks, Bonds, And Real Estate BI   Japan's central bank made the incredible announcement last week that it would buy stocks, bonds, and real estate in a bid to devalue the yen. They've already set up a $61.1 billion fund targeting bonds, exchange-traded funds (ETFs), and real estate investment trusts (REITs) and it's a bid to fight deflation by blatantly inflating all kinds of asset prices. As Joe Weisenthal has pointed out, this is part of Japan's new 'rabid dog' monetary policy -- They want speculators to be absolutely terrified by the unpredictable nature of the central bank. It could suddenly intervene in currency markets, suddenly start buying Nikkei ETFs, or just throw free money at banks and order them to lend. They're craaazy, so beware if you're long the yen. Yet even Japan's wild actions to discredit its own currency hasn't stopped the yen from appreciating further. It's now below 82 per U.S. dollar and near year-to-date lows. Maybe that's why Bank of Japan governor Masaaki Shirakawa has today 'hinted' that the central bank could expand its $61.1 billion inflate-the-market-at-all costs buying program even further. "If judged necessary in the future, steering monetary policy by making further use of the fund is one of the likely policy options," he said at a parliamentary committee meeting reports the Wall Street Journal. Translation -- We can and will trash our currency to the best of our ability. Anything for the exporters.

Faber- I'm Ultra-Bearish On Everything, And We're At A Turning Point Where It's Time To Dump Bonds BI

Inflation-linked bonds show more concerns than Fed MW

4- STATE & LOCAL GOVERNMENT

California to Sell 24 Government Buildings for $2.3 Billion CNBC

 

The state announced Monday it is selling 24 government office buildings — including the Ronald Reagan State Building in Los Angeles and the San Francisco Civic Center — to a group of private investors for $2.3 billion.  The Associated Press reported earlier this year that the deal would end up costing the state $5.2 billion in rent over 20 years, perhaps saddling taxpayers with costs beyond whatever the state would net from the sale. a study by Beacon Economics reached a similar conclusion by looking at a 30-year period.

US cities face big public pension deficits FT

Four Governors on How to Cut Spending  WSJ

After years of cost increases that exceeded population growth and inflation, the budgets of many American states plunged into crisis during the economic downturn. We asked Ed Rendell, Arnold Schwarzenegger, Deval Patrick and Bob McDonnell to tell us how they are coping and how they plan to save money in the future

5- CENTRAL & EASTERN EUROPE

7- RISK REVERSAL

8- COMMERCIAL REAL ESTATE

9-RESIDENTIAL REAL ESTATE - PHASE II

Home Prices Are Love Affair Heading for Rocks Lynn

The foreclosure freeze freakout MW

FDIC Floats Rules on Closing Firms  WSJ

 

Federal regulators proposed a rule that would require creditors of large financial firms to suffer losses in the event of a firm's collapse.

14- CORPORATE BANKRUPTCIES

The President's Nun: Obamacare Scranton Scandal Explodes American Spectator

 

Hospitals, said this doctor -- frequently run a debt. "What's different? Why now?" he said in terms of the rationale for selling the Mercy hospitals. The reason is exactly as CEO Cook originally said it was. ObamaCare cuts in Medicare reimbursement have changed the rules so drastically for hospitals "you [Mercy Health Partners] are in an untenable situation," said this physician. Most hospitals have accumulating debt because of capital investments, says the doctor. But they can't deal with that debt if in fact their ability to earn money is cut off or drastically reduced over time. Alarmingly, the doctor, with a lifetime of practice in hand, says that "hospitals close in clusters where there is decreased income in terms of relatively low Medicare reimbursement…because they are the most vulnerable." He adds that what is happening in Scranton, Nanticoke, and Tunkhannock with the Mercy hospitals "is just the beginning. It will happen everywhere because reimbursements will be reduced" under ObamaCare. Particularly, he adds, in areas where you have a high elderly population. If the doctor is right, and he is not alone in saying this, the proposed sale of the three Mercy hospitals becomes a harbinger of what will happen nationally as a result of ObamaCare slowly tightening its government tentacles over the private health care system. Which means the sale of the three Mercy hospitals has added Scranton to what the Wall Street Journal has already called ObamaCare's "trail of destruction."

OTHER TIPPING POINT CATEGORIES NOT LISTED ABOVE

19-US PUBLIC POLICY MISCUES

24-RETAIL SALES

26-GLOBAL OUTPUT GAP

31-FOOD PRICE PRESSURES

Worrying Over China and Food Sorkin

Meat Market Corn Crunch Means Costliest Beef in Quarter Century BL

32-US STOCK MARKET VALUATIONS

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BP - British Petroleum SULTANS OF SWAP: BP Potentially More Devastating then Lehman! ------------   Curbs on deepwater drilling lifted early  FT New environmental and safety regulations guard against accident

   

CENTRAL BANKING MONETARY POLICIES, ACTIONS & ACTIVITIES ------------   Bernanke's History Lesson- Japan  WSJ   Criticisms Ben Bernanke made of Japan's central bank a decade ago—saying it was too timid in stimulating Japan's economy to prevent deflation—give hints of what the Fed's next steps might be.   Fed Moves Viewed as Targeting the Dollar  WSJ   Fed Officials Were Prepared to Ease `Before Long,' Minutes Say BL Minutes Federal Reserve Fed tilts to more monetary easing  FT Minutes show likelihood of QE2 in November More Fed easing likely won't help economy: Hoenig Reuters  Speech Federal Reserve “There simply is no strong evidence the additional liquidity would be particularly effective in spurring new investment, accelerating consumption, or cushioning or accelerating the deleveraging that is hopefully winding down.” Fed's Yellen acknowledges risks to ultra-low rates AP Speech  Federal Reserve Experts warn that further easing could sink recovery Fund Strategy Deutsche on the liquidity trap – and the last hurrah FTA The Fed's QE2 — Speeding Our Demise Decline of the Empire "Ben Bernanke can not repeal the law of gravity no matter how hard he tries. Any boost he did achieve in house and stock prices would be temporary, as it was the last time around. Equities would once again revert (fall) to their natural price levels, and the latest deception ( stimulus) would be played out without turning the economy around. And if Americans did spend more money for a while based on their new-found wealth, they would once again find themselves holding the debt bag after that phony wealth disappeared."

 

 GENERAL INTEREST

 

America's Faltering Empire  Decline of the Empire

 

If we assume that Empires rise & fall, and history tells us they always do, the question becomes where do we stand? Again, it is crystal clear that our power is waning, to wit— - The Imperial Capital (aka. Washington, D.C) is now mostly out of touch with the citizenry, and thus no longer serves their interests. - Corruption is rife in the Capital, with corporate special interests, especially in Finance, dominating any actions taken there. This makes a mockery of our so-called "Democracy." - The things that made us great are falling apart. For example, our Middle Class is disappearing at an alarming rate. Wealth & income disparity in the United States is greater than at any time since the late 1920s before the 1929 crash and the subsequent Great Depression. These developments are related to the outsourcing of our manufacturing base, which began in earnest in the early 1990s during the Age of Globalization. - The United States is effectively broke, or soon will be. The private sector no longer functions. Our failed domestic sectors are bankrupting us (e.g. Banking or Housing—see Citigroup, or Fannie & Freddie). The public sector grows overly large. We can no longer afford our Imperial Adventures, and must borrow money from rising powers like China to carry them out (e.g. Iraq, Afghanistan). - The United States is heavily dependent on resources (chiefly oil) that it does not produce domestically. Thus America must defend far-flung supply chains to secure these resources, but its ability to do so, or coerce others to sell us what we need, becomes weaker & weaker over time. - Corruption itself, aside from plain vanilla bribery, is a symptom of a lack of Vitality and a tendency toward Paralysis & Complexity which always arises when an Empire goes downhill. It happened in Britain, it happened in Rome, and it is happening here. I have written that our get up and go has got up and went. In other words, we are stuck on The Wheel of Suffering. By my reckoning, the Empire's Decline began in the early 1980s. I date it then because a wide array of disturbing economic data points to that period. For example, it is no accident that the so-called "credit bubble" got started during that time, and later grew to disastrous proportions during the Lost Decade 2000-2009.Increasingly, people did not earn a living wage and spend their money based on savings & income. They spent money they didn't have because of easy credit. They speculated in stocks & houses, among other things. As Bill Bonner once pointed out, Easy Credit Is Stimulus. You can see why I find it a complete joke that we must now stimulate an economy that has been over-stimulated for nearly 30 years.

 

This is a "run" on the system. The final run Real Reform

 

Forget about piddly runs on national banks. If the info my colleague has been tracking for many years is correct, a mega run on the entire economic system appears to be set in place and on its way. Here are the indicators: The price of agricultural, industrial commodities, stocks and bonds are surging simultaneously People in the know are beginning to get rid of money And acquiring tangible stuff with that money (commodities, land, businesses, gold) Money is now less appealing than tangible wealth. They no longer want to save in money, financial capital. They want to save in tangible assets, real capital, wealth. The stuff now in greater demand than money. That is the real indicator. This is an extremely disturbing development.

Third world America Macleans

U.K. Warns of Cyber Attack Risk  WSJ

The head of Britain's communications intelligence agency said it may need to receive feeds of information from private companies in key economic sectors in order to protect the U.K. economy from the threat from cyber attacks.

 

FLASH CRASH - HFT - DARK POOLS

Lazy Portfolio winners and Flash Crash Zen Farrell

MARKET WARNINGS

Options Show No Black Swan in Emerging Markets as Stocks Surge BL

Risk to the Downside Grows Kass

Shrugging Off Bad News Saut

CURRENCY WARS

What Is Rally In Gold Telling Us? Wells Fargo

Currency tensions to continue China Daily 

China paper warns currency war could fuel bubbles Hindustan Times

Fed’s Bizarre Tactics Target Weaker Dollar Merk

Former Fed Member Tells Obama To Pull A "Gordon Brown" And Sell All Of America's Gold ZH

Currencies and bonds fire quant funds to big rallies  FT

Q3 EARNINGS

Posco Cuts Profit Forecast After Costs Erode Earnings  BL

Shares of Korea-based Posco -- the world's third largest steelmaker -- and a major proxy for global demand, has come out with disappointing earnings and a mediocre outlook, sending its shares down over 2% in Korean trading.  What's going on? It looks like a classic case of mediocre demand and high underlying costs, as iron ore prices continue to surge.

Intel Sees Strong Corporate Demand  WSJ

MARKET & GOLD MANIPULATION

AUDIO / VIDEO

QUOTE OF THE WEEK

 

"The global financial system continues to be unsound in the same way that a Ponzi scheme is unsound: there are not enough cash flows to ultimately service the face value of all the existing obligations over time. A Ponzi scheme may very well be liquid, as long as few people ask for their money back at any given time. But solvency is a different matter - relating to the ability of the assets to satisfy the liabilities." John Hussman No Margin of Safety, No Room for Error

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