Important News - Nov. 10
By Daniel at 10 November, 2009, 1:18 pm
Enjoyable article with lots of sad truth.
Wall Street is honest and stupid. They make it clear that they want to own everything including our lives - that is honest. On the stupid side they do not understand that this wealth transfer robs working people of their livelihood and wealth production ends.
- 1) Fitch Says U.K. Rating Most at Risk Among Top-Rated…(then warns about U.S. AAA Rating)
“The U.S.’s rating also might be at risk of a review if its fiscal position does not stabilize in the next couple of years, Riley was reported by Reuters as saying in a television interview.”
1A) Japan faces risk of ratings downgrade over debt (more info on Japan)
- 2) Shocking numbers: Real unemployment tops 22% (FROM JEROME CORSI’S RED ALERT)
“”Understanding that the real level of unemployment in October 2009 was closer to 22 percent than to the officially reported 10 percent is an important corrective,” Corsi wrote, “especially if we are to appreciate the extent to which a Dow at or above the 10,000 benchmark is nothing more than another Fed-created bubble.”
With millions of jobs outsourced to China and India under free-trade globalism, the dollar weakness that accompanies most recessions is not stimulative, he explained, largely because the U.S. has lost so many manufacturing jobs that are never returning to its shores.”
(Posted last Friday by r101958)
“Here is a more accurate number:
From SGS: “Adding the excluded long-term discouraged workers back into the total unemployed, unemployment more in line with common experience — as estimated by the SGS-Alternate Unemployment Measure — rose to about 22.1% in October, up from 21.4% in September. See the Alternate Data tab at www.shadowstats.com for a graph and more detail.”"
- 3) Bill Gross on CNBC…China and Japan lose 13% on U.S. Treasuries (at 4:30 on Video)
“Gross notes that over the last year alone the depreciating dollar means that every single Treasury purchased by China, Japan etc with a 1 to 2 % yield has essentially generated a negative 13 to 14% return. Yes, NEGATIVE 13 to 14% return.”
“If India were to lift is gold share of FX reserves from 6% to 20%, where it was during the strong U.S. dollar policy days of 15 years ago, we estimate that gold would go to $1300/ounce.
If China were merely to copy what India just did and raise its share to 6%, then gold would go to $1,400/ounce, based on our in-house analysis.
If the USA were to go back to a 40% ratio of gold reserves to money supply (using the monetary base), where it was a century ago when the Fed was first created, from 17% currently, that would equate to three years’ supply of bullion, and alone take the gold price up to $2,750/ounce, based again on our research on price sensitivities to central bank buying activity.””
“Banks around the world face increases in funding costs that could cut profits and hit their customers as they look to refinance $7,000bn-plus in short-term debt expiring in the next three years with longer-dated bonds, according to research released on Tuesday.
Institutions seeking to reduce their reliance on short-term paper will have to pay up because interest rates are likely to rise and governments will stop supporting the financial system, the study by the credit rating agency Moody’s concludes.”
“Moody’s estimates that a lender wanting to refinance a short-term government-guaranteed bond with 10-year paper could see costs rise nearly 7 percentage points”
“GMAC, a crucial player in the U.S. auto industry, has been unable to raise the $11.5 billion regulators said it needed after stress test results were announced in May. The Fed says the finance company is expected to close the gap with more money from the $700 billion financial bailout.
GMAC, already the recipient of $12.5 billion in taxpayer infusions, is negotiating with regulators over how much more it will receive.”
“The global economic crisis is not over, said Harvard University professors Kenneth Rogoff and Niall Ferguson, challenging the G20 group of wealthy countries’ assumptions that the world is on the road to recovery.
Public spending in the form of bailouts and stimulus packages will create a debt burden for the world’s governments, the two professors told Bloomberg.
“The financial crisis may eventually morph into a government-debt crisis,” says Rogoff, former chief economist at the International Monetary Fund.”
“Five days after announcing dozens of layoffs in its wholesale unit, Sprint Nextel Corp. (S) said it’s cutting hundreds more jobs – up to 2,500 – by the end of the year.”
“As he seeks concessions from state workers to balance his first budget, Gov.-elect Chris Christie is examining the possibility of declaring a financial emergency in the state, according to an official familiar with his plans.”
“The Nutter administration on Monday convened a meeting with City Council members to deliver more grim economic news: the city has a new and unexpected budget deficit, topping $30 million.
Top aides to the mayor told councilmembers that despite months of cutbacks, the government at this point has a $31-million deficit in the current fiscal year, which ends next July.”
“The City of Grand Rapids is facing a budget deficit of nearly $28 million for the year beginning July first. Grand Rapid’s City Manager says its been a horrible process.”I can only tell you that I am personally devastated. I have never had to do anything like this. This is certainly the saddest days of my life,” said Grand Rapids City Manager Greg Sundstrom.The cuts are the result of declining income tax revenues which are on pace to fall 15 percent, and the year is not over.”
“State is “running out of money,’ governor says in plea for cuts”
“”Some say the deficit is not even as deep as we have described it. Some say the revenues are coming back, and others say Wall Street will bail us out. I suggest to you that that is wishful thinking, my colleagues,” Paterson said. “And we do not have time to engage in it.”
As soon as the $132 billion budget was created in April, fiscal critics were warning that it was built on overly rosy revenue projections and inflation-busting spending levels. Monday, Paterson joined in, warning lawmakers against making spending promises that cannot be kept or resorting to “phony solutions” for the deficit.”
“The amount of revenue the Peach State pulled in from various taxes plunged 17.8 percent in October, the Georgia Department of Revenue reported Monday.
Georgia took in $1.14 billion last month, compared with $1.39 billion in October 2008.”
“WINTER HAVEN - State Rep. John Wood, speaking at a City Commission meeting Monday evening, presented a bleak picture of continuing budget woes on the state level that will trickle down to cities.
“The overriding issue will continue to be money, or lack of it,” said Wood, R-Winter Haven, who represents District 65, which encompasses much of northeast Polk County and a portion of Winter Haven.
This means there will be no state budget requests from local governments because the funds aren’t available to fill them.
“The economy is having a great toll on our government. The budget is going to be an extreme challenge,” Wood said, adding that legislators will be dealing with a $2.5 billion deficit.”
“The national median price clocked in at $177,900, or 11 percent below the third quarter last year.”
“Ambac reported that, should the OCI decide to initiate delinquency proceedings in order to protect the interests of its policyholders, an event of default could occur with respect to Ambac’s debt (that is, the holding company debt), which would in turn accelerate principal totaling $1.64 billion, as well as terminate credit default swap contracts insured by Ambac Assurance. This in turn could liquidiate mark-to-market claims for underlying exposures in swaps totalling approximately $23 billion, the company said.”
17) In the 1930s over 11,000 banks failed.
Many depositors lost all of their funds. Back then most of those banks were state chartered and were quite small, so the number sounds much bigger than the problem actually was in dollar terms. Today we have seen a consolidation in the number of banks from around 11,000 ten years ago to around 8,300 in the summer of 2009. The amounts of funds, however, involved in the crisis today absolutely dwarfs the bank problems of the 1930s. The current credit bubble inflated as the LARGEST CREDIT BUBBLE EVER SEEN IN THE WORLD AND IS A GLOBAL ISSUE OF MASSIVE PROPORTIONS - but the US is at the epicenter.
18) Breaking: Advanta files for bankruptcy — more bad news for small-business borrowers
“Advanta’s bankruptcy comes just one week after another top small business lender, CIT Group, filed its own bankruptcy petition. Both companies were hit with a sharp rise in defaults as the recession deepened. Advanta’s default rate reached 24% in September, up from 11% one year ago, according to the company’s financial filings.
- saxplayer00o1
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