Important News - Nov. 15
By Daniel at 15 November, 2009, 9:46 pm
Zero rates means there is something very, very wrong.
Japan has been in a zero rate crisis for over 2 decades during which time it has watched its stock market collapse in price by 80% and real estate fall by around the same amount. Low interest rates provide no solution whatsoever, and they are evidence of a very serious disease with an economy.
1) Chart Comparison of Depressions
If you superimpose a graph from the beginning of the 1929 great depression over a graph from the market now, it shows a DOW high of 10,500[now] before the beginning of a big[huge] overdue pullback [ to 5,000- 6,500? ]..
* 29 have been accused of spousal abuse
* 7 have been arrested for fraud
* 19 have been accused of writing bad checks
* 117 have directly or indirectly bankrupted at least 2 businesses
* 3 have done time for assault
* 71 cannot get a credit card due to bad credit
* 14 have been arrested on drug-related charges
* 8 have been arrested for shoplifting
* 21 are currently defendants in lawsuits
* 84 have been arrested for drunk driving in the last year
3) FED May Cause Next Crisis, Hong Kong’s Tsang Suggests
The Fed’s policy of keeping interest rates near zero is fueling a wave of speculative capital that may cause the next global crisis, Hong Kong’s leader said. “I’m scared and leaders should look out,” said Donald Tsang, chief executive of the city. “America is doing exactly what Japan did last time,” he said, adding that Japan’s zero interest rate policy contributed to the 1997 Asian financial crisis and U.S. mortgage meltdown.
4) Japan Faces Fear Of New Downturn
Japan’s new government faces a dilemma in trying to prevent a double-dip recession, with recent stimulus efforts due to wane, debt soaring and the economy likely to begin losing steam by early next year.Talk of new stimulus measures to respark the growth is pushing up long-term interest rates, threatening to limit any impact of fresh spending. That, in turn, is forcing officials to look for cuts to offset any new expenditures — moves that could undermine a recovery in demand.
5) Ha-ha-ha! “Now is a great time to buy!”
Ron Paul laughed when he explained the stupidity of propping up out of control property prices, rather than let them find their own bottom naturally through the market. It is ridiculous for us to be paying tax dollars to those buying overpriced housing.
6) “Buffett: Put out economic fire then deal with deficit” (CNN)
“In an interview with Charlie Rose, Buffett said if the United States keeps flooding the world with its debt, countries will eventually notice that U.S. fiscal policies are “out of control” and become “less and less and less enthused” about lending to it.”
“Buffett said while he’s “not for shooting them,” the executives should not be able to walk away with even 10% of their previous net worth and the directors who hired them should also be punished. ”
here is the interview:
http://www.charlierose.com/view/interview/9284
7) Supply, Demand, and Healthcare Reform
Here are some basic principles of supply and demand: If a government policy increases the demand for a service, the price of that service tends to rise. If the government prevents prices from rising, shortages develop. The quantity provided is then determined by supply and not demand. In the presence of such excess demand, the result could be a two-tier market structure. Consumers who can somehow pay more than the government-mandated price will be able to purchase the service, while those paying the controlled price may be unable to find a willing supplier.
Commercial Real Estate Woes Are Deepening (M.W.)
A survey by Foresight Analytics found that 53 percent of commercial real estate mortgages due by 2014 — or some 770 billion dollars — were “underwater,” meaning the borrowers owe more than the value of the property.
9) U.S 1929 Great Depression vs. 2008 financial, housing, credit crisis
Great Depression happened in 1929. It took over 10 years to cure.
Effects of depression:
13 million people became unemployed.
Industrial production fell by nearly 45% between the years 1929 and 1932.
Home-building dropped by 80% between the years 1929 and 1932.
From the years 1929 to 1932, about 5000 banks went out of business.
That’s where when the buyer ran out of the market…. and this is what happening now in 2008. Investors now are panic and cash out from stock market.
10) Will interest rates go up considerably in 2009?
11) World CDS exposure is now over $1.1 Quadrillion or 20 X World GDP
12) Celente Predicts Revolution, Food Riots, Tax Rebellions By 2012
Trend forecaster, renowned for being accurate in the past, says that America will cease to be a developed nation within 4 years, crisis will be “worse than the great depression”
13) China has now become the biggest risk to the world economy
Far from taking over as the engine of growth from an exhausted West, China is making matters worse. Its “beggar-thy-neighbour” policies continue to play havoc with global trade and risk tipping the world into a second leg of the Great Recession.
14) Roubini: The Worst Is Yet To Come!
Persistent, high unemployment for a long, long time unless leaders take “bold” policy action, warns Dr. Doom.
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