Global Economy Bursting?

[Terrel L. Shields]

didn't even grow up during the "space race."

whippersnapper...I remember people complaining about Sputnik and mad because the Russkies beat us in space.

 

[Restrain]

I remember the folks taking me out back to watch the satellite go over. It was amazing to a kid that Buck Rogers technology was actually coming to pass. I just KNEW we would pass the Russians. Then the Democrats, starting with Walter Mondale, began shortcutting the space program. In their belief that we should all share in space exploration, and trying to downplay American excellence, they ignored the science fiction space war truism: he who controls the orbitals controls the planet. We have ceded control of the orbitals to those who mean us harm through our giving up on the space race.

 

[Randolph Kinney]

Problem? Consumers are using their credit cards less and less. Worse, the consumers are paying down their balances. That means the dollar that would have been spent was used to de-leverage. As debt deflates, so does the economy.

Not to worry, the government is expanding its debt.

 

[Austin]

For the record. Violence broke out around the 1st of December 2010. Mobs in England protesting tuition increases and cyber war by radicals supporting Assange who published governments docs. The pace quickens.

Camilla hit by rioter through car window as protesters attack royals

http://www.thisislondon.co.uk/stand...b-attacks-charles-and-camilla-on-fees-riot.do

 

[Randolph Kinney]

On Christmas Shopping Lists, No Credit Slips

http://www.nytimes.com/2010/12/10/business/10shop.html?nl=todaysheadlines&emc=a25

More consumers are shunning credit cards for holiday shopping and using cash to keep themselves on budget. To combat that, Chase Freedom and Discover More cards are offering $100 bonuses when new credit card customers spend a certain amount within the first three months, along with 5 percent cash back on holiday purchases at department stores and other categories. With customers moving to cash or debit, the credit card companies are simply less profitable. And GDP growth is inhibited by the consumer not buying more.

This change in consumer habit will be very hard to break no matter how cheap and easy credit becomes.

 

[Randolph Kinney]

Mortgage-Bond Ruling ‘Clear Negative’ for Banks

http://www.bloomberg.com/news/2010-...ng-clear-negative-for-banks-analyst-says.html

Judge allows a suit against JPMorgan Chase and three credit ratings companies to enter the discovery phase. If evidence is found of negligence or fraud or misrepresentation, $179.2 billion liability loss could be the adverse judgment against the mortgage underwriters.

It is a good thing.

 

[Randolph Kinney]

U.S. Treasury yields are climbing. Mortgage interest rates are rising. Where she stops, no one knows. How much is the runaway deficit and debt adding to the problem?

Investors Pile Into Commodities

http://online.wsj.com/article/SB10001424052748703963704576005933072423242.html?mod=googlenews_wsj

Investors Hold Biggest Commodity Positions On Record

Who are the players besides speculators? Hedge funds, pension funds and mutual funds are major players now. "Speculative money from the likes of hedge funds, index funds and pension funds is coming into the commodity markets at a blistering pace."

The regulators are worried; oh what to do, what to do.

The Dodd-Frank law requires the regulator to set limits on how many commodity futures contracts in energy and metals a speculator can own. The CFTC regulator can add to the volatility and cause a major player to demand delivery. All those screaming about JP Morgan manipulating silver prices should think twice about their screaming. If the CTFC limits contracts, it will lead to equal long and short liquidations. And who has advance notice of client's buy or sell orders?

 

[Riick]

U.S. Treasury yields are climbing.
Mortgage interest rates are rising.
Where she stops, no one knows.

AFAIC, this is a good thing;
rates have been held abnormally low for years,
considering the actual inflation rate.

How much is the runaway deficit and debt adding to the problem?

Perhaps the better question is WHY bond investors allowed themselves to be beaten down for so long,
or was it just the long long long run the bond market has had, the long-term downtrend that made everyone
in bonds easy money since the days of 15-18% 5 & 10 year rates?
.

 

[Randolph Kinney]

AFAIC, this is a good thing;
rates have been held abnormally low for years,
considering the actual inflation rate.
Perhaps the better question is WHY bond investors allowed themselves to be beaten down for so long,
or was it just the long long long run the bond market has had, the long-term downtrend that made everyone
in bonds easy money since the days of 15-18% 5 & 10 year rates?
.

I suspect that when the fear of risk of default is over comed by fear of printing money with out limits, interest rates will rise. And commodity prices will also rise.

That is exactly what the data is telling. The fear of default risk of alternative investments drove investors to U.S. Treasuries. That fear has been replaced by the fear of inflation brought on by excessive debt growth with no end in sight and the FED with its willingness to execute QE; running the printing press.

 

[Caterina Platt]

I suspect that when the fear of risk of default is over comed by fear of printing money with out limits, interest rates will rise. And commodity prices will also rise.

That is exactly what the data is telling. The fear of default risk of alternative investments drove investors to U.S. Treasuries. That fear has been replaced by the fear of inflation brought on by excessive debt growth with no end in sight and the FED with its willingness to execute QE; running the printing press.

Here we go. It's no longer a joke about the guns, ammo and beans. It was only partially a joke to begin with but it's full tilt reality now, isn't it? We are Germany in the '20s folks. But I think it's Chinese that we should be brushing up on now.