Global Economy Bursting?

[Big ole Boy]

Running out of lying room

... I have noticed quite a "reported difference" between East Coast gasoline and West Coast ....

... close to 75 cents a gallon more (mostly taxes) ..... usually its not quite that much ...... not sure why ... maybe its the Moon Beam differiential (Jerry Brown)

...... liberals are hoping their child does not grow up too fast ..... you can lie to a child for only so long and then the child grows up ..

.... the media and liberals are running out of "lying room"

....

...... what if this country glorified Workmanship of the Worker in every way possible ....

.... a collectivism that celebrates and encourages the trademans ...... a new guilded age ....

..... a new guilded age ... a new Buck Roger's skyline without the smog ....

.... its hard being 7 billion strong ..... 7 billion trademans ...

.... to have 7 billion folks getting along .....

... will take more than Nanny Mayors telling what size drink we can have ....

... who are these people?

.... you and me ...... you and me when we have power looking through a rear view mirror

..

 

[Workbox]

Its an ugly opening in the market today. I wonder how much blood they want in the streets?

 

[Randolph Kinney]

Its an ugly opening in the market today. I wonder how much blood they want in the streets?

Greenspan had an insightful analysis of why the economy can't recover. It shows up in the lack of investment in 20+ year assets by corporations and individuals. No one has confidence that far in the future as they once did. The uncertainty is too great to risk that sort of investment so the discounting becomes extreme to justify that risk and therefore no investment, just piles of cash and short term investments.

Central bank interventions with QE and other mechanisms that distorts risk and therefore misallocation of capital adds to the uncertainty. There is a crowding out of private investments with the government soaking up capital that should have gone to private investments.

The 10 year U.S. Treasury note broke below 1.5%. The 30 year U.S. Treasury bond broke below 2.5% Really? The market is discounting the interest rate risk and inflation risk.

The employment numbers released this morning were really rotten and the previous months numbers were also revised down, meaning jobs are not happening, the economy is slowing.

Interesting times. Greenspan said to watch the Spanish and Italian 10 year bond yield and then look at the French 10 year bond yield. Compare those to the German 10 year bond and the U.S. Treasury 10 year note. Money is fleeing out of Spain with banks runs. People are leaving for Germany with their money.

 

[Randolph Kinney]

The latest jobs report came out today with the Labor Department reporting that nonfarm payrolls (jobs) increased by 69,000 in May. Today's chart provides some insight into the current US job market by comparing the percentage change in total nonfarm payrolls (blue line) since the declared end of the Great Recession to the performance of the private sector job market (gold line) and government sector job market (red line) during the same period. As today's chart illustrates, the overall job market (blue line) continues to trend higher albeit at a pace that has slowed over the past several months. Today's chart also illustrates that the government job market has been trending significantly lower since the first half of 2009 (with the exception of temporary census hiring in mid-2010). This decline is due to federal, state and local governments attempting to realign their budgets following an unexpected decline in revenues as a result of the historic plunge in housing prices (i.e. property taxes, capital gains, etc.) and nonfarm payrolls (i.e. income taxes, payroll taxes, etc.).

 

[Restrain]

Stock market had its worst day, dropping over 2%. Now has lost all gains since Jan 1. People are moving their funds to T-bills paying 1.5% on a 10-year note. More concerned about fund preservation than gains. The retail investor has just about abandoned the stock market, and most of the rest will walk away after the last week.

 

[Workbox]

Greenspan had an insightful analysis of why the economy can't recover. It shows up in the lack of investment in 20+ year assets by corporations and individuals. No one has confidence that far in the future as they once did. The uncertainty is too great to risk that sort of investment so the discounting becomes extreme to justify that risk and therefore no investment, just piles of cash and short term investments.

Central bank interventions with QE and other mechanisms that distorts risk and therefore misallocation of capital adds to the uncertainty. There is a crowding out of private investments with the government soaking up capital that should have gone to private investments.

The 10 year U.S. Treasury note broke below 1.5%. The 30 year U.S. Treasury bond broke below 2.5% Really? The market is discounting the interest rate risk and inflation risk.

The employment numbers released this morning were really rotten and the previous months numbers were also revised down, meaning jobs are not happening, the economy is slowing.

Interesting times. Greenspan said to watch the Spanish and Italian 10 year bond yield and then look at the French 10 year bond yield. Compare those to the German 10 year bond and the U.S. Treasury 10 year note. Money is fleeing out of Spain with banks runs. People are leaving for Germany with their money.

The next line of fear is 1250 on the SnP. We broke 1292 today and the 200 DMA and that was a significant technical barrier.

 

[Terrel L. Shields]

This looks like a repeat of last year... last year blamed on Japan and the "Arab Spring"....so whatza new whipping boy? Greece and Spain?

 

[Randolph Kinney]

America Lost 129,000 Millionaires in 2011

http://www.cnbc.com/id/47631154

America’s millionaire population declined last year for the first time since the financial crisis, according to a new report.

The population of U.S. millionaire households (households with investible assets of $1 million or more) fell to 5,134,000 from 5,263,000 in 2011, according to The Boston Consulting Group’s Global Wealth study.

Total private wealth in North America fell by 0.9 percent, to $38 trillion.


The ultra-rich were the largest losers in dollar terms. Households in North America with investible assets of more than $100 million saw their wealth decline 2.4 percent. Their population declined slightly to 2,928 from 2,989.

The main reason for all this wealth loss? Stocks.

Globally, the picture looked a little brighter. Virtually all of the growth in global millionaires came from emerging markets last year. While the United States lost nearly 130,000 millionaires, the rest of the world added 175,000 millionaires. There are now 12.6 million millionaire households globally, according to BCG.

The country with the highest “millionaire density” – proportion of population who are millionaires – was Singapore. More than 17 percent of Singapore’s households are millionaires.

While 2011 saw declines in U.S. millionaires, the future looks brighter, BCG said. They expect wealth held by millionaires globally to grow at around six percent a year in Asia-Pacific. “We are in a two-speed world,” said the report. “All of the growth is being driven by developing markets.”

 

[Randolph Kinney]

California Cuts Threaten the Status of Universities

http://www.nytimes.com/2012/06/02/u...?_r=1&nl=todaysheadlines&emc=edit_th_20120602

Class sizes have increased, courses have been cut and tuition has been raised — repeatedly. Fewer colleges are offering summer classes. Administrators rely increasingly on higher tuition from out-of-staters. And there are signs it could get worse: If a tax increase proposed by Gov. Jerry Brown is not approved this year, officials say they will be forced to consider draconian cuts like eliminating entire schools or programs.

 

[Randolph Kinney]

Just reading about all the financial problems, all debt related, and banks.

The governments are printing money and propping up banks. The problem is not government debt per se. The real problem is that the $70 trillion in G10 debt is collateral for $700 trillion in derivatives. The increasing worry and realization is that governments cannot prevent the coming collapse of the financial system.

As money drains from banks and countries to flee to Germany or the U.S., yields are forced lower as the risk premium is forced to zero. While the risk premium for countries that are being bailed out continue to expand, derivatives take on a self-fulfilling prophecy of default.

Just need a triggering event like Lehman Brothers ...