More about the dollar meltdown, but sort of the same thing when US can not afford to import the oil needed for it inefficient "suburban infrasturcture." “UN Says New Currency Is Needed to Fix Broken Confidence Game” * is the title of following Bloomberg article: The dollar’s role in international trade should be reduced by establishing a new currency to protect emerging markets from the “confidence game” of financial speculation, the United Nations said. UN countries should agree on the creation of a global reserve bank to issue the currency and to monitor the national exchange rates of its members, the Geneva-based UN Conference on Trade and Development said today in a report. China, India, Brazil and Russia this year called for a replacement to the dollar as the main reserve currency after the financial crisis sparked by the collapse of the U.S. mortgage market led to the worst global recession since World War II. China**, the world’s largest holder of dollar reserves, said a supranational currency such as the International Monetary Fund’s special drawing rights, or SDRs, may add stability. “There’s a much better chance of achieving a stable pattern of exchange rates in a multilaterally-agreed framework for exchange-rate management,” Heiner Flassbeck, co-author of the report and a UNCTAD director, said in an interview from Geneva. “An initiative equivalent to Bretton Woods or the European Monetary System is needed.” From: http://www.bloomberg.com/apps/news?pid=20601087&sid=aSp9VoPeHquI ------------------- *Not quite calling the US's triple AAA bond rating and the dollar a "Ponzi scheme" but getting close to that. **China is not waiting for dollar replacement. China is rapidly using dollar reserves to buy real assets. For recent buying see: http://www.sciforums.com/showpost.php?p=2360922&postcount=848
A graph worth 10,000 words, but here are a few: Note how short the blue bars are becoming. Job holders are stopping to quit. Not much now of "Take this job and shove it." attitude around - More like: "Please God, don't let me be next to lose my job." Also note the collapse (green line hires) started to be clear, in hind sight, by Jan 2008. That cost reduction is why profits are recovering, but who will buy the production as green line trend continues down? US population & labor force is growing. - US needs to ADD at least 100,000 net hires each month (to avoid social unrest, etc.). Please Register or Log in to view the hidden image!
Please Register or Log in to view the hidden image! From: http://www.bloomberg.com/apps/news?pid=20601087&sid=a3dnPxhcGAxs Sept. 10 “ Foreclosure filings in the U.S. exceeded 300,000 for the sixth straight month as job losses that boosted the unemployment rate to a 26-year high left many homeowners unable to keep up with their mortgage payments. A total of 358,471 properties received a default or auction notice or were seized last month … That’s up 18 percent from a year earlier, and down 0.5 percent from July ... One in 357 households received a filing. Foreclosures rose from a year earlier as companies cut payrolls by 216,000 workers last month, boosting the U.S. jobless rate to 9.7 percent … The rise in unemployment is having a bigger impact than an effort by the U.S. government and banks to modify mortgages and prevent foreclosures … “The foreclosure numbers are largely unemployment related,” Davis, a former Federal Reserve Board economist, said in an interview. “As long as 15 million Americans are unemployed, record foreclosures will continue.” Foreclosures aren’t abating even as demand is returning to the U.S. housing market after a three-year slump. ..." Billy T comment: Because the banks taking back a foreclosed house do not want to rent it or risk vandals stealing the dishwasher, etc. or burning it down, etc. they dump it quickly with low price even if they do not get the full mortgage repaid. Thus, the increasing number of foreclosed properties is a large factor in why home sales are improving, but still far below normal for a healthy economy. Workers are still losing jobs and just to keep the unemployed of the growing work force a static percentage, the US needs to ADD 100,000 jobs each month, not lose 200,000+ each month. Who to Blame: The steady reduction of the purchasing power of salaries while GWB was POTUS, combined with the tax relief for the already wealth (more than the 900 billion Obama’s health care plan will cost) that built the modern factories in China and closed the older non-competitive ones in the US is still dragging the US down into depression. Joe American had to go deeper into debt under GWB to compenstate for the decreasing puying poer of his salaries – cannot now be 72% of the US economy and Government spending with borrowed money cannot replace Joe’s buying for long, before the house of cards falls down. BTW, Warren Buffett is planning to boost his ownership of BYD motors from 10% to between 20 and 25% soon. They are doing very well selling: ~200,000 electric hybrids this year mainly in China, which is also doing very well thanks to the “trickle down” investments GWB’s tax relief for the already wealth, like Warren, made possible. So remember to blame GWB and the “trickle down” economy supporters, not Obama, when US government can not borrow more to replace Joe’s former 72% of US economy spending. Joe is saving now or at least trying to pay off some of his debts.
The graph of post 162 is no longer displaying. It had the link to the site included in the graph so I did not add it to my text, but found it in article atwww.calculatedriskblog.com/ I to give a direct link to the post 162 graph in post 167. The above link was to the article it was in but that site seems to be a collection of financial aricles (mainly blogs, I think) that are newly replaced each day - I.e. unless they hav3e an archive you can search for the artilce the graph came from a few days ago, you will only be able to access the graph (perhaps only for a week or two?) Graph splits job lose totals into two stacked bars: Red was the discharged & blue was the "I quit" loses. The blue was a decreasing percent of total job loses. Hence my comment about there being few singing "Take this job and shove it." now. There was a green line that showed the new hires (now below the losses), which somewhat surprizing to me was an nearly steady down sloping line that broke from the nearly flat section of years at the START of 2008. - I.e at least 9 months before Wall Street realized the economy was in trouble - a little known "leading indicator" I think. When you stop to think about it, this makes sense for an economy that is 72% consummer driven. Presumably if the net jobs creation turns up, even before it becomes positive - that would be a leading indicatior too. (that recovery is coming.) Unfortunately the downward slope of the green line, although nearly steady decline was curving slightly more downward. As a poor replacement for the original 162 graph look at this one: Please Register or Log in to view the hidden image! A semi-log plot would be better as 0.001 lose now is greater % than earlier.* This graph shows that the job loss rate is still growing – becoming a higher fraction of the total work force – and much worse than any recent recession. I.e. supports my years old prediction, based on policies of GWB’s administration, that depression was inevitable for US and EU. Obama and his team are doing the best they can to avoid that, but there is no way that Joe American can resume support of 72% of the economy as he went too deep into debt when GWB’s policies cut purchasing power of his salary (and burdened the economy with needless war for oil, gave trickle down tax relive to build the modern factories in China etc. – Those factories will still be keeping US’s older ones closed in 2020. – They will not just disappear.) ---------------- *On semi-log graph, the slight recent curve upwards, (slope becoming less negative) would not be there. I.e. the current percentage of REMAINING employed losing their jobs is actually increasing, not decreasing, as the slight decrease in the negative slope of the last few months suggest. To overstate my point for those who don't know much math: The curve MUST become flat horizontal when everyone has lost their job.
no one would just take your word on these things. you are biased and deceptive so you cannot be used as a source for speculation.
I found post 162 graph! at: http://2.bp.blogspot.com/_pMscxxELHEg/SqU9topoIbI/AAAAAAAAGT4/JmHMtTVXWT4/s1600-h/JOLTS.jpg It will not post still but if you go there you can see it. (I just did) If it works for you, please tell me and if you can make it display please do so.
Fortunately, they do not need to now that I have (in post 167) given a direct link to the graph that no longe automatically displays in post 162. I.e. they can see for themselves. If you think that graph (or the "poor subsitute" in post 165) is false, or carefully selected due to the "bias" you assert (with no evidence provided) I encourage you to find* even one graph that tells a significantly different story than the FACT that the current decline is the worst since the 1929 depression. Also I have in a post a about month ago, posted graphical data showing the current decline is running ahead of the 1929 collapse. I may try to find that post and give link. - There were lots of graphs in a set of three post as you can only include three in any one post. In the mean time Try to support your post 166 claim that I am posting biased data (or retract it.) You said there "... you are biased and deceptive ..." I take offense at that false, unsupported, post. I am just telling it like it is while many are in a state of denial. ------------------ *You may be able to find one or two false ones. While searching for the post 162 graph, I got more than 400 hits of graphs of the job loss data. I did not open them all but the few dozen I did, all support my facts any none your POV about them being biased and deceptive. IMHO a smarter move would be for you to retract your unsupported slur against me while you can still edit and before I report it.
your graph that show mid 80s and present is designed to look dramatic. the increment is 0.970 and 0.960 at lowest points. 'I am just telling it like it is' Honestly i dont read your posts all through.
I have no idea what graph you refer to. None I can find include the "mid 80" nor any "increment” (of what?) certainly not in such as small range. Tell at least where that graph is and what you are posting about - your post is incoherent!
Some interesting graphs: Please Register or Log in to view the hidden image! Since this is Please Register or Log in to view the hidden image! I.e. Many governments & wealthy individuals have been buying in London, Frankfort, Dubai, Hong Kong,(even Brazil) etc. now Instead of USA. - A smart move with the dollar falling in value, but it does make their local currence increase in value and that hurts their exports. Consequently, many, especially China and Brazil, are building their internal domesting demand while exports to US fall. (As dollar falls, Americans can not affort to buy as much and also Joe American is now trying to pay off debts and / or save so is not buying many domestic goods either, without government aid such as "cash for clunkers"or grants to first time home buyers etc.) Same facts with more details and numerically presented for various stock markets etc.: For the period ending 4/30/09: 3 mos .. 12 mos ...3 yrs ... 5 yrs MSCI Brazil USD ....................... 27.34 .. -47.94 ... 2.04 ... 26.73 MSCI Indonesia USD ................ 43.48 .. -36.42 ... 0 ........ 15.43 MSCI EM Latin America USD ..... 22.08 .. -46.43 ... -1.56 ... 19.4 BSE Sensex LCL India ............... 21.00 .. -34.04 .. -1.28 ... 15.08 MSCI Argentina USD ................ -4.78 .......n/a ... -25.13 ... -5.64 MSCI Turkey USD .................... 23.51 .. 42.53 ... -17.25 ... 7.38 MSCI Metals & Mining USD ....... 20.06 .. -54.46 .. -9.34 ... 10.39 MSCI Mexico USD ..................... 12.6 .. -46.27 ... -9.37 ... -9.69 MSCI EM GR USD ..................... 25.93 .. -42.72 ... -5.23 ... 11.46 MSCI Chile USD ........................ 9.75 .......n/a ..... 2.26 ... 12.88 S&P 500 ................................. 6.48 .. -35.51 ... -10.77 ... -2.7 Only in badly governed Argentia, the US (and closely tied to US, Mexico) would you be better off if you had kept your money under the mattress for last 5 years! "Annualized Average Returns (in US$) are up to 25 Times Better Than the US." {Billy T notes: Rapid fall of USD in last 10 days makes foreign gains even larger when converted into dollars. Also table data only goes thru 30April09. Typically foreign market gains in last 4.5 months since then have been twice the US's S&P gains.} This graph, however does shows only three months of relative gains (ends 1 June 09): Please Register or Log in to view the hidden image! “…Even after a 32% rebound in the U.S., the S&P 500 still lags the world badly. Amazing, isn't it? Chile…Turkey…Indonesia…Brazil…are all returning on average up to 25 times more to investors than the good old USA. And this trend is going to continue… for the rest of our investing lives. {bold & underlined in original} You may not like hearing this. Few people do. But if you don't invest with this trend, you're going to get left far, far behind. It's just a fact. …” Quote & graphs from: http://www.oxfonline.com/MMR/MMR080...922&o=27515&s=28824&u=40779324&l=46750&r=Milo For more details about China (a major part of the rest of world / Asia data here) See: http://www.sciforums.com/showpost.php?p=2364719&postcount=869 and al posts 868 & 870, by X-Man2.
The US has screwed itself over to the point of no return,I think we should just sell ourselves to the Chinese,hell they practically own us anyway.I can see it a coming,The United States Of China.Hey it was fun for some while the party lasted.
Two setp link to animated history (by Bloomberg) of how US triggered the current global collapse of credit. (Lehman bankrupcy was trigger). Go to: http://www.bloomberg.com/apps/news?pid=20601087&refer=top_news&sid=avI7UENmRggQ Then Step 1: Click on orange graphic tab. Step 2: With small triangle in upper right of new screen, step thru history pages. To speed your understanding of what you will see: The "CP" label on two small graphs in lower right of screen is for "Commercial Paper." I.e. corporate promises to pay with interest later for loan now. Promised payment is usually only a few months into the future. (longer terms are corporated bonds.) Sequence has most steps in Sept 2008, then jumps to July 2009 for last two screens. A vertical yellow line in the two small graphs show time of the comments on their time scales. I.e. these last two time steps are sort of the present conditions, but the white circulating balls, that represent money flow, still travel at the same speed. That is misleading as the velocity of money is very slow now. Because the velocity of money is slow, the effect of the trillions pumped out by central banks is greatly reduced -almost as if that money had not been sent into the economy. This is the main real problem, IMHO: When the velocity of money does return to even half its normal value we EITHER have run-away-inflation, OR high interest rates (higher than investing the money and high enough to compensate for the erosion of value the lesser inflation is making). Thus the recovery will be killed in its crib by "tight money" money policy if the "OR" solution is followed, unless the central bankers are very lucky and wise. (I.e. manage to find a path between the "EITHER" and the “OR." As both are unstable with positive feel back, that will be like trying to walk a tight rope. - Tilt slightly too much to either side and you fall into the abyss of run-away inflation or deep depression. With bad luck, or a little "help" from Congress, you can have both.
On example of why BRIC currencies are stronger than the Dollar - more secure: The S&P 500 has gained 54.5% since its March 9, 2009 low, it remains 33.2% below its all-time high of 1565.15 on Oct. 9, 2007. (From Business Week today) The Brazilian Bovespa index 27Oct 08 low was 29.434 and yesterday 14 Sept09, it closed at 58.867 for a recovery from the low of 100.00% but in dollar terms nearly 150% as value of the dollar has continued to decrease vs. the Brazilian real. (from Folio de Sao Paulo today)
"Unemployment rose in 27 U.S. states in August, with California and Nevada reaching record levels of joblessness. ... Labor Department reported today in Washington. California’s unemployment rate reached 12.2 percent and Nevada’s climbed to 13.2 percent. ... Economists surveyed by Bloomberg News this month said the unemployment rate nationally will reach 10 percent this year, a reminder that consumers are unlikely to lead the recovery {THEY WERE 72% OF IT}. ...Unemployment in the District of Columbia also exceeded 10 percent, for a fourth consecutive month, rising to 11.1 percent from 10.6 percent. “I’m caught up in the horrible transition phase between entry-level and mid-level professional,” said Jason Chang, 31, who lives in Arlington, Virginia, a suburb of Washington. ..." FROM:http://www.bloomberg.com/apps/news?pid=20601087&sid=aNfVuMdRsGgA PS 92 US banks have now failed in 2009. FDIC just announced, on Bloomberg radio, that they need more funds. May ask Congress for help or try to float bonds etc. More on this at: http://www.bloomberg.com/apps/news?pid=20601087&sid=anA40Xh8bco4 Billy T comments: I'm sorry for Jason, but more so for the recent and coming college grads, many of whom will be moving back into their parent's home as with no job - they can not even pay rent on a trailer. -As far paying back on their student loans -forget about that for years. Until their dad loses his job, they can put their feet under Dad's dinning room table. SUMMARY: THE MELT DOWN CONTINUES.
Why is my beloved Canada still considered such a shabby place to do business, given all the crap going on down south? We've always been told how bad our unemployment rates are, yet 12.2% like you're claiming for California is utterly disgusting by our standards, and I'll bet those stats don't even count the border jumpers. 12.2% is like what we get out on the east coast, which we already recognize as an economic basket case where hardly anyone lives anyhow. Add up the amount the average American pays in user fees (i.e. private healthcare) and taxes, and I'll bet even on those grounds Canadians come out ahead at this point. Yeah we're not perfect, but why does the world still treat us like a bunch of retarded lumberjacks?
Irwin Financial’s 2 Bank Units Seized, Pushing U.S. Toll to 94 Sept. 19 (Bloomberg) -- Irwin Financial Corp.'s bank units in Kentucky and Indiana, with $2.5 billion in deposits and offices in nine states, were closed by regulators, pushing the tally of failed US lenders this year to 94. http://www.bloomberg.com/apps/news?pid=20601087&sid=aPtgVuIMrCnU
In series of 6 posts, the first when only 72 banks had failed, I have been reporting “progress” towards my prediction that 100 US banks would fail in 2009 vs. only the 3 that failed in 2007. See more extensive details and my discussion on the latest at: http://www.sciforums.com/showpost.php?p=2368339&postcount=149 The main point being: The interval (averaged for all of 2009 to date) is now one bank failure every 2.75 days. It was more than 3 days between failures when I first started to note and post this data, less than 50 days ago! If one only used the failures after my post 126, the rate would be about one every 2.2 days now. I.e. failure rate is really rapidly accelerating (amid the "green shoots" ). So ~140 banks will fail in 2009. - Nearly six times more than in 2008, which included the collapse of December. Or ~45 times more than the normal year of 2007.
