Seeking Alpha

Mac Slavo's  Instablog

Mac Slavo
Send Message
Mac Slavo is a legend in his own mind. He spreads the legend wherever he can, though most people point, laugh and snicker -- but he's good with that. Mac would be considered by some to be a doom and gloomer, though he believes reality is reality, and he tries to assign no positive or negative... More
My blog:
  • China Growth Booms, But Is It About to Collapse?

    It looks like the economic recovery is being officially confirmed globally and not just here in the US as China Trade Rebound Aids Global Economic Recovery:

    China’s exports surged in December and imports rose to a record in a stronger-than-forecast trade rebound that may lessen the case for governments to sustain stimulus programs this year.

    Exports climbed 17.7 percent from a year earlier, the first increase in 14 months, and imports jumped 55.9 percent, the customs bureau said on its Web site yesterday. Year-on-year comparisons are affected by the tumble that began in late 2008, when the global credit crisis deepened.

    It’s not that we don’t want a recovery to happen, it’s just that we’re not sure if we can believe the Chinese customs bureau. We may be biased in our assessment, of course, because we are very much anti-communists here at SHTF Plan, but it seems to us that China has blown a huge bubble, and in order to keep it from collapsing they may need to pump some of their numbers a little bit.

    Considering the US Government recently revised 2009’s 3rd quarter GDP growth by about 38% (to the down side), our suspicions about China are probably well founded.

    We’re not the only ones that have misgivings about China’s numbers. James Chanos, the hedge fund investor who made a pretty penny when Enron collapsed because he didn’t believe their numbers either, sees an economic crash in China:

    As most of the world bets on China to help lift the global economy out of recession, Mr. Chanos is warning that China’s hyperstimulated economy is headed for a crash, rather than the sustained boom that most economists predict. Its surging real estate sector, buoyed by a flood of speculative capital, looks like “Dubai times 1,000 — or worse,” he frets. He even suspects that Beijing is cooking its books, faking, among other things, its eye-popping growth rates of more than 8 percent.

    “Bubbles are best identified by credit excesses, not valuation excesses,” he said in a recent appearance on CNBC. “And there’s no bigger credit excess than in China.” He is planning a speech later this month at the University of Oxford to drive home his point.

    Central planners around the world can only play these games for so long before the effects of nature take hold.

    The global economy remains very much intertwined, so any bubbles that burst, whether in the US or China or Europe, will detonate the entire Superbubble.

    Chanos article hat tip Tom of the North

    Disclosure: No positions.
    Jan 11 10:48 AM | Link | Comment!
  • 2010 Predictions: A List of Lists from Around the Web

    As 2009 comes to a close, predictions for 2010 are plentiful. We’ve compiled a list from around the web for your reading pleasure.

    Trend forecaster Gerald Celente predicts:

    • an economic crash
    • terrorism
    • the rise of neo-survivalism
    • an anti-immigration movement
    • read more…

    Karl Denninger’s thoughts on Where We’re Headed

    • The stock market will end lower on December 31, 2010 than where it is on January 1, 2010.
    • Housing prices will fall another 20%.
    • Banks will begin dumping their foreclosure inventories.
    • A massive wave of small business bankruptcies.
    • Unemployment will appear to improve, but it will be an illusion and we’ll end 2010 above 10% on the U-3 unemployment rate
    • Read more…

    National Inflation Association:

    • We will learn the 2009 holiday shopping season was a bust.
    • We will see a major decline in the Dow/Gold ratio.
    • The U.S. Dollar Index will see short-term bounce, then huge crash.
    • Oil will rise back above $100 per barrel.
    • Major Food Shortages.
    • Read more…

    James Kunstler: Forecast 2010

    Hat tip to Tom of the North for sending this one over.

    • Rising Treasury interest rates resulting from, in part, forced government bailouts of bankrupt states like California and New York
    • Dismal Q4 2009 retail sales will force many businesses into bankruptcy, including national chains. As a result, vacancies will increase and this leads to a final “push off the cliff” for commercial real estate.
    • The above will lead to regional bank closures, leading to a bankrupt FDIC having to request direct bailouts from Congress, leading to even higher Treasury interest rates and higher mortgage rates.
    • All of this leading to the recognition that we have entered a serious depression, which is only a facet of the greater period of hardship we have also entered, which I call The Long Emergency.
    • Outbreak of civil disturbances on many levels.
    • read more…

    Kitco Commentator Roger Wiegand on Good News and Bad News for 2010:

    • Housing sales both new and used for the first half of 2010 fail so badly, this market is literally in free-fall. There will be 7-10 million new mortgage defaults with most of those in the prime paying (not sub-prime) category caused by job losses
    • $40-$50 billion in U.S. credit card failures are reported
    • First half auto sales are reported. They will be so poor more car-makers file bankruptcy
    • Commercial real estate loans bankrupt many developers and their projects among those existing, under construction, and planned.
    • New York, New Jersey, Connecticut, Michigan, Ohio, Florida, Arizona, Nevada and California are among the financially worst, hurting from falling tax revenue on broken businesses and consumers….When some states face total collapse it will get very ugly very quickly….They will spend until there is nothing left to spend and then scream for help to the Federal Government.
    • Read more…

    Tony Sagami of Uncommom Wisdom Daily:

    • The U.S. stock market is more overvalued and headed for a very painful fall.
    • The dollar is overdue for a short-term bounce, but the factors that killed the dollar in 2009 — runaway government spending and massive trade deficits — haven’t been fixed, so the long-term trend of the dollar is still downward.
    • Interest rates are higher, but they are headed a lot higher. Inflation has yet to rear its ugly head … but it is coming.
    • The commodity boom has a long way yet to run.
    • Read more…

    WebBot Half Past Human:

    The predictions noted here are based on analysis by Half Past Human’s WebBot analysis tools. The information is acquired from across the internet, parsed, analyzed and the interpreted.

    *Note from Clif High of Half Past Human: The predictions herein are produced using our radical linguistics method that has been in development and production since 1997. The data sets employed are a result of the data gathering begun in October 2008.

    *Do not assume we know what we are doing in the presentation of this material. Always discount the information presented as it has an in-built error toward the most extreme connotations.

    source: The Shape of Things to Come (Volume 0, Issue 3) - Data Set Analysis Dec 6 2009.

    • More whistleblowers and information will be released about global warming, putting the entire global warming power structure at risk.
    • The dollar will continue to die. Data sets are pointing to a very visible impact on the planetary populace as the financial system goes into lockdown crisis that will apparently ‘peak’ sometime before the March equinox.
    • After November 2010, the US Dollar and the federal reserve will lose influence in the world at a shockingly fast rate.
    • Social order will begin to crumble in a rapid manner once a threshold of suffering is breached. The issue seems to be large scale failure of the distribution system, which results in shortages of food across wide regions of the USA and other countries.
    • Disruptions of social infrastructure over 2010 and 2011 in the continental USA include, among other things, medical systems, financial system, local government, natuonal energy supplies, law enforcement, food and energy production, international communications and transportation. All of these are indicated to be collapsing or imploding under the pressures of corruption and twisted hidden agendas.
    • Visit Half Past Human…

    Sharon Astyk: Practice Losing Farther, Losing Faster:

    Hat tip to The Survival Mom for sending this one over.

    • 2010 will mark a (probably dramatic) resumption of the economic crisis, which will not be short or pleasant.
    • We will face deflation, probably simultaneously with fluctuating and sometimes extremely high (at least in relationship to people’s ability to pay) prices for food and energy
    • The trend towards growing your own, small home livestock, and home food preservation will continue to grow and expand
    • There will be a fragmentation of mostly fairly unified fronts among climate change activists and scientists as we are forced to deal with the revelations of last year
    • Most people won’t look at 2010 as the year it all went to hell. But looking back from 2015 to 2005, they will know that somewhere in there, it all went to hell, and well, this was right there in the middle.
    • Read more…

    Got a prediction, or care to comment on one of the predictions above? Feel free to post it below. You’re guess is as good as any!

    Disclosure: disclosure: no positions
    Jan 01 2:35 AM | Link | Comment!
  • World Crisis: No Bailout Will Stop It

    Sometimes, a bailout is not enough.

    When Dubai World black swanned global investors last month with what amounts to be a reported $80 Billion in debt liabilities, it sent shivers down the spine of many a financial manager and stock trader. For those who were paying attention, Dubai’s troubled assets were no surprise, it was simply a matter of time. Oft repeated by contrarian analysts and investors like Dr. Doom Marc Faber, Gerald Celente, Jim Rogers, and Karl Denninger, the mathematical certainty of the economic crisis would play out - eventually.

    It was a year ago that the entire global financial system, spear headed by the USA, faced the real possibility of total meltdown, that is if you trust the motivational fear tactics employed former Treasury Secretary Henry Paulson.

    This week, the American public received word that the banks once deemed too-big-to-fail will be paying back their TARP funds, ostensibly because they are now cured of the financial contagion that threatened sudden death, economic collapse and the implemntation of martial law.

    In addition to Bank of America and JP Morgan Chase, we have commercial real estate powerhouse and partially owned subsidiary of Warren Buffet Enterprises, Wells Fargo, which announced it will sell $10.4 billion in stock and exit the TARP bailout. According to a company statement, the bank plans to pay back $25 billion in taxpayer funds. CEO John Stumpf, presumably also doing gods work, says “we’re ready to fully repay TARP in a way that serves the interests of the U.S. taxpayer, as well as our customers, team members and investors.” Management did not comment on whether the share sales totaling around $14.8 billion, when you count additional plans to  raise capital, will devalue, by way of dilution, the amount of market capitalization held by shareholders.

    Citibank, who also committed to repaying $20 billion in TARP funds yesterday saw a stream of positive news throughout the media when they announced their intentions. Just 24 hours later, Bloomberg reports that Citigroup’s Exit From the Bailout is Clouded by Citi Holdings Assets. It seems that CEO Vikram Pandit failed to mention that his company is “emerging from a U.S. bailout with higher capital levels and loan-loss reserves than any peer.” That amount to somehwere in the area of $617 billion.

    Dubai showed how investors and traders are ready to run at the first sign of trouble. As has been the case for the last nine months, however, the Dubai crisis was quickly subdued by stories of bailouts from their sister city, Abu Dhabi. And indeed, Dubai has been rescued with what amounts to be a $10 billion bailout that should help the former real estate Mecca of the Middle East make at least a few payments to keep it a float for a little bit longer. Regional investment firms will receive some of their funds, but as for non-Middle Eastern investors, the verdict is still out, though, as Abu Dhabi’s rulers said, “they will not necessarily just bail out everyone across the board. They will be selective.”

    This seems to be the norm these days, so it’s no surprise. Certain entities, for whatever reasons, are bailed out, while others suffer the collapse of their wealth for trusting in the belief that asset prices always go up forever.

    As Real Estate Collapse (Wave One)  in the US proved, no asset will appreciate all the time. Like Dubai, the underlying assets in America, Europe, and even China have been slowly simmering for the last year or so. And once the public gets a taste of the toxicity, there will be no stopping the panic as everyone in just about every asset class decides to run for the exit.

    When the panic does start, it may be an event perceived to be too-small-to-matter, like a Dubai that exposes several larger global players, which leads to a domino effect that will echo through the entire financial markets. It may start with debt defaults in an  Euro Zone country like Greece or Hungary, or maybe with commercial real estate or Wave Two of the Mortgage Meltdown in the US. It could be a geo-political event  with Iran and Israel, or a terrorist attack on a Saudi Arabian pipeline.

    Right now, the world is on edge. The citizens of the US, as well as the global public don’t really know who to trust to tell them the truth. They are on alert, consciously or subconsciously, and if they perceive even a small threat, the fight-or-flight system will be activated.

    Some say that a year ago we faced economic disaster on a massive scale. In one year, governments around the world have printed money, and done little else, except to provide daily lip service and commentary. The contagion has been lying dormant and will become an epidemic.

    No bailout will stop it.

    Disclosure: Disclosure: Short BAC
    Dec 15 10:29 AM | Link | Comment!
Full index of posts »
Latest Followers

Latest Comments

Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.