Herr Jordan

The Coming Economic Collapse, Part 1

Most Americans WANT to be on Reality TV and most Brits ARE on reality TV. Maybe that's better.

On Jun 06 12:58 PM Brendanav wrote:

> Britain? Are you serious? On second thought, living in an Orwellian
> nightmare with 5,000,000 spycams might be good for the large number
> of Britons who just want to be fed and watered. You are certainly
> right that when a nation can no longer provide the right of individuals
> to be left alone form the mericiless eye of an outrageous police
> state, that that nation may be a better place for those who are not
> individuals. Thye are challenged by the 10 percent who strive and
> as always prefer not to think of their ordinariness or laziness,
> and all the cameras and spycams of that hideously oppressive state
> cannot create a vibrant society that moves forward. Anyway, if it
> was such a swell place, why do they need the spycams? The whole place
> is getting really creepy.

Friday Outlook: Commodities, Global Markets

This has been going on since the beginning in 1620. (Forget about 1776, it was already ancient history by then.)

The problem is that occasionally things get out of hand. Don't forget Europe in 1914.

It is said by most historians that virtually no one predicted either the French Revolution or World War I. We who lived through the collapse of the Soviet Union have to admit that we did not predict that collapse either, even if we were convinced that Gorbachev would create a China-like synthesis of communism and capitalism.

Get real. It is not possible for governments to control and manipulate markets forever and that is why, finally, the Soviet Union collapsed.

America will either reform the way Britain has done throughout her history and progress with non-violent political revolutions, or have a violent revolution the way so many other countries have done.

Let's hope our Anglo Saxon traditions prevail.

Friday Outlook: Commodities, Global Markets

Thanks for posting what almost no one wants to hear (only TWO plus points and one of them was mine!?)

However, it really IS true that the government can't control markets forever.

I suppose some people in the ruling class have been lying to us, and to themselves, for so long about the virtues of free markets that they cynically and hypocritically manipulate them without even feeling guilty.

However supply/demand and other irreducible economic facts determine prices, sooner or later.

Massive market distortions, yes. Crimes, yes. But keeping fingers in dykes forever, no.

On May 29 07:50 PM Sober Realist wrote:

> Manipulation: How Markets Really Work
> by Stephen Lendman
> Friday, 29 May 2009
>
> The government's visible hand and insiders control markets and manipulate
> them up or down for profit - all of them, including stocks, bonds,
> commodities and currencies. Wall Street's mantra is that markets
> move randomly and reflect the collective wisdom of investors. The
> truth is quite opposite. The government's visible hand and insiders
> control markets and manipulate them up or down for profit - all of
> them, including stocks, bonds, commodities and currencies.
>
> It's financial fraud or what former high-level Wall Street insider
> and former Assistant HUD Secretary Catherine Austin Fitts calls "pump
> and dump," defined as "artificially inflating the price of a stock
> or other security through promotion, in order to sell at the inflated
> price," then profit more on the downside by short-selling. "This
> practice is illegal under securities law, yet it is particularly
> common," and in today's volatile markets likely ongoing daily. <br/>
>
> Why? Because the profits are enormous, in good and bad times, and
> when carried to extremes like now, Fitts calls it "pump(ing) and
> dump(ing) of the entire American economy," duping the public, fleecing
> trillions from them, and it's more than just "a process designed
> to wipe out the middle class. This is genocide (by other means) -
> a much more subtle and lethal version than ever before perpetrated
> by the scoundrels of our history texts."
>
> Fitts explains that much more than market manipulation goes on. She
> describes a "financial coup d'etat, including fraudulent housing
> (and other bubbles), pump and dump schemes, naked short selling,
> precious metals price suppression, and active intervention in the
> markets by the government and central bank" along with insiders.
> It's a government-business partnership for enormous profits through
> "legislation, contracts, regulation (or lack of it), financing, (and)
> subsidies." More still overall by rigging the game for the powerful,
> while at the same time harming the public so cleverly that few understand
> what's happening.
>
> Market Rigging Mechanisms - The Plunge Protection Team
> On March 18, 1989, Ronald Reagan's Executive Order 12631 created
> the Working Group on Financial Markets (seekingalpha.com/symbo...)
> commonly known as the Plunge Protection Team (seekingalpha.com/symbo...).
> It consisted of the following officials or their designees:
> -the President;
> -the Treasury Secretary as chairman;
> -the Fed chairman;
> -the SEC chairman; and
> -the Commodity Futures Trading Commission chairman.
> read more....
> baltimorechronicle.com...

Housing's Big Picture Isn't Pretty

Foreigners (from many countries) will buy more houses (as Carey_Jim's humorous post tried to say?)

We are now living in a global economy. We have labor immigration and labor outsourcing and soon we could have an international (upper) middle class as well.

If American cities remain livable, wealthy foreigners from the Middle East, Mexico, South America, Europe, Russia, China, India and other places will step into the breach and buy houses that Americans can't afford.

They will send their children to private schools but they will pay taxes, mostly for a strong police force.

I can't predict the future any more than any one else can so I should change all of the 'wills' to 'mights' but if it does happen it will be a Black Swan event, obviously because everyone probably thinks it is impossible..
On May 25 12:40 PM Sober Realist wrote:

> "Look for a monster housing rally around the corner as the government
> announces a the Mandatory Second Home Purchase Program for Americans
> deemed to be carrying insufficient levels of debt." --- Dean M.<br/>
>
> Simply put, when the price of a house far exceeds the average annual
> income of the mainstream buyer, then that price must drop to a wage-sustainable
> level.
>
> Excellent point by LilBob:
> "One thing I find interesting is that if you look at the writings
> of some early 20th century economists such as Pigou and Hobson, conditions
> that required urban workers to spend more than 20% of their disposable
> income on housing were considered significant contributors to poverty.
> Nowadays, someone who only spends 20% of their salary on housing
> is considered to be doing relatively well."

Housing's Big Picture Isn't Pretty

When are you going to buy a house?


On May 25 11:27 AM china man wrote:

> that's xie xie to you.

Housing's Big Picture Isn't Pretty

Unions


On May 24 07:06 PM Lightway wrote:

> Interest rates (and their effect on housing prices) do not exist
> in a vacuum. We have big unemployment, bloated home inventory (too
> much supply), and a major price correction occurring.
>
> The basic equation is that you can only afford a house that is 3
> times gross monthly income. There is no amount of funny money that
> can alter this basic equation. In many places, this equation is still
> entirely out of whack, with x4-6 or higher incomes required to purchase
> certain houses. During the height of the bubble, it was sometimes
> as much as 9. This was leverage to the extreme, and it still needs
> to correct itself. Prices have a long way to correct themselves.
> Just do a quick Redfin search and then check the price history on
> many of these houses, you will see original houses in 2000 selling
> for 2-3 times the original price.
>
> To take it one step further, when those interest rates DO go up (which
> they will have to eventually), home ownership affordability gets
> even tougher, especially with all the ARM-like products resetting
> based on the interest rates.
>
> Schiff gets it, when he mentions that inflation has the possibility
> of putting an artificial floor on pricing. Personally I don't see
> this as something that will help affordability, as wages, which have
> already been flat for years, will not have any inflation protection
> in them, and will continue to fall behind.
>
> Great article.
>
> On May 24 02:09 PM Stone Fox Capital wrote:

Preview from Europe: Green Shoots with Roots

Too many people have made too much money chasing too many bubbles to listen to reason.

The common belief is that perception is reality and, therefore, that reality is created by people using words.

When you present negative ideas, you are perceived as trying to talk markets down, presumably so your portfolio will grow.

Those of us who believe that the real world exists, independent of what human beings think about it, listen to reason and use reason to examine the world of facts that exist, around us and in spite of what we think of them.

History proves that we are in the minority but that we are right in the long run.

But people will blow bubbles and then chase them, for ever.

Orgy of Optimism in the Markets

As I said before:

There is an entire generation of traders, both in equities and real estate, who have only seen, with minor corrections, markets moving up.

Assuming that these people began trading and flipping real estate at ages 25-30, they are now approaching their mid fifties and and early sixties and therefore they are mature and influential traders and financial advisers.

How can we expect an entire generation of people who have made enormous profits from rising markets to suddenly turn into bears?

It is the reverse of the generation of our fathers and grandfathers who bought everything with cash if they bought anything at all.

These kinds of habits only die when those who have them die.

But whatever you think about investor psychology, it can't change the fundamentals in the long run, and all the statistical maneuvering in the world can't change fundamentals.

The only way to change this is to suspend the laws of economics.

The two common methods of suspending economic laws are called fascism and socialism and socialism will never happen in America, in spite what the Yahoos say.

I prefer functioning economic laws and a bad economy to fascism.

Sectors Indicate Correction, Not Reversal

There is an entire generation of traders, both in equities and real estate, who have only seen, with minor corrections, markets moving up.

Assuming that these people began trading and flipping real estate at ages 25-30, they are now approaching their mid fifties and and early sixties and therefore they are mature and influential traders and financial advisers.

How can we expect an entire generation of people who have made enormous profits from rising markets to suddenly turn into bears?

It is the reverse of the generation of our fathers and grandfathers who bought everything with cash if they bought anything at all.

These kinds of habits only die when those who have them die.

But whatever you think about investor psychology, it can't change the fundamentals in the long run, and all the statistical maneuvering in the world can't change fundamentals.

The only way to change this is to suspend the laws of economics. The two common methods of suspending economic laws are called fascism and socialism and socialism will never happen in America, in spite what the Yahoos say.

I prefer functioning economic laws and a bad economy to fascism.



The post World War II period saw an enormous American prosperity in the face of all of the economic pessimism that was caused by the Great Depression and World War II.

The American economic decline will occur in the face of all of the irrational exuberance produced by so much speculative profit for the last couple of generations.

But economic fundamentals can't be denied.

Warnings from the President: This Is a Bear Market Rally

Nixon was associated with the far right in those days but compared with today's political leaders he looks like a lefty.

If he were President today, does anyone doubt that Tricky Dick would nationalize General Motors or Bank of America?

Nationalization is an political-economic debate which I don't care to pursue now but I don't think it is healthy that America has moved so far to the right that it is off the table.

As many have pointed out, and not just our contemporaries, some industries are necessary for national defense. It isn't simply a question of good or bad business practices.

But, as many have pointed out on this forum, the oligarchs are in control and allow virtually no input from intellectuals and other geeks.

Has Natural Gas Hit Bottom?

Clears throat. Can't say anything useful.

Exits left.

Thursday Outlook: Commodities, Global Markets

It's about sound bites and advertisements not fundamentals.

Reason and reality checks are irrelevant until the inevitable crash when almost everyone gets trampled on the way to the exits, and at which time the blame game starts.

America is NOT Nazi Germany but the history of Hitler and the Nazis teaches us that the most reasonable people, who warned that Hitler and the Nazis were criminals and thugs, were ignored from 1933 until 1943 (Stalingrad) at which time it became clear that the Nazi party would go down in flames, in a Gotterdamerung of defeat.

But even after Germany was buried in rubble the most prominent Nazis came back to rule post World war II Germany and the leaders of the Gestapo (the Nazi secret police) were enlisted by the American government to transform the bungling, ineffective American OSS into the 'mighty' CIA.

After all the economic bubbles in the United States since the end of the Vietnam war it is hard to blame Joe the investor for seeing Wall Street as a giant money tit in the sky that will never stop delivering.

Even when the crash comes, and whatever form it takes, the same American hucksters and advertising machine will proclaim that huge profits will be made cleaning up the rubble.

That's the way it is in Las Vegas, America. It's about sound bites and advertisements.

What desert? What water shortage?

Blue Skies Forever.

On 'Rock Bottom' Housing Prices

If prices fall then piggies who built their houses out of brick and saved their money for a rainy day will have more buying power.

Piggies who built their houses out of wood and spent about as much as they saved will gain about as much as they lose from deflation.

Piggies who built and bought straw houses, and spent their profits on wine, women and song will have hangovers.

Straw house piggies are making a lot of anti-inflation noises these days. Oink, oink.

Where Is the Economy Headed? Four Bearish Views

World War I saw 40 million killed in the war and 50 million killed by a tiny microorganism too small to be seen by any microscope of 1918. It was called the flu virus.

Pandemics, earthquakes, hurricanes, tornadoes, wars, revolutions, economic catastrophes and other acts of God occur.

It's not pessimism speaking, its history.

I'm not predicting anything, just looking backwards.

On May 11 03:58 PM Cetin Hakimoglu wrote:

> So much doom and gloom.....

McDonald's Chews Up Competition with April Sales Surge

During steep recessions-depressions people economize by eating out less.

Fast food chains can cannibalize each others profits to increase sales but customers will sooner or later figure out that they can make a slow food hamburger for about 1/3 the price of a fast food hamburger and total sales will fall.