USA and the Global Systemic Crisis 2008-2010 ~ A Collective Discussion

[101Armorer]

Supposedly, if one can understand these 3 stages of currency crisis, one may overcome the growing global crisis. I'm not sure if that's even possible given the depth of this crisis that seems to have no end in sight, but you can be the judge for yourself. Keep in mind that this class 101 observation of it is done without factoring great wars. Of which is on the horizon. IMHO



http://www.moneyandmarkets.com/the-big- ... 6?FIELD9=2

Following the Worst Crisis Since the Great Depression

by Bryan Rich 06-26-10


Three Stages of a Currency Crisis

Stage #1: Loss of Confidence

The number one cause of a currency crisis is when investors flee a currency because they expect it to be devalued.


Stage #2: Herding

When it’s thought that investors are moving out of a currency, others follow. This is typical “herding” psychology.


Stage #3: Contagion

The next step is contagion. And contagion is a phenomenon in which a currency crisis in one country triggers crisis in other countries with similar weaknesses.

[bird]

Supposedly, if one can understand these 3 stages of currency crisis, one may overcome the growing global crisis. I'm not sure if that's even possible given the depth of this crisis that seems to have no end in sight, but you can be the judge for yourself. Keep in mind that this class 101 observation of it is done without factoring great wars. Of which is on the horizon. IMHO



http://www.moneyandmarkets.com/the-big- ... 6?FIELD9=2

Following the Worst Crisis Since the Great Depression

by Bryan Rich 06-26-10


Three Stages of a Currency Crisis

Stage #1: Loss of Confidence

The number one cause of a currency crisis is when investors flee a currency because they expect it to be devalued.


Stage #2: Herding

When it’s thought that investors are moving out of a currency, others follow. This is typical “herding” psychology.


Stage #3: Contagion

The next step is contagion. And contagion is a phenomenon in which a currency crisis in one country triggers crisis in other countries with similar weaknesses.

of course you also have the underlying contagion which may be debt concerns or an attack by hedge funds. soros attacked the pound in the 90's iirc. it has been said the greece problem is the result of a hedge fund attack.

but the format is logical. classical and neo-classical economists ignore behavioral economics as well as minsky. they ignore the impact of money thinking it is simply neutral and a store of value. it is not.

that is one reason more that free marketists are wrong. everywhere that friedmanism has been tried has resulted in hot capital flows generally out of a country as a direct result of the austerity programs imposed by friedmanism. iirc, there was a quite attributed to him where he says that he is not an evil man. no, he was worse that that. he was a blind, arrogant man who thought he understood when he didn't.

[101Armorer]

of course you also have the underlying contagion which may be debt concerns or an attack by hedge funds. soros attacked the pound in the 90's iirc. it has been said the greece problem is the result of a hedge fund attack.

but the format is logical. classical and neo-classical economists ignore behavioral economics as well as minsky. they ignore the impact of money thinking it is simply neutral and a store of value. it is not.

that is one reason more that free marketists are wrong. everywhere that friedmanism has been tried has resulted in hot capital flows generally out of a country as a direct result of the austerity programs imposed by friedmanism. iirc, there was a quite attributed to him where he says that he is not an evil man. no, he was worse that that. he was a blind, arrogant man who thought he understood when he didn't.

Yeah.... free marketing has gone upside down bonkers driven by our mad CEOs and Wall Streeters, while consumers took several yrs to figure out that there's no more bottom left to stand on... only straw over pit holes. Now, they are sensing what they should have been sensing in 2007. Confidence is out to lunch. DUH!






http://www.businessinsider.com/consumer ... une-2010-6
Consumer Confidence Collapses Massively In June

Vincent Fernando, CFA | Jun. 29, 2010,
shopping shoppers retail returns line black friday sales upset sadThe Conference Board's consumer confidence index for June dropped sharply to 52.9, which is a horrible underperformance of expectations given that consensus had forecast a reading of 62.

It also disappoints bulls after three consecutive months of improvement previously.

To some degree a pullback was expected as the economy has been long forecast to slow as we enter the second half of 2010, but this shift in consumer sentiment has clearly been surprisingly severe.

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http://www.telegraph.co.uk/finance/mark ... -data.html
Markets tumble on poor Chinese, US economic data
The FTSE slid to a 10-month low as signs of a global economic slowdown hit markets around the world.

Published: 4:06PM BST 29 Jun 2010

[bird]

of course you also have the underlying contagion which may be debt concerns or an attack by hedge funds. soros attacked the pound in the 90's iirc. it has been said the greece problem is the result of a hedge fund attack.

but the format is logical. classical and neo-classical economists ignore behavioral economics as well as minsky. they ignore the impact of money thinking it is simply neutral and a store of value. it is not.

that is one reason more that free marketists are wrong. everywhere that friedmanism has been tried has resulted in hot capital flows generally out of a country as a direct result of the austerity programs imposed by friedmanism. iirc, there was a quite attributed to him where he says that he is not an evil man. no, he was worse that that. he was a blind, arrogant man who thought he understood when he didn't.

Yeah.... free marketing has gone upside down bonkers driven by our mad CEOs and Wall Streeters, while consumers took several yrs to figure out that there's no more bottom left to stand on... only straw over pit holes. Now, they are sensing what they should have been sensing in 2007. Confidence is out to lunch. DUH!






http://www.businessinsider.com/consumer ... une-2010-6
Consumer Confidence Collapses Massively In June

Vincent Fernando, CFA | Jun. 29, 2010,
shopping shoppers retail returns line black friday sales upset sadThe Conference Board's consumer confidence index for June dropped sharply to 52.9, which is a horrible underperformance of expectations given that consensus had forecast a reading of 62.

It also disappoints bulls after three consecutive months of improvement previously.

To some degree a pullback was expected as the economy has been long forecast to slow as we enter the second half of 2010, but this shift in consumer sentiment has clearly been surprisingly severe.

*************************************************************************************
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*************************************************************


http://www.telegraph.co.uk/finance/mark ... -data.html
Markets tumble on poor Chinese, US economic data
The FTSE slid to a 10-month low as signs of a global economic slowdown hit markets around the world.

Published: 4:06PM BST 29 Jun 2010

confidence is the key. debt is not a problem per se until confidence unravels. the entire financial system and, indeed, capitalism are founded upon a ponzi scheme which is a combination of fractional reserve banking, money created from nothing (interest) and debt financing. if the populace loses confidence it is very difficult to restore it. credit locks up and you have what we have now. deficit spending while supporting corporate profits also attempts to inject liquidity into the system to free up lending. unfortunately banks still are not lending. to make matters worse the loss of manufacturing base means that the companies that are left are small to medium and their credit is likely to not be as good or they do not have the pull with bankers. it is a vicious circle.

we also have this little tidbit regarding the baltic dry index:

http://www.businessweek.com/news/2010-0 ... rplus.html

[101Armorer]

we also have this little tidbit regarding the baltic dry index:

http://www.businessweek.com/news/2010-0 ... rplus.html

Now I wonder if this pushes China into pursuing minerals in Afghanistan? Is there ore in Afghanistan? Or does it push China into other ore deposit countries at some level of economic panic?

From your article:

June 30 (Bloomberg) -- Commodity shipping costs measured by the Baltic Dry Index extended their longest losing streak in almost five years as an expanding fleet overwhelmed weakening demand for grain, coal and ore carriers.

Imports of coal and iron ore by China, the world’s biggest user of the commodities, fell for two consecutive months, customs data show. Grain shipments from South America slowed, leaving shipping lines with “the full force of vessel supply,” Martin Sommerseth Jaer and Erik Nikolai Stavseth, Oslo-based analysts with Arctic Securities ASA, said in a report.

[bird]

we also have this little tidbit regarding the baltic dry index:

http://www.businessweek.com/news/2010-0 ... rplus.html

Now I wonder if this pushes China into pursuing minerals in Afghanistan? Is there ore in Afghanistan? Or does it push China into other ore deposit countries at some level of economic panic?

From your article:

June 30 (Bloomberg) -- Commodity shipping costs measured by the Baltic Dry Index extended their longest losing streak in almost five years as an expanding fleet overwhelmed weakening demand for grain, coal and ore carriers.

Imports of coal and iron ore by China, the world’s biggest user of the commodities, fell for two consecutive months, customs data show. Grain shipments from South America slowed, leaving shipping lines with “the full force of vessel supply,” Martin Sommerseth Jaer and Erik Nikolai Stavseth, Oslo-based analysts with Arctic Securities ASA, said in a report.

imo, china will pursue materials wherever they can. oil, minerals, natural gas it matters not. unfortunately for them they have bought into the deathstyle at the tipping point of the confluence of population pressure, political/social unrest, and increasing resource scarcity.

[bird]

we also have this little tidbit regarding the baltic dry index:

http://www.businessweek.com/news/2010-0 ... rplus.html

Now I wonder if this pushes China into pursuing minerals in Afghanistan? Is there ore in Afghanistan? Or does it push China into other ore deposit countries at some level of economic panic?

From your article:

June 30 (Bloomberg) -- Commodity shipping costs measured by the Baltic Dry Index extended their longest losing streak in almost five years as an expanding fleet overwhelmed weakening demand for grain, coal and ore carriers.

Imports of coal and iron ore by China, the world’s biggest user of the commodities, fell for two consecutive months, customs data show. Grain shipments from South America slowed, leaving shipping lines with “the full force of vessel supply,” Martin Sommerseth Jaer and Erik Nikolai Stavseth, Oslo-based analysts with Arctic Securities ASA, said in a report.

imo, china will pursue materials wherever they can. oil, minerals, natural gas it matters not. unfortunately for them they have bought into the deathstyle at the tipping point of the confluence of population pressure, political/social unrest, and increasing resource scarcity.

[101Armorer]

You're correct bird..... we're seeing it now. Nations who have accelerated quickly in economic progress now faces the true barometer of economics of the 21st Century. The inflated bankrolls drowning in toxic paperwork is now coming home to roost. All that can be done is printing up more fake monopoly monies to postpone what's inevitable.... crash and burns. Banks and Wall Street have done everything that they can to absorb the free rides of bailouts / stimulus until there's no more.


http://www.elliottwavegms.com/2010/07/b ... te-losses/
Banks Continued Failure To Realise Commercial Real Estate Losses…
From http://www.mybudget360.com

The massive commercial real estate market is already plaguing the weak balance sheets of banks. It is the case that each Friday, we are likely to see one U.S. bank fail because due to high levels of commercial real estate (CRE) debt on their books. This market is likely to cause the failure of hundreds of banks and put the economy down into another real estate funk. The amount of commercial real estate transactions shows no sign of recovery in this market. And why would there be any recovery? This is an area for hotels, strip malls, condos, and other projects that usually reflect a healthy and growing economy. We do not have that and the problems embedded in CRE are going to stifle any growth for years to come.
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The market in CRE is enormous. This market is over $3.5 trillion and is likely to damage the regional banks much more deeply than larger banks that have a taxpayer safety net:
The current weakness in the economy is a realization that problems are still deep in the system. Think of how large the CRE market is. Roughly $3.5 trillion in debt secured by casinos, strip malls, empty condo projects, and other real estate that likely is underwater. Keep in mind that at one point this market was over $6 trillion in value. The CRE market looks to be valued at $3.5 trillion to $3 trillion with the same amount of loans outstanding. In other words, the market sector is underwater.

The problems with commercial real estate have shown up in prime locations like San Francisco to Chicago. These CRE debt problems are not a reflection of poor areas as we are at times led to believe. These were high flying speculative bets that were only successful as long as the pipeline to greater fools was in place. When that line quickly dried up, so did the system and all the funding that kept the game going. It was the perfect definition of a bubble.
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This is why the CRE market is the next shoe to drop and with so much debt outstanding it is going to put an incredible amount of pressure on already weak balance sheets. What is even worse is that the U.S. taxpayer is going to be likely on the hook for all these speculative bad bets. If you haven’t noticed the bailouts don’t do much for the real economy except shoring up the investment banks on Wall Street.

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Throw in CRE debt, troubled residential mortgages, defaults with credit cards, auto repos, and all other debt instruments and you can understand why the chart above is spiking. But think of it this way; the credit card market is approximately $850 billion in debt outstanding while CRE debt is up to $3.5 trillion.

[bird]

You're correct bird..... we're seeing it now. Nations who have accelerated quickly in economic progress now faces the true barometer of economics of the 21st Century. The inflated bankrolls drowning in toxic paperwork is now coming home to roost. All that can be done is printing up more fake monopoly monies to postpone what's inevitable.... crash and burns. Banks and Wall Street have done everything that they can to absorb the free rides of bailouts / stimulus until there's no more.


http://www.elliottwavegms.com/2010/07/b ... te-losses/
Banks Continued Failure To Realise Commercial Real Estate Losses…
From http://www.mybudget360.com

The massive commercial real estate market is already plaguing the weak balance sheets of banks. It is the case that each Friday, we are likely to see one U.S. bank fail because due to high levels of commercial real estate (CRE) debt on their books. This market is likely to cause the failure of hundreds of banks and put the economy down into another real estate funk. The amount of commercial real estate transactions shows no sign of recovery in this market. And why would there be any recovery? This is an area for hotels, strip malls, condos, and other projects that usually reflect a healthy and growing economy. We do not have that and the problems embedded in CRE are going to stifle any growth for years to come.
.
.
.
The market in CRE is enormous. This market is over $3.5 trillion and is likely to damage the regional banks much more deeply than larger banks that have a taxpayer safety net:
The current weakness in the economy is a realization that problems are still deep in the system. Think of how large the CRE market is. Roughly $3.5 trillion in debt secured by casinos, strip malls, empty condo projects, and other real estate that likely is underwater. Keep in mind that at one point this market was over $6 trillion in value. The CRE market looks to be valued at $3.5 trillion to $3 trillion with the same amount of loans outstanding. In other words, the market sector is underwater.

The problems with commercial real estate have shown up in prime locations like San Francisco to Chicago. These CRE debt problems are not a reflection of poor areas as we are at times led to believe. These were high flying speculative bets that were only successful as long as the pipeline to greater fools was in place. When that line quickly dried up, so did the system and all the funding that kept the game going. It was the perfect definition of a bubble.
.
.
.
This is why the CRE market is the next shoe to drop and with so much debt outstanding it is going to put an incredible amount of pressure on already weak balance sheets. What is even worse is that the U.S. taxpayer is going to be likely on the hook for all these speculative bad bets. If you haven’t noticed the bailouts don’t do much for the real economy except shoring up the investment banks on Wall Street.[u]
[/u]
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Throw in CRE debt, troubled residential mortgages, defaults with credit cards, auto repos, and all other debt instruments and you can understand why the chart above is spiking. But think of it this way; the credit card market is approximately $850 billion in debt outstanding while CRE debt is up to $3.5 trillion.

stimulus cannot do much due to the point in history, imo. since manufacturing has been abandoned stimulus cannopt create or push forward manufacturing jobs. they simply are not there. if we grant that the larger protion of those employed is in the small to medium company then we must grant that stimulus won't work there as they are likely caught, imo, in a cash flow crunch. most often such companies lack the deep pockets required to be markedly successful and provide the boost in terms of employment. they also lack the ability to pay the wages necessary to stimulate consumption by workers.

this is key. one is reading "the great foinancial crisis: causes and consequences" by magdoff and foster. what we have is sympotomatic of a mature capitalist economy. it is also symptomatic of what economics is which is political economics. it is critical that economics be viewed as occurring between classes. not because of the old chestnut that one party is playing at class warfare but because the top income groups seek to increase their position at the expense of those below. it is always about class warfare.

[101Armorer]

Class warfare plus being duped by govt Cons for their own personal agendas. Absolutely!

Check out this revealing article that I posted in our sister forum that lists the 50 stats about our economic situation. WOW! Talk about a wake up call.... just go thru those 50 facts!!!!


50 Statistics About The U.S. Economy That Are Almost Too Crazy To Believe
http://www.airamericaplace.com/index.ph ... ntry293858





Then, check out these 3 myths: Dupe city.

http://www.marketwatch.com/story/the-th ... 2010-06-29
Myth 1: Unemployment is below 10%
What nonsense that is. The official jobless rate, at 9.7%, is a fiction and should be treated as such. It doesn't even count lots of unemployed people. The so-called "underemployment" or U-6 rate is an improvement: For example it counts discouraged job seekers, and those forced to work part-time because they can't get a full-time job. That rate right now is 16.6%, just below its recent high and twice the level it was a few years ago

Myth 2: The markets are panicking about the deficit
the rates on U.S. bonds have been plummeting recently. The yield on the 30-year Treasury bond down to just 4%. By historic standards that's chickenfeed. Panicked? The bond markets are practically snoring.

They aren't seeing inflation either. On the contrary, they're saying it will average just 2.3% a year over the next three decades. That's the gap between the interest rates on inflation-protected Treasury bonds and the rates on the regular bonds. By any modern standard the forecast is low. Instead of worrying about inflation, some are starting to worry about something even more dangerous: deflation, or falling prices.


Myth 3: The U.S. is sliding into "socialism"
Numbers published by the Federal Reserve a few weeks ago show that corporate profit margins have just hit record levels. Indeed. Andrew Smithers, the well-regarded financial consultant and author of "Wall Street Revalued," calculates from the Fed's latest Flow of Funds report that corporate profit margins rocketed to 36% in the first quarter. Since records began in 1947 they have never been this high. The highest they got under Ronald Reagan was 30%.

Meanwhile, federal spending, about 25% of the economy this year, is expected to fall to about 23% by 2013. In 1983, under Ronald Reagan, it hit 23.5%. In the early 1990s it was around 22%. Some socialism.

What about the rest of the budget? It's jumped from around 7% of GDP a few years ago to about 10% now. Out of control? It's been in the 6% to 9% range for decades. It's forecast to fall to about 8% again in a few years.

[101Armorer]

The IMF took a bite out of Obama and then Obama took a bite right back out of the IMF.


http://www.washingtonpost.com/wp-dyn/co ... 06116.html

The United States recently opened itself to the most intense scrutiny yet by the International Monetary Fund, and on Thursday was offered a bitter pill when the agency criticized some well-defended aspects of American culture -- cheap fuel, subsidized housing, and a government retirement check.

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The U.S. reports outline a number of problems facing the American economy as it emerges from its worst economic downturn since the Great Depression -- lingering unemployment, a likely permanent loss of output, an expected wave of defaults on commercial real estate deals that could damage local and regional banks -- and include a long list of recommendations for U.S. officials and regulators.


The document did not go over well with the Obama administration, which has made a strong commitment to coordinate global economic policy within the G-20 and agreed with the other members at the recent meeting in Toronto to allow country-by-country "name and shame" reports to be submitted by the IMF when the group gathers for periodic summits.

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An administration official said the IMF's conclusions were too harsh.

[101Armorer]

The inside story about the IMF. This is what they are doing. No surprise to many here.



http://globalresearch.ca/index.php?context=va&aid=20056

The US Treasury and the Federal Reserve are Manipulating the Gold Market

by Bob Chapman

We have found it interesting that the IMF prohibits members from tying their currencies to gold. All of you out there who believe the IMF’s, SDRs, Special Drawing Rights, will be gold backed are mistaken. This historical operating position was further proven when on August 15, 1971 the US closed the gold window. This was the advice Mr. Nixon received from Paul Volcker, who was an early member of the Trilateral Commission and is an Illuminist. Volcker has also been a leader against the US using gold in its monetary policy. Since 8/15/71 there has been an official war against gold by the elitists behind the curtain. It was that seminal event that essentially changed the future of America and the world. At that time US debt was just short of $500 billion. Today short-term debt is $14 trillion and long-term debt is $105 trillion. The engineer of the failure of the US banking system and the failure of the dollar and the rejection of it is at the feet of Mr. Volcker. What he has done to America at the behest of his Illuminist masters is reprehensible. That was eventually followed by the elimination of Glass Steagall and the looting and the collapse of our financial system. This is the result of the corruption of our system.

The result of this treachery is the coming with the complete collapse of the stock market and the end of real estate as an investment. The powers that be have destroyed a once great nation. Everywhere you look, budgets of towns, cities, counties, states and governments are in a shambles. The entire world is becoming their world. You have no doubt seen the elitists’ answer, which is we all switch to the SDR, another fiat currency, devalue all currencies versus the SDR and allow defaults among nations, just as we predicted would happen, although not in this particular way. The solutions being proffered are not solutions at all, only different methods of paying back the bankers and keeping them in business.

That keeps the leaders of the system solvent and throws the debt on the citizen. Mind you, these same bankers were the ones who destroyed our system – or better yet their system – in order to bring about world government. It should not be surprising that gold has been the investment leader.

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These financial and economic matters are very perplexing and social and political issues complicate them. The theory of corporatist fascism, that is so prevalent in America today, has spawned an economic policy of centralism, debt and monopoly driven by the privately owned Federal Reserve, banking and Wall Street. The tune is borrow and go deeper into debt to the bankers until America is bankrupt. This last chapter will be kicked off with more taxes and more fiscal debt. This will be accompanie4d by massive unemployment and eventually a deflationary depression. The unemployment problem is being deliberately allowed to worsen both by the administration and Congress, which won’t address the real reasons our nation is in such a state of failure. What else can you call the loss of 5 million jobs from free trade, globalization, offshoring and outsourcing, which is still going on and the loss of 8.4 million via recession/depression. That is 13.4 million jobs supposedly being filled by a birth/death model and service and retail jobs with little remuneration. Those who control our government, politicians and our economy are about to kick Americans when they are down. Those who control government and their emissaries loathe capitalism and love collectivism. The average American so disgusts our controllers that, if they could they would remove 80% from society.

[101Armorer]

Meanwhile, back in Ireland.... things not going so well.



Irish Nationwide: 'We will collapse if you do nothing'

Saturday July 17 2010

IRISH Nationwide told the Department of Finance the building society would collapse within days if the Government "did nothing", shortly before it announced the State guarantee.

However, the Government was already planning the possible nationalisation of the building society.

Documents released yesterday show that on September 13 -- two weeks before the blanket bailout was introduced -- it had already put in place a 25-point contingency plan for the nationalisation of the society.

[101Armorer]

Meanwhile, back in the US.......



http://online.wsj.com/article/SB1000142 ... 62256.html
* JULY 19, 2010, 11:50 A.M. ET

Home-Builder Confidence Drops [/b]

BY JEFF BATER AND VICTORIA MCGRANE

Rattled by economic conditions and the expiration of a government subsidy for home buyers, U.S. builder confidence in July sank to its lowest level in more than a year, casting doubt on the housing sector's recovery.

The National Association of Home Builders' monthly gauge of confidence in new-home sales fell two points to 14, the lowest level since April 2009.

The bigger-than-expected drop marked the second ...

[101Armorer]

Meanwhile.... back at the banksters.... while more smaller banks bites the dust while too big to fail banks grows larger in their corruption.....


http://rawstory.com/news/afp/US_bank_fa ... 42010.html
US bank failures reach 108 for 2010
AFP
Published: Saturday July 24, 2010

Seven more local and regional banks have closed their doors in the United States, bringing the total number of US bank failures to 103 this year, federal bank regulators announced.

The numbers released by the Federal Deposit Insurance Corporation indicate that the failure rate in 2010 was quicker that the year before.