David Westerfield

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Category: Economics Page 3 of 8


China Risks Moving World Into Greater Recession

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On November 18, 2009

In Business, Economics

China has now become the biggest risk to the world economy – Ambrose Evans-Pritchard, (bracketed insertions and emphasis mine)

These are headlines you won’t ever read, that to me are worthy of true news alerts.

“By holding the yuan to 6.83 to the dollar to boost exports, Beijing is dumping its unemployment abroad – ‘stealing American jobs’, says Nobel laureate Paul Krugman. As long as China does it, other tigers must do it too.

Western capitalists are complicit, of course. They rent cheap workers and cheap plant in Guangdong, then lobby Capitol Hill to prevent Congress doing anything about it. This is labour arbitrage.

At some point, American workers will rebel. US unemployment is already 17.5pc under the broad ‘U6‘ gauge followed by Barack Obama [the same gauge used to determine unemployment during the Great Depression if that is any indicator of where things actually stand]. Realty Track said that 332,000 properties were foreclosed in October alone. More Americans have lost their homes this year than during the entire decade of the Great Depression. A backlog of 7m homes is awaiting likely seizure by lenders. If you are not paying attention to this political time-bomb, perhaps you should.”

It’s worth noting that Evans-Pritchard is known for making overstatements, though he has been right most of the time to be sure. However, these numbers are not overstatements.

Obama on US Debt

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On November 18, 2009

In Economics, Politics

Obama: Too much debt could fuel double-dip recession – Reuters.com

Our Debt as it Stands Now – TreasuryDirect.gov

“‘It is important though to recognize if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the U.S. economy in a way that could actually lead to a double-dip recession,’ [President Obama] said.

Hello … The Democrats are the one’s with these outrageous policies, bailouts, massive government spending, health care expenditures, the very one’s looking to expand our debt way beyond where it is now. On top of that, President Obama himself has been a huge backer of these policies, fighting tooth and nail, as well as campaigning, to make sure they are passed.

Is he back-peddling now on all the spending? I mean I hope he is, don’t get me wrong, because we need to reverse this stuff or the economy is going to get even worse. I would applaud him for doing so. It just makes you wonder what the Chinese are saying to him on his trip behind the scenes, or if he’s just talking out of the other side of his mouth. And I wonder if what they are saying to him will make any impact, if they are making economic threats of some nature. Interesting development … just trying to make sense of all of this, because, well, it doesn’t.

Update:

Senate Health Bill Totals $849 Billion, CBO Estimates – FOXNews

Russia Today with Gerald Celente on the Economy

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On November 17, 2009

In Business, Economics, Video

Gerald Celente discusses the current status of our economy with Russia Today. In posting this, it is not an attempt at fear-mongering, but simply to point out what needs to be heard so we elect leaders who know what they’re doing to get us out of this. Frankly, even most Republicans don’t seem to understand what to do either. As one guy said recently on a blog I read, “First we need to elect competent leaders who know how the machine of politics and economics works, and then we’ll talk about issues.”

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Phony GDP Growth – Peter Schiff

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On November 6, 2009

In Economics, Video

The Wall Street Crisis May Be Over, But The Real Economic Crisis Still Looms

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On October 15, 2009

In Business, Economics, Video

(Update: to be fair, Bank of America did take a hit this past quarter)

In order to create incentive and get consumers’ as well as investors’ confidence back up to levels before the financial crisis started, it seems the media and their overlords, whoever they may be (I personally think Goldman, JPMorgan, BofA, et al. :] ), are intent on continuing to mask the reality of the actual crisis in the housing market and the broader market that is getting worse and apparently far from over, where there is an increasing amount of pain and hurt; something those very banks helped create and are profiting from now.

Case in point: foreclosures for the third quarter versus foreclosure filings year over year.

“The number of households caught up in the foreclosure crisis rose more than 5 percent from summer to fall as a federal effort to assist struggling borrowers was overwhelmed by a flood of defaults among people who lost their jobs.”

Now while the above is certainly a true number and an accurate reading of the number of actual foreclosures for the third quarter, the reality going on behind the scenes can be seen in this article, which has come out on the same day as the last article:

“U.S. foreclosure filings climbed to a record in the third quarter as lenders seized more properties from delinquent borrowers, according to RealtyTrac Inc.

A total of 937,840 homes received a default or auction notice or were repossessed by banks, a 23 percent increase from a year earlier, the Irvine, California-based seller of default data said today in a report. One out of every 136 U.S. households received a filing, the highest quarterly rate in records dating to January 2005.”

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Discussion of a Financial Coup D’Etat on our Economy … on PBS

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On October 14, 2009

In Business, Economics, Politics

http://www.pbs.org/moyers/journal/10092009/watch.html

(For the record, I do not necessarily agree with every view in this interview. As far as Moore is concerned, I agree with him concerning the assessment of the problems, that bankers (though I would add the government intertwined with the bankers) have created the problems. But I do not agree with his assessment that capitalism, as a theory, is the problem that perpetuated this crisis … bankers and big government are the problem.)

It stunned me this was aired on PBS with Bill Moyers, of all places: http://www.pbs.org/moyers/journal/10092009/watch.html … really worth watching. These are not some right-wing, gun-slingin,’ militia crazies from the boondocks. In this 20 minute interview, former IMF Chief Economist Simon Johnson and Rep. Kaptur (D-OH) discuss the likelihood that a financial coup d’etat has taken place in our economy. Very fascinating and startling. I never thought I would be hearing these things coming from the likes of PBS with Bill Moyers. Glenn Beck? Sure, you would expect that. But PBS? The conversation in the financial industry is taking a major turn now.

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Dumping the Dollar in the Middle East, Russia, China, Japan, and France?

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On October 6, 2009

In Business, Economics, Video

From the Independent: The demise of the dollar:

“In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

“Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

“‘These plans will change the face of international financial transactions,’ one Chinese banker said. ‘America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate.'”

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Government Action Creating Larger Moral Hazard Than Before Crisis

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On September 24, 2009

In Economics, Politics

Ambrose Evans-Pritchard on the Real Cause of the Crisis

By

On September 23, 2009

In Business, Economics

Germany declares economic war

“… Banks did not cause this global crisis. Governments around the world caused the crisis by forcing down the price of credit (Greenspan, Bank of Japan, and ECB on short rates: China et al on long rates, by flooding the global bond market) far too low for many years, encouraging debt. Banks were the instruments, not the cause. That is an elementary point that many people … still fail to understand.” – Ambrose Evans-Pritchard

Commercial Real Estate Watch

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On September 18, 2009

In Business, Economics

“In order to sort through the disaster that is Wells Fargo’s commercial loan portfolio, the bank has hired help from outside experts to pour over the books… and they are shocked with what they are seeing. Not only do the bank’s outstanding commercial loans collectively exceed the property values to which they are attached, but derivative trades leftover from its acquisition of Wachovia are creating another set of problems for the already beleaguered San Francisco-based megabank.”

“The CRE alarmists may yet be proven right, but the delayed reckoning due to CDS [credit default swap’s] accounting means it may take a while for these shoes to start dropping.”

“The next wave of the credit crisis is about to hit — a collapse in com mercial real estate and potential explosion of bank failures. With its resources tapped out by the first wave, what should Washington do?

“Over the last year, the Federal Reserve doubled the size of its balance sheet, and took unprecedented action in monetizing government debt and extending credit to financial institutions. Now it must head off inflation and extricate itself from $5 trillion-plus in credit exposure from various bailouts. The Treasury, meanwhile, is issuing debt at the fastest pace in peacetime history.

“Now comes the next crisis. The same factors that caused the residential bubble — easy credit, lax lending standards and booming mortgage-backed-securities underwriting — also drove commercial real-estate overvaluation. But the commercial market lags the residential one by about a year, so this bubble is still popping.”

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