Photographer Detained For Taking Pics Of BP Refinery As Up To 100% Of Pensacola Area Reservations Canceled
by Zero Hedge - July 4th, 2010 11:56 pm
Courtesy of Tyler Durden
Courtesy of BP, and everyone cutting corners wherever possible, it is becoming increasingly clear that the economic impact to the gulf economy will be devastating, particularly in the tourism industry, with “some condos and hotels reporting 100 percent cancellations.” And we have still to find someone who will willingly eat shrimp without a gun at their heads… and it is not just the surging price for the crustacean as the supply plummets. Imagine just how ugly it would get if Americans were allowed to have an idea of just how bad it truly is: it appears that the recently instituted “Beyond” First Amendment, where freedom of the press now carries a $40,000 fine and/or incarceration, has seen its first casualty: “A photographer taking pictures of a BP refinery in Texas was detained by a BP security official, local police and a man who said he was from the Department of Homeland Security.” Who would have thought change you can believe in referred to the amendments to the constitution, starting with the first.
As more oil has spilled, fewer people have been willing to spend their summers at the beach.
Cancellations came in waves. One hundred cancellations were made around the second week of the spill, according to Schroeder. June 10 — the day the first tar balls hit the beaches — saw 1,000 more cancellations.
In addition, the phones have stayed ominously silent as new reservations have dried up. It’s been a week since the heaviest batch of oil hit the area, but the damage has already been done to the industry.
“It’s pretty safe to say about 75 percent of our reservations that have been on the books are gone,” Schroeder said. “Some condos and hotels are 100 percent cancelled.”
Oil cleanup has been a day-to-day process with cleanup crews working around the clock. Night cleanup has been the most effective because of the cooler weather.
“With every change of the tide, the impact is different,” said Sonya Daniel, public information manager for Escambia County. “It’s like a windshield wiper effect. There are good days and bad days. As long as the oil is still flowing, we’re going to have a chance for oil.”
Alex has been a major impact on the cleanup efforts, covering as much as 20
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What do banking crises have to do with consumption?
by ilene - July 4th, 2010 11:19 pm
What do banking crises have to do with consumption?
Courtesy of Michael Pettis, China Financial Markets
Just three days after returning to Beijing from New York, I had to leave again, this time to a series of conferences in Torino, Italy, so it is hard to do much writing for my blog, especially since I won’t spend my free time in the hotel when there is so damned much food out here that urgently needs sampling. Still, I did want to write a hurried note about a topic of conversation that came up a lot while I was in the US and even more here in Italy.
For the next several years, as Keynes reminded us in the 1930s, savings is not going to be a virtue for the world economy. It is more likely to be a vice. In order to regain growth the world desperately needs less savings and more private consumption, but I think it is not going to get nearly enough to generate growth. Why? Because in all the major economies the banking systems are largely insolvent, or about to become so, and desperately need to rebuild capital. For reasons I discuss below, this will have a large adverse impact on private consumption.
Let’s go through the major banking systems. First, the crisis started in the US and, perhaps as a consequence, US banks have already identified a lot of their problem loans and have been the most diligent about rebuilding their capital bases. They nonetheless still have a long ways to go, even though a large part of the bad loan problem was directly or indirectly transferred to the US government. By the way, transferring bad loans to the government may be good for the banks but will have the same adverse impact on consumption. I try to explain why below.
Second, in Japan, during the past twenty years the Japanese government and the beleaguered Japanese household have been tasked with keeping the banking system alive. I don’t know whether or not the banking system has finally been cleaned up, but for the purpose of my calculations it doesn’t really matter. The Japanese government has been saddled with a huge nominal debt burden, which is only bearable because interest rates are kept artificially low. Forcing down the interest that depositors and bondholders receive means that borrowers are getting (albeit not visibly) substantial amounts…
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On Why America’s 234th Birthday May Not Have Many More To Follow
by ilene - July 4th, 2010 10:27 pm
On Why America’s 234th Birthday May Not Have Many More To Follow
Courtesy of Tyler Durden
As overindebted Americans and bankrupt cities and municipalities spend millions to celebrate America’s 234th birthday (and delighted by the fact that while the rest of the world is writhing in austerity, we actually can still pretend we can afford such demonstrations of affluence) with brilliant if transitory firework displays, it behooves everyone to step away from the symbolic, and consider for a minute the circumstances surrounding this country’s declaration of independence. Since at the basis of every action there is always a monetary incentive, for a critical perspective of the economic conditions that led not only to the violent separation of the US from England, but to the subsequent creation of the Federal Reserve, the abolition of the gold standard, and all culminating with the imminent "end of the road” for the financial system as we know it, we present the following essay from reader Matthew Hinde.
I’m sure you know that the primary reason for the American War of Independence was to break from the English banking system of the time. The English Banks wanted the US government and corporations to borrow money from them in order to trade. This is really what the founding fathers of America fought against and won independence from. And so after the war had been won the US financial system was controlled, and all US Dollars were issued, by the US Government. The value of each Dollar was fixed (i.e. there was no inflation) and ALL the banks operated within the financial system. The most significant aspects were that the value of a dollar was FIXED and that the commercial banks were not empowered to create money. This is really what the English banks wanted to be in control of – the power to create money and lend it to the US entities at interest.
After the establishment of the Federal Reserve in 1913, however, the bankers finally got their way in the US. They took control of the US financial system and Fractional Reserve Banking became a reality in the US. What this means is that the financial system was essentially privatized and the commercial banks started to create money “out of thin air” by taking in deposits and then using these deposits to empower them to make loans significantly
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On Why America’s 234th Birthday May Not Have Many More To Follow
by Zero Hedge - July 4th, 2010 10:27 pm
Courtesy of Tyler Durden
As overindebted Americans and bankrupt cities and municipalities spend millions to celebrate America’s 234th birthday (and delighted by the fact that while the rest of the world is writing in austerity, we actually can still pretend we can afford such demonstrations of affluence) with brilliant if transitory firework displays, it behooves everyone to step away from the symbolic, and consider for a minute the circumstances surrounding this country’s declaration of independence. Since at the basis of every action there is always a monetary incentive, for a critical perspective of the economic conditions that led not only to the violent separation of the US from England, but to the subsequent creation of the Federal Reserve, the abolition of the gold standard, and all culminating with the imminent “end of the road” for the financial system as we know it, we present the following essay from reader Matthew Hinde.
I’m sure you know that the primary reason for the American War of Independence was to break from the English banking system of the time. The English Banks wanted the US government and corporations to borrow money from them in order to trade. This is really what the founding fathers of America fought against and won independence from. And so after the war had been won the US financial system was controlled, and all US Dollars were issued, by the US Government. The value of each Dollar was fixed (i.e. there was no inflation) and ALL the banks operated within the financial system. The most significant aspects were that the value of a dollar was FIXED and that the commercial banks were not empowered to create money. This is really what the English banks wanted to be in control of – the power to create money and lend it to the US entities at interest.
After the establishment of the Federal Reserve in 1913, however, the bankers finally got their way in the US. They took control of the US financial system and Fractional Reserve Banking became a reality in the US. What this means is that the financial system was essentially privatized and the commercial banks started to create money “out of thin air” by taking in deposits and then using these deposits to empower them to make loans significantly in excess of those deposits. I’m sure you can
…
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Europe Weekly Summary
by Zero Hedge - July 4th, 2010 9:41 pm
Courtesy of Tyler Durden
A recap and look at things to come from the ever optimistic Dane, Goldman’s Erik Nielsen
Happy Saturday,
First of all, to my many colleagues at Goldman to whom I mistakenly sent an email yesterday soliciting suggestions for what to cover in today’ email: My apologies – I meant to send it to our own little team, but hit the wrong send-list. That said, many thanks for the huge number of suggestions I got; I have been truly overwhelmed by the enthusiasm. I’ll be covering a number of the issues you suggested, but many of them we’ll have to take bilaterally, unfortunately.
So, fresh from having watched Germany outplay Argentina – and following the Netherlands’ triumph over Brazil yesterday – I cannot help think that the Euro-zone seems to outperform expectations in football pretty much as they do in terms of economic performance. If Spain does its job tonight, the Euro-zone will be occupying three out of the four semi-finalists spots down in SA. Who would have thought…
Here’s how Europe looks from the shade of my chestnut tree here in Chiswick:
- In the battle between stress markets and the real economy, last week went to the markets – but all due to poor data from the rest of the world.
- Marginally good news on the banks; we are all looking forward to the stress tests in 4-5 weeks.
- Confirmed decent growth indicators out of the Euro-zone this past week – and great growth numbers out of Ireland and Spain!
- The IMF has been busy this past week in Europe, extending the credit line to Poland, disbursing to Romania and agreeing a loan to Ukraine.
- Finally, call someone! – roaming became a lot cheaper in Europe this past week, thanks to the EU.
- Looking ahead – first and foremost, happy Fourth of July tomorrow!
- We’ll get industrial production numbers for May throughout Europe this coming week; we think they’ll all look pretty good. In the Euro-zone, Spain already reported, and we’ll get Germany, France and Italy this coming week.
- ECB meets on Thursday and the Watchers’ conference is on Friday. Listen out for what they think of Eonia and Euribor – and the banks.
- The UK also prints IP and manufacturing production (should be okay), and the MPC meets (no change.)
- Switzerland prints inflation (no
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America is 234 Years Old Today – Is It Finished?
by phil - July 4th, 2010 5:57 pm
"The average age of the world’s greatest civilizations has been two hundred years. These nations have progressed through this sequence. From bondage to spiritual faith; from spiritual faith to great courage; from courage to liberty; from liberty to abundance, from abundance to complacency; from complacency to apathy, from apathy to dependence, from dependence back into bondage." – Professor Joseph Olson
Is America, then, living on borrowed time? Are we so far past our prime and so into old age as a civilization that we are now senile and oblivious to our present surroundings, causing a danger to ourselves and others? Do we find ourselves living in the past and repeating the same old tales of our former glories over and over again to anyone who will listen? Are we barely kept alive by various medications that only stave off conditions that are getting worse every day while still imagining that, if there were a need, we could rise up and be strong again — but not today as there’s rice pudding for desert and we don’t want to miss that!
Well I have news for you – This country isn’t old and it isn’t sick but it has been drugged and it has been beaten down and robbed and I am going to tell you that I not only saw it happen, but I think I got a pretty good look at the 10,000 guys who did it. It was the top 0.01%! Who are the top 0,01%? They are the top 10,000 income earners in the United States of America. If you THINK you are in the top 0.01%, you are not. People in the top 10,000 know only KNOW they are in the top 0.01% but they know where they rank as well. The median ANNUAL income of a person in the top 0.01% is $50,000,0000. They have $350,000,000 in assets and, since 1978, that is an increase of 550% – how have you done the past 30 years?
Now we are (or used to be) a pretty rich country and the median income of the 118M people who earn enough money to pay income taxes is about $50,000 but the cost of living in the same country as people who earn an average of 976 times more than that is pretty high as well (see "The Dooh Nibor Economy"). Even worse, The 10,000 paid just $112Bn in taxes last year – that’s just over 20% of their income, while the rest…
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THE “DIRE” CONSUMER CREDIT PROBLEM
by ilene - July 4th, 2010 4:36 pm
Happy 4th of July!
(Sorry not to follow that up with better news. - Ilene)
THE “DIRE” CONSUMER CREDIT PROBLEM
Courtesy of The Pragmatic Capitalist
Is there a debt problem in the United States? You better believe it. But it’s not debt problem everyone is panicking over (the government deficit). It’s at the private sector level. This classic balance sheet recession has consumers saddled with debt. Peter Cecchini, chief strategist at BGC Financial LP says there is over TWO TRILLION dollars in necessary deleveraging to occur over the coming few years. Combine that with government austerity and there is only one result – PAIN. See the full video below:
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Texas AG Candidate Sues Goldman et al For Causing “Recession, Unemployment” And Everything Else That’s Bad
by ilene - July 4th, 2010 4:33 pm
Texas AG Candidate Sues Goldman et al For Causing "Recession, Unemployment" And Everything Else That’s Bad
Courtesy of Zero Hedge’s Tyler Durden
Yesterday, NY’s pension fund sued BP for having the temerity to see its shares drop. Today, the Democratic candidate for Texas AG has filed a Legal Complaint and Legal Brief against Goldman Sachs et literally al for "causing financial crisis and physical harms; recession; unemployment; home and wealth loss; forced cutbacks in a wide variety of critical areas, including medical care, social services, and environmental protection" and pretty much everything that is bad in the world. Tomorrow, one million Americans file a class action lawsuit against E-Trade for experiencing a downday.
In an action that is undoubtedly predicated by the plunging cash coffers and the drop in Texas pension funds, coupled with Wall Street’s less than stellar popularity rating, the Democrat candidate for Texas Attorney General, Barbara Ann Radnofsky, has decided to put the two together, and to get her campaign off to a rock solid start, by suing Goldman Sachs Group, Morgan Stanley, UBS, Merrill Lynch/BOA, Citigroup, Credit Agricole, Credit Suisse, Deutsche Bank ("the Banks"), Moody’s, Standard and Poor’s, Fitch (“the Ratings Agencies”), AIG Insurance Company (AIG) and other John Doe defendants. The basis of the lawsuit apparently comes from this: "the U.S. Supreme Court recognizes the State’s right to sue to protect its physical and economic well being and that of its citizens and the State’s possession of Quasi Sovereign Interests in physical wellbeing and economic prosperity. The doctrine permits damages from such underlying theories as common law fraud and RICO, and survived Motions to Dismiss in the State tobacco litigation."
In other words the vampire squid has become nothing more than a pack of cigarretes: Goldman Lights (recessed filter) anyone? Soon, we will be adding cancer to the list of evils unleashed upon the world at the breaking of the seventh seal.
Not sure what to make of this – you see we have no legal Ph.D., but blaming someone for all the troubles in one state based on years of imprudent and reckless decisionmaking, coupled with legislative and regulatory capture, sure sounds like the July 4th thing to do. Some Ph.D.’s who however are smarter than us, and as a result can opine (in this case affirmatively), are the following:
"Having reviewed the Complaint, and bringing their expertise to explain this action as viable, reasonable, plausible
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Economic Data Storm Slams S&P 500
by Chart School - July 4th, 2010 4:12 pm
Economic Data Storm Slams S&P 500 (SPY)
Courtesy of John Nyaradi
Weekly Stock Market Commentary from Wall Street Sector Selector
Last weekend we discussed the economic data storm coming up and concluded our report by saying, “This data storm will likely set the tone for the coming weeks and whether or not the theme will be “risk on” or “risk off.”
Well, the data storm turned out to be a hurricane and, by Friday afternoon going into the long 4th of July weekend, it was definitely “risk off” for U.S. markets.
After Wednesday’s close, we went to “Red Flag Flying” mode, expecting lower prices ahead and our portfolios went to 100% cash on Thursday morning.
Looking at My Screens
All major indexes suffered severe technical damage this week as we found the markets declining for seven days in a row.
As always, the charts tell the story:
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Trichet Reiterates Austerity Message; Germany Plans More Borrowing Cuts; Will the Treasury Rally Last?
by ilene - July 4th, 2010 2:47 pm
Trichet Reiterates Austerity Message; Germany Plans More Borrowing Cuts; Will the Treasury Rally Last?
Courtesy of Mish
Once again and with greater force, Europe has snubbed its nose (and rightfully so) the Keynesian clowns in US academia and the Obama administration.
Bloomberg reports Trichet Calls on EU Governments to Reduce Budget Deficits to Boost Growth.
European Central Bank President Jean- Claude Trichet pressed governments to trim their budget deficits, saying such action would boost economic growth by improving confidence of consumers and investors.
“We are in a period where we have to manage budgets very tightly,” Trichet told journalists in Aix-en-Provence, France. “I have no problem with austerity, rigor. I call this good budgetary management.”
Trichet said today that deficit reduction won’t choke growth and a failure to stem budget gaps would be equally risky for the recovery.
“Confidence is key for growth, and if you cannot have confidence in the sustainability of the fiscal policies then you have no growth because you have no confidence,” he said. “The two things are complimentary.”
Germany to Reduce Deficit by 80 billion euros ($100 billion) over five years
Reuters reports Germany plans to cut new borrowing in savings drive
Germany plans to cut net new borrowing by some 80 billion euros ($100 billion) over five years, reducing supply of Europe’s benchmark debt and adding pressure on other euro zone members to tighten their own public finances.
The draft budget for 2011, which the cabinet plans to approve on Wednesday for ratification in parliament in November, will anchor a 34 billion euro reduction in new issuance over the next two years compared to earlier plans.
The federal government also aims to cut spending to 307.4 billion euros next year, a 3.8-percent decrease from plans made before a "debt brake" law was passed in 2009, details of the draft made available to Reuters on Sunday showed.
The budget is the latest chapter in Germany’s drive to consolidate public finances, a move that has drawn criticism from some other large countries that say it is too early to withdraw support enacted during the financial crisis.
Unions have promised stiff resistance and industrial action looks likely — a threat that could rise as cuts in social services deepen and health care costs rise as planned.
In addition, some politicians from within Merkel’s ruling coalition say the measures are
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
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