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Posts Tagged ‘debts’

The Real Horror Story: The U.S. Economic Meltdown

The Real Horror Story: The U.S. Economic Meltdown

Courtesy of Michael Snyder at Economic Collapse 

economic meltdownThis October, millions of Americans are going to watch horror movies and read horror stories because they enjoy being frightened.  Well, if you really want to be scared, you should just check out the real horror story unfolding right before our eyes – the U.S. economic meltdown.  It seems like more bad news for the U.S. economy comes out almost every single day now.  Unfortunately, things are about to get a whole lot worse.  The mainstream media has been treating "Foreclosuregate" as if it is a minor nuisance, but the truth is that the lid is about to be publicly lifted on years and years of massive fraud in the U.S. mortgage industry, and this thing has the potential to cause economic chaos that is absolutely unprecedented.  Over the past several days, expert after expert has been coming forward and warning that this crisis could completely and totally paralyze the mortgage industry in the United States.  If that happens, it will be essentially like pulling the plug on the U.S. economic recovery. 

Not that there was going to be a recovery anyway.  The truth is that economic statistic after economic statistic has been pointing to incredible trouble for the U.S. economy.

For example, the U.S. government just announced that the U.S. trade deficit went up again in August.  According to the U.S. Census Bureau, the U.S. trade deficit was $46.3 billion during August, which was up significantly from $42.6 billion in July.

So how much coverage did this get in the mainstream media? 

Well, just about none.

We have gotten so used to horrific trade deficits that it isn’t even news anymore.

But these trade deficits are absolutely killing our economy.

How long do you think that the U.S. economy can keep shelling out 40 or 50 billion more dollars than we take in every single month?

If you look at the countries around the world that have become very wealthy, almost all of them have gotten that way by trading with the United States.

Meanwhile, many of our once great manufacturing cities are turning into open sewers.

Every single politician in the United States should be talking about the trade deficit.

But hardly any of them are.

Is it because Americans have all become so dumbed-down that we don’t understand these things anymore, or is it because we are so…
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The Bernanke Speech

The Bernanke Speech

Courtesy of MIchael Snyder at Economic Collapse 

When Federal Reserve Chairman Ben Bernanke gives a speech about the U.S. economy, it gets a whole lot more attention than when Barack Obama gives a speech about the U.S. economy.  Why is this true?  Well, it is because Bernanke has a whole lot more control over the U.S. economy than Obama does. It is the Federal Reserve that controls monetary policy and interest rates. It is the Federal Reserve that can create money out of thin air. It is the Federal Reserve which is going to have the most influence over whether there will be inflation or deflation. So when Bernanke gives a speech, world financial markets listen. On Friday, news of the Bernanke speech sent gold and silver soaring towards new highs and send the U.S. dollar tumbling once again.  This new Bernanke speech was yet another very strong indication that Helicopter Ben is getting ready to fire up the printing presses in an attempt to get the U.S. economy moving.   

So is it a good thing for an unelected, virtually unaccountable private central bank called the Federal Reserve to have more power over the U.S. economy than the president of the United States?

Of course not.

But that is the way our system works.

So what did Bernanke say during his speech in Boston that was so earth shattering?

Well, you can read a full transcript of what Bernanke said right here.  The following are a few key excerpts from Bernanke’s remarks….…
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Foreclosure Fraud: 6 Things You Need To Know About The Crisis That Could Potentially Rip The U.S. Economy To Shreds

Foreclosure Fraud: 6 Things You Need To Know About The Crisis That Could Potentially Rip The U.S. Economy To Shreds

Courtesy of Michael Snyder at Economic Collapse 

The foreclosure fraud crisis seems to escalate with each passing now.  It is being reported that all 50 U.S. states have launched a joint investigation into alleged fraud in the mortgage industry.  This is a huge story that is not going to go away any time soon.  The truth is that it would be hard to understate the amount of fraud that has gone on in the U.S. mortgage industry, and we are watching events unfold that could potentially rip the U.S. economy to shreds.  Many are now referring to this crisis as "Foreclosure-Gate", and already it is shaping up to be the worst thing that has ever happened to the U.S. mortgage industry.  At this point, it seems inevitable that some financial institutions will go under as a result of this mess.  In fact, by the end of this thing we might see a whole bunch of lending institutions crash and burn.  This crisis is very hard to describe because it is just so darn complicated, but it is worth it to try to dig into this thing and understand what is going on because it has the potential to absolutely decimate the entire U.S. mortgage industry.

The truth is that there was fraud going on in every segment of the mortgage industry over the past decade.  Predatory lending institutions were aggressively signing consumers up for mortgages that they knew they could never repay.  Many consumers were also committing fraud because a lot of them also knew that they could never possibly repay the mortgages.  These bad mortgages were fraudulently bundled up and securitized, and these securitized financial instruments were fraudulently marketed as solid investments.  Those who certified that these junk securities were "AAA rated" also committed fraud.  Then these securities were traded at lightning speed all over the globe and a ton of mortgage paperwork became "lost" or "missing". 

Then, when it…
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Currency War

Currency War

Courtesy of Michael Snyder at Economic Collapse 

Are you ready for a currency war?  Well, buckle up, because things are about to get interesting.  This week Japan fired what is perhaps the opening salvo in a new round of currency wars by publicly intervening in the foreign exchange market for the first time since 2004.  Japan’s bold 12 billion dollar move to push down the value of the yen made headlines all over the world.  Japan’s economy is highly dependent on exports and the Japanese government was becoming increasingly alarmed by the recent surge in the value of the yen.  A stronger yen makes Japanese exports more expensive for other nations and thus would harm Japanese industry.  But Japan is not the only nation that is ready to go to battle over currency rates.  The governments of the U.S. and China continue to exchange increasingly heated rhetoric regarding currency policy.  In Europe, there is growing sentiment that the euro needs to be devalued in order to help European exports become more competitive.  In addition, exporters all over the world are already loudly complaining about the possibility that the Federal Reserve is about to unleash another round of quantitative easing. 

Virtually all major exporting nations want the value of the U.S. dollar to remain high so that they can keep flooding us with lots of cheap goods.  The sad reality is that our current system of globalized trade rewards exporting nations that have weak currencies, and many nations have now shown that they are willing to take the gloves off to make certain that their national currencies do not appreciate in value by too much.

Some nations have been involved in open currency manipulation for some time now.  For example, Singapore is well known for intervening in the foreign exchange market in order to benefit exporters.  Also, the Swiss National Bank experienced losses equivalent to about 15 billion dollars trying to stop the rapid rise of the Swiss franc earlier this year.…
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20 Signs That The Economic Collapse Has Already Begun For One Out Of Every Seven Americans

20 Signs That The Economic Collapse Has Already Begun For One Out Of Every Seven Americans

Courtesy of Michael Snyder at Economic Collapse 

For most Americans, the economic collapse is something that is happening to someone else.  Most of us have become so isolated from each other and so self-involved that unless something is directly affecting us or a close family member than we really don’t feel it.  But even though most of us enjoy a much closer relationship with our television sets than we do with our neighbors at this point, it is quickly becoming undeniable that a fundamental shift is taking place in society.  Perhaps you noticed it when two or three foreclosure signs went up on your street.  Or perhaps it got your attention when that nice fellow down the street lost his job, and he and his family seemingly just disappeared from the neighborhood one day.  The Census Bureau made front page headlines all over the nation this week when they announced that one out of every seven Americans was living in poverty in 2009.  Every single day more Americans are getting sucked out of the middle class and into soul-crushing poverty.   

Unfortunately, most Americans don’t really care because it has not affected them yet.

But this year, millions more Americans will discover that the music has stopped playing and they are left without a seat at the table.

Meanwhile, neither political party has a workable solution.  They just like to point fingers and blame each other.

The Democrats blame Bush for all the poverty and advocate expanding programs for the poor.  Not that there is anything wrong with a safety net.  But the "safety net" was never meant to hold 50 million people on Medicaid and 40 million people on food stamps.  The number of Americans on food stamps has more than…
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REGARDING THOSE “STRONG” CORPORATE BALANCE SHEETS

REGARDING THOSE “STRONG” CORPORATE BALANCE SHEETS

Courtesy of The Pragmatic Capitalist 

Calculator and pencil on top of balance sheet

Brett Arends had an excellent piece on MarketWatch yesterday regarding the true state of US corporations.  You’ve probably heard the argument before that corporations are sitting on record piles of cash – their balance sheets are in immaculate condition. Right?  Wrong!  These comments are generally made without accounting for both sides of the ledger.  What is often ignored is that the total debts of these companies has also skyrocketed.  Admittedly, I’ve been guilty of this in the past when discussing corporate cash levels and Arends (rightfully) sets the record straight.  He notes that corporations are even worse off today (in terms of debt levels) than they were when the crisis began:

“American companies are not in robust financial shape. Federal Reserve data show that their debts have been rising, not falling. By some measures, they are now more leveraged than at any time since the Great Depression.

You’d think someone might have noticed something amiss. After all, we were simultaneously being told that companies (a) had more money than they know what to do with; (b) had even more money coming in due to a surge in profits; yet (c) they have been out in the bond market borrowing as fast as they can.

Does that sound a little odd to you?

A look at the facts shows that companies only have “record amounts of cash” in the way that Subprime Suzy was flush with cash after that big refi back in 2005. So long as you don’t look at the liabilities, the picture looks great. Hey, why not buy a Jacuzzi?

According to the Federal Reserve, nonfinancial firms borrowed another $289 billion in the first quarter, taking their total domestic debts to $7.2 trillion, the highest level ever. That’s up by $1.1 trillion since the first quarter of 2007; it’s twice the level seen in the late 1990s.”

This will also sound familiar to readers of John Hussman who has debunked the cash on the sidelines story more than once:

Interestingly, some observers lament that corporations and some individuals are holding their assets in “cash” rather than spending and investing those balances, apparently believing that this money is being “held back” from the economy. What


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How in Heck Can Anybody Even Think That We Are on the Cusp of a Consumer-Led Recovery?

How in Heck Can Anybody Even Think That We Are on the Cusp of a Consumer-Led Recovery?

Courtesy of Michael Panzner at Financial Armageddon 

Plunge

(Image: Source)

For a growing number of Americans, job prospects are bleaksavings are too lowdebts are overwhelming, and, as the following report reveals, credit ratings are shot to pieces — how in heck can anybody even think that we are on the cusp of a consumer-led recovery?

"More Americans’ Credit Scores Sink to New Lows" (Associated Press)

The credit scores of millions more Americans are sinking to new lows. 

Figures provided by FICO Inc. show that 25.5 percent of consumers – nearly 43.4 million people – now have a credit score of 599 or below, marking them as poor risks for lenders. It’s unlikely they will be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use.

Because consumers relied so heavily on debt to fuel their spending in recent years, their restricted access to credit is one reason for the slow economic recovery.

"I don’t get paid for loan applications, I get paid for closings," said Ritch Workman, a Melbourne, Fla., mortgage broker. "I have plenty of business, but I’m struggling to stay open."

FICO’s latest analysis is based on consumer credit reports as of April. Its findings represent an increase of about 2.4 million people in the lowest credit score categories in the past two years. Before the Great Recession, scores on FICO’s 300-to-850 scale weren’t as volatile, said Andrew Jennings, chief research officer for FICO in Minneapolis. Historically, just 15 percent of the 170 million consumers with active credit accounts, or 25.5 million people, fell below 599, according to data posted on Myfico.com.


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Zero Hedge

Q1 Earnings Summary: More Than Half Have Missed Revenues

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

When it comes to Q1 earnings expectations one thing is well known: they are low. Very low. So low in fact that as we showed earlier this week, Q1 earnings growth is now projected to be the lowest since Q3 2012, a dramatic change from EPS expectations at the start of the first quarter when it was optimism, all the way.

...



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Chart School

How Long to the Next Recession? iM's Weekly Update

Courtesy of Doug Short.

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

The BCI remains unchanged from last week?s upward revised level of 169.2. BCIg, the smoothed annualized growth of BCI, is slightly down at 16.9 from last week's upward revised 17.0. This week?s BCI shows no recessionary trends.

Figure 1 plots BCIp, BCI, BCIg and the S&P500 together with the thresholds (red lines) that need to be crossed to be able to call a recession.


Click for a larger image

The off-peak indicator BCIp is at 99.9 and at this level the BCIw graphic with the tracks to recession is not applicable.

The BCI, BCIp and BCIw are described in...



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Phil's Favorites

The Voice Of The Moon: A Rare Interview With Ilargi

Courtesy of The Automatic Earth.


Arthur Rothstein Subsistence homestead project, Dalworthington Gardens, Texas Summer 1936

I did an interview last Saturday with KMO at C-Realm, who serves up a great free podcast every week on a wide variety of topics. Here’s his description of this one:

KMO welcomes Ilargi of The Automatic Earth to the C-Realm to talk about the sorry state of watchdog journalism, the unhelpful rhetoric of American politicians and pundits around Vladimir Putin’s actions with regard to Ukraine, the media’s failure to examine the US role in bringing down the Yanukovych government, and the fragility of the Chinese economy given its dependence on a shadow banking system which has provided ...



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Insider Scoop

UPDATE: DuPont Posts Drop In Q1 Net Profit

Courtesy of Benzinga.

Related DD Earnings Scheduled For April 17, 2014 Stocks To Watch For April 17, 2014 Monsanto Beats Views As Profit Climbs (Fox Business)

DuPont Co (NYSE: DD) reported a 57% decline in its first-quarter earnings.

DuPont's quarterly profit slipped to $1.44 billion, or $1.54 per share, compared to a year-earlier profit of $3.35 billion, or $3.58 per share. Excludi...



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Option Review

Short Term Bearish Options Trade On Las Vegas Sands

A roughly quarter of a million dollar play in the 17Apr’14 expiry $74 strike put options on Las Vegas Sands Corp (Ticker: LVS) caught our eye this morning, as just one full trading session remains in the life of these contracts in this holiday-shortened week. Shares in LVS are up more than 2.0% on the session at $74.90 just before 11:30 am ET and off an earlier session high of $75.44. Like many of the relative outperformers of 2014, shares in LVS have declined substantially since the beginning of March, down around 15% at its current level from a high of $88.28. Recent sessions have been volatile in this and other high-beta names, and perhaps this environment is just what the morning’s put trader is looking for ahead of expiration.

...

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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Sabrient

What the Market Wants: Positive News and Stocks at Bargain Prices

Courtesy of David Brown, Sabrient Systems and Gradient Analytics

Last week’s market performance was nasty again, especially for the Small-cap Growth style/cap, down 4%.  Large-caps faired the best, losing only 2.7%.  That’s ugly and today’s market seemed likely to be uglier today with escalating tensions over the weekend in Ukraine. 

But once again, positive economic trumped the beating of the war drums. Retail Sales jumped up 1.1% over a projected 0.8% and last month’s tepid 0.3%, which was revised up to 0.7%.  While autos led, sales were up solidly overall.  Business inventories were about as expected with a positive tone.  Citigroup (C) handily beat estimates to add to the morning’s surprises.  As a result, the market was positive through most of the day, led by the DJI, up 0.91%, and the S&P 500, up 0.82%.  NASDAQ had a less...



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Digital Currencies

Facebook Takes Life Seriously and Moves To Create Its Own Virtual Currency, Increases UltraCoin Valuation Significantly

Courtesy of ZeroHedge. View original post here.

Submitted by Reggie Middleton.

The Financial Times reports:

[Facebook] The social network is only weeks away from obtaining regulatory approval in Ireland for a service that would allow its users to store money on Facebook and use it to pay and exchange money with others, according to several people involved in the process. 

The authorisation from Ireland’s central bank to become an “e-money” institution would allow ...



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OpTrader

Swing trading portfolio - week of April 14th 2014

Reminder: OpTrader is available to chat with Members, comments are found below each post.

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here...



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Market Shadows

Winning: Defined as Losing Less

By Paul Price of Market Shadows

Market Shadows Excelled – With a 1.36% Weekly Decline

In the land of the blind, the one-eyed man is King. Our Virtual Value Porfolio took on that role this week as we lost a modest 1.36% of our value while the DJIA, S&P 500 and Nasdaq Composite dropped from 2.35% - 3.10%.

We remain bullish despite the shaky end of week sentiment. Our original $100,000 now totals $145,058 including our 2.8% cash reserve.

 ...



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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here is the new Stock World Weekly. Please sign in with your user name and password, or sign up for a free trial to Stock World Weekly. Click here. 

Chart by Paul Price.

...

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Promotions

See Live Demo Of This Google-Like Trade Algorithm

I just wanted to be sure you saw this.  There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.

If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.

Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.

Follow this link to register for their training webinar where they’ll demonstrate the tested and proven Algorithm powered by the same technological principles that have made GOOGLE the #1 search engine on the planet!

And get this…had you done nothing b...



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Pharmboy

Here We Go Again - Pharma & Biotechs 2014

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Ladies and Gentlemen, hobos and tramps,
Cross-eyed mosquitoes, and Bow-legged ants,
I come before you, To stand behind you,
To tell you something, I know nothing about.

And so the circus begins in Union Square, San Francisco for this weeks JP Morgan Healthcare Conference.  Will the momentum from 2013, which carried the S&P Spider Biotech ETF to all time highs, carry on in 2014?  The Biotech ETF beat the S&P by better than 3 points.

As I noted in my previous post, Biotechs Galore - IPOs and More, biotechs were rushing to IPOs so that venture capitalists could unwind their holdings (funds are usually 5-7 years), as well as take advantage of the opportune moment...



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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...

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