Friday, July 24, 2009

The Wall Street Journal USA July 24 2009

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Poll: Americans lacking in emergency funds

Many Americans are badly lagging in their emergency funds
even as rising unemployment increases the odds they will need to rely on them to get by, a new survey released Tuesday shows.

Forty-nine percent of employed adults interviewed in a nationwide poll conducted for Country Financial said they wouldn't be able to pay their bills on time if they went more than a month between jobs.

Half of those surveyed said they would tap their savings to cope with a shortfall in income if they lost their jobs, according to the poll results. Another 16 percent said they would use their retirement accounts, while 8 percent said they'd need bank loans and 7 percent would rely on credit cards. (more)

Gerald Celente on Alex Jones July 22, 2009

Part 2, Part 3, Part 4

Americans: 3X More Miserable Than Previously Calculated

Economists like to call their profession "The Dismal Science," so you'd think they would have a monopoly on, or at least competence in, measuring dreariness. But it turns out they're not even measuring our misery properly. So claims the Huffington Post, which recently debuted its own Misery Index -- the sum of unemployment and inflation -- to account for the millions of Americans who've been pushed to part-time, or simply given up looking for jobs altogether, but don't appear in the official unemployment rate. (more)

US Dollar Collapse Imminent

We don't like to make bold predictions. But this time, it is different (famous last words).

You might have seen that we at Crossroads FX tend to trade in a very systematic way, using signals of our proprietary trading system without asking too many questions. But you know, from time to time patterns emerge where you cannot resist.

If you take a look at a 300min chart of the EUR/USD Future, everything looks like "normal business". The Euro is trading well above the green buy line in bullish territory, and the line of least resistance is safely pointing to the upside, predicting higher prices in the near future. (more)

Energy Demand In Canada & USA Expected to Drop

Retail sales of electricity in the industrial sector continue to decline, having fallen by 12 percent during the first quarter of 2009 compared with year-ago levels. Total consumption of electricity is projected to fall by 2.0 percent for the entire year of 2009 and then rise by 0.8 percent in 2010.

Buying Opportunity In Corn?

Bubble Deniers

Two important headlines this morning, both of them fraudulent:

“Chinese economy bounces back,” says one headline in the International Herald Tribune.

“JPMorgan profit soars despite downturn,” says another.

The average reader or TV viewer will go no further. “Ah,” he says to himself, “good news; the worst is over. China is a green shoot as big as the Amazon. And JPMorgan is a leader in the financial sector. If the financial sector is doing well, the whole world economy must be doing well.”

But here at the Daily Reckoning, we can’t help ourselves. If we see a silver lining, we look for the cloud. We see garbage... we look for the rat... (more)

Roubini Sees Risk of ‘Double Dip’ Global Recession

The global economy may fall back into a recession by late 2010 or 2011 because of rising government debt, higher oil prices and a lack of job growth, said Nouriel Roubini, the New York University economist who predicted the credit crisis.

A “perfect storm” of fiscal deficits, rising bond yields, “soaring” oil prices, weak profits and a stagnant labor market could “blow the recovering world economy back into a double-dip recession,” he wrote in a research note today. “It is getting more likely unless a clear exit strategy from the massive monetary and fiscal stimulus is outlined even before it is implemented.”

Roubini, chairman of Roubini Global Economics and a professor at NYU’s Stern School of Business, predicted that the global economy will begin recovering near the end of 2009. The U.S. economy is likely to grow about 1 percent in the next two years, less than the 3 percent “trend,” he said. (more)

How Much Is a Trillion Dollars?

Skating on Thin Ice

As 2009 moves past its midpoint, many market participants are briskly trying to forget the carnage of 2008 and the first quarter of 2009. But, before we get lost in the euphoria of the 36% Dow rally in the Spring/Summer of this year, a little hindsight is in order. In March, the Dow had plunged to 6,547, or some 53 percent down from its nominal 14,164 high in 2007. Despite the recent gains, we are still nearly 40% below the 2007 peak. This is a brutal truth that everyone seems to be ignoring.

Last week, Merrill Lynch, that storehouse of economic sagacity, announced that the recession was over. Even the bearish NYU economist Nouriel Roubini was reported as saying "the worst is behind us." However, wishing earnestly for something does not make it so.

Admittedly, the financial meltdown that threatened in late 2008 appears to have been contained. In addition, the Fed's actions in the credit markets have held interest rates down and turned the yield curve positive. The credit markets also have started to ease. In addition, the federal government's injection of trillions of dollars into the economy has "boosted confidence" for those too short-sighted to know the consequences. This welcome news has provided impetus to equities. (more)

U.S. Stock Futures Fall on Microsoft, American Express, Amazon

July 24 (Bloomberg) -- U.S. stock futures fell, indicating the Standard & Poor’s 500 Index will slump after climbing to an eight-month high, as Microsoft Corp., American Express Co. and Inc. posted disappointing quarterly results.

Microsoft retreated 6.9 percent on lower profit and sales than analysts estimated. American Express slipped 5 percent after saying earnings decreased as the recession made it harder for cardholders to keep up with payments. lost 6.6 percent following price cuts that caused the online retailer’s revenue to miss projections.

S&P 500 futures expiring in September declined 0.4 percent to 965.20 at 9 a.m. in Tokyo. Dow Jones Industrial Average futures dropped 29 points, or 0.3 percent, to 8,962. U.S. stocks surged yesterday, sending the Dow above 9,000 for the first time since January, as EBay Inc., Ford Motor Co. and AT&T Inc. beat estimates and home resales increased more than forecast. (more)

Has housing hit bottom?

Resales of U.S. single-family homes and condos rose 3.6% in June to a seasonally adjusted annual rate of 4.89 million, the highest level since October, the National Association of Realtors reported Thursday.
Resales have risen for three straight months for the first time in more than five years.
The increase was higher than expected. Economists surveyed by MarketWatch expected sales to rise to 4.85 million. Sales are down 0.2% on a year-on-year basis.
The housing market appears to be healing, said Lawrence Yun, NAR's chief economist.
Inventories of unsold homes are still elevated and putting pressure on prices. And the damage from the housing bubble's collapse is still having an impact. Distressed properties accounted for 31% of sales in June. (more)