Thursday, September 10, 2009

Wall Street Journal September 10 2009

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McAlvany Weekly Commentary: Sept 9, 2009

ECOSPASM: Inflation, Deflation, & Stagflation in One!

September 9th, 2009

The Gods of the Copybook Headings by Rudyard Kipling

As it will be in the future, it was at the birth of Man
There are only four things certain since Social Progress began.
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool’s bandaged finger goes wabbling back to the Fire;

(To read the entire poem, go to: )

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John Embry - Gold Outlook: Explosion in the Price of Gold Imminent

John Embry and Andrew Mickey

Andrew Mickey: Thanks for joining us today John. A lot has happened since we last talked in February. Basically, it looks like almost everything we looked at last time - gold, silver, agriculture, and other hard assets – continue to be out of favor. There have been “gold shoots,” but nothing really sustainable.

That’s why, today, I want to get into a few more specific topics with you. And one thing that's really hot right now is what's going on in China with the real debt explosion. To me, it seems similar to the “Greenspan Solution” – cut interest rates so low they’re actually negative so its cost prohibitive not to borrow money, sit back, and watch an asset bubble form.

Do you see any problems in China? What are your thoughts on this? (more)

S&P 500 Moving Averages Show ‘Fierce’ Rally: Technical Analysis

A rise in the Standard & Poor’s 500 Index’s five-month moving average above its 15-month moving average for the first time since 2003 signals stocks are in the early stages of a bull market, said Alexander Associates LLP.

The S&P 500’s five-month moving average climbed to 974.39 yesterday, higher than the 15-month moving average of 972.56, according to data compiled by Bloomberg.

The five-month moving average rose above the 15-month line three other times in the past two decades: March 1991, October 1994 and July 2003. Each cross foreshadowed returns of at least 16 percent during the following 18 months. (more)

A year after financial crisis, the consumer economy is dead

One year after the near collapse of the global financial system, this much is clear: The financial world as we knew it is over, and something new is rising from its ashes.

Historians will look to September 2008 as a watershed for the U.S. economy.

On Sept. 7, the government seized mortgage titans Fannie Mae and Freddie Mac. Eight days later, investment bank Lehman Brothers filed for bankruptcy, sparking a global financial panic that threatened to topple blue-chip financial institutions around the world. In the several months that followed, governments from Washington to Beijing responded with unprecedented intervention into financial markets and across their economies, seeking to stop the wreckage and stem the damage. (more)

Top 1 Percent of Americans Reaped Two-Thirds of Income Gains in Last Economic Expansion

Two-thirds of the nation’s total income gains from 2002 to 2007 flowed to the top 1 percent of U.S. households, and that top 1 percent held a larger share of income in 2007 than at any time since 1928, according to an analysis of newly released IRS data by economists Thomas Piketty and Emmanuel Saez.[1]

During those years, the Piketty-Saez data also show, the inflation-adjusted income of the top 1 percent of households grew more than ten times faster than the income of the bottom 90 percent of households.

The last economic expansion began in November 2001 and ended in December 2007, according to the National Bureau of Economic Research, which means the Piketty-Saez data essentially cover that expansion. The last time such a large share of the income gain during an expansion went to the top 1 percent of households — and such a small share went to the bottom 90 percent of households — was in the 1920s (see Figure 1). [2] (more)

Treasury Sees Millions More Foreclosures

Only 12 percent of U.S. homeowners eligible for loan modifications under the Obama administration's housing rescue plan have had their mortgages reworked, and millions more foreclosures are coming, the Treasury Department said on Wednesday.

A Treasury report showed 360,165 people had their monthly payments reduced through August, up from 235,247 through July, but a senior Treasury official conceded much more must be done to soften the impact of a severe and prolonged housing crisis.

"The recent crisis in the housing sector has devastated families and communities across the country and is at the center of our financial crisis and economic downturn," Michael Barr, assistant Treasury secretary for financial institutions, told a House Financial Services subcommittee. (more)

Gerald Celente on Goldseek Radio 05 Sept 2009

Is Another 9/11 Set to Unfold?

Earlier this year, quite by happenstance, I read a book written by Pulitzer Prize-winning reporter James B. Stewart.

Photo: At 9:02, United Airlines flight 175 about to impact the World Trade Center south tower.

"Heart of a Soldier" tells the story of two men who, well before it happened, foretold not only of the terrorist attack of 9/11 but also the 1993 bombing in the World Trade Center parking garage that preceded it.


UK was hours from bank shutdown

Britain was within hours of a banking shutdown last autumn as the government battled to piece together a rescue plan for the stricken Halifax and Royal Bank of Scotland, it has emerged.

Treasury mandarins and Bank of England officials battled the clock to come up with a support package on the weekend of 12 October. If they had failed, the Financial Services Authority could have ordered the closure of cash machines and prevented deposits at either of the two main casualties of the global financial chaos. (more)