Wednesday, September 30, 2009

Jay Taylor: Turning Hard Times Into Good Times

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Early retirements strain Social Security: Is U.S going broke?

In the latest sign the Social Security ticking time bomb is almost ready to explode, an unexpected spike in the number of early retirement claims will cause the entitlement program to run a deficit as early as 2010, nearly a decade ahead of earlier projections.

The system has suffered not only a 23% increase in early retirement applications, but the severe recession has resulted in the loss of 6.9 million jobs. In this negative feedback loop, older employees lose their jobs and thus stop paying into the system while applying for early retirement benefits when they are unable to secure a new job. (more)

Three Trading Videos

This week we have not one, but three trading videos to watch. Each video will offer insights into three of the most important markets in the world.

The first video is on gold and where this market is headed by the end of the year:

Watch here:

The second is about crude oil and where we will see this market heading:

Watch here:

Lastly, a different look at the S&P 500 that you won't want to miss:

Watch here:

U.S. Economy: Home Prices Increase by Most Since 2005

Home values in 20 U.S. cities climbed in July by the most in almost four years, helping stem the record plunge in household wealth that’s depressed spending.

The S&P/Case-Shiller home-price index rose 1.2 percent in July from the prior month, the biggest gain since October 2005, the group said today in New York. Another report showed consumer confidence unexpectedly fell in September, while holding above the record low reached earlier this year.

Home values are rebounding as low borrowing costs and government tax credits lift home sales. Combined with rising stock prices, the gains will begin to restore the $13 trillion plunge in net worth caused by the worst financial crisis since the Great Depression, a process that economists such as Brian Bethune say will take years to complete. (more)

U.S. Government Gold Manipulation Document Declassified

The Federal Reserve, in the 1970's, had a secret agreement with the German government whereby the German government agreed not to buy gold in the open market, or from other governments, at a price above the then-official U.S. government price of $42.22 per ounce, despite the fact that the open market price for gold was then trading between $160 to $175 per ounce.

The information has come to light as a result of a declassified Memorandum sent by then-Federal Reserve Chairman Arthur Burns to President Gerald Ford. The document was originally classified as "Strictly Confidential".

The document was originally posted at ZeroHedge and brought to my attention by Lori Smith. I have since verified the authenticity of the document in a conversation with the Gerald R. Ford Library archivist Mark Fischer. Although the document appears to have a declassification date stamped on it of 6-28-05, Fischer tells me that the document was declassified just recently on 9-15-09. (more)

CNBC September Total Viewership Down 37% YoY

According to Nielsen, CNBC's annual decline in total September viewership was a massive 37%: the worst YoY performance in 2009. The decline in the demo audience also hit a high of 27%. The dilemma for Jeff Immelt is the following: do CNBC pundits keep pumping GE (which everyone ignores, as CNBC's credibility is practically nonexistent), or, at the expense of marking a few hundred billion assets at GECC to fair market value, incite another major market crisis. Perhaps, just perhaps, if the later were to occur, CNBC would have some chance of salvaging its prior year numbers. Although with CNBC now spending hours a day advertising GE engines, it seems like external advertisers couldn't care less: after all, GE is subsidizing its own station by selling them ad space. Business schools have a word for that: vertical integration. Sane people have another word: biased reporting.

Newspaper Stocks Surge As Own News Improves

Newspapers may have finally stopped _ or at least slowed _ their harrowing descent into a financial abyss after three years of plunging revenues, crumbling stock prices and shrinking staffs.

The latest glimmer of hope came Tuesday when Gannett Co., the largest U.S. newspaper publisher, announced that its third-quarter earnings will be substantially above analysts' forecasts.

Although Gannett's revenue for the period, which ended Sunday, fell slightly below analysts' projections, executives said newspaper advertising sales didn't fall as badly as they did in the first and second quarters.

That's not saying much. Gannett's ad revenue from USA Today and its other print publications dived 33 percent during the first half of the year. (more)

Business Week (05/10/2009)

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