Saturday, June 26, 2010

World Financial Report, June 25, 2010

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The Economist - 26 June 2010

The Economist is a global weekly magazine written for those who share an uncommon interest in being well and broadly informed. Each issue explores the close links between domestic and international issues, business, politics, finance, current affairs, science, technology and the arts.
In addition to regular weekly content, Special Reports are published approximately 20 times a year, spotlighting a specific country, industry, or hot-button topic. The Technology Quarterly, published 4 times a year, highlights and analyzes new technologies that will change the world we live in.

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20 Must-See Charts On America's Disastrous Level Of Government Spending

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ECRI Leading Economic Index Plunges At -6.9% Rate, Back To December 2007 Levels When Recession Officially Started

It's getting close: the fabled -10% annualized change (see David Rosenberg) which guarantees a recession is now just 3.1% away, which at this rate of collapse will be breached in two weeks. The ECRI is now at December 2007 levels, the time when the last recession officially started. The index dropped from an annualized revised -5.8% (previously -5.7%) to -6.9%. As a reminder, from Rosie, "It is one thing to slip to or fractionally below the zero line, but a -3.5% reading has only sent off two head-fakes in the past, while accurately foreshadowing seven recessions — with a three month lag. Keep your eye on the -10 threshold, for at that level, the economy has gone into recession … only 100% of the time (42 years of data)." We are practically there. (more)

The Many Faces Of Gold

Who isn't talking about gold these days? Maybe that's more the appropriate question than not. Of course dial the clock back seven to ten years and serious discussions of gold set against the context of the macro credit cycle, monetary and fiscal policy, etc. were almost strictly confined to the bearish underground. Certainly we are in the underground no more. Well above ground and gaining more widespread recognition by the day as many of the former bearish underground rationales for accumulating and holding gold are now coming true right before our eyes and clearly entering mainstream debate, if not conviction. It's time for a quick little review, but what we hope to accomplish in this discussion is twofold. We want to have what we believe is very much an unconventional look at gold that we really have not seen in this conceptual format anywhere else. As you know, charts of gold relative to the major global currencies are a dime a dozen. We don't want to waste your time as you can find them anywhere and everywhere across the net. Gold is breaking out really against all global currencies. That's not new news. The Dow and S&P expressed in terms of gold, etc. Pretty conventional stuff in terms of more mainstream commentary and analysis. We're going to have a look at gold relative to what we believe are important historic economic markers of the real economy itself. And it just so happens that this little view of life dovetails into the second purpose we have in presenting this review. We know you've seen a number of pundits predict $2,000 gold, $3,000 gold and even perhaps a moon shot to $5,000 gold and beyond. (more)

5 housing and financial stories showing profound weakness in the economy

Unfortunately the storyline regarding housing is all too predictable. For California, once the vice grips tightened around the option ARM and Alt-A universe in 2007 and 2008, the housing market in the state collapsed like a piƱata in the subsequent years. Now, all the mainstream analysts are “shocked” that new home sales have fallen into the abyss. Thing are so bad, that new home sales on a seasonally adjusted basis fell to a record low level and Census data goes back to 1963. When we chart this as you will see, this is a historic fall. Yet this is all expected. The removal of the federal tax credit and pent up demand moved forward caused a bear market bounce for housing. All it took was one month worth of data to crush the entire idea that the housing market was somehow supporting itself. (more)

Obama Strategy for G-20 in Ottawa: Push Euro Down, Drive Renminbi Up, Attack Germany, and Keep Toxic Derivatives in Charge of the World Economy

Business Week - 28 June - 4 July 2010

Each issue of BusinessWeek features in-depth perspectives on the financial markets, industries, trends, technology and people guiding the economy. Draw upon Business Week's timely incisive analysis to help you make better decisions about your career, your business, and your personal investments.

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The Coming U.S. Real Estate Crash

This week headlines across the United States screamed that new home sales in the U.S. had declined to the lowest level since the U.S. government began keeping track in 1963. But in the news stories covering this data in the mainstream media, they were always very careful to give their readers lots of reasons why things are going to "get back to normal" very soon. But the truth is that is simply not going to happen. Right now the United States is heading for another real estate crash. The only thing that has been holding it back was the huge bribe (called a tax credit) that the U.S. government was giving people to buy houses. Now that the tax credit has expired, there is no artificial incentive to buy homes and the real estate market has fallen through the floor. Unfortunately, there is every indication that things are going to get even worse. Read on to find out why.... (more)

Lawmakers agree on Wall Street's biggest overhaul since 1930s

Congressional negotiators Friday approved the most sweeping overhaul of U.S. financial regulation since the Great Depression, reshaping oversight of Wall Street and some of its most opaque concoctions.

Lawmakers from the House and Senate worked through the night in a 20-hour session to reach deals on two of their most far-reaching and contentious proposals -- a ban on proprietary trading by banks and new oversight of the derivatives market. This month, they’ve also agreed on measures to wind down big firms whose collapse might shake markets, to keep tabs on hedge funds and to make it easier for investors to sue credit raters.

“This is going to be a very strong bill, and stronger than almost everybody predicted that it could be and that I, frankly, thought it would be,” House Financial Services Committee Chairman Barney Frank, a Massachusetts Democrat, told reporters June 23 as lawmakers prepared for the final round of talks. (more)

Jim Rogers Video On: Silver, Gold, Sugar, Agriculture, Oil, Euro, US Dollar And Currencies

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