Tuesday, August 10, 2010

Side effect of the new frugality: Happiness


She had so much.

A two-bedroom apartment. Two cars. Enough wedding china to serve two dozen people.

Yet Tammy Strobel wasn’t happy. Working as a project manager with an investment management firm in Davis, Calif., and making about $40,000 a year, she was, as she put it, caught in the “work-spend treadmill.”

So one day she stepped off.

Inspired by books and blog entries about living simply, Ms. Strobel and her husband, Logan Smith, both 31, began donating some of their belongings to charity. As the months passed, out went stacks of sweaters, shoes, books, pots and pans, even the television after a trial separation during which it was relegated to a closet. Eventually, they got rid of their cars, too. Emboldened by a Web site that challenges consumers to live with just 100 personal items, Ms. Strobel winnowed down her wardrobe and toiletries to precisely that number.(more)

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Market Data Firm Spots the Tracks of Bizarre Robot Traders

The Atlantic,
Mysterious and possibly nefarious trading algorithms are operating every minute of every day in the nation's stock exchanges.

What they do doesn't show up in Google Finance, let alone in the pages of the Wall Street Journal. No one really knows how they operate or why. But over the past few weeks, Nanex, a data services firm has dragged some of the odder algorithm specimens into the light.

The trading bots visualized in the stock charts in this story aren't doing anything that could be construed to help the market. Unknown entities for unknown reasons are sending thousands of orders a second through the electronic stock exchanges with no intent to actually trade. Often, the buy or sell prices that they are offering are so far from the market price that there's no way they'd ever be part of a trade. The bots sketch out odd patterns with their orders, leaving patterns in the data that are largely invisible to market participants. (more)

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When Will Financial Armageddon Begin?

By Greg Hunter


A little more than two years ago, economist John Williams of shadowstats.com predicted a “severe recession” was coming and soon. At the time, I was working as an investigative correspondent for CNN. I interviewed Williams for a story about the coming financial crisis. Most so-called experts, at the time, did not see the financial meltdown coming, let alone that all the banks were in trouble. Williams’ assessment of the economy was spot on in 2008. I don’t see how you can characterize what we have now as anything but a “severe recession.” Accurate information is the first and foremost reason to use someone as a source when you are a journalist. In my experience, what I have gotten from Williams has been stellar. (Click here for the 2008 CNN story featuring Williams and his predictions for the President in 2012.) (Click here for shadowstats.com)

Williams also predicted 2 years ago we would have a “hyperinflationary depression” within 10 years. Then, about a year ago, he revised his prediction and narrowed the window to “five years.” The day before last Friday’s dismal jobs report, Williams said, “. . . the timing of the looming U.S. financial Armageddon is coming into better focus, with increasingly high risk of it breaking within the next six months to a year.”

“Financial Armageddon . . . within the next six months to a year.” I called Williams to see why the odds of calamity have accelerated. He told me on the phone last night, “What is happening now to bring the timing into focus is the economy IS turning down. It is no longer the perspective the economy is going to turn down. That, in turn, will eventually trigger all the problems with the dollar, the debt and the deficit.” (more)

Shadow Fed: Europe May Default, GOP Will Win House

By: Dan Weil

The recent annual gathering of financial movers and shakers known as a “Shadow Fed” produced some predictions of a sovereign default in Europe.

It also produced a consensus forecast that Republicans will regain control of the House of Representatives this November.

The Maine confab is hosted by Cumberland Advisors money management firm and was attended by 41 heavyweights in the financial community this year.

Of the 26 participants in the group’s survey, four expected at least one European country to default or reschedule its debt payments in the next year, according to a commentary about the meeting written by Cumberland Chairman David Kotok that appeared on various media outlets. (more)

Massive Wealth Shift in Full Swing

Martin here with a quick update on foreign markets.

One year ago, in our 2009 Global Forum, we forecast a massive shift of wealth — from the United States, bogged down with huge deficits and chronic, long-term unemployment … to emerging markets, enjoying the most rapid growth on the planet.

Now, that shift is in full swing …

Since the beginning of 2009, despite the biggest government bailouts and stimulus of all time, the Dow Jones Industrial Average is up only 15.4 percent.

In contrast …

  • FXI, our favorite exchange traded fund (ETF) focused on China’s blue chips, has gained 35.8 percent in the same period, beating the Dow by 2.3 to one …
  • The ETF tied to Singapore’s market (EWS) has gained 58.5 percent, trumping the Dow by 3.8 to one …
  • The ETF for Chile (ECH) has jumped 80.5 percent, or 5.2 times faster than the Dow, and …
  • Our favorite Brazil ETF — EWZ — has surged by a whopping 113.2 percent, or 7.35 times better than the Dow!

In other words, for every $10,000 investors might have made in the Dow since the beginning of 2009, you could have made $73,500 simply buying and holding the Brazil ETF. (more)

BNN : Top Picks

BNN speaks to Jim Huang, president, T.I.P. Wealth Manager shares his top picks.

click here for video

Who’s Scoffing Now?

by David Galland, Managing Editor, The Casey Report

A couple weeks ago, the family and I watched Dirty Jobs, an altogether entertaining show from the Discovery Channel. In the episode we watched the host, Mike Rowe, serve as a mechanic in the military. There were a couple of things that caught my eye.

The first was that, using nothing more than a cleverly arranged array of blocks and tackle, five members of the mechanics group were able to easily muscle a well-stuck 5-ton Humvee from deep sand. We humans are, indeed, a creative and intelligent species.

The second thing was the strict adherence to protocol, with everyone acting almost robotic in their issuance of commands and responses, and surgical in their use of equipment. Even so, this slavish adherence to “the book” is understandable, given that the soldiers operate in extremely difficult, dangerous, and often chaotic circumstances.

Therefore, I had to raise an eyebrow the next day. when BBC reported that of $9 billion allocated to the U.S. military to be used in Iraq reconstruction projects, fully $8.7 billion has gone missing. Proving, once again, that no matter how well plans are laid or how tightly “management” might think they are controlling things, gaps in process can open up that are wide enough to drive a Humvee through – a Humvee full of cash, in this particular case. (more)

Rolling Stone: Wall Street's Big Win

By Matt Taibbi

Cue the credits: the era of financial thuggery is officially over. Three hellish years of panic, all done and gone – the mass bankruptcies, midnight bailouts, shotgun mergers of dying megabanks, high-stakes SEC investigations, all capped by a legislative orgy in which industry lobbyists hurled more than $600 million at Congress. It all supposedly came to an end one Wednesday morning a few weeks back, when President Obama, flanked by hundreds of party flacks and congressional bigwigs, stepped up to the lectern at an extravagant ceremony to sign into law his sweeping new bill to clean up Wall Street.

Obama's speech introducing the massive law brimmed with celebratory finality. He threw around lofty phrases like "never again" and "no more." He proclaimed the end of unfair credit-card-rate hikes and issued a fatwa on abusive mortgage practices and the shady loans that helped fuel the debt bubble. The message was clear: The sheriff was padlocking the Wall Street casino, and the government was taking decisive steps to unfuck our hopelessly broken economy. (more)

U.S. electricity blackouts skyrocketing

(CNN) -- New York's Staten Island was broiling under a life-threatening heat wave and borough President James Molinaro was seriously concerned about the area's Little League baseball players.

It was last July's Eastern heat wave and Consolidated Edison was responding to scattered power outages as electricity usage neared record highs.

So, authorities followed Molinaro's suggestion to cancel that night's Little League games, which were to be played under electricity-sucking stadium lights.

"Number one, it was a danger to the children that were playing out there in that heat, and secondly it would save electricity that people would need for air conditioning in their homes," said Molinaro, who'd been forced to sleep at his office that night because of a blackout in his own neighborhood. (more)

The Great Grain Robbery

In 1972, Russia’s wheat crop failed. Russia had to dip into the global grain markets to meet demand. Before Washington knew the plight of its Cold War adversary, Russia bought up all of the surplus wheat in the US. Dubbed “The Great Grain Robbery,” Russia’s purchases sent grain prices soaring around the world.

Grain prices soon hit 125-year highs in Chicago. In a 10-month span, soybeans went from $3.31 to $12.90 a bushel. Food prices around the world rose 50% in 1973.

Some of the old traders are wondering if it’s happening all over again.

On Thursday, wheat prices hit $7.25 a bushel, a 71% increase since the June low. It’s the biggest one-month jump in three decades. The last time prices got this high was during the food crisis in 2008. (Wheat prices topped out at $13 then.) You may recall the ensuing food riots across the globe from Haiti to Egypt to Bangladesh.

Russia is again the center of attention. The worst heat wave and drought in a century has baked crops to a crisp in Russia, Ukraine and Kazakhstan. These three are among the biggest exporters of wheat in the world. They provide critical food supplies to the largest importing regions in the world – the Middle East and North Africa. (more)

Gerald Celente on Alex Jones

Alex welcomes back to the show Gerald Celente, a trend forecaster, publisher of the Trends Journal, business consultant and author who makes predictions about the global financial markets and other events of historical importance. Celente's accurate forecasts include the 1987 stock market crash, the collapse of the Soviet Union in 1991, the 1997 Asian currency crash and the 2007 subprime mortgage crisis. He is the author of Trend Tracking: The System to Profit from Today's Trends and Trends 2000: How to Prepare for and Profit from the Changes of the 21st Century. Alex covers the latest news and also takes your calls. click here for audio

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