Monday, May 28, 2012

Real federal deficit dwarfs official tally

The typical American household would have paid nearly all of its income in taxes last year to balance the budget if the government used standard accounting rules to compute the deficit, a USA TODAY analysis finds.

Under those accounting practices, the government ran red ink last year equal to $42,054 per household — nearly four times the official number reported under unique rules set by Congress.

A U.S. household's median income is $49,445, the Census reports.

The big difference between the official deficit and standard accounting: Congress exempts itself from including the cost of promised retirement benefits. Yet companies, states and local governments must include retirement commitments in financial statements, as required by federal law and private boards that set accounting rules. (more)

Are Investors Running Out of Safe Havens to Put Money?

Amid all the challenges facing the markets — Greece, Facebook, JPMorgan — investors face an even larger potential problem: They soon could be running out of traditional safe havens for their money.

Much has been made recently of how gold no longer offers its traditional buffer against financial turmoil, with the yellow metal in a sharp pullback since early March.

But some strategists are beginning to worry that other places where investors are stowing their money — high-grade bonds, Treasurys and defensive stocks in particular — also could be losing their protective shields.

"The problem is we're seeing safe-haven flows with shrinking instruments into which you can run," says Kim Rupert, managing director of global fixed income analysis at Action Economics in San Francisco. "Once the run for the exits gets started it's going to be an absolute stampede." (more)

Near A Bottom In Crude Oil?

Rick Rule: "Avoiding the Ugly in the Junior Resource Sector"

In this excerpt from a talk at the Casey Research Recovery Reality Check Summit, legendary resource speculator Rick Rule makes a strong case for careful, disciplined investing in the junior resource sector, despite the market turning truly ugly.

You can hear Rick's entire entire presentation, along with those by the 30 other experts at the Summit – including their stock tips and other recommendations. The full audio collection is available in CD or MP3 format. Get full details here.

Steve Quayle - Preparing For The Financial Collapse & The Enemies Within

Steve Quayle guests with Doug and Joe Hagmann in a fascinating discussion on the current state of National, International and Socio-Economic affairs; and how you can be ready Physically, Spiritually, Financially and Geographically.We have a creator, but organized religion and politics have completely raped us into becoming sheeple.... come on people. religions today use war, rape and torture to make themselves right! I believe that somehow the true meaning that god wants us to know, has been hijacked. FOLLOW THE MONEY, for it is the root of bad.. we are hypocrits,wanting more more more while not reaching out a hand, sharing and just being nice anymore! According to apocrypha old writings this world and our material existence was created to punish us, so actually all these wars, elites, banksters are divinely allowed to f us up. Just look at the history, same thing over and over again.

Tyler Durden's picture Retail Pulls Money Out Of Stocks For 13th Consecutive Week

Not like this will come as a surprise to anyone in the aftermath of last week's abysmal FaceBook IPO which pretty much killed all retail interest in equity markets, but in the last week, the "dumb" money pulled another $3.5 billion out of domestic stocks per ICI, bringing the total tally to 13 consecutive weeks of outflows, and 52 weeks of outflows in the past 56 weeks, with redemptions amounting to $46 billion in 2012, compared to just $6.5 billion for the same period in 2011. Algo-matic, the 20 remaining Primary Dealers and whatever hedge funds are left can pass hot grenades amongst each other: the retail money (RIP) has found other ways to amuse itself.

US Weekly Economic Calendar

time (et) report period Actual forecast previous
Memorial Day
None scheduled
9 am Case-Shiller home price index April -- -0.8% (nsa)
10 am Consumer confidence index May 70.0 69.2
10 am Pending home sales April -- 4.1%
8:15 am ADP employment May -- 119,000
8:30 am Weekly jobless claims 5-26 370,000 370,000
8:30 am GDP revision 1Q
1.8% 2.2%
9:45 am Chicago PMI May 56.5% 56.2%
8:30 am Nonfarm payrolls May
165,000 115,000
8:30 am Unemployment rate May 8.1% 8.1%
8:30 am Personal income April 0.3% 0.4%
8:30 am Consumer spending April 0.3% 0.3%
8:30 am Core PCE price index April 0.2% 0.2%
10 am ISM May 54.0% 54.8%
10 am Construction spending April 0.2% 0.1%
TBA Motor vehicle sales May 14.5 mln 14.4 mln