Wednesday, February 3, 2010

Jay Taylor: Turning Hard Times Into Good Times

click here for audio

Afghan 'geological reserves worth a trillion dollars'

Afghanistan, one of the world's poorest countries, is sitting on mineral and petroleum reserves worth an estimated one trillion dollars, President Hamid Karzai said Sunday.

The war-ravaged nation could become one of the richest in the world if helped to tap its geological deposits, Karzai told reporters.

"I have very good news for Afghans," Karzai said.

"The initial figures we have obtained show that our mineral deposits are worth a thousand billion dollars -- not a thousand million dollars but a thousand billion," he said. (more)

The Next Leg Of The Housing Crisis In Five Simple Charts

Everything that the government has done so far, with a few minor detours, has been almost exclusively focused on maintaining home prices high, by tweaking either the supply or the demand side of the housing equation. As the bulk of consumer net wealth is concentrated in the housing sector, and a wealthy and confident consumer, much more so than the banking system, is critical to the recovery of America's economy, the Administration will do everything in its power to achieve its goal of artificially manipulating the housing market, thereby not causing an incremental loss of wealth to those still stuck with overpriced houses, while the real intersection of actual supply and demand curves would indicate a materially lower equilibrium price. This is ironic, as proper price discovery is critical for a true recovery, since Americans realize all too well that buying a house at prevailing levels in advance of the second down-leg in housing is senseless, the continued pursuit of such flawed policies by the Fed and President Obama merely pulls the market ever further away from its equilibrium, thereby making the anticipated second dip so much more likely and not that far off in the distant future. Below are 5 simple charts the highlight just how precarious the housing situation in the U.S. is, and how likely the second, and probably much more fierce, leg down in the markets is going to be. (more)

20 reasons Global Debt Time Bomb explodes soon

Retire? You can fuggetaboutit if the new Global Debt Time Bomb is detonated by any one of 20 made-in-America trigger mechanisms.

Yes, 20. And yes, any one can destroy your retirement because all 20 are inexorably linked, a house-of-cards, a circular firing squad destined to self-destruct, triggering the third great Wall Street meltdown of the 21st century, igniting the Great Depression II that George W. Bush, Ben Bernanke, Henry Paulson and now President Obama have simply delayed with their endless knee-jerk, debt-laden wars, stimulus bonanzas and bailouts.

Wow, what an epic Hollywood blockbuster this will make: You know the drama, can't miss the warnings. The financial press is flooding us with plot lines ... a Forbes cover story focuses on a "Global Debt Bomb: How It Could Wreck Your Life" ... Leaders at the World Economic Forum on Swiss Mt. Davos fear another global meltdown will trigger mass rebellions ... The Economist calls the plot a "Global Asset Bubble," with cheap money fast driving up asset prices. (more)

Warning: This is Not Another Wall Street Conspiracy Theory, These are the Facts

Just last week, the House Committee on Oversight and Government Reform held a hearing on the U.S. Federal Reserve's decision to directly pay billions of dollars to banks as part of its scheme to bail out insurance giant American International Group Inc. (NYSE: AIG).

According to committee Chairman Dennis Kucinich, D-Ohio, the testimony that congressmen heard just didn't "pass the smell test."

What really stinks about the whole mess is not only the cover-up of what really happened and why, but the inability of anybody in Congress to actually do their homework and be able to frame pointed questions and get to the truth. (more)

Unemployment Rises in Most Metro Areas

Unemployment rose in most cities and counties in December, signaling that companies remain reluctant to hire even as the economy recovers.

The unemployment rate rose in 306 of 372 metro areas, the Labor Department said Tuesday. The rate fell in 41 and was unchanged in 25. That's worse than November, when the rate fell in 170 areas, rose in only 154 and was unchanged in 48.

The metro employment numbers aren't seasonally adjusted and can be volatile. Many of the increases were due to seasonal factors.

For example, Ocean City, N.J., which bills itself as "America's Greatest Family Resort," saw its unemployment rate jump to 16.4 percent in December from 14.8 percent the previous month.
That's double the 8 percent it reported in July, even though the nation's economy was in worse shape then. (more)

Victor Sperandeo on Ben Bernanke / Hyperinflation

The Subtle Nationalization of the Banks and Housing Market – How the Taxpayers Support the Banks through Pseudo Nationalization. We Own the Financial

I was amazed at how many people got all worked up when the idea of nationalizing the banks came up. These people fail to pay attention to the fact that we’ve already nationalized Fannie Mae and Freddie Mac and these two giants essentially hold up the entire edifice of the secondary mortgage market. But no one in their right mind is buying those risky mortgage backed securities anymore right? Well we have a program for that too with the Federal Reserve nearing its stated buying cap of $1.25 trillion in mortgage backed securities. In other words, we’ve already nationalized the mortgage market except unlike nationalization, we get the worst junk pushed to taxpayers while the banks enjoy record profits and nothing really fundamentally changes. (more)

Roubini: U.S. In Trouble as Outlook Is Very Dismal

The outlook for the U.S. economy is “very dismal” because growth is coming from replenishing depleted inventories while stimulus measures are largely fueling consumption, says New York University economist Nouriel Roubini.

Most Americans will still feel like they are in a recession as unemployment rates will rise from current levels of around 10 percent, he says.

“I think we're in trouble,” Roubini told Bloomberg.

“It’s going to feel like a recession even if technically we’re not going to be in a recession.” (more)

50% devaluation of the US Dollar 2010, get out of paper money

An Insider's View of the Real Estate Train Wreck, by David Galland, The Casey Report

The first time I spoke with real estate entrepreneur Andy Miller was in late 2007, when I asked him to serve on the faculty of a Casey Research Summit. As John Mauldin, a former faculty member himself, knows, we're very selective with our speakers. And there was no one in the nation I wanted more than Andy to address the critical topic of real estate.

My interest in Andy was due to the fact that he has been singularly successful in pretty much all aspects of the real estate market, including financing and developing large projects – such as shopping centers, apartment communities, office buildings, and warehouses – from one end of the country to the other. His expertise has also allowed him to build an impressive business providing assistance to large financial institutions that need help in dealing with problem commercial real estate loans. As you might suspect, business is booming. (more)