Wall Street Is Running A Casino

America Just Declared The Recovery Over So You'd Better Get Ready For The Double Dip

Today's bleak consumer confidence number is undoubtedly bad news for the economy. The bigger than expected drop suggests that consumers have lost confidence in the recovery, which will drive down home prices and consumer spending.

Consumer confidence is typically our "first look" at the state of the economy. While most government aggregated data come out with a two-month lag, or more, consumer confidence hits with just a one month lag. Studies have shown that consumer confidence is a good predictor of consumer spending numbers. Basically, people surveyed seem to be good at accurately reading their own economic situation, and those surveyed accurately reflect the broader economy. When consumer confidence drops to such deep unexpected levels--today's were the worst in 27 years--then it is a flashing red-light about the economy. (more)

Keiser Report №19: Markets! Finance! Scandal!

The Triple Dip?

Home prices are falling again, says the latest rendition of the Case-Shiller home price index. National home prices fell 2.5% year over year in the fourth quarter of 2009, the group claims. Both the 10-city and 20-city indexes dropped 0.2% from the previous month.

That puts the average home price down 29% from its 2006 peak, back to prices typical of summer 2003. Ouch.

“This isn’t a forecast, but it’s a worry,” Robert Shiller, founder of the index, told unwilling ears on CNBC, “that home prices might drop substantially from here foreword, once this [government] support is taken away… Mortgage rates will go up, the economy might double dip, the expectations for housing -- which helped drive the markets -- might change suddenly when people see the support being withdrawn. Some people were buying because of the homebuyer tax credit. When that’s withdrawn, a lot of people will be absent the market. There is substantial downward risk right now.

“But on the other side,” he added, unable to control laughter sprung from true insanity of it all, “we’ve seen a bubbly nature in the market recently. So I think just uncertainty is at a maximum right now.” Agora Financial

Gold May Advance to $1,400 in 12 Months: Technical Analysis

Gold may climb to about $1,400 an ounce in the next 12 months, according to technical analysis by Chartered Market Technician Daniel Bruno, who advises banks and hedge funds.

The attached chart shows gold is trading above a trend line that starts from the metal’s low in January last year. A climb to $1,419 an ounce would equate to a 150 percent projection of bullion’s rally from January 2009 to its record in December, according to a series of numbers known as the Fibonacci sequence.

Gold “remains robust above its rising trend line,” and the recent rebound from a three-month low on Feb. 5 is a “bullish” signal, Bruno said in an interview. “We project about $1,400 within 12 months as long as the $1,000 level holds,” he said. (more)

Ireland, Greece and leaving the euro

The economic travails of Ireland and Greece have provoked a debate on the wisdom of the two most vulnerable members of the infamous PIGS (Portugal, Ireland, Greece and Spain) grouping of Eurozone members, on leaving the euro.
On Sunday, in an article in The Sunday Independent, economist and Group Business Editor of Independent Newspapers, Brendan Keenan, pointed out that both Ireland and Greece are largely dependent on foreign lenders to fund their public debt and suggested that if an exports boost did not follow from devaluation, leaving the euro could result in a more dire situation for a country than it had faced within the EMU (European Monetary Union). He says it depends on how sensitive a country's exports are to internal costs, and whether those costs rise quickly because of the increase in imported costs from the cheaper currency. Keenan concludes that those countries which think the balance of advantage for them lies with euro membership will have to tailor their policies to achieve growth within the single currency. Ireland has not yet done so. "We should worry less about debt and defaults and more about enhancing the economy itself," he says. (more)

China in record US debt sell-off

China sold a record amount of its US Treasury holdings in December, ceding its place as the world's biggest foreign holder of US debt to Japan.

According to Treasury figures released on Tuesday, Beijing sold off more than $34bn of its holdings in the final month of 2009, cutting its holding of US debt by just over 4 per cent to $755.4bn.

Japan now holds almost $11bn more US debt than China, with a total of nearly $769bn.

Japan had been the largest holder of US Treasury bonds until September 2008, when it was overtaken by China. (more)