Growing Numb to Crises: Don’t Let it Happen to You
Posted on 23 June 2010.
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Thursday, June 24, 2010
Expert: US Debt Bomb to Now Explode Five Years Sooner
The Treasury Department’s projection that U.S. debt will reach $19.6 trillion by 2015 brings the ticking debt bomb five years closer to exploding than previously projected, says Delta Global Advisors’ Michael Pento.
He warns that time is running out to do something to avoid such an economic doomsday.
The Treasury also estimated that total U.S. debt will top $13.6 trillion this year and rise to 102 percent of GDP by 2015, and that publicly traded debt would reach $14 trillion by 2015, up from last year's debt of “just” $7.5 trillion.
“The problem is that growing GDP when debt levels are so high is extremely difficult,” Pento wrote in a note to investors. (more)
He warns that time is running out to do something to avoid such an economic doomsday.
The Treasury also estimated that total U.S. debt will top $13.6 trillion this year and rise to 102 percent of GDP by 2015, and that publicly traded debt would reach $14 trillion by 2015, up from last year's debt of “just” $7.5 trillion.
“The problem is that growing GDP when debt levels are so high is extremely difficult,” Pento wrote in a note to investors. (more)
Two Leading Indicators Pointing to Another Recession
There are two well-known and important leading economic indexes for the U.S. economy: • The Conference Board’s Leading Economic Index (LEI), and
• The Weekly U.S. Leading Economic Index published by the Economic Cycle Research Institute.
I use them both in my analytical work to better understand the economy’s actual position in the business cycle. And in 2007, they gave me clear, recession warning signs. (more)
Small Banks and Big Risks
Congress is planting the seeds of the next big bank bailout.
Attention is focused on the House-Senate conference on a once-in-a-generation rewrite of the rules of finance. Meanwhile, a provision added, almost unnoticed, to a help-small-business bill that passed the House last week would allow all but the 100 largest banks to pretend they haven't made bad loans. The goal is to prompt them to lend more readily to small businesses.
The provision would permit more than 7,800 banks, with nearly $3 trillion in assets among them, to spread losses on bad real estate loans over six to 10 years instead of recognizing reality immediately. (more)
Euro's Fall Brings New Bargains Overseas
Europe is on sale.
A friend of mine left this week for Paris and a charming Left Bank hotel for less than $200 a night. A quick glance at some Internet travel sites indicated a slew of bargains, including cruises of the Greek isles for travelers who want to contribute to the country's struggling economy.
With the euro worth about $1.23, it might be time to book a long-delayed visit to a euro-zone country. But it’s not only hotels and restaurants that are attractively priced. Everything priced in euros is cheaper than it was as long as a buyer is paying in a currency that has appreciated against the euro. That’s not just dollars, especially since China said over the weekend that it would allow the yuan to appreciate. (more)
Find a personal money coach, free
Can't control your finances? Get yourself a coach.
Financial coaching is a relatively new concept, and it's available -- free -- to folks who realize they're headed for trouble as well as to those in crisis situations like collections or foreclosure.
Most programs are set up for low-income workers. Action for Boston Community Development, for example, is designed for Beantown residents living at 200% or less of the federal poverty level.Other programs don't have income limits. After all, it isn't only the working poor who have financial problems. Tiffany, a 33-year-old Connecticut resident, says she and her husband both have good jobs. But one month they couldn't find the money to pay a utility bill. (Last names have been withheld for privacy.) (more)
2 ETFs for any market conditions
With the last few years' volatility and major indexes still below highs last seen more than ten years ago at the beginning of "The Tech Wreck," many investors are wondering if there are any "safe harbors" or investments that can still generate a decent return on investment for the long term. While there's no "sure thing," one can look back over the last ten years and find various asset classes that have steadily outperformed the S&P 500 and might continue to do so in the future.
In this article we'll take a look at two of these and examine how they've fared and how and why they might continue to outperform in the future. (more)
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