Baltic Dry Index. 2452 +13 on the week
LIR Gold Target by 2019: $3,000.
"We shouldn't pour cold water on everything. We, the eight or nine players in global investment banking, have a very good future."
Deutsche Bank, CEO Josef Ackermann. Davos, January 2007.
American’s have all the beamers that they need, plus a surfeit of flat screen TV's, white goods, small electrics, and assorted Chinese knick knack’s of every description, according to Harvard’s Larry Summers, now in the process of jumping ship from the sickly Obama administration in Washington. The American consumer is all spent out and deeply in debt, and can no longer be the driver of global growth, according to Mr. Summers. Bad news indeed for all the export growth countries, now all busy manipulating their currencies lower in a failing attempt to keep exporting to US consumers. Below, Bloomberg covers the bad news. With a tidal wave of austerity sweeping across Euroland and the UK, the European consumer is an unlikely candidate to step up as a replacement buyer, that leaves the middle class of China, India and Japan, to drive the global economy. 2011 looks set to be the economic year from hell, though no one in the stock markets seems to see a problem coming.
"It's strange that men should take up crime when there are so many legal ways to be dishonest. “
Al Capone
Summers Says Global Economy Should Not Rely on U.S. Consumers
Oct. 1 (Bloomberg) -- U.S. trading partners should no longer rely on American consumers to drive global growth, said Lawrence Summers, the departing director of the National Economic Council.
“The global economy needs to be rebalanced,” Summers said today in Washington, speaking by video link to an economic development conference in Yalta, Ukraine. “It can’t have the United States consumer being the single engine of global economic growth.”
-----Summers also warned nations against interfering in currency markets. “When governments seek to manipulate exchange rates for competitive advantage, it rarely ends well,” he said.
The House of Representatives voted this week for a measure that would let domestic companies petition for duties on imports from China to compensate for the effect of a weak yuan. China said the legislation would do nothing to cut the U.S. trade deficit and only risk harming growth. The Senate won’t take up its version until after the November election, said Senator Charles Schumer, a New York Democrat.
http://noir.bloomberg.com/apps/news?pid=20601068&sid=aZ5qJB8WRSIk
Next, the very latest in the unofficial trade war between China and Japan. As a disinterested observer in faraway London, Japan doesn’t seem to hold any cards in the game except possibly getting dealer America to deal it the card marked US Navy. But the dealer is in deep hoc to China, and dealing Japan that card comes with all kinds of complications. We await next week’s developments with great interest. Yet another reason to stay long physical precious metals.
China Tells Japan to Maintain Ties After Island Dispute Erupts
Oct. 2 (Bloomberg) -- China called on Japan to make an effort to maintain relations as a dispute over islands both nations claim sent relations to their lowest in five years.
“I hope Japan will work with China to jointly maintain relations between the two countries,” Ma said, adding China has always attached importance to developing ties with Japan.
The uninhabited islets in the East China Sea, known as Senkaku in Japanese and Diaoyu in Chinese, have been Chinese territory since ancient times, Foreign Ministry spokesman Ma Zhaoxu said late yesterday, according to the state-run Xinhua news agency. Japan’s claim to the territory is “absurd, illegal and invalid,” he said.
Japanese Prime Minister Naoto Kan yesterday reiterated that the islands are Japanese territory historically and based on international law. Sovereignty over the area would give the holder rights to undersea gas and oil reserves.
Relations between Japan and China deteriorated after a Chinese fishing boat collided with two Japanese Coast Guard vessels. The release of the trawler’s captain after he was held for 17 days failed to assuage the Chinese government.
China two days ago released three of four Japanese employees of a construction firm, Fujita Corp., who were arrested for allegedly videotaping military targets.
After the trawler collision, China cut off ministerial talks and disrupted exports of rare earth metals such as cerium, used in polishing glass for hard-disk drives and as a catalyst to reduce car emissions.
China issued a travel advisory for Japan after Chinese tourists on a bus were harassed on Sept. 30.
The diplomatic row is the most serious since 2005, when thousands of Chinese protested Japanese textbooks, saying they downplayed that nation’s wartime atrocities.
http://noir.bloomberg.com/apps/news?pid=20601087&sid=at331_Cygc28&pos=9
Below, Uncle Sam joins John Bull in getting ready to devalue what passes in the 21st century for money. If this policy really worked, Argentina and Zimbabwe would be model countries. I don’t expect our ending to be very different to theirs, just that as far larger economies with mostly better rule of law, it will take both a little longer to achieve that promised land.
"The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice."
Henry Hazlitt
Fed Debates Easing Tools as Dudley Says Further Steps Warranted
Oct. 2 (Bloomberg) -- Federal Reserve policy makers are now debating how to deploy tools for more unconventional easing as two top officials indicated action may be needed to lower unemployment persisting near 10 percent.
“Further action is likely to be warranted unless the economic outlook evolves in a way that makes me more confident that we will see better outcomes for both employment and inflation before too long,” New York Fed president William Dudley said yesterday.
His comments, following Chairman Ben S. Bernanke’s statement on Sept. 30 that the Fed has a duty to aid the economy, indicate that the outlook has weakened enough for action, said former Fed Governor Laurence Meyer. Dudley, vice chairman of the Fed’s policy-setting Open Market Committee, said additional securities purchases can have a “significant” effect on the economy
----“They have decided to do another round of quantitative easing,” said Dino Kos, managing director at Portales Partners LLC in New York and former executive vice president in charge of markets at the New York Fed. “The only thing left to fight over is how they do it.”
Dollar Weakens
The dollar fell to the lowest level since March versus the euro and dropped against the yen after Dudley’s comments.
----The speech is “a strong indication that the next statement is going to announce purchases,” said Jan Hatzius, who succeeded Dudley as chief U.S. economist at Goldman Sachs Group Inc. In a research note, Goldman Sachs said the amount of announced purchases is likely to be $500 billion.
http://noir.bloomberg.com/apps/news?pid=20601068&sid=aYzDJA9ZqWyE
We end for the weekend with America’s mortgage foreclosure industry in chaos. This week, Bank of America joined JP Morgan and Ally Financial’s GMAC division in stopping foreclosures in 23 states. Between them they account for roughly 35,000 mortgages a month. By the end of the month, it is highly probable that all mortgage foreclosures in the 23 states will have been stopped. No word so far, as to what this does to the billions in pools of mortgages peddled to unsuspecting investors worldwide, and all too often rated falsely “triple-A” in the process. With 35,000+ stopped foreclosures piling up per month, and perhaps another 500,000+ requiring renewed investigation to find out who really holds the right to foreclose under the 23 states different systems, the whole massive mess is a fitting end to the decade of avarice and fraud unleashed by Wall Street peaking 2004-2007. If just 10% of the 500,000 are found to be in error, with the wrong party having foreclosed fraudulently, damaging the foreclosed party in the process, the US tort bar will be I clover for the rest of this new decade. The Banks are going nowhere, and have very deep pockets backed up by the Fed. Who wouldn’t want to file a class action lawsuit in 23 states, and possibly toss in a RICO filing on top. If it wasn’t so serious and devastating to so many of the parties being foreclosed, this would be the stuff of a major Hollywood comedy.
The private sector will find ways to structure debt arrangements that will ensure that most US homeowners facing big increases in their mortgage payments will stay in their homes, Ed Lazear, chairman of the White House council of economic advisers has told the Financial Times.
September 2 2007
BofA Halts Foreclosures: Do Any Banks Actually Read Their Own Documents?
(Oct. 1) -- The devil is in the details, but who has time to read them?
Bank of America today announced that it will halt foreclosures in 23 states. The reason, according to BofA, is that the company rarely, if ever, actually read any of the 7,000 to 8,000 foreclosure documents it mailed out to struggling homeowners each month, CBS News reported. As a result, the bank may have missed errors or not reviewed faulty information provided by law firms that could have reversed a foreclosure decision.
In a deposition, a bank official was candid about the reason that she did not review the information contained in the documents. "I typically don't read them because of the volume that we sign."
As Daily Finance reported, BofA's move comes just five days after JPMorgan announced that the company likewise signed 18,000 mortgage documents each month without knowing their actual contents.
GMAC also halted foreclosures last month after acknowledging that upward of 10,000 monthly foreclosure affidavits were signed by people who had no direct knowledge of whether what was contained in them was true or false.
"…it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now."
Cyril Moulle-Berteaux. Managing partner, Traxis Partners LP. May 6, 2008. WSJ.
Have a great weekend everyone.
GI.
No comments:
Post a Comment