But yes, there is other news
Apr. 28th, 2011 11:53 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
solarbirdAnd finally, in other news:
Tories are starting to plan for an NDP government, and at least this one says, "Well, after the last few years, we have it coming." (As do the Grits.)
Meanwhile, in BC, the Lower Mainland real estate market just bit the turf. That's gonna hurt.
Meanwhile, how 'bout that US$? DIX of 73.270 and that's not awesome - it's below the lows of a couple of years ago, and that's part of that stock market rally - a lot of new cash (mostly in the form of, let's call it, printed money) is making its way into various markets. Adjusted for the dollar's devaluation, stocks are up less than a percent for the year. The DIX was actually below 73 for a while this morning.
Mish argues that no one wants to be the reserve currency, because the costs are too high. It's an interesting read, if nothing else.
Have you seen silver lately? Silver is where people who can't afford to play with gold. As gold gets higher, you get more people forced out by pricing, and into silver. You can make a lot of money in a silver spike. You can also lose even more; it's one of those make-a-small-fortune-by-starting-with-a-big-one markets. But until then, industries which use silver are going to suffer. When you have shit like this going down, you have a run on silver - it'll rocket up and then right back down, so be careful.
That M1 multiplier I keep talking about isn't getting any healthier, by the way. The GDP boost being provided by "borrowed" - really printed, functionally, at this point - money isn't keeping up with the cost of that money. I've talked about that before, of course; debt is good, but debt is only good if the economic gain is greater than the cost of borrowing. So if you borrow $1 and pay 20¢ in interest, and get back $2 in economic growth, you're golden! That's good debt. But you'd better get at least $1.20 back in economic growth - no return, but no loss - or you're borrowing yourself downward, not upwards. Currently, the US is borrowing itself down.
Talking of, Robert Rubin has plans for working around the debt ceiling - at least for a little while.
Housing has continued to be a complete disaster. Most of this loss hasn't been realised yet, either in securities based on insane valuations or in actual attempt to recoup investment when moving, but it's still huge, as this breakdown shows. There's actually been a resumption in CDO action; since nobody got punished and none of the money stolen via fraud got returned, and all the criminals were rewarded with bailouts, you're seeing some double-dipping going on. Because why? Because they got away with it and they made a profit. That profit came out of your tax dollars, but who cares about that? See previous posts about corporate regulatory capture.
Talking of, Zero Hedge says it's not merely the top 1% - it's the top 0.1%, and has charts to show it.
I've been talking occasionally (hopefully at least some online) about the ramp up in the producer cost index. That's about to hit retail. Wal-Mart is telling anyone who will listen to prepare for serious inflation at the retail level. Some of that is the collapsing US$, but some of it is also in food due to poor crops and other unfortunate combinations of effects.
Japan's retail sales collapse, due to the tsunami. This is of course unavoidable, but still isn't going to help anything economically.
All that said, remember I talked about the collapse in the Baltic Dry Index? That is not yet being seen in railcar loadings. I must emphasise that this down signal has not had the critical confirmation it needs to have before it becomes meaningful.
And now we have initial unemployment (first version) gains coming in at 429,000 again - and last weeks' was revised upwards (again) to 404,000, and two weeks ago's revised figure is at 416,000. That's a steady 4-handle, which is, as they say, not helping. (And yes, the birth/death model is still adding over 100,000 "estimated jobs" per month. Participation rate is still hovering at a very low 64%.) MarketWatch now reports that food stamps now make up 18.3% of personal income, and wages are down to 50.5%, both reported as the highest and lowest figures (respectively) on record.
Oil hit US$114/barrel this morning before heading back down to $112 and change; Exxon is doing just great. Gold, US$1539/oz.
That's all for now. Good luck out there.
Tories are starting to plan for an NDP government, and at least this one says, "Well, after the last few years, we have it coming." (As do the Grits.)
Meanwhile, in BC, the Lower Mainland real estate market just bit the turf. That's gonna hurt.
Meanwhile, how 'bout that US$? DIX of 73.270 and that's not awesome - it's below the lows of a couple of years ago, and that's part of that stock market rally - a lot of new cash (mostly in the form of, let's call it, printed money) is making its way into various markets. Adjusted for the dollar's devaluation, stocks are up less than a percent for the year. The DIX was actually below 73 for a while this morning.
Mish argues that no one wants to be the reserve currency, because the costs are too high. It's an interesting read, if nothing else.
Have you seen silver lately? Silver is where people who can't afford to play with gold. As gold gets higher, you get more people forced out by pricing, and into silver. You can make a lot of money in a silver spike. You can also lose even more; it's one of those make-a-small-fortune-by-starting-with-a-big-one markets. But until then, industries which use silver are going to suffer. When you have shit like this going down, you have a run on silver - it'll rocket up and then right back down, so be careful.
That M1 multiplier I keep talking about isn't getting any healthier, by the way. The GDP boost being provided by "borrowed" - really printed, functionally, at this point - money isn't keeping up with the cost of that money. I've talked about that before, of course; debt is good, but debt is only good if the economic gain is greater than the cost of borrowing. So if you borrow $1 and pay 20¢ in interest, and get back $2 in economic growth, you're golden! That's good debt. But you'd better get at least $1.20 back in economic growth - no return, but no loss - or you're borrowing yourself downward, not upwards. Currently, the US is borrowing itself down.
Talking of, Robert Rubin has plans for working around the debt ceiling - at least for a little while.
Housing has continued to be a complete disaster. Most of this loss hasn't been realised yet, either in securities based on insane valuations or in actual attempt to recoup investment when moving, but it's still huge, as this breakdown shows. There's actually been a resumption in CDO action; since nobody got punished and none of the money stolen via fraud got returned, and all the criminals were rewarded with bailouts, you're seeing some double-dipping going on. Because why? Because they got away with it and they made a profit. That profit came out of your tax dollars, but who cares about that? See previous posts about corporate regulatory capture.
Talking of, Zero Hedge says it's not merely the top 1% - it's the top 0.1%, and has charts to show it.
I've been talking occasionally (hopefully at least some online) about the ramp up in the producer cost index. That's about to hit retail. Wal-Mart is telling anyone who will listen to prepare for serious inflation at the retail level. Some of that is the collapsing US$, but some of it is also in food due to poor crops and other unfortunate combinations of effects.
Japan's retail sales collapse, due to the tsunami. This is of course unavoidable, but still isn't going to help anything economically.
All that said, remember I talked about the collapse in the Baltic Dry Index? That is not yet being seen in railcar loadings. I must emphasise that this down signal has not had the critical confirmation it needs to have before it becomes meaningful.
And now we have initial unemployment (first version) gains coming in at 429,000 again - and last weeks' was revised upwards (again) to 404,000, and two weeks ago's revised figure is at 416,000. That's a steady 4-handle, which is, as they say, not helping. (And yes, the birth/death model is still adding over 100,000 "estimated jobs" per month. Participation rate is still hovering at a very low 64%.) MarketWatch now reports that food stamps now make up 18.3% of personal income, and wages are down to 50.5%, both reported as the highest and lowest figures (respectively) on record.
Oil hit US$114/barrel this morning before heading back down to $112 and change; Exxon is doing just great. Gold, US$1539/oz.
That's all for now. Good luck out there.
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no subject
Date: 2011-04-28 07:22 pm (UTC)no subject
Date: 2011-04-28 09:02 pm (UTC)no subject
Date: 2011-04-28 08:49 pm (UTC)no subject
Date: 2011-04-28 09:04 pm (UTC)no subject
Date: 2011-04-28 09:41 pm (UTC)Which also means I'm going to hang onto it; it's for major inflation and currency disaster scenarios. Although I've considered selling my one .1oz gold coin and converting IT into silver; the silver to gold price ratio seems badly out of whack.
no subject
Date: 2011-04-28 10:06 pm (UTC)While commodities, energy, and food are showing inflation, it hasn't affected core inflation numbers at all. Core inflation is still way too low--about 1%, when the target is 2%, and the target should be more like 4% or even higher. Inflation hurts people with low and moderate incomes but the real problem there is the stagnation of incomes. So long as unemployment is high and incomes are flat or declining we need more inflation than we have.
The reason our spending isn't getting anywhere is that we haven't had much of it. If you include government spending at all levels we're just treading water. Much of our debt has been tax cuts with a poor return or corporate bailouts with a net return far below opportunity cost. We need to be spending way more, particularly on infrastructure, but also on more support for the unemployed and those who lost or are in danger of still losing their homes. And we should be planning higher marginal rates on high incomes that are phased in as soon as we have a real recovery and have any real threat of inflation. Tax rates on the lower 80% are about right; we need to tax all investment income at the same rate, get rid of most deductions, and add in a bunch of new tax brackets starting at $250K and working up to a top rate of 50% or more.
The bipartisan (and worse, international) anti-deficit and austerity madness is killing any hope of a real recovery. That needs to change, and change fast.
Edited to add: I hope the NDP wins in Canada. Their proposed economic remedies and policies are a lot better than those of either the Tories or Liberals. Hopefully they'll be able to provide a good counter-example to the current widespread madness.