Results 1 to 5 of 5

Thread: News from around the world

  1. #1
    Veteran Member person's Avatar
    Joined
    Sep 2007
    Posts
    633
    Thanks
    33
    Thanked 34 Times in 23 Posts

    Default News from around the world

    Starting international:

    More pondering about why the USD hasn't crashed and burnt already
    Inquiring minds are pondering the question "Is the ECB propping up the US dollar?"
    Please consider the following email chain over the past five days, all from people whose opinions I respect. The discussion started with an email from Minyan Phillip on May 2nd.
    http://globaleconomicanalysis.blogsp...up-dollar.html

    In the last few day I have been at the Asian Development Bank meetings in Madrid and then visited Hong Kong and China. I have presented my view on the severity of the US recession and its potential effects on economic growth in China and Asia. Will this region decouple from the US economic contraction?
    Here are three media reports of my views on the US and its effects on Asia:
    http://www.rgemonitor.com/blog/roubini/252585/


    Moving towards the US:

    Gambling with other people's money seems to be working out so well for everyone else - Let it ride!
    The Pension Benefit Guaranty Corp., the government agency that protects the pensions of 44 million workers in case their employers can't (or won't) pay promised benefits, has announced that to avoid going bust it will double the percentage of its portfolio -- to 45% -- that it puts into stocks. An additional 10% will go into alternative investments, including hedge funds.
    http://articles.moneycentral.msn.com...ef=patrick.net

    May 9 (Bloomberg) -- The U.S. House of Representatives passed legislation to let a federal agency insure up to $300 billion in mortgages to help homeowners avert foreclosure, a day after the White House threatened to veto the measure.
    http://bloomberg.com/apps/news?pid=2...fer=realestate

    I've left out most of the bad hedge fund news from the last few days... there's just too much of it.

    Boosting revenue sounds like a good plan:
    NEW YORK (Reuters) - Citigroup Inc said on Friday it plans to shed $400 billion of assets within three years and boost revenue by up to 10 percent annually, in a bid to restore profitability after huge losses tied to flagging mortgage and credit markets.
    http://www.reuters.com/article/ousiv...080509?sp=true

    As does palming bad debt onto other people
    The worlds largest banks are feeding on the worlds public sector more than ever. Bloomberg is reporting that Citigroup and UBS are exiting the auction rate securities market.
    http://bankimplode.com/blog/?p=165

    And people are having a hard enough time buying stuff to pay their mortgages, apparently
    No longer able to turn their homes for cash, Americans are increasingly using plastic to meet their basic living expenses. But many can't afford to pay the bills.
    http://money.cnn.com/2008/05/09/news...ion=2008050909

    While in the past cards were used primarily to purchase big ticket items, spreading out costs over many months, they are now increasingly used to bridge the gap between cost of living and the diminishing purchasing power of Americans who have been taxed mercilessly by inflation.
    ...
    In fact, one reason some homeowners have such large mortgages is that they consolidated their credit card debts into their mortgages each time they refinanced. Why should renters be forced to pay off their credit card debts while homeowners have theirs forgiven?
    http://www.financialsense.com/fsu/ed...2008/0509.html

    On to commodities:

    ORLY?
    The opportunities given today in gold & silver will be written about for another few years. The prices offered in early 2008 will be seen as tremendous bargains.
    http://www.financialsense.com/fsu/ed...2008/0507.html

    The fact of the matter is that gold and silver are becoming more of a bargain on a daily basis. The reason is very simple: Every day, the central bank money spigots are spewing out at least ten times as much money, as miners are able to produce gold and silver!
    Until this situation is reversed, the fundamentals will support higher prices.
    http://www.financialsense.com/fsu/ed...2008/0509.html

    Oil gives me a headache
    The difficulty with the bubble moniker is determining exactly how much of the price is being driven by purely speculative factors. With Crude, a variety of forces are driving prices: A combination of both fundamentals (increasing demand, constrained supply, pipeline problems), technicals (Trend, money flow, etc.), along with the geopolitics of two Middle East wars -- as well as some speculation.
    http://bigpicture.typepad.com/commen...il-bubble.html

    So does GSAX need to unwind a long oil position?
    Goldman Sachs is at it again, manipulating the price of oil and gas. This is the same old game and don't you play it.
    http://www.stockmarketimplode.com/20...l-that-is.html

    There is quite a bit of sentiment around that it's those damn speculators driving up futures prices. But shouldn't people just sell to them then, and take their money, if it's just hot air?
    From Bloomberg:
    India, the world's second-largest buyer of vegetable oils, banned futures trading in soybean oil, rubber, chick peas and potatoes as the government intensified efforts to cool inflation that's at the highest in more than three years.
    Trading has been halted for at least four months from today...
    http://www.nakedcapitalism.com/2008/...ia-closes.html

    I really wish I understood the supply and demand situation better, myself.
    Opinion among economists, at least those polled by the Wall Street Journal, is unusually united: 89% think that skyrocketing commodity prices are the result of fundamentals, not too much cash chasing too few raw materials.
    Yet bubble-like enthusiasm abounds.
    http://online.wsj.com/article/SB121026120931177437.html
    http://www.nakedcapitalism.com/2008/...driven-by.html
    Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor
    - Dr John Zoidberg

  2. #2
    Veteran Member person's Avatar
    Joined
    Sep 2007
    Posts
    633
    Thanks
    33
    Thanked 34 Times in 23 Posts

    Default Re: News from around the world

    More developments in the oil situation

    Oil prices may hang above $100 a barrel for the rest of this year but will fall as low as $80 next year as world demand slackens and Saudi Arabia tries to buy influence with the incoming president by pumping more crude oil, an influential Lehman Brothers analyst said in a report issued today.
    Saudi engineers have been working on several big projects that could boost the nation's output by 1.3 million barrels a day
    http://www.forbes.com/home/2008/05/0...f_0509oil.html

    As prices jumped to another record, a member of OPEC signaled on Friday for the first time in months that the oil cartel might increase its output to prick the price bubble.
    http://www.nytimes.com/2008/05/10/bu...eH9zW5bc6Hx+Zw

    LONDON (Reuters) - From the poorest of Africa to the United States and big business, a breakneck rally that could take oil to $200 a barrel is likely to inflict pain on everyone.
    http://www.reuters.com/article/reute...18364020080509

    SAN FRANCISCO (MarketWatch) -- Crude-oil futures closed at an all-time high near $126 a barrel Friday, with strong demand for diesel fuel and concerns about global crude supplies prompting a weekly gain of over 8%.
    http://www.marketwatch.com/news/story/oil-futures-rally-record-high/story.aspx?guid={8F39C505-9A6F-479A-96F6-F0BECA9A607B}
    Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor
    - Dr John Zoidberg

  3. #3
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: News from around the world

    If I had tried to connect all of these dots I would have been accused of wearing a 'tin foil hat'. However, it is absolutely undeniable that the US dollar's (temporary) turnaround, $120+ oil prices, <$900 gold prices etc. are the result of something besides free market forces.

    The 'tin foil hat' crowd would tell you that the world's central bankers are playing one game, while the world's energy producers are playing another game, and the US FED / congress is attempting to play a third game ... all of which will end badly for the average American.

    The same 'tin foil hat' crowd will tell you that, given the levels of US personal debt, and the levels of US gov't debt (which must filter down to increased tax burden on US taxpayers), that America is already bankrupt. But much like a person preparing to file bankruptcy, Americans seems to be borrowing and spending every dollar they can lay its hands on - selling off accumulated assets and spending the proceeds - all the while putting their faith in the idea that when they finally run out of credit and assets that the gov't will come to their rescue by making their debts magically disappear. Most Americans have no concept of the possibility that the US gov't may in fact be powerless to 'rescue' them, that a replay of the 'great depression' is actually possible, that the accepted standard of living in America could permanently decline etc.


    my 'friend' Elaine elaborates at

    (snip)"As we still try to probe the murky darkness surrounding the 'rescue' of Bears Stearn, we are in the middle of a much more audacious scam concerning Citibank. An honest detailing of numbers and facts is nearly impossible. We can't fathom this mess so long as all parties are anxious to not see the bottom of this dark pit. The SEC is honest in seeking some illumination. But the bosses over the SEC who are the political powers in DC do NOT want the truth known or they would be yelling about the lies surrounding simple calculations of our inflation rate or our trade problems! Instead, of all people, they are even more anxious to avoid all this. So I expect this second rescue to be manhandled through even more secretively than the Bears Stearns business.


    Toyota Sees FY08 Op Profit Plunging 30% On High Materials Costs

    NAGOYA (Nikkei)--Toyota Motor Corp. (7203) said Thursday it expects fiscal 2008 group operating profit to tumble 30% to 1.6 trillion yen as rising resource prices and the strong yen eat into its bottom line.


    The Japanese are absolutely livid with fear and anger over the yen. And this is why today's news is also about talking up the dollar. After all, this is supposed to help the US by making oil cheaper only it has failed. But it will save Toyota! Why we are saving Toyota has to be explained later when we try to explain why investors in Bears Stearns took huge losses but the Arabs owning Citibank won't. Mexico and Venezuela are cutting oil exports to the US. Do we want to see Saudi Arabia join them? Blackmail goes hand in hand with economic black pools. The US banking system is 100% dependent upon the Japanese carry trade. And to enable this, we have to make the yen weak against the dollar no matter what! "(snip)

    (snip)"The oil news gets worse and worse. If we rush over to Iran and make some deals, we will see global oil prices drop by around 30% or more. Russia just joined the embargo on Iran in the hopes this will raise the price of RUSSIAN ENERGY another 20-50%. They are praying this embargo will drive world over to over $200 a barrel! Russia be rich! America be...hold on...BANKRUPT.

    Now, I don't care how crazy Iran is, we buy oil from cruel Burma! Burma's dictators just decreed they will kill off most of their poor people and have sent away the UN food and medicine! And they are dying, those poor, poor people. But we get oil from them! YUP. We want that oil! So how is Iran different? They aren't half as bad, I would suggest. No, we want them weak. But this scheme is making RUSSIA very strong! Is that smart?

    Iran has no nukes. Russia has the world's other biggest nuclear arsenal and is huge and can survive WWIII. Iran can't. So why are we enriching Russia while beggaring OURSELVES???? This makes no sense. And note that no one makes this obvious connection in public.

    US Leads Effort To Prop Up Dollar

    The Bush administration is leading the international effort to put a floor under the falling dollar.

    The conventional wisdom holds that the Europeans, worried that the mighty euro is making their companies less competitive, prodded Treasury Secretary Henry Paulson and other group of seven finance ministers last month into signaling their joint disapproval of the dollar’s plunge. Canada has also been troubled by the strong loonie.

    But a senior U.S. Treasury official says that the move actually came at the behest of the American side.


    “Since our last meeting, there have been at times sharp fluctuations in major currencies, and we are concerned about their possible implications for economic and financial stability,” the G-7 statement said. Behind the carefully crafted code of G-7 communiqués, the message was clearly intended to warn markets that the dollar shouldn’t fall much further.

    “The G-7 language was meant to direct attention beyond the short-term U.S. financial market turmoil,” said the senior Treasury official on Friday. The official noted that the administration expects faster growth in the U.S. and slower growth in euro zone countries in the coming months, a combination that would presumably strengthen the dollar against the euro.

    Treasury officials declined to say whether they believe the G-7’s verbal push achieved its end. Currency movements are unpredictable and respond to interest rates, economic growth and other factors.


    Arrest these madmen! For the last...35 amazing years, the US has tried to weaken the dollar to stop the flood of imports. But every time we start to make tiny headway, they reverse gears and save our competitors and doom us! They are TRAITORS. Or insane or both. NOTHING real is taken into account when we discuss FX markets. If reality intruded, the US would have a dollar worth less than a dime. And it will be soon enough. But only after everyone overseas unloads all their US junk bonds.
    "(snip)
    Last edited by Melonie; 05-10-2008 at 04:57 AM.

  4. #4
    Veteran Member person's Avatar
    Joined
    Sep 2007
    Posts
    633
    Thanks
    33
    Thanked 34 Times in 23 Posts

    Default Re: News from around the world

    Quote Originally Posted by Melonie View Post
    If I had tried to connect all of these dots I would have been accused of wearing a 'tin foil hat'.
    "It's not paranoia if they really are out to get you", the saying goes I don't have enough information to connect the dots (or if I did I'd be putting on some large positions instead of posting to SW ) but there's an awful lot of wierd stuff happening all at once...

    Quote Originally Posted by Melonie View Post
    The 'tin foil hat' crowd would tell you that the world's central bankers are playing one game, while the world's energy producers are playing another game, and the US FED / congress is attempting to play a third game ... all of which will end badly for the average American.
    Even just getting inside the heads of big energy producers is a really really complicated thing. The long term contracts typical of some industries makes it a little easier, but not everyone is privy to that stuff. Of course, everyone's playing games

    Quote Originally Posted by Melonie View Post
    The same 'tin foil hat' crowd will tell you that, given the levels of US personal debt, and the levels of US gov't debt (which must filter down to increased tax burden on US taxpayers), that America is already bankrupt. But much like a person preparing to file bankruptcy, Americans seems to be borrowing and spending every dollar they can lay its hands on
    Tragedy of the commons (http://en.wikipedia.org/wiki/Tragedy_of_the_commons) - given that you don't control what other people do, you're best off taking care of yourself. It feels like a run on the bank in slow motion, to me. You're either as screwed (probably) or less screwed than if you did nothing, so why not, eh?
    Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor
    - Dr John Zoidberg

  5. #5
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: News from around the world

    ^^^ two words sum up your point very nicely ...

    Moral Hazard




    The difference between Moral Hazard and your Tragedy of the Commons is that, with the former, most of the individuals involved are actually unaware or uncaring of the negative effects they are generating for others as long as it results in advantage for themselves. In comparison, with the latter, everyone involved is acutely aware of the shared negative effects and in fact 'factor in' the negative effects on themselves (all the while choosing to keep doing what they're doing and increasing those negative effects). The actual situation is probably a blending of the two different principles.

Similar Threads

  1. World News
    By The Jackal in forum The Lounge
    Replies: 10
    Last Post: 01-02-2012, 10:53 PM
  2. End o the world continues. And in other news...
    By person in forum Dollar Den
    Replies: 14
    Last Post: 10-19-2008, 02:50 PM
  3. Replies: 0
    Last Post: 05-05-2007, 12:01 PM
  4. OMG, Fox News just said the world is flat!
    By Vaughn in forum The Lounge
    Replies: 53
    Last Post: 06-05-2006, 05:15 PM
  5. News From the World of Wine
    By Yekhefah in forum The Lounge
    Replies: 5
    Last Post: 01-05-2006, 06:20 PM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •