How “Adjusting for Slippage” Adds to Sovereign Debt Woes
“AA+ is also not a bad rating,” reassured German Chancellor Angela Merkel. The French were not so eager to agree with Merkel’s patronizing assessment…and neither were any of the other nine Eurozone governments that received a rap across the knuckles from S&P.
China’s Cinderella Story
One of the big questions of the year is whether China blows up or not. Hard landing or soft? When will the clock strike midnight on the Chinese? Things are slowing down, and it feels like it’s getting late.
But first, why does this matter? China matters because China is big. If this were 1980 — when China’s economy was about one-seventh the size of the US’s economy, no one would care. Today, the appetite China has for raw materials is no secret, and is one of the main reasons why miners and oilmen are flush with cash. So if you invest in miners and oil companies, then the answer to the hard landing question decides the fate of your portfolio.
Unsolvable Insolvency
Italian bond yields are edging back up. And Greece is negotiating a default. They want to avoid a naked, noisy default…so they are dressing it up as “voluntary” or ‘soft.’ But they can’t disguise the fact that Greece has bills it can’t pay. On the 20th of March it needs to come up with 14.4 billion euros, followed by billions more in the months following. That is more than 6% of national GDP. It would be as though the US had to pay a trillion dollars.
The Fed's Incredible Rate Forecasting Hubris. by James A. Dorn
The Federal Reserve’s decision to provide multiyear
forecasts for the federal funds rate, and to indicate when that rate
might be increased is intended to improve monetary policy by making it
more transparent. Currently, the Fed funds rate is close to zero and is
expected to remain there until at least mid-2013.
With the Fed’s new policy, a small group of experts—the Board of
Governors and the presidents of the twelve Federal Reserve Banks—will
individually report their longer-run projections for the target federal
funds rate they think is consistent with their dual mandate to maintain
price stability and achieve full employment.What Happened to the GOP's Free-Market Principles?. by David Boaz
You expect Democrats to accuse former businessman Mitt
Romney of “putting profits over people — making a buck or a few million
of them no matter what it took or who it hurt,” as Democratic National
Committee spokesman Brad Woodhouse did in releasing a new Web video.
But it’s sad to see the economic ignorance displayed by Romney’s
Republican rivals. Rick Tyler, long the closest aide to Newt Gingrich
who is now running the pro-Gingrich super PAC, Winning Our Future,
declares, “His business success comes from raiding and destroy
businesses — putting people out of work, stealing their health care.”
The PAC’s ad calls Romney “a predatory corporate raider.”The Number One Catastrophic Event That Americans Worry About: Economic Collapse
Can
you guess what the number one catastrophic event that Americans worry
about is? There are certainly many to choose from. Many Americans are
deathly afraid of a major terrorist attack. Others live in constant
fear of natural disasters such as earthquakes, volcanoes and
hurricanes. Still others are incredibly concerned that a massive
pandemic will break out at any time or that World War III will erupt in
the Middle East. Yes, there are certainly a lot of potential
catastrophic events that one can worry about in the times in which we
live, but the number one catastrophic event that Americans worry about
is actually "economic collapse". At least that is what a recent survey
conducted by Leiflin Inc. for the EcoHealth Alliance found. But this
goes along with what so many other polls have found over the past few
years. Over and over again, opinion polls have found that the number
one issue that American voters are concerned about is the economy. The
truth is that average Americans are deeply, deeply concerned about
unemployment, debt, the housing crash and the steady decline in the
standard of living. It has been years since the U.S. economy has
operated at a "normal" level, and many Americans are afraid that things
could soon get a whole lot worse.34 Shocking Facts About U.S. Debt That Should Set America On Fire With Anger
34 Shocking Facts About U.S. Debt That Should Set America On Fire With Anger
We
have all been lied to. For decades, the leaders of both major
political parties have promised us that they can fix our current system
and that they can get our national debt under control. As the 2012
election approaches, they are making all kinds of wild promises once
again. Well you know what? It is all a giant sham. The United States
has gotten into so much debt that there will be no coming back from
this. The current system is irretrievably broken. 30 years ago the U.S.
debt was a horrific crisis that was completely and totally out of
control. If we would have dealt with it back then maybe we could have
done something about it. But now it is 15 times
larger, and we are adding more than a trillion dollars to the debt every
single year. The facts that you are about to read below should set
America on fire with anger. Please share them with as many people as
you can. What we are doing to our children and our grandchildren is
absolutely nightmarish. Words like "abuse", "financial rape", "theft"
and "crime" do not even begin to describe what we are doing to future
generations. We were the wealthiest nation on earth, but it wasn't good
enough just to squander all of our own money. We had to squander the
money of our children and our grandchildren as well. America has been
so selfish and so self-centered that it is hard to argue that we don't
deserve what is about to happen to this country. We have stolen the
future of America, and yet we strut around as if we are the smartest
generation that ever walked the face of the earth.All of this prosperity that we see all around us is just an illusion. It is a false prosperity that has been purchased by the biggest mountain of debt in the history of the world.
When Times Get Tough, The Tough Get A Backbone
When Times Get Tough, The Tough Get A Backbone
Do
not ever give up. That is one of the secrets to life. Almost everyone
comes to a moment in life when things look absolutely hopeless. But
those that have come through those moments know that there is always a
way to turn things around. When times get tough, the tough get a
backbone. Yes, a horrific economic collapse
is coming and the world is going to become incredibly unstable. But
the purpose of waking people up and getting them to realize what is
about to happen is not so that they can shiver in fear. When a military
unit gets intel that indicates that the enemy arrayed against them is
far more powerful than previously thought, do they give up all hope and
run away like little girls? Of course not. Instead, they use that
intel to prepare for the coming battle. Only cowards give up. When you
totally give up, you lose everything and the enemy wins. Our life does
not consist of what we own anyway. If every single thing that you own
was taken away from you, would your life be over? No! When we leave
this world, we will not be remembered for what we owned. Rather, we
will be remembered for how we lived.Ack! They Are Actually Going To Let Greece Default!
Ack! They Are Actually Going To Let Greece Default!
I
wish that I had an "aha moment" to share with you today, but instead
all I have is an "ack moment" to share. As I was analyzing all of the
info coming out of Europe in recent days, I came to the following
realization: "Ack! They are actually going to let Greece default!" The
only question is whether it is going to be an orderly default or a
disorderly default. Of course the EU (led by Germany) could save Greece
financially if it wanted to. But Germany has decided against that
course of action. Many in the German government are sick and tired of
pouring bailouts into Greece and then watching Greek politicians fail to
fully implement the austerity measures that were agreed upon. At this
point a lot of German politicians are talking as if a Greek default is a
foregone conclusion. For example, Michael Fuchs, the deputy leader of
Angela Merkel's political party, recently made the following statement:
"I don't think that Greece, in its current condition, can be saved."
But that is not entirely accurate. Greece could be saved, but the
Germans don't want to make the deep financial sacrifices necessary to
save Greece. So instead they are going to let Greece default.If You Are A Blue Collar Worker In America You Are An Endangered Species
Have
you ever heard of the dodo bird? Once upon a time, dodo birds lived on
the island of Mauritius in the Indian Ocean. But if you go there today
you won't find any because they are extinct. Well, if you are a blue
collar worker in America today it looks like you are headed for a
similar fate. Blue collar workers are truly becoming an "endangered
species" in the United States. In the old days, the balance of power
between business owners and labor was more even because they both needed
each other. But today that has all changed. Thanks to robotics,
automation and computers there is simply not as much of a need for
physical laborers anymore and nothing is going to reverse that trend.
Big employers will continue to look for ways to replace men with
machines, and there is nothing wrong with that. But there is another
major trend that is also destroying blue collar jobs in America that we should
do something about. Right now, it is perfectly legal for big
corporations to shut down manufacturing facilities in the United States
and send the jobs over to nations on the other side of the globe where
it is legal to pay slave labor wages and where there are barely any
regulations. As you will see later on this article, this has been the
biggest reason for the shocking blue collar job losses in America over
the past decade. The big corporations don't care that you need to pay
the mortgage and put food on the table for your families. All they care
about it the bottom line, and if dramatic changes are not made soon,
the number of blue collar jobs leaving the United States will continue
to increase.Iran, the U.S. and the Strait of Hormuz Crisis
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The United States reportedly sent a letter to Iran via multiple intermediaries last week warning Tehran that any attempt to close the Strait of Hormuz constituted a red line for Washington. The same week, a chemist associated with Iran's nuclear program was killed in Tehran. In Ankara, Iranian parliamentary speaker Ali Larijani met with Turkish officials and has been floating hints of flexibility in negotiations over Iran's nuclear program.
Q4 GDP - No Recession In Sight
Monday
Morning Outlook
Brian S. Wesbury - Chief Economist
Robert Stein, CFA - Senior Economist
We
were too high on inventories as well as government purchases, and that made our
overall forecast too high. However, our estimates of consumer spending,
business investment, home building, and the trade balance were all pretty darn
close to the mark. Final sales (GDP excluding inventories) grew at a 3.2%
annualized rate.
Monday, January 16, 2012
An Ignored 'Disparity'
An Ignored 'Disparity'
With all the talk about "disparities" in innumerable contexts, there
is one very important disparity that gets remarkably little attention
-- disparities in the ability to create wealth. People who are
preoccupied, or even obsessed, with disparities in income are seldom
interested much, or at all, in the disparities in the ability to create
wealth, which are often the reasons for the disparities in income.
New National Poll: Romney Gains, Obama Struggles
New National Poll: Romney Gains, Obama Struggles
What's a political writer to do on a slow news day when official Washington is closed for business?
Blog about new polls, that's what! Fox News has a new survey out,
which examines both the Republican presidential primary and broader
political questions. The top line take-away is that Mitt Romney has drastically expanded his lead among the national GOP electorate:
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