Saturday, May 30, 2009
Thursday, May 28, 2009
Wednesday, May 27, 2009
In the housing sector march price index continues to tumble. Existing home sales went up slightly:
The FDIC reported on the health of its troubled banks and it is not good:
GM could not come to terms with the bondholders. It now looks like the government is going to fund the new company with 50 billion dollars of fresh money. They will own 70% of the firm.
So much for free markets:
Late in the day we heard that Commercial Mortgage Backed Securities are in trouble with the TALF program. It looks like the program will likely lead to a subtantial downgrade on AAA bonds issued from 2005 through to 2007 and again weaken banks balance sheets. Here is the report leased at 2:25 today on Bloomberg:
John Taylor released a scathing attack on the health of the usa economy. He claims that the exploding debt is killing the usa:
China today scathed the usa for its massive printing of paper money:
China has warned a top member of the US Federal Reserve that it is increasingly disturbed by the Fed's direct purchase of US Treasury bonds.
By Ambrose Evans-Pritchard
Last Updated: 1:52PM BST 27 May 2009
Richard Fisher, president of the Dallas Federal Reserve Bank, said: "Senior officials of the Chinese government grilled me about whether or not we are going to monetise the actions of our legislature."
"I must have been asked about that a hundred times in China. I was asked at every single meeting about our purchases of Treasuries. That seemed to be the principal preoccupation of those that were invested with their surpluses mostly in the United States," he told the Wall Street Journal.
His recent trip to the Far East appears to have been a stark reminder that Asia's "Confucian" culture of right action does not look kindly on the insouciant policy of printing money by Anglo-Saxons.
Mr Fisher, the Fed's leading hawk, was a fierce opponent of the original decision to buy Treasury debt, fearing that it would lead to a blurring of the line between fiscal and monetary policy – and could all too easily degenerate into Argentine-style financing of uncontrolled spending.
However, he agreed that the Fed was forced to take emergency action after the financial system "literally fell apart".
Nor, he added was there much risk of inflation taking off yet. The Dallas Fed uses a "trim mean" method based on 180 prices that excludes extreme moves and is widely admired for accuracy.
"You've got some mild deflation here," he said.
The Oxford-educated Mr Fisher, an outspoken free-marketer and believer in the Schumpeterian process of "creative destruction", has been running a fervent campaign to alert Americans to the "very big hole" in unfunded pension and health-care liabilities built up by a careless political class over the years.
"We at the Dallas Fed believe the total is over $99 trillion," he said in February.
"This situation is of your own creation. When you berate your representatives or senators or presidents for the mess we are in, you are really berating yourself. You elect them," he said.
His warning comes amid growing fears that America could lose its AAA sovereign rating.-END-
However the big story was Marc Faber discussing the fact that the usa will enter hyperinflation equal to Zimbabwe:
Bill Holter discusses the bankruptcy of GM and its implications:
In summary, we saw the Dow plummet as the long bond tanked. The dollar which was under fire early was the focal point that needed rescuing. The dollar rose from 80.04 to 80.33, Not much of a rise in the face of the twin bond and stock market rout.
We are living in extremely dangerous times.
I will speak to you tomorrow