Recession – Page 16 – Infinite Unknown

Energy Advisor Warns of $12-15-a-Gallon Gas

May 22, 2008 by Infinite

Robert Hirsch, an energy advisor, says CNBC morning show prediction was a citation of the ‘Dean of Oil Analysts.’

Robert Hirsch, Management Information Services Senior Energy Advisor, gave a dire warning about the potential future of gas prices on CNBC’s May 20 “Squawk Box”. He told host Becky Quick there was no single thing that would solve the problem, due to the enormity of the problem.

“[T]he prices that we’re paying at the pump today are, I think, going to be ‘the good old days,’ because others who watch this very closely forecast that we’re going to be hitting $12 and $15 per gallon,” Hirsch said. “And then, after that, when oil – world oil production goes into decline, we’re going to talk about rationing. In other words, not only are we going to be paying high prices and have considerable economic problems, but in addition to that, we’re not going to be able to get the fuel when we want it.”

Hirsch told the Business & Media Institute the $12-$15 a gallon wasn’t his prediction, but that he was citing Charles T. Maxwell, described as the “Dean of Oil Analysts” and the senior energy analyst at Weeden & Co. Still, Hirsch admitted the high price was inevitable in his view.

“I don’t attempt to predict oil prices because it’s been impossible in the past,” Hirsch said in an e-mail. “We’re into a new era now, and over the next roughly five years the trend will be up significantly. However, there may be dips and bumps that no one can forecast; I wouldn’t be at all surprised. To me the multi-year upswing is inevitable.”

Maxwell’s original $12-15-a-gallon prediction came in a February 5 interview with Energytechstocks.com, a Web site run by two former Wall Street Journal staffers.

“[Maxwell] expects an oil-induced financial crisis to start somewhere in the 2010 to 2015 timeframe,” Energytechstocks.com reported. “He said that, unlike the recession the U.S. appears to be in today, ‘This will not be six months of hell and then we come out of it.’ Rather, Maxwell expects this financial crisis to last at least 10 or 12 years, as the world goes through a prolonged period of price-induced rationing (eg, oil up to $300 a barrel and U.S. pump prices up to $15 a gallon).”

According to associate of Maxwell at Weeden & Co., Maxwell is out of the country and currently unavailable for comment.

Maxwell’s biography on the Weeden & Co. Web site said he “has been ranked by the U.S. financial institutions as the No. 1 oil analyst for the years 1972, 1974, 1977 and 1981-1986,” according to polls taken by Institutional Investor magazine.

“In addition, for the last 17 years he has been an active member of an Oxford-based organization comprised of OPEC and other industry executives from 30 countries who meet twice a year to discuss trends within the energy industry.”

Although Maxwell’s prediction is for the long-term, not everyone supports high-end predictions, even in the short-term. CNBC contributor and the vice president of risk management for MF Global (NYSE:MF) John Kilduff said on “The Call” May 7that he expected gas prices to drop following the Chinese Olympics, as China’s economic boom slows down.

By Jeff Poor
Business & Media Institute
5/21/2008 3:38:13 PM

Source: Business and Media

JPMorgan Chase CEO: Recession Just Beginning

May 13, 2008May 13, 2008 by Infinite

NEW YORK — JPMorgan Chase & Co.’s chief executive said Monday that while the crisis in the credit markets appears to be three-quarters over, he believes a U.S. recession is just beginning.

“Even if the capital markets crisis resolves, it does not mean that this country will not go into a bad recession,” said CEO James Dimon, whose bank saw its first-quarter profit fall by half due to the recent collapse of the U.S. mortgage market. “The recession just started.”

“We don’t know if it’s going to be mild or severe,” he continued, speaking at a conference in New York hosted by Swiss bank UBS AG. “We’re thinking there’s a third of a chance that it’s going to be pretty bad … closer to the 1982 recession than the very mild recessions we had in 2001 and 1990.”

The Only “Win-Win” Investment I know of …

May 13, 2008 by Infinite

Gold’s precipitous tumble from its record-high of $1,038 set on March 17 down to the recent $850 level has lots of people asking, “Is gold’s bull market over?”

My answer: No! Not by a long shot!

I know you’ve been getting an earful from the talking-head ninnies about how the long-running commodity bull is getting short of breath and is about to be put out to pasture. Ignore them.

Other than a pullback here and there, gold — and virtually all natural resource prices — are headed much higher in the months and years ahead.

My next target for gold: $1,250 an ounce. Then, its inflation-adjusted high of at least $2,270.

Those numbers should come as no surprise. I’ve mentioned them several times before. Why I am I so bullish?

I’m not going to get into all the arguments that clearly spell higher prices for gold. You’ve heard them from me time-and-time again.

Instead, I’m going to point out something you’ve probably never thought about when it comes to gold. Heck, even the smartest guys on Wall Street haven’t figured it out yet …

Gold Is In A “Win-Win” Situation!

Consider the following two possible macroeconomic background scenarios for gold:

Buying Opportunity For Gold And Silver

May 9, 2008 by Infinite

The international banking cartel during the past month has managed to push the price of gold down to the $850 – $880 level and silver down to the $16 – $17 level. The manipulation of the gold and silver market is incredibly obvious just by looking at daily charts of the gold and silver prices. Quite frequently you’ll see a nose dive in the price of both gold and silver without any sort of rationale behind the price swing. Also consider the fact that the price of oil is around $120 barrel which means that gold is incredibly undervalued relative to the oil price.

Even a 10 to 1 gold to oil ratio is low from a historical perspective and as we speak, gold is well under that ratio. Gold at the $850 – $880 level is a tremendous buying opportunity. The corporate controlled media is telling us that the commodity bull is over and the U.S. Dollar is stabilizing. Therefore it is prudent to do the opposite of what they are advocating. Anyone saying that the U.S. Dollar has stabilized is living in fantasy land. The Federal Reserve recently cut interest rates another 25 basis points and they continue talking about creating more money out of thin air to bailout banks that are on the brink of collapse. The U.S. Dollar is heading further down the toilet unless there is a dramatic reversal in monetary policy and that doesn’t look as if it will happen anytime soon.

(Buying Gold and Silver may save your life, when the economy crashes. But you can’t eat it.
Thats why you have to store lots of food and water as well. – The Infinite Unknown)

U.S. risks stagflation, says BIS chief

April 30, 2008 by Infinite

BASEL, Switzerland, April 29 (Reuters) – Stagflation is an increasingly plausible prospect in the United States and weak economic growth could last well into 2009, if not longer, the head of the Bank for International Settlements says.

That does not herald a rerun of the economic stagnation and rampant inflation that ran riot during the 1970s when oil prices last soared to unprecedented levels, Malcolm Knight, BIS general manager, said in an interview.

But it does cast some doubt on the White House’s thesis that the economy will rebound in the second half of 2008 in response to the tens of billions of dollars of tax rebates the government will be delivering to U.S. households in the coming weeks.

“I see a certain amount of scope for stagflation in a number of economies and that usually tends to result in subpar economic growth performance for an extended period of time, which could go well into 2009 or even longer,” said Knight, a Canadian who worked for more than 20 years at the International Monetary Fund.

“I think the U.S. economy is likely to experience weakness this year and in much of 2009,” said Knight, speaking to Reuters at BIS headquarters in Basel, Switzerland.

“Stagflation is a definite risk.”

Inflation hits consumers worldwide

April 14, 2008 by Infinite

(AXcess News) – Gas pumps in the United States tell the same story as rice prices in Thailand: Inflation is a global phenomenon this year.

Oil hit a record $112 per barrel this week, and a United Nations official warned of continued pressure on food prices, which by one index are up 45 percent in the past year.

The challenges are worst in developing nations, where raw materials account for a larger share of consumer spending. But another factor – the sagging value of the US dollar – means that imports cost more in America and other nations that peg their currencies to the dollar.

Still, regardless of this currency phenomenon, several broad forces are pushing prices up.

After years of strong global economic growth, prices of oil, grains, and some metals have spiked. Investors are adding fuel to that fire by buying up hard assets like commodities, which are viewed as a hedge against inflation.

More fundamentally, many nations have been relatively loose in the creation of money supply. For all the news about interest-rate cuts by the Federal Reserve, this trend goes well beyond US shores.

The Face of a Prophet

April 13, 2008 by Infinite

George Soros will not go quietly.

At the age of 77, Mr. Soros, one the world’s most successful investors and richest men, leapt out of retirement last summer to safeguard his fortune and legacy. Alarmed by the unfolding crisis in the financial markets, he once again began trading for his giant hedge fund — and won big while so many others lost.

Mr. Soros has always been a controversial figure. But he is becoming more so with a new, dire forecast for the world economy. Last week he rushed out a book, his 10th, warning that the financial pain has only just begun.

“I consider this the biggest financial crisis of my lifetime,” Mr. Soros said during an interview Monday in his office overlooking Central Park. A “superbubble” that has been swelling for a quarter of a century is finally bursting, he said.

IMF says US crisis is ‘largest financial shock since Great Depression’

August 15, 2008April 10, 2008 by Infinite

A foreclosure sign in Florida. Photograph: Joe Raedle/Getty Images

America’s mortgage crisis has spiralled into “the largest financial shock since the Great Depression” and there is now a one-in-four chance of a full-blown global recession over the next 12 months, the International Monetary Fund warned today.

USA 2008: The Great Depression

April 10, 2008 by Infinite

Food stamps are the symbol of poverty in the US. In the era of the credit crunch, a record 28 million Americans are now relying on them to survive – a sure sign the world’s richest country faces economic crisis

We knew things were bad on Wall Street, but on Main Street it may be worse. Startling official statistics show that as a new economic recession stalks the United States, a record number of Americans will shortly be depending on food stamps just to feed themselves and their families.

Dismal projections by the Congressional Budget Office in Washington suggest that in the fiscal year starting in October, 28 million people in the US will be using government food stamps to buy essential groceries, the highest level since the food assistance programme was introduced in the 1960s.

Disadvantaged Americans queue for aid in New York

Read moreUSA 2008: The Great Depression

81% of Americans think country on ‘wrong track’

July 20, 2008April 5, 2008 by Infinite

WASHINGTON – FOUR out of five Americans believe things are ‘on the wrong track’ in the United States, the gloomiest outlook in about 20 years, according to a New York Times/CBS News poll.

The poll, released on Thursday, found that 81 per cent of respondents felt ‘things have pretty seriously gotten off on the wrong track’. That was up from 69 per cent last year and 35 per cent in early 2003.

Only 4 per cent of survey respondents said the country was better off than it was five years ago, while 78 per cent said it was worse, the newspaper said.

Bernanke Warns of Possible Recession

January 2, 2010April 4, 2008 by Infinite

WASHINGTON (AP) – Federal Reserve Chairman Ben Bernanke said Wednesday a recession is possible and policymakers are “fighting against the wind” in trying to steady a shaky economy. He would not say if further interest rate cuts are planned.

Bernanke’s testimony before the Joint Economic Committee of Congress was a more pessimistic assessment of the economy’s immediate prospects than a report he delivered earlier this year. His appearance on Capitol Hill came amid a trio of economic slumps in the housing, credit and financial areas.

“It now appears likely that gross domestic product (GDP) will not grow much, if at all, over the first half of 2008 and could even contract slightly,” Bernanke told lawmakers. GDP measures the value of all goods and services produced within the United States and is the best barometer of the United States’ economic health. Under one rule, six straight months of declining GDP, would constitute a recession.

Federal Reserve Chairman Ben Bernanke testifies on Capitol Hill in Washington,
Wednesday, April 2, 2008, before the Joint Economic Committee.
(AP Photos/Susan Walsh)

USA 2008: The Great Depression

April 10, 2008April 3, 2008 by Infinite

Disadvantaged Americans queue for aid in New York

The Subprime Crisis is Just Starting

June 25, 2008April 3, 2008 by Infinite

(Excerpt: “For these reasons, there is a powerful, powerful case for moving a substantial portion of your assets into tangible assets. Good examples of tangible assets include gold, silver, commodities, real estate, farmland and energy.”)

by Daniel R. Amerman, CFA | March 20, 2008

Overview

As the author of three books on mortgage finance and related derivative securities, and speaking as someone who first turned mortgages into rated securities in 1983, I’m going to let you in on an unfortunate little secret – the real subprime mortgage securitization crisis may not have even started yet. But, there is a good chance the real crisis will arrive soon.

This assertion that the crisis could just be getting started may seem absurd and extraordinarily out of touch. What about the approximately 45,000 homeowners losing their homes to foreclosure in the United States every month? What about the 8.9% plunge in nominal housing prices in 2007, the largest decline in over 20 years? What about Bear Stearns losing 94% of the value of its stock in 2 days, with even the remaining 6% in value being based on an unprecedented loan from the Fed before JP Morgan would agree to the acquisition? How much worse could it get?

Chaos on Wall Street

July 20, 2008April 3, 2008 by Infinite

THE BAILOUT BOYS: S.E.C. Chairman Christopher Cox (left) with Paulson, President Bush and Bernanke.

The big banks’ fear of big losses is threatening to bring down the entire system, with dire consequences for all of us. Here’s what’s going on, and what we can do about it.

(Fortune Magazine) — What in the world is going on here? Why is Washington spending billions to bail out Wall Street titans while leaving struggling homeowners to fend for themselves? Why are the Federal Reserve and the Treasury acting as if they’re afraid the world may come to an end, while the stock market seems much less concerned? And finally, what does all this mean to those of us who aren’t financial professionals?

Okay, take a few breaths, pour yourself a beverage of your choice, and I’ll tell you what’s happening – and what I think is going to happen. Although I expect these problems will resolve themselves without a catastrophic meltdown, I’ll also tell you why I’m more nervous about the world financial system now than I’ve ever been in my 40 years of covering business and markets.

IMF: U.S. Economy Will Go Into Recession In 2008

April 2, 2008 by Infinite

The International Monetary Fund will next week forecast that the US economy will go into recession this year, a German newspaper reported Tuesday, citing an upcoming report.

The IMF believes the US will experience at least two successive quarters of negative growth — the technical definition of a recession — and will grow only half a percent over the whole of 2008, weekly Die Zeit reported.

As Jobs Vanish, Food Stamp Use Is at Record Pace

March 31, 2008 by Infinite

Driven by a painful mix of layoffs and rising food and fuel prices, the number of Americans receiving food stamps is projected to reach 28 million in the coming year, the highest level since the aid program began in the 1960s.The number of recipients, who must have near-poverty incomes to qualify for benefits averaging $100 a month per family member, has fluctuated over the years along with economic conditions, eligibility rules, enlistment drives and natural disasters like Hurricane Katrina, which led to a spike in the South.

But recent rises in many states appear to be resulting mainly from the economic slowdown, officials and experts say, as well as inflation in prices of basic goods that leave more families feeling pinched. Citing expected growth in unemployment, the Congressional Budget Office this month projected a continued increase in the monthly number of recipients in the next fiscal year, starting Oct. 1 – to 28 million, up from 27.8 million in 2008, and 26.5 million in 2007.

The percentage of Americans receiving food stamps was higher after a recession in the 1990s, but actual numbers are expected to be higher this year.

Germans Fear Meltdown of Financial System

December 7, 2008March 30, 2008 by Infinite

Germany and other industrialized nations are desperately trying to brace themselves against the threat of a collapse of the global financial system. The crisis has now taken its toll on the German economy, where the weak dollar is putting jobs in jeopardy and the credit crunch is paralyzing many businesses.

A trader reacts in front of the DAX board at the Frankfurt stock exchange.

The Bundesbank, Germany’s central bank, doesn’t like to see its employees working too late, and it expects even senior staff members to be headed home by 8 p.m. On weekends, employees seeking to escape the confines of their own homes are required to sign in at the front desk and are accompanied to their own desks by a security guard. Sensitive documents are kept in safes in many offices, and a portion of Germany’s gold reserves is stored behind meter-thick, reinforced concrete walls in the basement of a nearby building. In this environment, working overtime is considered a security risk.But the ordinary working day has been in disarray in recent weeks at the Bundesbank headquarters building, a gray, concrete box in Frankfurt’s Ginnheim neighborhood, where the crisis on international financial markets has many employees working late, even on weekends.

Jobless Claims Jump by 22,000

March 22, 2008 by Infinite

WASHINGTON (AP) – The number of newly laid off workers filing for unemployment benefits rose last week to the highest level in nearly two months, providing more evidence that the weak economy is drying up jobs.The Labor Department said Thursday that applications for jobless benefits totaled 378,000 last week. That was an increase of 22,000 from the previous week and was a far bigger jump than had been expected.

The four-week average for new claims rose to 365,250, which was the highest level since a flood of claims caused by the 2005 Gulf Coast hurricanes.

The current economic slowdown, which many economists believe has already turned into a full-blown recession, is starting to show up in the labor market in terms of higher layoffs and weaker hiring numbers.

A worker prepares the walls for a new home at the Huntington Homes modular home factory in East Montpelier, Vt., Tuesday, March 11, 2008. The troubles in housing with falling sales and prices in many parts of the country have acted as a drag on the overall economy, contributing to a serious slowdown that many analysts are worried could push the country into a recession. (AP Photo/Toby Talbot)

Hair of the Dog

March 18, 2008 by Infinite

Are you at all suspicious? Does it sound too good to be true? Here we are, plunging into a recession. The proximate cause is irresponsible mortgage loans made to people who can’t pay the money back. The deeper cause is, at least in part, years of too much borrowing and spending by Americans, both as individuals and collectively through the government. But behold: there is-oh, joy!-bipartisan agreement on a solution. Although quibbling over the details, everyone-Republicans and Democrats, the White House and Congress, all the presidential candidates-agrees that what we need is a “fiscal stimulus.”In other words, the government should go out and borrow even more money and pass it around for us to spend. The experts caution that for maximum stimulus effect, we must be sure to spend it immediately. No squirreling it away for a rainy day. In drinking circles, they call this hair of the dog: to cure a hangover, you have another drink.

Foreigners buy stakes in U.S. at record pace

July 20, 2008March 18, 2008 by Infinite

Last May, a Saudi Arabian conglomerate bought a Massachusetts plastics maker. In November, a French company set up a new factory in Adrian, Michigan, adding 189 automotive jobs to an area accustomed to layoffs. In December, a British company bought a New Jersey maker of cough syrup.For much of the world, the United States is now on sale at discount prices. With credit tight, unemployment growing and worries mounting about a potential recession, American business and government leaders are courting foreign money to keep the economy growing.

Foreign investors are buying aggressively, taking advantage of American duress and a weak dollar to snap up what many see as bargains, while making inroads into the world’s largest market.

Last year, foreign investors poured a record $414 billion into securing stakes in U.S. companies, factories and other properties through private deals and purchases of publicly traded stock, according to Thomson Financial, a research firm.

Dobbs: Our leaders have squandered our wealth

December 7, 2008March 18, 2008 by Infinite

NEW YORK (CNN) — President Bush’s assurances that we’ll all be “just fine” if he and Congress can work out an economic stimulus package seem a little hollow this morning.Much like Federal Reserve Board Chairman Ben Bernanke’s assurances last May that the subprime mortgage meltdown would be contained and not affect the broader economy. And it seems Treasury Secretary Henry Paulson has spent most of the past year trying to influence Chinese economic policy rather than setting the direction of U.S. economic policy.

There is no question that Bush, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid will quickly come up with an economic stimulus package simply because they can no longer ignore our economic and financial crisis. That economic stimulus plan will amount to about 1 percent of our nation’s gross domestic product, an estimated $150 billion.

But all of us should recognize that the stimulus package will be inadequate to drive sustainable growth in our $13 trillion economy. An emergency Fed rate cut and an economic stimulus plan are short-term responses to our complex economic problems, nothing more than bandages for a hemorrhaging economy.

Darker Days Ahead?

December 7, 2008March 18, 2008 by Infinite

Robert Reich warns a recession, or worse, could be coming.

Think the last few days have been bad for Wall Street and the rest of the world’s markets? Hang on, things are probably going to get worse, says Robert Reich, President Clinton’s former secretary of Labor and author of the recent book “Supercapitalism: The Transformation of Business, Democracy and Everyday Life.” According to Reich, who currently teaches public policy at the University of California, Berkeley, the United States might even be headed toward a depression.

Reich: 'Now we have a mess on our hands. Bernanke has the only
       pooper-scooper in town, but it is too small for the job.'

Stock Market And Monetary System On The Verge Of Collapse (Video)

June 4, 2012March 18, 2008 by Infinite

Ron Paul was the only hope for America.

YouTube

America’s economy risks mother of all meltdowns

December 3, 2008March 18, 2008 by Infinite

“I would tell audiences that we were facing not a bubble but a froth – lots of small, local bubbles that never grew to a scale that could threaten the health of the overall economy.” Alan Greenspan, The Age of Turbulence.

That used to be Mr Greenspan’s view of the US housing bubble. He was wrong, alas. So how bad might this downturn get? To answer this question we should ask a true bear. My favourite one is Nouriel Roubini of New York University’s Stern School of Business, founder of RGE monitor.

Recently, Professor Roubini’s scenarios have been dire enough to make the flesh creep. But his thinking deserves to be taken seriously. He first predicted a US recession in July 2006*. At that time, his view was extremely controversial. It is so no longer. Now he states that there is “a rising probability of a ‘catastrophic’ financial and economic outcome”**. The characteristics of this scenario are, he argues: “A vicious circle where a deep recession makes the financial losses more severe and where, in turn, large and growing financial losses and a financial meltdown make the recession even more severe.”

Prof Roubini is even fonder of lists than I am. Here are his 12 – yes, 12 – steps to financial disaster.

Russia quietly prepares to switch some oil trading from dollars to rubles

March 17, 2008March 15, 2008 by Infinite

MOSCOW: Russia, the world’s second-largest oil-exporting nation after Saudi Arabia, has been quietly preparing to switch trading in Russian Ural Blend oil, the country’s primary export, from the dollar to the ruble. But the change, if it comes, is still some time off, industry analysts and officials said.

“The role of the key reserve currencies is under review,” said Dmitry Medvedev, the likely successor to President Vladimir Putin, “And we must take advantage of it.”