Recession – Page 3 – Infinite Unknown

On the Edge with Max Keiser (09/04/09): The Banksters have free reign in America

September 6, 2009 by Infinite

Related articles:
– Goldman Sachs Wrong on Economic Recovery, Macro Hedge Funds Say (Bloomberg):
Sept. 1 (Bloomberg) — Paul Tudor Jones, the billionaire hedge-fund manager who outperformed peers last year, is wagering that Goldman Sachs Group Inc. and Morgan Stanley got it wrong in declaring the start of an economic recovery.

“If we have a recovery at all, it isn’t sustainable,” Kevin Harrington, managing director at Clarium, said in an interview at the firm’s New York offices. “This is more likely a ski-jump recession, with short-term stimulus creating a bump that will ultimately lead to a more precipitous decline later.”

– Head of China Investment Corporation: China & America are addressing bubbles by creating more bubbles (Reuters):
“It will not be too bad this year. Both China and America are addressing bubbles by creating more bubbles and we’re just taking advantage of that. So we can’t lose,” he said.

– US: Biggest pension funds record steep losses of almost $100bn (Financial Times)

– CalPERS Admits California “Pension Costs Unsustainable” (Global Economic Analysis)

– CalPERS Invested More than $110 Million with Former ‘Car Czar’ CalPERS has invested more than $110 million with financier Steven Rattner, who resigned as President Barack Obama’s “car czar” amid an investigation into his dealings with New York’s public employee pension fund.

Guest is Mike Morgan of GoldmanSachs666.com

Mike Morgan: “Obama is the worst thing that could happen in the US.”

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UK Has Record July Deficit as Recession Curbs Taxes

August 21, 2009August 21, 2009 by Infinite

– Britons bottom of list for economic faith in government and banks (Guardian)

– David Cameron warns spending could lead to Britain defaulting on its debt (Guardian)

– Public finances much worse than feared (Guardian):
“The public finances data were far worse than expected,” said Peter Dixon at Commerzbank. “Tax revenues have clearly collapsed.”

This is also not a recession, but the “Greatest Depression”.

Aug. 20 (Bloomberg) — Britain had an 8 billion-pound ($13.2 billion) budget deficit in July, the largest for the month since records began in 1993, as the recession ravaged tax revenue and the cost of unemployment benefits surged.

The shortfall compared with a surplus of 5.2 billion pounds a year earlier, the Office for National Statistics said in London today. It came in a month when the Treasury usually gets a boost from quarterly tax payments. Britain last had a deficit in July in 1996.

The U.K. will have the biggest deficit in the Group of 20 next year, when Prime Minister Gordon Brown faces re-election, according to the International Monetary Fund. Brown is urging G- 20 leaders to keep up a coordinated fiscal stimulus until a world economic recovery is more certain. The Conservative opposition says spending cuts and possible tax increases are needed to curb debt.

“They’re completely disastrous numbers,” Paul Mortimer- Lee, an economist at BNP Paribas SA, said on Bloomberg Television in London. “With the economy in a parlous state, not much tax is being collected. The chancellor’s estimate for the deficit is going to be overshot by a considerable margin.”

The Treasury forecasts a deficit of 175 billion pounds in the fiscal year that began in April. In the first four months, the shortfall was 50 billion pounds, more than triple the level a year earlier.

US Economy: This is No Recession. It’s a Planned Demolition

August 14, 2009 by Infinite

Must-read.

ben-bernanke
Bernanke has pulled out all the stops.

Credit is not flowing. In fact, credit is contracting. That means things aren’t getting better; they’re getting worse. When credit contracts in a consumer-driven economy, bad things happen. Business investment drops, unemployment soars, earnings plunge, and GDP shrinks. The Fed has spent more than a trillion dollars trying to get consumers to start borrowing again, but without success. The country’s credit engines are grinding to a halt.

Bernanke has increased excess reserves in the banking system by $800 billion, but lending is still slow. The banks are hoarding capital in order to deal with the losses from toxic assets, non performing loans, and a $3.5 trillion commercial real estate bubble that’s following housing into the toilet. That’s why the rate of bank failures is accelerating. 2010 will be even worse; the list is growing. It’s a bloodbath.

The standards for conventional loans have gotten tougher while the pool of qualified credit-worthy borrowers has shrunk. That means less credit flowing into the system. The shadow banking system has been hobbled by the freeze in securitization and only provides a trifling portion of the credit needed to grow the economy. Bernanke’s initiatives haven’t made a bit of difference. Credit continues to shrivel.

The S&P 500 is up 50 percent from its March lows. The financials, retail, materials and industrials are leading the pack. It’s a “Green Shoots” Bear market rally fueled by the Fed’s Quantitative Easing (QE) which is forcing liquidity into the financial system and lifting equities. The same thing happened during the Great Depression. Stocks surged after 1929. Then the prevailing trend took hold and dragged the Dow down 89 percent from its earlier highs. The S&P’s March lows will be tested before the recession is over. Systemwide deleveraging is ongoing. That won’t change.

No one is fooled by the fireworks on Wall Street. Consumer confidence continues to plummet. Everyone knows things are bad. Everyone knows the media is lying. Credit is contracting; the economy’s life’s blood has slowed to a trickle. The economy is headed for a hard landing.

Bernanke has pulled out all the stops. He’s lowered interest rates to zero, backstopped the entire financial system with $13 trillion, propped up insolvent financial institutions and monetized $1 trillion in mortgage-backed securities and US sovereign debt. Nothing has worked. Wages are falling, banks are cutting lines of credit, retirement savings have been slashed in half, and home equity losses continue to mount. Living standards can no longer be bandaged together with VISA or Diners Club cards. Household spending has to fit within one’s salary. That’s why retail, travel, home improvement, luxury items and hotels are all down double-digits. The easy money has dried up.

According to Bloomberg:

“Borrowing by U.S. consumers dropped in June for the fifth straight month as the unemployment rate rose, getting loans remained difficult and households put off major purchases. Consumer credit fell $10.3 billion, or 4.92 percent at an annual rate, to $2.5 trillion, according to a Federal Reserve report released today in Washington. Credit dropped by $5.38 billion in May, more than previously estimated. The series of declines is the longest since 1991.

A jobless rate near the highest in 26 years, stagnant wages and falling home values mean consumer spending… will take time to recover even as the recession eases. Incomes fell the most in four years in June as one-time transfer payments from the Obama administration’s stimulus plan dried up, and unemployment is forecast to exceed 10 percent next year before retreating.” (Bloomberg)

What a mess. The Fed has assumed near-dictatorial powers to fight a monster of its own making, and achieved nothing. The real economy is still dead in the water. Bernanke is not getting any traction from his zero-percent interest rates. His monetization program (QE) is just scaring off foreign creditors. On Friday, Marketwatch reported:

“The Federal Reserve will probably allow its $300 billion Treasury-buying program to end over the next six weeks as signs of a housing recovery prompt the central bank to unwind one its most aggressive and unusual interventions into financial markets, big bond dealers say.”

Right. Does anyone believe the housing market is recovering? If so, please check out this chart and keep in mind that, in the first 6 months of 2009, there have already been 1.9 million foreclosures.

delinquencies-and-foreclosures

The Fed is abandoning the printing presses (presumably) because China told Geithner to stop printing money or they’d sell their US Treasuries. It’s a wake-up call to Bernanke that the power is shifting from Washington to Beijing.

That puts Bernanke in a pickle. If he stops printing; interest rates will skyrocket, stocks will crash and housing prices will tumble. But if he continues QE, China will dump their Treasuries and the greenback will vanish in a poof of smoke. Either way, the malaise in the credit markets will persist and personal consumption will continue to sputter.

Bank of England: Recession will be the worst in modern history

August 13, 2009 by Infinite

– Ben Bernanke: This financial crisis may be worse than the Great Depression

Britain is facing the steepest recession in modern history, Mervyn King, the Bank of England Governor, declared as it laid bare the full extent of the damage wrought by the financial crisis.

bank-of-england

The economy will take longer to recover from this recession than it did in previous economic slumps and it will take “several years” before banks are lending normally to households and businesses, Mr King said.

The downbeat message came as the Bank disclosed that it was likely to keep interest rates low for far longer than experts had predicted as Britain shakes off the effects of the downturn.

The Bank said that it expected the economy to contract by an annual rate of 5.5 per cent at its lowest point this year – an even deeper dive than experienced in the 1930s – let alone any of the other postwar recessions.

Gerald Celente: 2.5 million jobs lost since Obama’s presidency

August 12, 2009 by Infinite

Truth versus Change & Believe

August 12, 2009

If Nostradamus were alive today, he’d have a hard time keeping up with Gerald Celente.
– New York Post

When CNN wants to know about the Top Trends, we ask Gerald Celente.
– CNN Headline News

There’s not a better trend forecaster than Gerald Celente. The man knows what he’s talking about. – CNBC

Those who take their predictions seriously … consider the Trends Research Institute.
– The Wall Street Journal

A network of 25 experts whose range of specialties would rival many university faculties.
– The Economist

US federal tax revenue plummets most since 1932!

August 4, 2009 by Infinite

The Greatest Depression is already here.

– The Greatest Economic Collapse Is Coming:
“To give you an idea of how big a problem these deficits are, consider that the US government could tax its citizens 100% of their earnings and NOT have a balanced budget.” (!)

– Richard Fisher, president of the Dallas Federal Reserve Bank:
The“very big hole” in unfunded pension and health-care liabilities is over $99 trillion.
(Full article: Here)

– On the Edge with Max Keiser: The coming collapse of the US will be much worse than that of the USSR (07/31/09)

– Ben Bernanke: This financial crisis may be worse than the Great Depression

– Gerald Celente on Fox News: The Greatest Depression (05/31/09)

– Peter Schiff: Americans of this generation are gonna look back at the 1930s with jealousy about how good people had it back then (03/16/09)

– Interview with Gerald Celente: 2009 – The Worst Economic Collapse Ever (02/10/09):
In 2009 we’re going to see the worst economic collapse ever, the ‘Greatest Depression’, says Gerald Celente, U.S. trend forecaster. He believes it’s going to be very violent in the U.S., including there being a tax revolt.

PLUMMETING TAXES

WASHINGTON – The recession is starving the government of tax revenue, just as the president and Congress are piling a major expansion of health care and other programs on the nation’s plate and struggling to find money to pay the tab.

The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression, while the federal deficit balloons to a record $1.8 trillion.

Other figures in an Associated Press analysis underscore the recession’s impact: Individual income tax receipts are down 22 percent from a year ago. Corporate income taxes are down 57 percent. Social Security tax receipts could drop for only the second time since 1940, and Medicare taxes are on pace to drop for only the third time ever.

The last time the government’s revenues were this bleak, the year was 1932 in the midst of the Depression.

“Our tax system is already inadequate to support the promises our government has made,” said Eugene Steuerle, a former Treasury Department official in the Reagan administration who is now vice president of the Peter G. Peterson Foundation.

“This just adds to the problem.”

US economy shrinks more than twice as much as previously estimated

August 1, 2009 by Infinite

July 31 (Bloomberg) — The first 12 months of the U.S. recession saw the economy shrink more than twice as much as previously estimated, reflecting even bigger declines in consumer spending and housing, revised figures showed.

The world’s largest economy contracted 1.9 percent from the fourth quarter of 2007 to the last three months of 2008, compared with the 0.8 percent drop previously on the books, the Commerce Department said today in Washington.

“The current downturn beginning in 2008 is more pronounced,” Steven Landefeld, director of the Commerce Department’s Bureau of Economic Analysis, said in a press briefing this week. The revisions were in line with past experience in which initial figures tended to underestimate the severity of contractions during their early stages, he said.

The updated statistics also showed that Americans earned more over the last 10 years and socked away a larger share of that cash in savings. The report signals the process of repairing tattered balance sheets following the biggest drop in household wealth on record may be further along than anticipated.

Spending Slumps

Consumer spending, which accounts for 70 percent of the economy, decreased 1.8 percent in last year’s fourth quarter from the same period in 2007, exceeding the prior estimate of a 1.5 percent drop. Purchases also began sinking sooner than previously projected, registering their first decline at the start of 2008 rather than in the second half.

Derivatives and stimulus spending will cause next financial crisis: Templeton’s Mark Mobius

July 16, 2009 by Infinite

mark-mobius
Mark Mobius, executive chairman of Templeton Asset Management Ltd., poses for a portrait in Hong Kong, March 23, 2009. Photographer: Scott Eells/Bloomberg News

July 15 (Bloomberg) — A new financial crisis will develop from the failure to effectively regulate derivatives and the extra global liquidity from stimulus spending, Templeton Asset Management Ltd.’s Mark Mobius said.

“Political pressure from investment banks and all the people that make money in derivatives” will prevent adequate regulation, said Mobius, who oversees $25 billion as executive chairman of Templeton in Singapore. “Definitely we’re going to have another crisis coming down,” he said in a phone interview from Istanbul on July 13.

Derivatives contributed to almost $1.5 trillion in writedowns and losses at the world’s biggest banks, brokers and insurers since the start of 2007, according to data compiled by Bloomberg. Global share markets lost almost half their value last year, shedding $28.7 trillion as investors became risk averse amid a global recession.

US Budget Gap Exceeds $1 Trillion for Fiscal Year

July 14, 2009 by Infinite

“U.S. Treasury Secretary Timothy Geithner said in a letter to Senator Judd Gregg last month that $70.1 billion in repayments from 32 banks that received government funds indicate financial firms are healing.”

“The banks have paid back funds from the $700 billion TARP program, enacted last year. Participating financial firms also have paid $5.2 billion in dividends to the U.S. government, Geithner said in the letter, dated June 30 and released July 7.”

Surprise! Must-read:

– Banks buying back TARP warrants at a discount, panel says (Market Watch):
WASHINGTON (MarketWatch) — A panel that oversees the $700 billion bank bailout package said Friday that financial institutions buying out warrants they gave the government in exchange for capital injections are now buying back those stakes at well below their fair value. The Congressional Oversight Panel, which is charged with overseeing the Troubled Asset Relief Program, or TARP, said in a report that a group of 11 small banks that have repurchased government warrants in exchange for taxpayer-funded assistance, have bought-out the stakes at 66% of their face value.

… and the taxpayer pays for it all. Change!

July 13 (Bloomberg) — The U.S. budget deficit topped $1 trillion for the first nine months of the fiscal year and broke a monthly record for June as the recession subtracted from revenue and the government spent to rejuvenate the economy.

The shortfall for the fiscal year that began Oct. 1 totaled $1.1 trillion, the first time that the gap for the period surpassed $1 trillion, Treasury figures showed today in Washington. The excess of spending over revenue for June was $94.3 billion, the first deficit for that month since 1991, according to data compiled by Bloomberg.

Individual and corporate tax receipts are sliding even as the worst recession in five decades shows signs of easing (?) because the jobless rate continues to rise — reaching a 26-year high in June — and companies have yet to see a sustained increase in demand. The shortfall is also widening as the government ramps up spending from the $787 billion stimulus program President Barack Obama signed into law in February.

UK economy shrinks at 1930s rates

July 3, 2009 by Infinite

The recession is now on a par with the very worst year of the Great Depression.

the-great-depression

The dire state the UK is in emerged on Tuesday as revised figures uncovered the full extent of the country’s economic contraction.

The economy shrank by 4.9pc in the year to the first quarter of 2009, the Office for National Statistics said. The fall in gross domestic product was significantly greater than had previously been calculated, as Government statisticians became aware of the full scale of the fall in company activity.

“Clearly this is now the worst peacetime recession since the 1930s,” said Michael Saunders, chief UK economist at Citigroup. “The worst contraction then was a year of around -5pc; this year will not be hugely different.”

The contraction in GDP during the first quarter alone was 2.4pc, compared with previous estimates of 1.9pc, according to the ONS. This was the biggest one-quarter fall in 35 years.

Moreover, the 4.9pc annual fall was the biggest since Government records began. According to statistics compiled by economic historian Angus Maddison, the contraction was the worst since 1931 – worse than any year during the Second World War and the demobilisation that followed.

The Height of Stupidity: Sweden Cuts Deposit Rate to NEGATIVE .25%

July 3, 2009 by Infinite

“…, punishing savers with negative deposit rates is the height of stupidity.”

“It would be fitting if there was an immediate run on deposits. And if that happens what will Sweden do? Halt deposits? Sweden risks (and deserves) a currency collapse and bank runs for this insane effort. Look for capital flight in Sweden.”

There has been a lot of ludicrous recommendations recently to combat deflation by making deposit rates negative. I did not think any central bank would be dumb enough to try it. I thought wrong.

Today, Riksbank, Sweeden’s central bank cut the deposit rate to -0.25% effectively charging savers interest on deposited money.

DATE 2/07/2009
The weak development of the economy requires a somewhat more expansionary monetary policy. The Executive Board of the Riksbank has therefore decided to cut the repo rate by 0.25 of a percentage point to 0.25 per cent.

Deep economic downturn

Economic activity abroad is very weak and this hits Sweden hard. Exports have fallen substantially and the situation on the labour market is continuing to deteriorate rapidly. The information received in recent months points to the economic downturn in 2009 being somewhat deeper than the Riksbank forecast in April.

Deposit Rate

The decision on the repo rate will apply with effect from Wednesday, 8 July. The deposit rate is at the same time cut to -0.25 per cent and the lending rate to 0.75 per cent.

Sweden Attempts To Boost Lending

Please consider Sweden cuts rates to new low, offers banks loans.

Sweden’s Riksbank cut interest rates to a fresh record low on Thursday and offered banks 100 billion crowns ($13.2 billion) to boost lending as it strives to reverse the country’s worst recession since the 1940s.

The central bank lowered its key interest rate by 25 basis points to 0.25 percent in a surprise move, putting official rates at their lowest since records began in 1907, and said it expected rates to remain at that level until late 2010.

“It’s a double whammy, or even a triple whammy,” said Roger Josefsson at Danske Markets.

“The deposit rates are actually negative now. In some sense they are creating a money machine for banks. You can lend all you want, but don’t put that back into the central bank.”

Sweden was plunged into recession late last year as the global financial crisis pulled the plug on market demand, leaving firms such as world number two truck firm Volvo scrambling to cut costs and shed jobs.

The central bank forecast the economy will contract 5.4 percent this year and return to tepid growth of 1.4 percent next year.

Read moreThe Height of Stupidity: Sweden Cuts Deposit Rate to NEGATIVE .25%

European industrial production plunged most on record, 21.6 % from a year earlier

June 12, 2009 by Infinite

European industrial production plunged by the most on record in April as the impact of the global recession was at its height. In the Eurozone, production tumbled 21.6 percent from a year earlier, the most since the data series commenced in 1986, Eurostat, the European Union’s statistics office in Luxembourg said today.

In recent weeks, PMI (Purchasing Managers’ Index) data; German industrial orders and the announcement that the global economy has bottomed from the German Kiel Institute and a similar upbeat outlook on the UK economy, from the National Institute of Economic and Social Research, has encouraged hope that a low-level recovery has begun.

In the month of April 2009, seasonally adjusted industrial production fell by 1.9% in the Eurozone (EA16) and by 0.9% in the EU272 . In March production decreased by 1.4% and 1.3% respectively.

In the year to April 2009, industrial production declined by 21.6% in the Eurozone and by 19.4% in the EU27 .

Ben Bernanke in Denial 2005-2007

June 11, 2009 by Infinite

Ben Bernanke is just another puppet of the elite behind the scenes.

Bernanke telling us not to worry about housing, mortgages, or car companies in the years before the recession, like denying a train wreck that is coming down the tracks.

Bernanke was chairman of President Bush’s Council of Economic Advisers, and now as chairman of the Federal Reserve, he’s the fourth most powerful person in the world according to Newsweek.

Spanish bank pays staff 30 per cent of their usual salary to take five years off

June 5, 2009 by Infinite

BBVA, a leading Spanish bank, is allowing staff to take five years paid leave, in an effort to cut costs during the recession.

Employees of BBVA, Spain’s second biggest bank, are being offered 30 per cent of their usual salary in return for staying away from work for between three and five years.

Anyone signing up to the scheme is guaranteed a job when their extended leave comes to an end. They will also have their health care costs covered for the length of their sabbatical.

Finance Minister Steinitz: Economy in ’emergency situation’

May 19, 2009 by Infinite

The economy faces an “emergency situation,” Finance Minister Yuval Steinitz warned on Monday, while urging lawmakers to support the government’s draft budget, as Israeli exports plunged 32 percent in the first four months of this year

yuval-steinitz
FINANCE MINISTER Yuval Steinitz (left) said at a meeting of the Knesset Finance Committee that the sharp decline in exports was ‘especially worrying.’ Photo: Ariel Jerozolimski

Gross domestic product shrank an annualized 3.6% in the first quarter, the Central Bureau of Statistics said on Sunday, demonstrating the “depth” of the crisis, Steinitz told the Knesset Finance Committee in Jerusalem. Export figures, which showed a 46% annualized decline, are “especially worrying,” he said.

“Whoever hasn’t understood until now how bad the crisis is, ought to understand now,” he said. “We are truly in an emergency situation.”

US red ink rising even higher, to $1.8 trillion

May 12, 2009 by Infinite

US red ink to top $1.8 trillion, 4 times record; gov’t borrows 46 cents for every dollar spent

WASHINGTON (AP) — The government will have to borrow nearly 50 cents for every dollar it spends this year, exploding the record federal deficit past $1.8 trillion under new White House estimates.

Budget office figures released Monday would add $89 billion to the 2009 red ink — increasing it to more than four times last year’s all-time high as the government hands out billions more than expected for people who have lost jobs and takes in less tax revenue from people and companies making less money.

The unprecedented deficit figures flow from the deep recession, the Wall Street bailout and the cost of President Barack Obama’s economic stimulus bill — as well as a seemingly embedded structural imbalance between what the government spends and what it takes in.

As the economy performs worse than expected, the deficit for the 2010 budget year beginning in October will worsen by $87 billion to $1.3 trillion, the White House says. The deterioration reflects lower tax revenues and higher costs for bank failures, unemployment benefits and food stamps.

Spanish economy heads for meltdown

May 12, 2009May 11, 2009 by Infinite

Spanish discontent as soup kitchens spring up

Hundreds of thousands of Spaniards are facing ruin as bankruptcies and unemployment rise

Faced with losing his home if he cannot find €6,000 (£5,350) by the end of this week, Javier Martínez has resorted to desperate measures: the unemployed father-of-four is selling his own flat and throwing in another, free.

Related article: Transplant tourism: Jobless Spaniards sell kidneys (Times Online)

The three-bedroom apartment in Tarazona, near Zaragoza in eastern Spain, is on the market for only €57,000. The former construction project manager is including a one-bedroom flat that he had been letting in an attempt to entice a buyer.

“I need to find the cash by May 15 or I may be declared bankrupt. I must provide for my children,” Mr Martínez said. He is one of hundreds of thousands of Spaniards facing ruin as Spain’s economy heads for meltdown.

The number of Spaniards unable to pay their debts has risen by 26 per cent to 2.7million in 2009, compared with the first four months of last year. During the same period 232,000 companies joined the list of bad debtors, a 67 per cent rise, according to AsNef-Equifax, a Spanish credit agency.

Bankruptcies are up 44 per cent in the first quarter this year against the final quarter of 2008, with the worst-hit sectors being services and construction.

Japan Exports Drop Record 49% as Global Slump Deepens

March 24, 2009 by Infinite

Vehicles bound for shipment wait in a lot in Kawasaki City, Kanagawa Prefecture, Japan on Jan. 16, 2009. Photographer: Haruyoshi Yamaguchi/Bloomberg News

March 25 (Bloomberg) — Japan’s exports plunged a record 49.4 percent in February as deepening recessions in the U.S. and Europe sapped demand for the country’s cars and electronics.

Shipments to the U.S., the country’s biggest market, tumbled an unprecedented 58.4 percent from a year earlier, the Finance Ministry said today in Tokyo. Automobile exports tumbled 70.9 percent.

The collapse signals gross domestic product may shrink this quarter at a similar pace to the annualized 12.1 percent contraction posted in the previous three months, the sharpest since 1974. Prime Minister Taro Aso is compiling his third stimulus package as companies from Toyota Motor Corp. to Panasonic Corp. fire thousands of workers.

In Israel, recession pressures boil over into looting

March 21, 2009 by Infinite

Isolated outbreaks have erupted after beleaguered business owners or managers defaulted on debts, stopped paying workers and went into hiding.

An Israeli man takes items from the shelves of a God’s Blessing supermarket in northern Israel after the company declared bankruptcy.

Reporting from Hatzor Haglilit, Israel — First came the employees, shortchanged two months’ pay and laid off by the supermarket called God’s Blessing. They rifled through their shuttered workplace, helping themselves to crates full of groceries.

As word spread through the small town, the store’s jilted creditors joined in. They dismantled the light fixtures, ripped out wiring and absconded with the cash registers, even as television cameras rolled.

Within hours the parking lot was jammed with ordinary shoppers. They left car engines running and brought their children to help pick the shelves clean. Finally even the shelves were hauled away, leaving latecomers to scrounge the floor for leftover fruit.

The two-day spree shocked and puzzled Israelis, who assume that the rule of law prevails in their society. Yet this and other recent cases of looting have coincided with news that the economy, flattened late last year after half a decade of enviable growth, had slid into recession.

From the Palm Islands to Emirates Bank, grand Dubai, United Arab Emirates, feels the economic crunch

March 19, 2009 by Infinite

From the Palm Islands to Emirates Bank, grand Dubai, United Arab Emirates, feels the economic crunch

They were heralded as “The 8th Wonder of the World” by numerous travel sites. They required a staggering $60 billion to construct, according to their developers. They attracted A-List celebrities from the Jolie-Pitts to the Beckhams to Lindsay Lohan. They were, in fact, “one of the most enterprising and ambitious ventures to ever have been imagined,” according to travel Web site Destination 360.

“They” are the epic Palm Islands, a series of three man-made islands in the shape of a palm tree, that along with the surrounding city of Dubai, were considered the “it” playground to the stars, a chic status-symbol to the rich, and a mammoth, epic, super-expensive, luxury landmark to the rest of us.

When you”re this high, you”ve got a long way to fall… And fall they have.

Yes, the global recession seems to be official, as the Palm Islands and Dubai have smacked into economic trouble, according to numerous published reports.

“It is clear that tens of thousands have left, real estate prices have crashed and scores of Dubai”s major construction projects have been suspended or cancelled,” the New York Times reports.

And the Palm Islands themselves? Not looking so good. The Mirror reports that the islands” real estate values have plummeted – by about half. Properties that were selling for about $4.5 million are now going for around $2.3 million. Probably not welcome news to celebs like Brad Pitt and Angelina Jolie who own property there, the paper reports.

But it gets worse. Real estate developer, Nakheel, maker of Dubai”s Palm Islands, has suffered recent layoffs, according to ABC News. The Guardian reports that the third of the Palm Islands, the Palm Deira, which was previously under construction, is on hold, and VIrtualTripping.com reports that it is downsizing in scale.

BMW slashes pay as profits plunge

March 18, 2009 by Infinite

BMW profits are down 78% on last year. Photograph: Simon Stuart-Miller

BMW is slashing boardroom pay by 40%, executive pay by a third and employee wages and salaries by 10% in an effort to preserve cash and retain its independence in the current savage car-market downturn.

The German group had €8bn (£7.3bn) in cash at the end of last year when it saw profits drop from more than €4bn in 2007 to just €921m, after demand plunged by a quarter at the end of last year.

Norbert Reithofer, BMW’s chief executive, told a press conference: “I am convinced that our employees understand the difficulty of the current situation and are willing to accept this hardship.” The dividend has been cut from €1.06 to €0.30 in a savage blow to shareholders.

Reithofer is paid a basic salary of €600,000 but saw his overall package last year cut to €2.3m from €3.75m in 2007, largely because his bonus was slashed in half to €1.65m as group earnings and sales plunged.

One official said: “I can live with this. At least I’ve got a job, a flat and a car.” But it is unclear how the 100,000-strong workforce will react after seeing a net 5,700 jobs go last year, 6,000 temporary staff lose their posts, including 850 at Mini’s Oxford factory, and plants put on a four-day week.

Fed to Buy $300 Billion of Longer-Term Treasuries

March 18, 2009March 18, 2009 by Infinite

Related article: China’s Leader Says He Is Worried Over U.S. Treasuries

Now China should be much more than just worried!

Now watch the dollar!!!

March 18 (Bloomberg) — The Federal Reserve said it will buy $300 billion in Treasury securities and acquire more mortgage and agency debt in an effort to bolster housing and hasten the end of the recession.

“To provide greater support to mortgage lending and housing markets, the committee decided today to increase the size of the Federal Reserve’s balance sheet further by purchasing up to an additional $750 billion of agency mortgage- backed securities,” the Federal Open Market Committee said after a unanimous vote in Washington today. “Moreover, to help improve conditions in private credit markets, the committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months.”

Chairman Ben S. Bernanke is opening a new front in monetary policy after unemployment climbed to 8.1 percent and economists forecast the economy will shrink through the middle of the year. Fed officials also kept the benchmark interest rate at between zero and 0.25 percent and said it will consider expanding the Term Asset-Backed Securities Loan Facility to include “other financial assets,” the statement said.

Jim Rogers on Bloomberg: There will be civil unrest in the U.S. and other countries (03/17/09)

March 17, 2009 by Infinite

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Peter Schiff: Speech on America’s Bubble Economy (3/13/09)

March 15, 2009 by Infinite

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Added: March 15, 2009
Source: YouTube

The bankruptcy of the UK is a very real probability, says leading investment bank

March 12, 2009 by Infinite

The Numis report says: “The bankruptcy of the UK is a very real probability as the UK Government is trying to stimulate a greater debt burden in a grossly indebted economy. We believe the scale of the macro imbalances in the UK means there is no prospect of a recovery in 2009 and we expect the UK to be mired in a deep recession through all of 2010.”

House prices may fall by a further 55 percent and there is a “very real probability” that Britain will be bankrupted, a leading investment bank has warned in a private note to clients.

People who bought buy-to-let flats are expected to “begin panic selling” and the average home value could drop below £100,000.

The predictions in a 298-page report from Numis Securities, a City investment bank, are the bleakest yet on the deteriorating state of the British property market.

House prices have already fallen by about 20 per cent over the past year.

However, in the note written last month, Numis said: “Despite UK house prices already having fallen 21% from the peak, we do not believe that the correction is anywhere near over.

“Our core headline forecast is that UK property prices remain between 17% and 39% overvalued based on fair valuation. Moreover, history has shown us that when property…which has experienced a price bubble corrects, the price tends to fall below fair value for a period of time, as confidence in that market remains low. Prices could fall a further 40-55% if the over-correction was as bad as the early 1990s in our view.”