Infinite Unknown

December 30, 2008

Source: YouTube

Tags: Bailout, Banking, Bonds, China, Debt, Economy, Fed, Federal Reserve, Government, Lehman Brothers, Politics, South Korea, Taiwan, U.S., Wall Street

As recession fears cause the nation to embrace greater state control of the economy and unimaginable federal deficits, one searches in vain for debate worthy of the moment. Where there should be an historic clash of ideas, there is only blind resignation and an amorphous queasiness that we are simply sweeping the slouching beast under the rug.

With faith in the free markets now taking a back seat to fear and expediency, nearly the entire political spectrum agrees that the federal government must spend whatever amount is necessary to stabilize the housing market, bail out financial firms, liquefy the credit markets, create jobs and make the recession as shallow and brief as possible. The few who maintain free-market views have been largely marginalized.

Taking the theories of economist John Maynard Keynes as gospel, our most highly respected contemporary economists imagine a complex world in which economics at the personal, corporate and municipal levels are governed by laws far different from those in effect at the national level.

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Tags: Debt, Dollar, Economy, Government, Inflation, Keynesianism, Peter Schiff, Politics, Recession, U.S.

A for sale sign stands outside a home in Boston, on Sept. 5, 2008. Photographer: Michael Fein/Bloomberg News

Dec. 30 (Bloomberg) — Home prices in 20 major U.S. cities declined at the fastest rate on record, depressed by mounting foreclosures and slumping sales.

The S&P/Case-Shiller index declined 18 percent in the 12 months to October, more than forecast, after dropping 17.4 percent in the year through September. The gauge has fallen every month since January 2007. Year-over-year records began in 2001.

See also: U.S. Economy: Confidence Sinks to Record Low on Jobs (Bloomberg)

The financial market meltdown that’s reverberated around the globe has prompted banks to curb lending, signaling the housing slump will persist for a fourth year in 2009. Falling property values have eroded household wealth, causing consumers to pare spending and deepening what is projected to be the longest recession in the postwar period.

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Tags: Economy, Housing, Housing market, U.S.

U.S. one hundred dollar bills are displayed for a photograph in New York on Dec. 30, 2008. Photographer: Daniel Acker/Bloomberg News

Dec. 31 (Bloomberg) — The dollar fell, heading for its worst annual decline against the yen in more than two decades, on speculation a U.S. report this week will show manufacturing shrank at the fastest pace since 1980.

The currency was also poised for a third annual loss versus the Swiss franc on bets the Federal Reserve’s zero target lending rate will weigh on demand for the greenback. The euro was set for the largest annual gain against the British pound since its 1999 debut on speculation the Bank of England will keep its main lending rate lower than the European Central Bank’s rate.

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Tags: Dollar, Economy, Euro, Swiss franc, Yen

A column of Israeli armored vehicles is deployed in a farmer’s field Tuesday near the Gaza border.

GAZA CITY (CNN) — Israel’s fourth day of attacks in Gaza sent the Palestinian death toll to more than 375 as the Jewish state’s prime minister warned Tuesday that the air offensive marked only the beginning, according to officials.

“We are currently at the first stage of the operation,” Prime Minister Ehud Olmert told President Shimon Peres during a morning briefing, officials said.

Related article: World rallies around Palestinians amid Gaza offensive

A girl in Caracas, Venezuela, holds a sign reading, “No more massacre in Gaza” at Israel’s embassy Monday.

Olmert’s summation came a day after Defense Minister Ehud Barak told Israel’s parliament that the campaign launched Saturday marked an “all-out war” against Hamas, the Islamic militant group that rules Gaza. Continue reading »

Tags: Ban Ki-moon, Ehud Barak, Ehud Olmert, Gaza, Hamas, Israel, Military, Politics, U.N.

For three straight days, Yellowstone National Park has been shaken by a serise of small earthquakes. Scientists are watching to see whether the tremors are signaling something bigger to come. (ABC News Photo Illustration)

CHEYENNE, Wyo. (AP) – Yellowstone National Park was jostled by a host of small earthquakes for a third straight day Monday, and scientists watched closely to see whether the more than 250 tremors were a sign of something bigger to come. Swarms of small earthquakes happen frequently in Yellowstone, but it’s very unusual for so many earthquakes to happen over several days, said Robert Smith, a professor of geophysics at the University of Utah.

“They’re certainly not normal,” Smith said. “We haven’t had earthquakes in this energy or extent in many years.”

Smith directs the Yellowstone Seismic Network, which operates seismic stations around the park. He said the quakes have ranged in strength from barely detectable to one of magnitude 3.8 that happened Saturday. A magnitude 4 quake is capable of producing moderate damage.

“This is an active volcanic and tectonic area, and these are the kinds of things we have to pay attention to,” Smith said. “We might be seeing something precursory.

Related article:
- Yellowstone National Park Hit by Hundreds of Small Earthquakes (Bloomberg)

“Could it develop into a bigger fault or something related to hydrothermal activity? We don’t know. That’s what we’re there to do, to monitor it for public safety.”

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Tags: Earthquake, Environment, Supervolcano, Volcano, Yellowstone

Billionaire Kirk Kerkorian, whose Beverly Hills-based investment company confirmed Monday that it had dumped its remaining stock holdings in struggling Ford Motor Co., had had a long, if not always profitable, relationship with Detroit.  Associated Press

The investor spent about $1 billion acquiring a 6.5% stake in the struggling automaker this year, then saw the value of its stock plummet.

Kirk Kerkorian wasn’t kidding when he said he was putting the brakes on his latest foray into the auto industry.

A spokeswoman for Tracinda Corp., the billionaire’s Beverly Hills-based investment company, confirmed Monday that it had dumped its remaining stock holdings in struggling Ford Motor Co. She declined to provide details of the stock sales.

Kerkorian owned 107.1 million Ford shares, or 4.9% of the company, in late October, when Tracinda reported in a regulatory filing that it had unloaded 7.3 million shares and planned to sell the rest of its holdings by the end of the year.

Because it owned less than 5% of the company — the regulatory threshold for reporting changes in stock ownership — Tracinda was not required to file information with the Securities and Exchange Commission regarding the more recent sales, such as when the shares were sold or at what price.

But Kerkorian, who began buying Ford shares in April and spent about $1 billion acquiring a 6.5% stake in the automaker, clearly took a bath on the investment. Ford was trading at about $7.75 a share when Kerkorian began acquiring his stake. The average price since his last SEC filing in late October: $2.33 a share.

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Tags: Economy, Ford, Stock Market

Vehicles bound for export wait in a lot in Yokohama City, Japan on Oct. 27, 2008. Photographer: Haruyoshi Yamaguchi/Bloomberg News

Dec. 30 (Bloomberg) — Japan’s economy will probably shrink at an annual 12.1 percent pace this quarter, the sharpest drop since 1974, as exports collapse, Barclays Capital said.

Gross domestic product in the three months ending tomorrow will fall at almost three times the 4.1 percent rate previously predicted, said Kyohei Morita, chief Japan economist at Barclays in Tokyo, after reports last week showed industrial production and exports posted the biggest declines on record in November.

“Given the speed and the length of the contraction, this recession could be the most severe in the postwar era,” Morita said. “We expect negative growth will continue for a fifth straight quarter to the April-June period of 2009.”

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Tags: Bank of Japan, Economy, Exports, GDP, Japan, Politics

What a difference 20 years makes.

The Japanese stock market on Tuesday morning completed its investment year with its usual half-day, Dec. 30 session. That won it the dubious honor of being the first major global stock market to put its 2008 performance in the books — and its double-digit loss is likely to be followed by most of the rest of the world.

The Nikkei Stock Average’s glory days above 38000 are a distant memory, as the Japanese stock market has completed its dismal 2008 investment year. Pictured, a trader in Tokyo earlier this month. Associated Press

The Nikkei closed up 1.3% to finish at 8859.56, booking its worst year ever with a loss of 42%. This follows an 11.1% decline for 2007. On a positive note, the index marked its first positive month since May.

More striking is the Nikkei’s comedown from its heights two decades ago. In 1989, on the last trading day of that year, Tokyo’s blue-chip index had touched an all-time high of 38915.86.

On Monday, the final full trading session of the year, the Nikkei had closed at 8747.17, down 7.65 points or 0.09%.

Insurance stocks in Tokyo on Monday surged in the wake of reports that Mitsui Sumitomo Insurance Group, Aioi Insurance and Nissay Dowa General Insurance were in talks to integrate their operations by next autumn.

In a statement posted on its Web site, Mitsui Sumitomo wrote that “no decision that needs to be disclosed has been made.” Mitsui Sumitomo rose 8.3%, Aioi soared 19% and Nissay Dowa jumped 15%.

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Tags: Economy, Japan, Nikkei, Stock Market

I am sure that things will turn out to be much worse than what this report predicts because the economic crisis has just begun.

• Businesses call for minimum wage freeze
• Report warns of ‘winter surge’ in unemployment

Next year will be the worst for jobs for almost 20 years, with a net reduction of at least 600,000 people in employment, according to a report published today.

The Chartered Institute of Personnel and Development (CIPD) is predicting a “winter surge” of redundancies in the first quarter of the year that could see as many as 300,000 lose their jobs.

The institute warned that unemployment would continue to rise in 2010, taking the total number of jobs projected to be lost over the course of the recession to about 1 million.

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Tags: Economy, Recession, U.K., Unemployment