Feb 09

- Watch The Financial Markets In Europe (Economic Collapse, Feb 7, 2013):

Is the financial system of Europe on the verge of a meltdown?  I have always maintained that the next wave of the economic crisis would begin in Europe, and right now the situation in Europe is unraveling at a frightening pace.  On Monday, European stocks had their worst day in over six months, and over the past four days we have seen the EUR/USD decline by the most that it has in nearly seven months.  Meanwhile, scandals are erupting all over the continent.  A political scandal in Spain, a derivatives scandal in Italy and banking scandals all over the eurozone are seriously shaking confidence in the system.  If things move much farther in a negative direction, we could be facing a full-blown financial crisis in Europe very rapidly.  So watch the financial markets in Europe very carefully.  Yes, most Americans tend to ignore Europe because they are convinced that the U.S. is “the center of the universe”, but the truth is that Europe actually has a bigger population than we do, they have a bigger economy then we do, and they have a much larger banking system than we do.  The global financial system is more integrated today than it ever has been before, and if there is a major stock market crash in Europe it is going to deeply affect the United States and the rest of the globe as well.  So pay close attention to what is going on in Europe, because events over there could spark a chain reaction that would have very serious implications for every man, woman and child on the planet. Continue reading »

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Dec 24


YouTube Added: 17.12.2012

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Apr 26

Related info::

- Obama Regime Seizes Family Farms Bank Accounts

- DHS Buys Enough Ammo To Wage Seven-Year War Against The American People

- America: A Government Totally Out Of Control (Video)

- US Government Plans To Destroy 4 Clean Energy Hydro Dams In Top Condition At The Klamath River That Supply Electricity To 70,000 Residents In The Area (Video)

- Obama Regime Seizes Control Over All Food, Farms, Livestock, Farm Equipment, Fertilizer And Food Production Across America Per Executive Order

Flashback:

- Former governor Jesse Ventura Conspiracy Theory: Police State (And FEMA Concentration Camps) – Full Length Video

- USDA: No strategic grain reserves … they sold them!


James Wesley Rawles is a former US Army intelligence officer who, for the last two decades, has authored bestselling books and top blogs on preparedness.


YouTube Added: 17.04.2012

@Amazon.com:

- Survivors: A Novel of the Coming Collapse:


- Strategic Relocation – North American Guide to Safe Places:

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Apr 05

- You Ain’t Seen Nothing Yet – Part Two (ZeroHedge, April 3, 2012)

See also:

- You Ain’t Seen Nothing Yet – Part One (ZeroHedge, April 2, 2012)

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Jan 18

In case you can’t watch this video (or any other YouTube video) use ‘ProxTube’ (Add-on).



YouTube 19.534.563 Views

- Gerald Celente: ‘Politics Is Show Business For The Ugly’ – Expects Europe To Collpase In April – On The NDAA And Indefinite Detention: ‘They Can Simply Blow My Brains Out Now’ … ‘This Is FASCISM’

- Max Keiser And Gerald Celente On MF Global Bankruptcy Implications – The JP Morgan Connection – Goldman Sachs – CME (‘Chicago Mafia Exchange’) – Gold, Silver – Syria, Iran – Entire Financial System Collapsing, One Big Global Ponzi Scheme – False Flag, WW III – Bank Holiday, Economic Martial Law – ‘YOUR MONEY ISN’T SAFE’ (Video)

- Gerald Celente Endorses Ron Paul For President – ‘The Entire Economic System Is Collapsing’ – ‘Fascism Has Come To America In Every Form’ (Video – Nov. 29, 2011) (Video)

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

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Oct 07

Prepare for collapse.

Got physical gold and silver (food, water etc.)?



YouTube

- IMF Advisor: Could See Eurozone ‘Meltdown’ in 2 Or 3 Weeks (Business Insider, Oct. 6, 2011):

In an interview on the BBC (via ZeroHedge), IMF advisor Robert Shapiro said some incredibly alarmist things.

He tells broadcasters that if eurozone leaders don’t address the crisis properly we will see a meltdown as soon as later this month.

In his words:

“If they can not address [the financial crisis] in a credible way I believe within perhaps 2 to 3 weeks we will have a meltdown in sovereign debt which will produce a meltdown across the European banking system.

We are not just talking about a relatively small Belgian bank, we are talking about the largest banks in the world, the largest banks in Germany, the largest banks in France, that will spread to the United Kingdom, it will spread everywhere because the global financial system is so interconnected. All those banks are counterparties to every significant bank in the United States, and in Britain, and in Japan, and around the world.

This would be a crisis that would be in my view more serious than the crisis in 2008…. What we don’t know the state of credit default swaps held by banks against sovereign debt and against European banks, nor do we know the state of CDS held by British banks, nor are we certain of how certain the exposure of British banks is to the Ireland sovereign debt problems.”

Continue reading »

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Oct 03

See also:

- British Foreign Secretary William Hague Condemns Crumbling Euro As A ‘Historical Monument To Collective Folly’, Says Euro Is A ‘Burning Building With No Exits’ Claim Is Correct

- Enron-i-sation of Europe; Is the Euro ‘Beyond Rescue’?

- Trader On BBC News: ‘Eurozone Market Will Crash’ – ‘Governments Don’t Rule The World, Goldman Sachs Rules The World’ – ‘In Less Than 12 Months The Savings Of Millions Of People Will Vanish’

Getting closer to the greatest financial collapse in world history.

- The No.1 Trend Forecaster Gerald Celente: Collapse – It’s Coming! Are You Ready? (06/14/2011)

This is the Greatest Depression.


- Eurozone teeters on the verge of a ‘euroquake’ if Greek default is bungled (Telegraph, Oct 1,  2011):

More than one in three international investors expect a global economic meltdown within the next 12 months, according to a new Bloomberg poll. Far more – almost 70pc – say the world economy is deteriorating, up from just 18pc four months ago.

At the heart of the gloom, of course, is the eurozone, with 90pc of those surveyed judging that the economy of the single currency area is getting worse. One wonders what planet the other 10pc are on.

Continue reading »

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Aug 17

- The explosive truth behind Fukushima’s meltdown (Independent, August 17, 2011):

Japan insists its nuclear crisis was caused by an unforeseeable combination of tsunami and earthquake. But new evidence suggests its reactors were doomed to fail.

It is one of the mysteries of Japan’s ongoing nuclear crisis: How much damage did the 11 March earthquake inflict on the Fukushima Daiichi reactors before the tsunami hit?

The stakes are high: if the earthquake structurally compromised the plant and the safety of its nuclear fuel, then every similar reactor in Japan may have to be shut down. With almost all of Japan’s 54 reactors either offline (in the case of 35) or scheduled for shutdown by next April, the issue of structural safety looms over any discussion about restarting them.

Continue reading »

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May 19


Added: 13. Mai 2010

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May 07

wall-street

“Guys this is probably the craziest I have seen it down here ever.”  (At 05:40)

Here it is, memorialized for the generations and away from the now openly ridiculous disinformation propaganda of the mainstream media, just what a full market meltdown panic sounds like: straight from the epicenter, the S&P 500 pits. Luckily open ouctry still exists, if at least for shock value.

For a first hand account of the most shocking 15 minutes in recent market history:

- Market Crash (MP3 7.97 MB)

Fat finger my ass.

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May 07

“I Have 80% Of My Assets In GOLD.”


Added: 7. Mai 2010

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

More from Gerald Celente:

- Gerald Celente: Obama’s Financial Reform Is Just A Show

- The No.1 Trend Forecaster Gerald Celente on ObamaCare, Dollar Devaluation And Gold

- Gerald Celente: This time they will close the Banks & Wall Street (03/27/10)

- Gerald Celente: ‘It’s the greatest bank robbery in world history and the banks are doing the robbing.’

- Gerald Celente: ‘The Crash is Coming in 2010.’

- The No.1 Trend Forecaster Gerald Celente: Financial Mafia Controlling US and Wall Street

- Survivor, America: ‘It’s Only Going to Get Worse,’ Gerald Celente Says

- The No.1 Trend Forecaster Gerald Celente: The Terror And The Crash of 2010

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Apr 20

Hiding behind the complexities of our financial system, banks and other institutions are being accused of fraud and deception, with Goldman Sachs just the latest in the spotlight. This has become the most pressing election issue of all

goldman-sachs-lloyd-blankfein
Goldman Sachs was in the spotlight last November when demonstrators protested outside its Washington offices against executive bonuses. (Bloomberg via Getty Images)

The global financial crisis, it is now clear, was caused not just by the bankers’ colossal mismanagement. No, it was due also to the new financial complexity offering up the opportunity for widespread, systemic fraud. Friday’s announcement that the world’s most famous investment bank, Goldman Sachs, is to face civil charges for fraud brought by the American regulator is but the latest of a series of investigations that have been launched, arrests made and charges made against financial institutions around the world. Big Finance in the 21st century turns out to have been Big Fraud. Yet Britain, centre of the world financial system, has not yet levelled charges against any bank; all that we’ve seen is the allegation of a high-level insider dealing ring which, embarrassingly, involves a banker advising the government. We have to live with the fiction that our banks and bankers are whiter than white, and any attempt to investigate them and their institutions will lead to a mass exodus to the mountains of Switzerland. The politicians of the Labour and Tory party alike are Bambis amid the wolves.

Just consider the roll call beyond Goldman Sachs. In Ireland Sean FitzPatrick, the ex-chair of the Anglo Irish bank was arrested last month and questioned over alleged fraud. In Iceland last week a dossier assembled by its parliament on the Icelandic banks – huge lenders in Britain – was handed to its public prosecution service. A court-appointed examiner found that collapsed investment bank Lehman knowingly manipulated its balance sheet to make it look stronger than it was – accounts originally audited by the British firm Ernst and Young and given the legal green light by the British firm Linklaters. In Switzerland UBS has been defending itself from the US’s Internal Revenue Service for allegedly running 17,000 offshore accounts to evade tax. Be sure there are more revelations to come – except in saintly Britain. Continue reading »

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Mar 21

There is no recovery!


A story that is not getting nearly enough attention is the ruinous fiscal meltdown occurring in state after state, all across the country.

Taxes are being raised. Draconian cuts in services are being made. Public employees are being fired. The tissue-thin national economic recovery is being undermined. And in many cases, the most vulnerable populations — the sick, the elderly, the young and the poor — are getting badly hurt.

Arizona, struggling with a projected $2.6 billion budget shortfall, took the drastic step of scrapping its Children’s Health Insurance Program. That left nearly 47,000 low-income children with no coverage at all. Gov. Jan Brewer is also calling for an increase in the sales tax. She said, “Arizona is navigating its way through the largest state budget deficit in its long history.”

In New Jersey, the newly elected governor, Chris Christie, has proposed a series of budget cuts that, among other things, would result in public schools receiving $820 million less in state aid than they had received in the prior school year. Some well-off districts would have their direct school aid cut off altogether. Poorer districts that rely almost entirely on state aid would absorb the biggest losses in terms of dollars. They’re bracing for a terrible hit.

For all the happy talk about “no child left behind,” the truth is that in Arizona and New Jersey and dozens of other states trying to cope with the fiscal disaster brought on by the Great Recession, millions of children are being left far behind, and many millions of adults as well. Continue reading »

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Feb 26

I don’t think that the US has five to seven years left before it will experience the greatest financial collapse in history.


The US is heading for a debt-driven “financial meltdown” within five to seven years, according to Judd Gregg, the outgoing Republican senator for New Hampshire.

In a robust and at times testy video interview for the Financial Times’s View from DC series, Mr Gregg also complimented China for showing rising alarm about the US’s mounting levels of public debt.

“We have had China say that they are looking for other places to put their reserves and that is probably a smart decision on their part,” said Mr Gregg, who will not seek re-election in November. “So the warning signs are pretty clear and the path is unsustainable and, at this point, unless we take different actions, unavoidable.”

Related article: China to Purchase 191.3 Tons of IMF’s Gold

But the senator, who was the most high-profile Repub­lican invited by Barack Obama, the president, to join his administration last year, an offer Mr Gregg accepted and then turned down, said he doubted that the two parties would get together to tackle it.

Last month 16 Republicans and 37 Democrats voted to establish a fiscal commission – seven votes short of what was needed to prevent a filibuster.

Mr Gregg also played down prospects for the non-statutory fiscal commission that Mr Obama set up by executive order last week. “It was just an edict that came from a Democratic president,” he said, adding, that “it’s the only game in town right now”.

Mr Gregg also disputed non-partisan economic studies that showed last year’s $787bn (€585bn, £520bn) stimulus cushioned the impact of the recession. “The facts are wrong,” he said. “I can understand how a Keynesian would make that argument. I find them absurd on their face.” Continue reading »

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Feb 23

“When I tell people to prepare themselves for a dirty war, they ask me: “America against whom?” I tell them that for sure they will find someone.”
– Marc Faber

I told you before that after bankrupting America and destroying the dollar the plan of the elite is to start WWIII.

There are also other forces at work that try to stop this, but you need to prepare yourself now, in case the elitists get their way.

I am not talking about preparing yourself out of fear. Not so many years ago preparedness was common sense.


marc-faber

The world’s most powerful investors have been advised to buy farmland, stock up on gold and prepare for a “dirty war” by Marc Faber, the notoriously bearish market pundit, who predicted the 1987 stock market crash.

The bleak warning of social and financial meltdown, delivered today in Tokyo at a gathering of 700 pension and sovereign wealth fund managers.

Dr Faber, who advised his audience to pull out of American stocks one week before the 1987 crash and was among a handful who predicted the more recent financial crisis, vies with the Nouriel Roubini, the economist, as a rival claimant for the nickname Dr Doom.

Speaking today, Dr Faber said that investors, who control billions of dollars of assets, should start considering the effects of more disruptive events than mere market volatility.

“The next war will be a dirty war,” he told fund managers: “What are you going to do when your mobile phone gets shut down or the internet stops working or the city water supplies get poisoned?”

His investment advice, which was the first keynote speech of CLSA’s annual investment forum in Tokyo, included a suggestion that fund managers buy houses in the countryside because it was more likely that violence, biological attack and other acts of a “dirty war” would happen in cities.

He also said that they should consider holding part of their wealth in the form of precious metals “because they can be carried”.

One London-based hedge fund manager described Mr Faber’s address as “excellent, chilling stuff: good at putting you off lunch, but not something I can tell clients asking me about quarterly returns at the end of March”. Continue reading »

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Feb 13

Must-read!


Prepare for an apocalyptic anarchy ending Wall Street’s toxic capitalism

ARROYO GRANDE, Calif. (MarketWatch) — Wake up investors. Are you prepared for the economic anarchy coming after a global-debt time bomb explodes? Are you thinking outside the box? Investing differently? Act now — tomorrow will be too late.

Start by looking past the endless cable skirmishes between Rush, Glenn, Bill and Shawn versus Harry, Nancy, Ben and Barack. Look way past the insurgency bonding Sarah and her diehard Tea Party revolutionaries with Ron Paul’s Neo-Reaganite ideologues, Fat-Cat Bankers and the Party of No, all planning a massive frontal assault on the 2010 elections, hell-bent on destroying the presidency. All that’s the sideshow.

The Big One is coming soon, bigger than the 2000 dot-com crash and the 2008 subprime credit meltdown combined. A huge market blowout. And as Bloomberg-BusinessWeek predicts: “The results won’t be pretty for investors or elected officials.”

After the global-debt bomb explodes don’t expect a typical bear correction followed by a new bull. Wall Street’s toxic pseudo-capitalism is imploding. Be prepared for a massive meltdown. Yes, already the third major bubble-bust of the 21st century, triggered once again by Wall Street’s out-of-control Fat Cat Bankers. And it’s dead ahead.

Can your family survive in the anarchy after the debt bomb explodes?

America’s already descending into economic anarchy. We’re all trapped in a historic economic supercycle, a turning point that must bleed through a no-man’s land of lawless self-destructive anarchy before a neo-capitalistic world can re-emerge. Investors tell me they “feel” it at a deep level, “know” it’s happening. They keep asking: “What’s the best investment strategy to prepare now?”

This is no joke, folks. Are you prepared? Or preparing? Will your family survive in a post-apocalyptic world, when anarchy is rampant in America? Look at Washington, Wall Street and Corporate America today. You know it’s already begun.

You are witnessing a fundamental breakdown of the American dream, a systemic breakdown of our democracy and our capitalism, a breakdown driven by the blind insatiable greed of Wall Street: Dysfunctional government, insane markets, economy on the brink. Multiply that many times over and see a world in total disarray. Ignore it now, tomorrow will be too late. Continue reading »

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Feb 06

* World’s top bankers fly in
* To meet at secret location
* Trouble on the horizon

wall-street_003
The high-powered gathering coincides with a fresh meltdown on world sharemarkets (AP)

THE world’s top central bankers began arriving in Australia yesterday as renewed fears about the strength of the global economic recovery gripped world share markets.

Representatives from 24 central banks and monetary authorities including the US Federal Reserve and European Central Bank landed in Sydney to meet tomorrow at a secret location, the Herald Sun reports.

Organised by the Bank for International Settlements last year, the two-day talks are shrouded in secrecy with high-level security believed to have been invoked by law enforcement agencies.

Speculation that the chairman of the US Federal Reserve, Dr Ben Bernanke, would make an appearance could not be confirmed last night.

The event will be dominated by Asian delegations and is expected to include governors of the Peoples Bank of China, the Bank of Japan and the Reserve Bank of India.

The arrival of the high-powered gathering coincided with a fresh meltdown on world sharemarkets, sparked by renewed concerns about global growth and sovereign debt.

Fears countries including Greece, Portugal, Spain and Dubai could default on debt repayments combined with disappointing US jobs data to spook investors. Continue reading »

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Dec 28

Listen AMERICA! Listen WORLD! Listen!!!

Stop listening to elite puppets like Obama, Bernanke and Geithner or you are doomed!!!


1 of 2:

2 of 2:

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Nov 29

- UAE faces up to $184 billion total debt: BofA-Merrill Lynch (Reuters):
LONDON (Reuters) – The United Arab Emirate (UAE) has total debt amounting to $184 billion at the end of 2009, according to estimates by Bank of America-Merrill Lynch, which said the region faces a heavy redemption schedule until 2013.



DUBAI, United Arab Emirates (AP) — The United Arab Emirates’ central bank is saying it “stands behind” local and foreign banks operating in the country, offering them access to money in a sign the Gulf Arab nation’s federal government is racing to curtail investor fears over Dubai’s crushing debt.

The UAE’s official WAM news agency said Sunday the central bank issued a notice to Emirati banks and foreign banks with branches in the country saying it would make available “a special additional liquidity facility linked to their current accounts at the central bank.”

Continue reading »

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Nov 26

Dubai is broke and will become a ghost town.

“Altogether, the Dubai government and its companies have more than $80 billion of debt. The emirate, which has a population of only two million, has been forced twice to approach its oil-rich neighbour in Abu Dhabi for the funds to bail it out.”


Palm Jumeirah
The Atlantis (!) hotel in Dubai

David Beckham and Brad Pitt are believed to be among the celebrities and sportsmen who bought villas in Palm Jumeirah in Dubai, a luxury development that juts out into the Gulf. But when the property bubble burst this year, residents saw the value of their investments collapse. Yesterday their situation worsened as Nakheel, the developer, and its state-owned parent made a request to suspend debt repayments.

The statement rocked credit mar-kets around the world and prompted analysts to question whether Dubai, the most populous of the United Arab Emirates, will be able to meet its obligations. The concern is that Nakheel will be unable to continue developing the Palm and neighbouring projects, leaving Dubai and its coastal waters an ugly, unfinished construction site.

When the 2,000 villas and townhouses on the Palm went on sale in 2002, they sold out in a month. Passing through en route to the World Cup in Japan and Korea were the England football team, and several players stopped off to sign up for £1 million properties on the artificial island, with Michael Owen, David James, Joe Cole, Andy Cole and Kieron Dyer, it was reported, joining Beckham on the beaches. Pitt and Angelina Jolie are also said to have bought homes.

Joe Cole was one of the few who got out in time. The Chelsea player sold his villa for about $3.5 million (£2.1 million) last summer as Dubai’s property bubble approached bursting point.

Nakheel is now in deep trouble and struggling to cover its debts. Dubai World, a government conglomerate that owns the developer, is $60 billion in the red. Yesterday’s announcement by the Dubai government that it wishes to suspend repayment of Dubai World’s debts for six months, including a $4 billion bond held by Nakheel that was due to be repaid next month, is the clearest indication that the emirate can no longer meet its obligations.

Work has stopped on several major projects around the city and companies have had to accept huge cuts in the value of their contracts. More than 400 projects worth more than $300 billion are said to have been cancelled or shut down as a result of the property collapse.

Continue reading »

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Nov 19

Société Générale has advised clients to be ready for a possible ‘global economic collapse’ over the next two years, mapping a strategy of defensive investments to avoid wealth destruction.

japan-mount-fuji
Explosion of debt: Japan’s public debt could reach as much as 270pc of GDP in the next two years. A bullet train is pictured speeding past Mount Fuji in Fuji city, west of Tokyo Photo: Reuters

In a report entitled “Worst-case debt scenario”, the bank’s asset team said state rescue packages over the last year have merely transferred private liabilities onto sagging sovereign shoulders, creating a fresh set of problems.

Overall debt is still far too high in almost all rich economies as a share of GDP (350pc in the US), whether public or private. It must be reduced by the hard slog of “deleveraging”, for years.

“As yet, nobody can say with any certainty whether we have in fact escaped the prospect of a global economic collapse,” said the 68-page report, headed by asset chief Daniel Fermon. It is an exploration of the dangers, not a forecast.

Under the French bank’s “Bear Case” scenario, the dollar would slide further and global equities would retest the March lows. Property prices would tumble again. Oil would fall back to $50 in 2010.

Governments have already shot their fiscal bolts. Even without fresh spending, public debt would explode within two years to 105pc of GDP in the UK, 125pc in the US and the eurozone, and 270pc in Japan. Worldwide state debt would reach $45 trillion, up two-and-a-half times in a decade.

(UK figures look low because debt started from a low base. Mr Ferman said the UK would converge with Europe at 130pc of GDP by 2015 under the bear case).

The underlying debt burden is greater than it was after the Second World War, when nominal levels looked similar. Ageing populations will make it harder to erode debt through growth. “High public debt looks entirely unsustainable in the long run. We have almost reached a point of no return for government debt,” it said.

Inflating debt away might be seen by some governments as a lesser of evils.

If so, gold would go “up, and up, and up” as the only safe haven from fiat paper money. Private debt is also crippling. Even if the US savings rate stabilises at 7pc, and all of it is used to pay down debt, it will still take nine years for households to reduce debt/income ratios to the safe levels of the 1980s.

The bank said the current crisis displays “compelling similarities” with Japan during its Lost Decade (or two), with a big difference: Japan was able to stay afloat by exporting into a robust global economy and by letting the yen fall. It is not possible for half the world to pursue this strategy at the same time.

SocGen advises bears to sell the dollar and to “short” cyclical equities such as technology, auto, and travel to avoid being caught in the “inherent deflationary spiral”. Emerging markets would not be spared. Paradoxically, they are more leveraged to the US growth than Wall Street itself. Farm commodities would hold up well, led by sugar.

Continue reading »

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Nov 10

The Real Tsunami Is Coming

next-bubble-commercial-real-estate
Cartoon courtesy of Giovanni Fontana

That’s right, the next train wreck will be in commercial real estate. Couldn’t be worse than last year’s residential market crash? That remains to be seen. But it’s coming soon, probably as early as the second quarter of next year, and there’s nothing that can prevent it. The government will intervene, trying desperately to delay the day of reckoning, and may even succeed. For a while. But make no mistake about it, that train is going off the tracks no matter what.

Every part of the sector – from multifamily apartment buildings to retail shopping centers, suburban office buildings, industrial facilities, and hotels – has accumulated a huge amount of defaulted or nonperforming paper. It’s an impossible, swaying structure that cannot long stand.

Just ask Andy Miller.

Andy is one of the most knowledgeable people around when it comes to commercial real estate. Co-founder of the Miller Fishman Group of Denver, he has spent twenty years buying and developing apartment communities, shopping centers, office buildings, and warehouses throughout the country. He’s also worked extensively – especially lately – with asset managers and special servicers (those who handle commercial mortgage-backed securities, or CMBS) from insurance companies, conduits, and the biggest banks in the U.S., advising them on default scenarios, helping them develop realistic pricing structures, and making hold or sell recommendations.

It isn’t easy. Commercial real estate sales are off a staggering 82% in 2009, compared with 2008, and last year was worse than ’07. No one is selling at depressed prices, but it hardly matters as there are no buyers, either because they’re afraid of the market or can’t meet more stringent loan requirements. Two years ago, the value of all commercial real estate in the U.S. was about $6.5 trillion. Against that was laid $3-3.5 trillion in loans. The latter figure hasn’t changed much. But the former has sunk like a bar of lead in the lake, so that now between half and two-thirds of those loans will have to be written down, Andy estimates.

“If the banks had to take that hit all at once, there wouldn’t be any banks,” he says.

And it’s actually worse than that. As even average citizens became aware during the subprime meltdown, loans in recent years were bundled into exotic financial vehicles that could be sold and resold, a class generically known as conduits. These commercial mortgage-backed securities, while less well known than their cousins built upon home loans, are nonetheless ubiquitous.

Continue reading »

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Jul 07

Why I Expect a Default on California’s Bonds

This is a day of reckoning for California and, ultimately, for all of America.

Will our nation’s largest debtors meet their massive financial obligations? Or will many ultimately default?

In California, the answer given by the state Treasurer’s office was a commitment never to default, seeking to directly refute my forecast issued here 13 days ago under the headline “California Collapsing.”

According to the BusinessJournal:

“The California’s state Treasurer’s office on Monday refuted an analyst’s recommendation last week that investors dump California municipal bonds and that the state is likely to default.

“Analyst Martin Weiss of Weiss Research said in a June 22 report that California’s financial woes create ‘a very high probability’ that California will eventually miss debt service payments.

“Mr. Weiss’ analysis and recommendation, to put it kindly, is misinformed,” responded Tom Dresslar, a spokesman for state Treasurer Bill Lockyer. “Even the credit rating agencies said, in announcing possible downgrades, that the likelihood of default is low.”

Ironically, just two days later …

California Defaulted on Its
Short-Term Debt Obligations

In lieu of cash, California issued i.o.u.’s to meet obligations to vendors and citizens, postponing payments on its current liabilities.

But current liabilities are short-term debts. Ergo, based on this standard definition, California is already defaulting.

It’s not the same as defaulting on its bonds. But for reasons I’ll explain in a moment, I’m now more convinced than ever that a bond default is also coming.

Consider the importance of this week’s events …

If California’s creditors had a say in the issuance of i.o.u.’s, Sacramento officials might be able to deny they’re in default by implying mutual consent. But that’s far from the facts. The creditors had nothing to do with this decision. It was unilateral, a telltale aspect of debt defaults.

If the i.o.u.’s were as good as cash, Sacramento might also deny the D-word. But the sad reality is that, if you’re among those stuck with California i.o.u.’s, you have only two choices: You have to either hold them while you sweat and cross your fingers or you have to sell them at a steep discount – exactly the same choices facing bond investors after a default.

If all major financial institutions accepted California i.o.u.’s, that might also help Sacramento justify a continued denial of default. But the reality is that most banks are not accepting the i.o.u.’s, and no one could argue their reasoning is financially unsound.

Why accept a piece of paper at face value when it’s worth significantly less than face value on the open market? The nation’s largest banks already have enough troubles with toxic mortgages, toxic credit cards and toxic loans on commercial real estate. They’re not exactly anxious to pile on toxic California paper.

If, as in past episodes, California’s budget mess were mostly due to a political snafu, it could be argued that the i.o.u.’s are merely a temporary stop-gap. But that’s clearly not the case either.

To the contrary, California’s budget crisis is rooted in an unprecedented economic depression with 11.5 percent unemployment and the greatest concentration of mortgage delinquencies in the nation. Even if the i.o.u.’s are ultimately paid in full, California’s debt troubles are not going away.

Why I Expect a Default on California’s Bonds

Short of an 11th-hour rescue from Washington – where political resistance to bailouts has grown dramatically in the wake of recent federal rescues – it will be extremely difficult for California to avoid a default on its bonds.

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Jun 29

California is on track to run out of cash by the end of July.

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Gov. Arnold Schwarzenegger tells reporters that he is resolute about state fiscal reforms. Schwarzenegger’s high-stakes strategy could close the budget abyss or cause a meltdown of state government.
(AP)

Reporting from Sacramento — Gov. Arnold Schwarzenegger, seeking to conquer what could be the last budget crisis of his tenure, is engaged in a high-stakes negotiating strategy with lawmakers that could force him to preside over a meltdown of state government.

As legislators have scrambled to stop the state from postponing payment of its bills and issuing IOUs starting next week, the governor has vowed to veto any measure that fails to close the state’s entire $24-billion deficit.

In doing so, Schwarzenegger has sent the message that he would rather allow the state to begin shutting down than let lawmakers push its troubles off for months by closing only part of the shortfall. The latter prospect could swallow up the rest of his governorship.

“Whatever needs to be done,” Schwarzenegger told reporters outside his Capitol office Friday when asked why he would be willing to delay payments to needy Californians. “I know that there is a history in this building of always being late with the budget, to drag it out and to kick that can down the alley. . . . I don’t think we have this luxury this time.”

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Jun 11

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The skyline of downtown Los Angeles is pictured at sunset (Reuters)

SAN FRANCISCO (Reuters) – California’s government risks a financial “meltdown” within 50 days in light of its weakening May revenues unless Governor Arnold Schwarzenegger and lawmakers quickly plug a $24.3 billion budget gap, the state’s controller said on Wednesday.

Underscoring the severity of California’s cash crisis, Controller John Chiang, who has previously warned the state’s government risks running out of cash without a budget deal, said revenues in May fell by $1.14 billon, or 17.7 percent, from a year earlier.

Additionally, the revenues of the government of the most populous U.S. state fell short of estimates in Schwarzenegger’s budget plan by $827 million, Chiang said.

He warned California’s state government is speeding toward a financial disaster unless officials act urgently to balance its books.

“Without immediate solutions from the governor and legislature, we are less than 50 days away from a meltdown of state government,” Chiang said in a statement.

California’s revenues have been on a dramatic slide as a result of recession, rising unemployment and its lengthy housing downturn.

The state’s revenues from personal income taxes tumbled by 39.3 percent in May from a year earlier while revenues from corporate taxes fell by 52.1 percent and revenues from sales taxes sagged by 7.6 percent, according to a report released by Chiang’s office.

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May 11

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.

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Mar 15

Western European banks are exposed to over £1 trillion of eastern European debt, leading to comparisons with the subprime crisis in the United States. Austria is particularly affected, with an outstanding loan portfolio to eastern Europe of £213 billion, 71 per cent of GDP.

Even worse: ‘Toxic’ EU bank assets total £16.3 trillion (Telegraph)


Ukraine and Latvia have warned that Western Europe faces financial disaster unless it unites to help stricken countries in the former Soviet bloc.

Government officials from the two countries, which are at risk of bankruptcy as a result of the global financial crisis, told the Daily Telegraph that the European Union’s biggest powers were in danger of repeating the worst mistakes of the 1930s depression by retreating into isolationism and protectionism.

Grigory Nemyria, Ukraine’s deputy prime minister, said that the EU had to overcome bitter internal differences over how to deal with the economic crisis in eastern Europe when world leaders met next month at the G20 summit in England.

“The EU should not just be helping Ukraine because Ukraine is helpless,” Mr Nemyria said. “It should be doing so because it is in the EU’s self-interest.

“There is a high exposure in the [Western European] banking sector to Ukraine, Latvia etc that can only be addressed by acting in concert. The cost of inaction will be far greater than the cost of action.”

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Feb 28

Iran needs the price of oil to stay above $70 per barrel or it will go bust in 2009.


Presidential powers in Iran are often circumscribed by the clerics

The sharp downward spiral of oil prices has prompted economists to predict that Tehran is facing severe financial hardship within the space of a few months.

Iran’s presidential contenders have to address the budget deficit brought about by the plummeting oil prices and the world banking crisis.

The country’s economy is almost totally dependent on oil, which accounts for 80% of the country’s foreign exchange receipts, while oil and gas make up 70% of government revenue.

Cash rolled in when the price of oil was above $140 a barrel and the country amassed huge foreign currency reserves, but with the price falling to around $40, that revenue has dried up accordingly.

For the first time since the Islamic revolution in 1979, Iranians will turn away from geopolitics and focus instead on the state of their economy when they go to the polls in June.

Impact of sanctions

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Feb 21


George Soros listens to economists speaking at the “Emerging from the Financial Crisis” annual conference at Columbia University, February 20, 2009.

NEW YORK (Reuters) – Renowned investor George Soros said on Friday the world financial system has effectively disintegrated, adding that there is yet no prospect of a near-term resolution to the crisis.

Soros said the turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union.

He said the bankruptcy of Lehman Brothers in September marked a turning point in the functioning of the market system.

“We witnessed the collapse of the financial system,” Soros said at a Columbia University dinner. “It was placed on life support, and it’s still on life support. There’s no sign that we are anywhere near a bottom.”

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Feb 20

Bloomberg has removed the article.


Feb. 19 (Bloomberg) — The collapse of the U.S. newspaper industry is accelerating as a deepening plunge in advertising forces publishers to consider curtailing print editions or shutting down altogether.

The Seattle Post-Intelligencer will shut down or appear only on the Internet if its parent company can’t find a buyer for it by March. The Tucson Citizen in Arizona will close if it can’t be sold. Denver’s Rocky Mountain News is up for sale, and Detroit’s two dailies cut their delivery schedule to three days a week.

“There’s going to be a lot of papers giving up days of the week that they publish editions and an acceleration of movement from print to digital publishing,” said Ken Doctor, an analyst at media consultant Outsell Inc. in Burlingame, California.

New York Times Co., Gannett Co. and McClatchy Co., which altogether own about 135 dailies, posted publishing ad revenue declines of more than 13 percent in 2008 and anticipate further drops this year. The publishers are selling assets and cutting at least 5,000 jobs amid the worst recession in more than 70 years.

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