Jim Rickards on Spain and Portugal's Debt

Peter Schiff on Ireland

FED POMO Purchase Update

The FED performed another POMO (Permanent Open Market Operation) purchase of $7.229 billion dollars.  This latest purchase brings the total to $130.719 billion dollars in POMO Purchases since August 17th 2010.  It will be interesting to see how may purchases get executed by the end of the year.

 

 

Operation 1 - RESULTS

Operation Date:	11/29/2010
Operation Type:	Outright Coupon Purchase
Release Time:	1:15 PM
Close Time:	2:00 PM
Settlement Date:	11/30/2010
Maturity/Call Date Range:	05/31/2013 - 11/15/2014
Total Par Amt Accepted (mlns) :	$7,226
Total Par Amt Submitted (mlns) :	$29,502

Weekly Food Stamp Report

I apologize for the food stamp graphs in the past, it actually wouldn't show the bars for anything over 1 million (I have fixed that).  Going forward the data is being archived to show the growth in the number of food-stamp recipients as well.  Below find the updated graph:

As you can see, this is much clearer on showing which states are most impacted.  Here is the data to support the graph as well:

State	Number on Foodstamps
Alabama	839,921
Alaska	81,271
Arizona	1,047,779
Arkansas	480,144
California	3,425,892
Colorado	424,314
Connecticut	359,487
Delaware	121,539
DistrictofColumbia	126,651
Florida	2,809,636
Georgia	1,681,376
Guam	38,292
Hawaii	145,534
Idaho	211,883
Illinois	1,695,069
Indiana	853,086
Iowa	351,992
Kansas	289,399
Kentucky	805,040
Louisiana	856,446
Maine	237,377
Maryland	606,893
Massachusetts	778,033
Michigan	1,877,087
Minnesota	452,612
Mississippi	594,788
Missouri	927,068
Montana	118,958
Nebraska	169,445
Nevada	309,586
NewHampshire	109,967
NewJersey	677,167
NewMexico	387,966
NewYork	2,874,189
NorthCarolina	1,442,650
NorthDakota	61,049
Ohio	1,670,671
Oklahoma	608,349
Oregon	733,371
Pennsylvania	1,638,967
RhodeIsland	148,529
SouthCarolina	829,862
SouthDakota	99,467
Tennessee	1,260,726
Texas	3,803,719
Utah	260,112
Vermont	86,897
Virginia	820,549
VirginIslands	21,272
Washington	998,372
WestVirginia	345,906
Wisconsin	757,728
Wyoming	35,536

Total number of persons on Food Stamps: 42,389,619

Weekly Updated Unofficial Problem Bank List

CalculatedRisk's updated Unofficial Problem Bank List reveals that 919 banks are now at risk.  The FDIC's failed bank list revealed no banks had failed this week, but CR's update did log one bank which was removed from the Problem Bank List:

The sole removal this week is the termination of an action by the FDIC against Torrey Pines Bank, San Diego, CA ($1.2 billion Ticker: WAL).

There were 17 additions to the problem bank list, which brought the total to 919 institutions and the assets of these 919 is at $410.2 billion.

Among the 17 additions this week are the Bank of the Orient, San Francisco, CA ($675 million); Town & Country Bank and Trust Company, Bardstown, KY ($454 million Ticker: FHDG); Border State Bank, Greenbush, MN ($347 million); McHenry Savings Bank, McHenry, IL ($271 million); and SouthBank, a Federal Savings Bank, Huntsville, AL ($265 million).

[Read More...]

Weekly KWN Interviews

This week King World News interviews Chris Whalen, John Embry and Rob McEwen on Metals, housing, big banks, the economy and more. 

Chris Whalen - Discusses how Governments have been trying to paper over their debt problems and now that is coming to a head.  Chris says a restructuring will have to occur in some major banks due to hidden losses (hidden through recent accounting rule changes).   When adding more debt becomes a problem and is no longer the way people do business or handle their lives, the economy will have to settle down to adjust to that.  Chris mentions that Bankruptcy is needed by some of these big banks, but has been avoided.  The Founders meant bankruptcy as a way to clean the system and we are not pursuing it due to the ramifications of doing it, so we continue to take on more debt.  Chris also talks about the pressures coming for the states budgets and stagflation (which puts pressure on the consumer).

John Embry - Discusses the main media's negativity on Gold, which has created a wrongful negativity impacting gold and will cause gold to shoot higher down the road.  John mentions that Eric Sprott believes Silver will hit $50 in the next few months, as well as the manipulation of silver being exposed adding to the acceleration.  John rightly mentions that QE is only necessary cause nobody else will purchase our debt, which forces the FED to have to buy it.  John discusses his views on the Euro and where it may possibly go.

Rob McEwen - Discusses how we got to the point we are at and how the government is looking to fight the problem we face now with Quantitative Easing (QE).  Rob talks about historical parallels where other countries performed the same type of printing that caused their currencies to go to zero.

Note: Chris Whalen has written a book that is supposed to be a pretty good read on our financial history called Inflated.

Losing Our Rights Through Fear Mongering

Well, a disappointing Thanksgiving where travelers failed to protest, defending their rights, protecting them from the TSA's illegal search and seizure.  We are now exposing ourselves to additional radiation with levels really unknown unless you believe the company that makes them (if so you've never seen  class action lawsuit commercials against drug companies that produce drugs that people are dying  or are sick from).  Lets assume the radiation levels are nominal (a little more can never hurt right), you still have an issue that the pictures of your body naked are in the hands of people other than you meaning your picture could end up on some website at some point.  

Now you can say well it protects us against the dangers of flying, well apparently that is not true as those that would do you harm have already found their way around these scanners (so your just doing it for fun) and the scans really didn't find much more than what was already being done in the first place.  What has been accomplished is a violation of your rights, the 4th amendment covers illegal search and seizure.

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

By tolerating these searches and not voicing our opinion to stop them, we are giving up our rights in the name of terror.  If we don't stop this, then what is next, as now a precedent has been established.  Write your congressman, governor and senator and tell them you don't want this personal violation to continue.

Fears about Portugal and Spain Grow

Portugal and Spain may need to join Ireland and Greece pursuing bailout money from the EU.  Friday bond holders dumped Portuguese and Spanish bonds in a panicked selling due to fears both countries will be forced to pursue bailouts.  It has been talked about for weeks that if Spain has to get bailed out, it could signal the end of the Euro and potentially the Eurpean Union. 

The draining confidence in Western Europe's weakest economies threatened to upend bond markets, destabilize the euro and drag out the global economic recovery if it is not quickly contained. 

The perceived risk caused rates at which the two countries can borrow near record highs.  This could cause a snowball effect making recovery more difficult for them.  [Read More...]

Russia and China Renounce the Dollar

Russian and China have decided to use their own currencies for bilateral trade, thus renouncing the U.S. dollar.  Both countries will still have to maintain dollars for trade between the U.S. and their countries but we are starting to see the slow chipping away of the U.S. dollar as a reserve currency.  This is how I would see it being done, little by little until the U.S. dollar as a reserve currency is really just a distinguished title rather than an advantage.  Both countries say the move is not meant to damage the U.S. dollar, rather to protect their domestic economies from the weakening dollar and poor monetary policy.  [Read More ...]

Russia has also started to add the Canadian dollar to its reserves so they can begin investing in assets denominated in the Canadian dollar.  This is another subtle move out of the U.S. dollar to purchase assets needed.  Russia also has its eyes on the Australian dollar, which would give the the ability to purchase from China, Canada and Australia in non-U.S. denominated currency.  The more Russia, China and others purchase in other currencies, the more the U.S. reserve currency status is reduced.  [Read More ...]

Is the Euro Game Up?

Hungary Pensions get an Ultimatum

In a Bloomberg article by By Zoltan Simon entitled "Hungary Follows Argentina in Pension-Fund Ultimatum, `Nightmare' for Some", Simon points out how Hungary is giving its people an ultimatum "hand over your private pensions to the state or lose your state pension".  

Economy Minister Gyorgy Matolcsy announced the policy yesterday, escalating a government drive to bring 3 trillion forint ($14.6 billion) of privately managed pension assets under state control to reduce the budget deficit and public debt. Workers who opt against returning to the state system stand to lose 70 percent of their pension claim.

I don't know about you, but handing over your life savings to an entity that is spending it faster than they can get it doesn't spell retirement down the road.  Most governments aren't very good at reducing their spending, seems like all they do is tax more and spend more.

“This is effectively a nationalization of private pension funds,” David Nemeth, an economist at ING Groep NV in Budapest, said in a phone interview. “It’s the nightmare scenario.”

 There have been numerous articles written this year suggesting the U.S. may do the same thing, this is literally the extraction of the wealth from the middle class.  [ Read More ... ]

Happy Thanks Giving

To all of the U.S. readers, happy thanksgiving.  This is a day we need to give thanks for all that we have and take a mental rest from all the economic news and turmoil.  Please keep you homeless shelters in mind this holiday season and bring food donations to them as I am sure they are running low from the additional person seeking refuge from this economy.

Affordable Housing Network

Matt Taibbi on the Impeding Mortgage Crisis

Weekly Fund Flows Munis In Trouble?

This week in the weekly fund flows some interesting things occurred.  For the week ended November 17th 2010 the amount of money coming out of domestic stocks shot back up to $2.797 billion dollars and $1.633 billion flowed into foreign stocks.  The interesting action though is what occurred in bonds.  Money flowing into Taxable Bonds slowed to $457 million dollars, down from a 4 week moving average of $4.457 billion dollars.  The other very interesting event that occurred is a massive move from Municipal bonds, in which $4.781 billion left muni's down massively from the positive inflow of $366 million 4 week moving average.

 

 

Looking at the Bond money flows, it really prompts you to wonder why the massive outflow from municipal bonds?  Are Muni bond holders indicating that their is a problem with states and their bonds?  Only time will tell, as I have said before it will take more than one week of action to determine a new trend, but this was an outlier in the muni market and definitely gets your attention.

Monthly New Home Sales

Octobers New Home Sales numbers were worse than expected.  New Home Sales are the Annualized number of new single-family homes that were sold during the previous month. They are considered a leading indicator of economic health because of the ripple effects in jobs it has throughout the economy.  The forecast called for October to have at least 311k new homes sales, but the actual headline number came in at a disappointing 283k ( disappointing to Keynesian's, as we have to build new things all the time to sustain the current growth model.  Everlasting growth, cause the earths space is infinite).  

 

Month over Month shows that the West is doing the worse in terms of growth, followed quickly by the Midwest.  The Northeast did not perform well over the past month as well.

Year over Year New home sales were horrible for the West with the Northeast doing the best.  Year over year is a better measurement as it lines up seasonalities and tends to project a more accurate picture.