11/19/09 Baltimore, Maryland – Long-time DR sufferers are already familiar with our friend and colleague Dr. Marc Faber – author of The Gloom, Boom and Doom Report, and one of the foremost contrarian economists working today.
Well, we’ve secured an exclusive interview with Dr. Faber – hosted by our own Dan Mangru – which will premier on Tuesday, November 24th at 2 PM…and it’s already creating quite a bit of buzz. Be sure to check out the trailer below, and click here to sign up for your access to this free event.
11/20/09 London, England – What happened yesterday? The Dow sold off 93 points. Investors had been hesitating. There’s supposed to be a recovery going on. But the latest news is unsettling. Housing and employment numbers are weak. What’s going on? Maybe this recovery is not a sure thing after all.
“Record numbers late on US loans,” says a headline in The Financial Times.
The story is easy to understand. People without jobs can’t make mortgage payments. So, payments are late on 1 of every 6 FHA mortgages. Mortgage defaults are at a 3-decade high. Of all mortgages, nearly one homeowner in 10 is running late in his payments.
As predicted in this space, problems in the housing finance sector are now shifting from sub-prime to prime mortgages. The subprime borrower had few resources. He washed up as soon as the crisis began. But now the prime borrower, who lost his job and is running out of options, is sinking too.
What’s the smart money doing?
The Dow is now up more than 50% from its March low…and has regained more than 50% of what it lost. Are the insiders taking advantage of this dip to get bigger stakes in their own companies? No… They’re selling 18 times as many shares as they’re buying. Go figure.
The insiders know that their businesses are not really in good shape. They’ve been able to maintain profit margins by cutting staff. But sales are down. And they don’t see where additional sales will come from.
Meanwhile, investors have been hallucinating about a real recovery. They’ve bid up the price of shares as though they expected a stunning…Read more…
11/20/09 Falun, Sweden – The expensive stimulus procedure intended to save the economy from its depths has hardly worked. Perhaps it seemed at first like a simple nip and tuck… the rising market has at least made things look a little better.
However, the operation actually came by way of extracting many of the economy’s critical organs — jobs, the financial health of the nation, the integrity of the US dollar, and so forth — basically the ones necessary to keep it alive.
11/20/09 London, England – Last month, a Hong Kong apartment set a record. It sold for $56.6 million, which works out to $11,350 per square foot – the highest price ever paid for a pad in China. The buyer may have just needed a roof over his head. More likely, he is bullish on China. We are too, in the sense that we expect the Middle Kingdom to mature in wealth and power in the 21st century. But here’s a better bet: that China will blow up before it grows up.
China is a country of hyperbole. There’s scarcely anything you can say about it that doesn’t end with ‘est.’ In some ways, it is the world’s oldest society. In other ways, it is its newest. It is the world’s richest – with more than $2 trillion in reserves. It is also the world’s poorest, with some 200 million people who get by on less than $5 per day. It faces the world’s biggest problems too.
Even in its calamities, China is second to none. People inside the Great Wall were about as rich as people outside it, man for man, until the 19th century. Then, China missed the industrial revolution. Nearby Japan missed it too, but quickly corrected its mistake. It kept the barbarians at arms length, but still managed to pick their pockets. The Chinese, on the other hand, played it cool. The barbarians had nothing to offer, they believed. They still think so. Said Xue Chen of the Shanghai Institute of International Studies, just last week: “The US has a lot to ask from China. On the other hand, the US has little to offer China.”
In the early 19th century, traders from Britain and America bought porcelain (china), silk…Read more…
It’s another sunny day of Indian summer here in Baltimore… here’s some fitting news: The “audit the Fed” bill is alive and kicking.
As we reported earlier this month, Ron Paul’s popular proposal of HR 1207 was gutted by Mel Watt, a congressman firmly tucked in the pocket of the American banking industry. In typical political…Read more…
The Lloyd’s Prayer
Our Chairman, who art at Goldman
Blanfein be thy name
The rally’s come
God’s work be done
On earth as there’s no fear of correction
Give us our daily gains…
Poor Goldman Sachs. Everyone is on its case. Criticizing. Carping. Jealous. Envious.
So, today we rise in defense of the Wall Street giant. Yes, the Goldmen may be shysters. But…Read more…
There is a crazy, night-and-day difference between Dubai and Mumbai. We were staying in the Taj Mahal Palace and Tower, the most notable target of terrorist attacks this time last year. Much to their delight, the mastermind of those bombings – Hafiz Mohammad Saeed – was released to house arrest this morning after an odd…Read more…
In case you were wondering, there is no way to stop spending a debt-based currency once you start, which handily explains why Doug Noland, in his Credit Bubble Bulletin, asks “what about an exit strategy? Well, I see a ‘No Exit’ sign. These distortions have been going on for too many years and become too…Read more…
As I checked the currencies throughout the day yesterday, I noticed that as the day went on, the non-dollar currencies were stronger, led by the Big Dog, euro (EUR)… But then late last night, and I mean late last night, I checked them, and those gains had been wiped out.
So, when I arrived here this…Read more…