August 2011


8/31 V of Galt: I open the Gates of Hell and Unleash “THE RANT”

By John Galt August 31, 2011 – 14:30 ET What we have here is a failure to communicate. I was watching a Reaganite on television today blaming a “lack of training” on the 4 million job openings not being filled by the 15 million unemployed. Really dorkboy? Really? You want to go there? You want to open up this can? Bull#!&@!!! I’ll open it tonight and give you a basic education on Main Street, U.S.A. economics. These fools on CNBC, FBN, and Bloomberg talk in elitist terms but have no clue….


More bad news for Rice: Floods threaten Vietnam’s Mekong Delta rice basket

By John Galt August 31, 2011 – 07:50 ET While Americans in the Northeast stripped the shelves bare thinking that grocery stores magically reproduce fresh stock at will, the future crisis building up worldwide regarding a potential rice shortage continues. With China experiencing major problems due to weather, Japanese rice contaminated with radiation from Fukushima, and South Korea reporting a sharp decline in production the other day, now flooding is threating the Mekong Delta region of Vietnam where a record crop was projected. From China Business News this morning: Floods threaten…



Case Shiller Indexes: Down Year over Year and bouncing on the bottom

By John Galt August 31, 2011 – 07:05 ET Yesterday the Case-Shiller indices were updated by Standard & Poor’s (Click here to read full report) and the bottom line without much drama is simple: Year over year the 20 city composite was down 4.5% year over year (seasonally adjusted) and 4.9% (NSA) Month over month the composite was down 0.1% (SA) and basically unchanged month over month. The five city condo index improved in Boston, Chicago, and New York where areas of high government spending continue and declined in Los Angeles…


8/30 Woo-Woo Report: Snakes, Panda Poop, and Bad Moms

By John Galt August 31, 2011 – 06:50 ET Just click on the links to find the Woo stories of the week thus far. I’m sure as the world turns even more amazing things will appear as we head into Weirdsville. Chinese chuggers compete for beer-drinking title(video at link) Adult children’s ‘bad mothering’ lawsuit dismissed Panda Poop Could Be Key To Producing Biofuels Man nabbed at U.S. airport with snakes in his pants  


Africa might ditch the Dollar for the Yuan in Trade with China

By John Galt August 30, 2011 – 18:05 ET This little gem of a story from Business Day, a South African financial news publication should be another warning to the sleeping morons in D.C. and Wall Street: Renminbi may replace dollar in Sino-African trade While the Bernank and the Bammer have been out beating their chests about the “world’s reserve currency” the nation of Communist China has been quietly setting up international trade agreements with nations who have crucial supplies of raw materials and strategic resources. From Brazil to Venezuela, Nigeria…


8/30 V of Galt: Did I mention today is DOOMER TUESDAY?

By John Galt August 30, 2011 – 17:30 ET It would appear there is a lot to talk about once again as our world teeters between stories of precious metals confiscation to massive natural disasters. Oh, and did I mention that our financial markets are in the midst of even more turmoil as Europe appears ready to commit Lehmancide? Tune into DOOMER TUESDAY to find out more… To call into the program dial: (877)213-6404 or (812)307-4363. Just click on the banner below to find the various audio players to listen or…


So much for the “relief” after the Italian Bond Auction Today

By John Galt August 30, 2011 – 05:25 ET Analysts had projected some relief in the European financial system and the Italian markets after today’s bond auctions in Rome, but so much for that: As soon as the results came in, with a higher yield I might add, the FTSE-MIB stock index plunged -109 points after trading modestly higher most of the morning. The snapshot above is only the latest indication that the markets are still roiled over the PIIGS problems and with what is about to occur in Greece also…


Bank of Flamerica gets FDIC non-approval of proposed settlement

By John Galt August 29, 2011 – 18:28 ET Oh man, oh man, oh man. Thank you Yves Smith for capturing this one: FDIC Objects to $8.5 Billion BofA Settlement (Updated) Click on the link to read the FDIC document and the bloodshed. Thank you Yves at Naked Capitalism. Wow, this is a fun one to read because the truth is sadistically painful and enjoyable.



Liberty Dollars May be Subject to Confiscation

By John Galt August 29, 2011 – 11:30 ET From CoinWorld.com (click on title read full article): Liberty Dollars may be subject to seizure Federal officials call medallic pieces ‘contraband’ from the article: Liberty Dollars held by collectors may be subject to seizure as contraband by federal law enforcement, officials with the U.S. Attorney’s Office and Secret Service said Aug. 24. Statements by officials for those two federal law enforcement agencies seem to reverse the position taken in comments released from the United States Attorney’s Office in Charlotte, N.C., and published…


Dallas Fed Mfg. Outlook: Going down fast

By John Galt August 29, 2011 – 10:45 ET The outlook from the Dallas Federal Reserve Bank report on manufacturing has gone from bad to worse in the August survey. The general business activity index remained negative for the fourth month in a row and fell from –2 to –11.4 and indications within the survey tend to signal further declines in the immediate future. The index overall has reached the flat line which in and of itself is a bad indicator for the nation: This is an almost perfect duplication of…


July Pending Home Sales continue long term downtrend

By John Galt August 29, 2011 – 10:20 ET The latest report from the National Association of Realtors indicates the end of the cash for clunkers housing stimulus was probably the last peak in activity we will see for quite some time. The amount is higher than last July’s low reading, which is the highlight the NAR will continue to point towards but the reality is that this is a long term trend line to the downside after the failed Obama housing stimulus program which only provided a temporary increase in…


Bank of America, which doesn’t need to raise capital, sells CCB stake raises $8.3 Billion

By John Galt August 29, 2011 – 09:55 ET The breaking news of the morning is that Bank of America, the institution whose CEO recently said on television that the company did not need to raise capital, has now raised another $8.3 billion which apparently it does not need by selling part of its stake in the China Construction Bank. This makes the one week take including Warren Buffett’s unnecessary investment a tad over $13.8 billion of fresh capital raised that they do not need. Considering the recent television appearances of…


And another failed Egyptian Treasury Auction

By John Galt August 28, 2011 – 23:10 ET From Reuters: Egypt reduces size of T-bill sale Sun Aug 28, 2011 11:49am GMT EXERPTED: The central bank sold 2 billion pounds of 91-day T-bills, the same amount it had offered, on behalf of the ministry. The average yield rose to 11.995 percent from 11.928 percent at last week’s auction. It sold only 2 billion pounds of 266-day T-bills, instead of the 3.5 billion pounds it had asked for. The average yield rose to 12.981 percent from 12.943 percent at the last…


Food Crisis Update: S. Korea Rice Output to hit 10 Year Low

By John Galt August 28, 2011 – 22:45 ET From the South Korean news agency Yonhap August 29, 2011: S. Korea’s rice output to hit 10-year low this year SEOUL, Aug. 29 (Yonhap) — South Korea’s rice production is forecast to hit a 10-year low this year due to shrinking farm land and lower yields caused by unfavorable weather conditions, a state-run think tank said Monday. According to the Korea Rural Economic Institute, rice production is expected to reach 4.12-4.24 million tons this year, down 1.2-4.0 percent from the previous year’s…


Think the Crisis is over? Hong Kong is worried about another “Lehman Brothers-type debacle”

By John Galt August 28, 2011 – 22:00 ET I for one, do not blame them in the least. Despite reports earlier tonight of two Greek banks merging to “strengthen” the system there, the fears of a potential Lehman Brothers style event are rampant among the insiders of the world financial elites. The nation of Hong Kong which suffered greatly during the Asian Tiger crisis of the 1990’s created a system where sensitivities to foreign bank issues and investment in region requires extra monitoring by the authorities. Thus when this story…


More bad news on the Shipping Front about the World Economy

By John Galt August 28, 2011 – 20:20 ET While America and the northeastern states are fascinated with a tropical storm that while tragic, was minimal in economic impact overall, one of the largest shipping companies in the world reported their H1 2011 earnings and it should give everyone a moment to reflect on the probability of a Q3 recession beginning in September of this year as I have postulated for months now. The report from the communist Chinese majority owned shipping corporation COSCO was dismal as reflected from the headline…


8/28 AEP: Euro bail-out in doubt as “hysteria” sweeps Germany

By John Galt August 28, 2011 – 16:05 ET Enough Irene and back to the other storm, brewing quietly but stronger in Europe. Ambrose Evan-Pritchard points out in today’s commentary from the UK Telegraph the dangerous road Germany is traversing with the leadership of Angela Merkel hanging in the balance. It is a must read as it highlights the point I have been making of the nature that this coming September will be “different this time” as many major financial issues coalesce in one point of time over a few weeks….



Tropical Storm Jose forms near Bermuda-Storm Warnings Issued for minimal T.S.

By John Galt August 28, 2011 – 09:15 ET This is a very minimal tropical storm with little threat to life and limb thus this will be the only posting on this system. The Bermuda government has issued a tropical storm warning and that should be about the extent of the threat. The satellite photo’s below exhibit why this is such a minimal threat: NHC advisory #1 (only one I’ll be posting): 000 WTNT31 KNHC 281213 TCPAT1 BULLETIN TROPICAL STORM JOSE SPECIAL ADVISORY NUMBER 1…CORRECTED NWS NATIONAL HURRICANE CENTER MIAMI FL…


Irene Hits New York City as a Tropical Storm

By John Galt August 28, 2011 – 09:11 ET I smell a whole lot of “I survived Hurricane Irene” with the New York City outline in the background t-shirts heading for the donation bin…. 0900 EDT update from the NHC: 000 WTNT64 KNHC 281302 TCUAT4 TROPICAL STORM IRENE TROPICAL CYCLONE UPDATE NWS NATIONAL HURRICANE CENTER MIAMI FL AL092011 900 AM EDT SUN AUG 28 2011 …CENTER OF IRENE MOVES OVER NEW YORK CITY… REPORTS FROM AN AIR FORCE HURRICANE HUNTER AIRCRAFT AND NATIONAL WEATHER SERVICE DOPPLER RADAR INDICATE THAT THE CENTER…


Irene + Social Media + NYC = Hilarity Ensues

By John Galt August 27, 2011 – 21:00 ET Irene is only a Cat 1 hurricane but thankfully it is strong enough to sit there and illustrate the idiocy of New York City and why I continue to the call to insist that if there is a God the movie “Escape from New York” will one day become a documentary. President Obama if you want to cure the unemployment problem, build that damned wall. Meanwhile, as the storm heads up the east coast, here is a sampling of tweets which illustrate…



Let the Irene Drama Queen Tweets Begin

By John Galt August 27, 2011 – 16:30 ET As the mainstream media hypes up the nine now 6 foot storm surge of Hurricane Irene, a quick reminder: Katrina’s surge was: 29 FEET Thus I’m not going to get excited about this as the only problems this should cause will be from freak accidents or the cleansing of the gene pool as Darwin Award winners claim their prize. Hurricanes are survivable storms but for some reason people insist on ignoring the warnings or acting like drunk asses. A prime example of…


8/27 Hurricane Irene: Cat 1 winds down to 80 mph-Heading Back into the Atlantic

By John Galt UPDATED 8/27 22:53 – No update yet from the NHC but the 0500 news will be more important. In the mean time, here’s the NYC radar…. UPDATED 8/27 17:00 – Instead of burying it below, here is the latest update as the storm is set to emerge back into the Atlantic and possibly get a little bit more energy and fuel to increase the storm strength slightly overnight. 000 WTNT34 KNHC 272055 TCPAT4 BULLETIN HURRICANE IRENE ADVISORY NUMBER 30 NWS NATIONAL HURRICANE CENTER MIAMI FL AL092011 500 PM…


8/26 WoO-Woo Report: America, Thank you for the WOO!

By John Galt August 26, 2011 – 22:15 ET Just click on the headline for the latest, greatest Woo-Woo news that I could find….THANK YOU AMERICA! Woo-Woo-Hoo! Lack of 400-pounders in lineup gets large man’s conviction overturned Captain allowed to stay in Navy despite bawdy videos Beetlemania: Feds Give 4 States $5.8 Million to Protect Insect Habitat Pat Robertson: Crack in Washington Monument ‘Sign from the Lord?’ Cops: Babysitter Puts Kid in Stroller, Loads Him Onto a Truck Bed and Goes for a Ride (Video) Man reports own parking violation to…


8/26 Market Preview: Is today another Bernankegeddon?

By John Galt August 26, 2011 – 05:30 ET Just a quick note before the insanity begins. I think Q2 GDP revision will disappoint with a 0.9% figure and Bernanke will follow with a Lewinsky and no concrete action to give financial markets a reason to rally. With the short end of the yield curve already trading in negative territory, if there is not a confirmation of Operation Twist and some declaration of more easing, there will be a massive sell off this afternoon in my opinion. Remember, the big money…


Words that Merriam-Webster Dictionary Left out of the 2011 U.S. Edition

By John Galt August 25, 2011 – 17:30 ET The annual story about the new words added to the lexicon of the English language has been presented to the public on a not so slow news day as per this Reuters story: US Merriam-Webster dictionary adds “tweet,” “bromance” Some of the clever words highlighted in the article include: “Tweet” “Bromance” “Crowdsourcing” “Parkour” “Boomerang child” While the list is extensive, I feel there are some clever words which are important to the English language that were overlooked. Here is my list of…


North Carolina Hurricane Checklist vs. Florida Hurricane Checklist

By John Galt August 25, 2011 – 17:05 ET This hurricane disaster checklist comparison is for primarily coastal residents but in the event of a large storm, could apply to those in the interior of a state if the storm is strong and large enough. From the NHC website, which is pretty much the same as the North Carolina checklist: Water – at least 1 gallon daily per person for 3 to 7 days Food – at least enough for 3 to 7 days — non-perishable packaged or canned food /…


8/25 Weekly Unemployment Claims: SA=Uh-Oh/NSA=Getting ready to Ramp Up

By John Galt August 25, 2011 – 16:45 ET While the mainstream media focuses on the fictional reason for the ramp in seasonally adjusted unemployment claims caused in their words by “striking Verizon workers applying for unemployment benefits” (CBS Radio news at noon and 1 p.m. EDT), the reality is that the Labor Department’s computers are, as usual, suffering from a fritz created by a unicorn pooping skittles into it’s floppy disk slot. The chart for non-seasonally adjusted claims shows a different story yet I think it is getting ready to…


Is Irene the Economy Killer of 2011?

By John Galt August 24, 2011 – 22:30 ET Sorry to sound cruel to those who have endured or those about to be engulfed by this monster storm, but the question has to be asked. The storms of 2004-2005 were thought to be a major contributing factor to the ultimate decline and fall of the U.S. economy in 2007 as Federal government spending and waste went into overdrive after the 2004 Florida hurricane blitz with government stimulus to help our state recover then in 2005 with the post-Katrina and Rita recovery…



8/24 18:40 ET BREAKING NEWS: Steve Jobs Resigns as CEO of Apple (KA-BOOM!)

By John Galt August 24, 2011 – 18:40 ET Uh, all I have is a headline but I thought the “Apple” nuke test photo was appropriate. Can we say “short the QQQQ’s tomorrow” boys and girls? Wow. From the WSJ: Full release from Apple now available: PRESS RELEASE: Letter from Steve Jobs August 24, 2011–To the Apple Board of Directors and the Apple Community: I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first…


8/24 IN the Blue Courner Nouriel “Party Animal” Roubini versus the Red Corner, Tyler “Fight Club” Durden

By John Galt August 24, 2011 – 18:30 ET I’m going to need more popcorn and beer for this fight, it’s getting good now. God I’m going to hate this if Twitter EVER goes to the Pay-Per-View concept…. And the bear with the Lion’s Heart replies: Follow me on Twitter as I follow both of them and enjoy the back and forth. Though I am biased and tend to support the guy who doesn’t act like a dirty old man at South Beach disco’s.


Today the Dow closed below August 25, 1999 Level; Gold around August 10, 2011 Level…I’m just sayin’

By John Galt August 25, 2011 – 16:30 ET Remember, gold is the adjustment for inflation; the chart for the DJIA in 1999 is not adjusted for inflation or “priced in 2005 dollars” as the BLS and BEA likes to game it. No other commentary is necessary other than my previous entry. (Click on the chart to enlarge/reduce) On August 25, 1999 the DJIA closed at 11,326.04. Today it closed at 11,320.71. I’m just sayin’. 3 weeks ago, gold was rallying above today’s levels. I’m just sayin’.


Durable Goods Orders for July 2011: Mo-Mo v. Yo-Yo

By John Galt August 24, 2011 – 13:55 ET A little late posting this from the report this morning but I wanted to check some data and see if my hunch was correct. As usual, it was. Thankfully machinery and capital goods orders do look better but generally the headlines flashed across the screens this morning tell a tale of using month over month and year over year statistics to extract the most desirable headline. The trailing 6 month non-seasonally adjusted figure though shows a disturbing trend as the third quarter…


Sell all your Gold now or suffer Catagelophobia

By John Galt August 24, 2011 – 13:30 ET The hottie  doesn’t seem to concerned about her gold (yes, sex sells). Seriously, if you are freaking out, click on the banner above this article  and sell Bobby all your precious metals so you don’t have to worry about the CNBS Fast Money team knocking on your front door and saying: Gold is selling off today and if anyone has been listening to my program, I’ve warned about $100 plus days swinging to the upside AND the downside. Welcome to one of…


Monthly New Home Sales Data Series

By John Galt August 24, 2011 – 08:55 ET Starting this month I shall be updating the series, sometimes with a special news entry when justified, but definitely in the Economic stats and data pages in the upper right hand corner of these pages. The latest sales figures reflect the depression in real estate continues with an average duration on the market for new homes still in excess of 6 months, this month at 9.4. Until the housing market recovers the American economy will flounder no matter how much creative accounting…


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