Economics

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An Interesting Story from Saudi: Gasoline Smuggling could cause shortages

By John Galt May 19, 2011 From the Arab News of Saudi Arabia this morning: Smuggling hits gasoline supplies in Riyadh region RIYADH: Shortage of gasoline type 95 in some regions in the Kingdom may develop into a crisis if suppliers do not quickly inject enough of it to the gas stations, local Arabic daily Al-Riyadh newspaper reported Tuesday. Especially in Riyadh region, there is a supply shortage. The newspaper said the owners of gas stations expressed fears that a real crisis might crop up that could cause economic losses to…



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5/18 MBA Mortgage Apps show some improvement

By John Galt May 18, 2011 The weekly report on mortgage applications for purchase without seasonal adjustment from the Mortgage Bankers Association illustrated a somewhat impressive improvement only registering a year over year decline of 1.7%. It is not positive which would not take much based on the volumes but it does lean towards some traffic testing the waters of the housing industry bouncing along the bottom.  


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Update: Canadian Oil Output Shut in up to 50,000 bpd due to wildfire

By John Galt May 17, 2011 The latest update from Reuters tonight is not encouraging: Canada oil output cut as Alberta wildfires rage 17 May 2011 20:50 Reuters * Fires continue to burn across northern Alberta * Production halted by fire threat, pipeline closure * About 100,000 bpd may soon be shut in (Adds details, Canadian oil prices) By Scott Haggett and Jeffrey Jones (Click on the link above to read the rest of the story) Per the National Post in Canada 40% of Slave Lake, Alberta has been destroyed and…


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The Housing Disaster Rolls On – The Spring of our Winter Discontent

By John Galt May 17, 2011 The Commerce Department released the latest report on housing starts and permits revealed that no sane, logical, intelligent soul would accept the FIBS (Financial Infomercial Broadcasting Services, aka CNBC, FBN, BLM) mantra of the past year that housing has bottomed and that the recovery was well under way. Amazingly enough the preachings and screeching of the pro-regime talking heads was non-existent on the morning radio or television programs. Thus there is a realization that perhaps, just perhaps, free money from the Federal Reserve does not…


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E.U. has a New Strategy for Greek Crisis: Newspeak

By John Galt May 17, 2011 The first story that caught my eye this morning was the revolutionary idea created by the European Union to solve the Greek solvency crisis: Start renaming the solutions. For example, when anyone else takes out a business loan and then at a later time due to a shift in economic conditions request to change the terms of repayment, it is properly labeled a “restructuring” which is the alternative to a default or late repayment and allows the debtor a chance to repay it at a…


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Tyler Durden Replies to PIMCO’s Bill Gross; It’s a Classic

By John Galt May 16, 2011 And they say that internet bloggers are not relevant to the conversation…. Then there is Bill Gross dropping the “internet blogger” reference on CNBC and Bloomberg today as you can see in the video in the earlier post below. In reality, I like Tyler’s response much more:   Tyler does have a wicked jab. To actually read his response, here is the story in all of its glory where Tyler replies to Bill: No, Actually Bill Gross IS Short Treasurys The best part of the…


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PIMCO’s Bill Gross: We are not Shorting US Treasuries

By John Galt May 16, 2011 So ZeroHedge was wrong? I’ll defer to his website for that answer but based on what PIMCO’s Bill Gross said in this interview, they are not shorting US debt: His other comments in the interview are fascinating as he basically paints a picture of stagflation and indicates that he will not be re-entering the US bond market due to our fiscal situation. Translation: Watch the other hand because the minute the Fed notifies him of Q.E. 3, he’s buying with two fists.


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Apparently my Listeners and Readers Have Not Been Paying Attention

By John Galt May 16, 2011 Apparently my listeners and readers have not been paying attention. If you were listening to the idiots on the various financial infomercial Bubblevision channels then you sold all of your gold, silver, farmland, and spare food in your bunker and bought as much stock in RMBS, BAC, or C. Heck, I figured that my listener and readership would suffer because nobody would listen to a bunch of bloggers and talk jocks who warn everyone about the ongoing economic collapse and fail to follow the party…


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U.S. Dollar Index fails First run at 76

By John Galt May 16, 2011 The first run at 76 failed this morning with the news the US Treasury is going to play games with the retirement system to keep the country under the debt limit and that the European Union does not foresee a Greek restructuring in the future which put a floor under the Euro at 1.40. The result was a sharp sell off in the USDX and now 75.20 becomes the next key level to watch then of course, 74. I expect to see this bounce violently…


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NAHB/Wells Fargo Homebuilder Confidence Index Flat at Low Levels for May

By John Galt May 16, 2011 The National Association of Homebuilders/Wells Fargo Confidence Index came in at flat level to April after last month was revised upwards from 15 to 16. The bad news was buried in the report (at this link) where builders indicated that ninety percent of the builders were concerned about the ability to sell the homes at the price they designated and seventy-three percent said they saw problems with consumers obtaining financing for the purchase. So much for the summer of recovery in construction that the Bubblevision…


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A Bank Failure You Won’t Hear About

By John Galt May 16, 2011 For once the FDIC isn’t behind a bank failure and seizure. Of course for them to be involved in actions in Dubai would be interesting although not shocking. Dubai Bank which is part of the troubled Dubai Holdings along with Emaar Properties, another troubled concern. While the United States sits in blissful ignorance of what is happening overseas as these institutions begin to fail as the lack of cash flow from their U.S. and European holdings starts to impact their viability as ongoing institutions, the…


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Empire State Manufacturing Survey – Getting Ugly

By John Galt May 16, 2011 The Federal Reserve Bank of New York just released their monthly survey and the ugliest data point beyond a huge decline from last month was the fact that prices paid were the second highest on record. The reading was 11.88 for May vs. 21.7 in April and does seem to add more ammunition to my theory that the Fed will pull the monetary reigns in during the summer and help to create a recession or at least a massive slow down for the last two…


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The Euro is Teetering Tonight

By John Galt May 15, 2011 Tonight’s action in the Euro is psychologically and technically not very reassuring as the currency appears poised to shatter the 140 level and proceed to test the 200 DMA. On the chart below of the Euro ETF proxy (FXE),  I’ve outlined the “failsafe” region (technically) in my opinion that must hold between 134 to 136 or this sucker will break down to 126 then retest the 2009 lows around 120. All of which should happen in the June to September time period.


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CPI Necessities Chart for April 2011 – It’s Transitory

By John Galt May 15, 2011 It is becoming somewhat spooky when the words of Ben Bernanke haunt the mind, week after week, thus I shall do the best that I can to escape this transitory trap he has placed most commentators into. Except in this case the “official” CPI report from last Friday was without a doubt seriously a transition before a major commodity crash brings the prices down the BLS creates out of thin air and allows the Fed even more room to monetize every living thing, dead thing,…


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China Suspends Diesel Exports-More Nations to Follow?

By John Galt May 15, 2011 The Communist Chinese government took a very effective step this weekend to preserve their fuel supplies and a direct hint to other nations on how to control the limited supplies of finished petrochemical goods on the world market. The Chinese announced via the Xinhua news agency that all diesel exports have been suspended with the exception of  diesel for Hong Kong and Macao. As the wars in the Middle East expand due to domestic discontent and the Untied States foreign policy retreats into a turtle…


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IMF Warns: Greece had best get their act Together or Else!

By John Galt May 15, 2011 Let the games begin! With DSK, the former IMF Chief, now participating in the exercise program in the New York City police holding cell, Greece has lost a crucial ally in the ability to borrow even more money that they will never repay. Thus this story leaking out to a German newspaper as reported by Reuters is no surprise: IMF has doubts over more credit for Greece -paper The reality is that the only solution is for Greece to default, either via a massive restructuring…


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New York Apparently is no longer a Worker’s Paradise

By John Galt May 15, 2011 For anyone buying the garbage that the state of New York is an economic paradise, I would suggest you read this article from the New York Daily News: New Yorkers under 30 plan to flee city, says new poll; cite high taxes, few jobs as reasons I’m not an expert but this article by Kenneth Lovett looks more like an advertisement for Texas, Florida, and North Dakota rather than staying behind in a state which was perceived to be “progressive” as they attempted to impose…


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IMF Head Arrested in NYC and not for Abusing Capitalists

By John Galt May 14, 2011 As I sit here and rebuild my SQL database and review the news of the past 24 hours this headline pops up and all I can say is WOW! (via Bloomberg) IMF’s Strauss-Kahn Arrested, Accused of Sex Attack, NYT Reports The story is discussing and if proven true in a court of law it’s another black eye for one of the most corrupt organizations in the new world system of “financial governance.”



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M.B.A. Mortgage Applications for Purchase Continue to Deteriorate

By John Galt May 4, 2011  It doesn’t get much uglier than this. Last May was bad, but we’re seeing further deterioration based on the report from the Mortgage Banker’s Association report this morning which means that even with the government offering artificially low interest rates and programs for lower income first time home buyers the lack of demand is coming home to roost. This should be a warning shot as no matter what the National Association of Realtors or Bureau of Economic of Analysis proclaim with their statistics, the reality…


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March Construction Spending Report: Another Sharp Decline

By John Galt May 2, 2011 The report for March Construction Spending from the Census Bureau this morning reflected another poor showing this month. Private construction was down 11% from 2010 levels which indicates that the spring season has not brought any relief to the industry. Particularly interesting beyond the drop in residential construction are the sharp declines in lodging, office, commercial, and manufacturing which plainly displays the lack of faith American corporations have in this “recovery” whereas they are not investing in expanding domestic infrastructure or apparently starting any number…


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The Largest Detention Camp in World History is Almost Complete

  By John Galt April 26, 2011 In the world of talk radio, the internet, and various other media outlets there have been legends of FEMA camps under construction throughout the United States, stories about U.N. troops training to round up United States citizens, and concoctions which make for fascinating fiction but little if any fact to support the various stories. In reality each of these stories unfortunately carry a kernel of truth within them, a factoid which stimulates the imagination but fails to capitalize on the big picture thus destroying…


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The Greek Budget Travesty Continues-Deficit far Higher than Expected

  Read it and weep from the Wall Street Journal:   Greece’s Budget Deficit Higher Than Expected APRIL 26, 2011, 7:56 A.M. ET WALL ST JOURNAL By MATTHEW DALTON And LAURENCE NORMAN BRUSSELS—Greece’s budget deficit in 2010 was 10.5% of gross domestic product, significantly larger than forecast by either the Greek government or the European Union authorities, Eurostat, the EU’s official statistics agency, said Tuesday. Needless to say this Greek tragedy is going to end the entire EU con game and force the creation of a new Euro for the South…


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China Decides to Invest it’s Fiat Dollar War Chest in Real Commodities

  By John Galt April 26, 2011 It was destined to be another quiet night on the international markets with Japan and Europe desperate to create a temporary dollar rally and the Fed more than happy to help where they could. Then from the other side of the globe an explosive headline from China Daily’s Tuesday edition: ‘New funds considered’ to protect reserves That sounds like a direct shot at one Ben Bernanke and the Federal Ponzi Reserve’s QE strategy but as one digs through the story, it is a realization…


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March 2011 New Home Sales: Improvement BUT

  By John Galt April 25, 2011 The statement from the Bureau of the Census via the Department of Commerce is pretty stark: Sales of new single-family houses in March 2011 were at a seasonally adjusted annual rate of 300,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 11.1 percent (±21.7%)* above the revised February rate of 270,000, but is 21.9 percent (±10.3%) below the March 2010 estimate of 384,000. The news is already being spun as a…


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The Housing Price Crash Continues per RadarLogic

  By John Galt April 21, 2011 And the hits keep on coming (from Housing Wire): RadarLogic home prices hit lowest level since 2003   All I can add is “you ain’t seen nothing yet” to quote BTO and folks when that headline replaces 2003 with 1995 or 1996, that is when we will probably be close to a bottom in real estate.


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Economic Recovery News for an Easter Holiday

    By John Galt April 21, 2011 If this is a recovery, I can’t wait to see the next recession, er, depression, er bubble boom….. MLB Takes Over Dodgers Operations Lee County’s $340 million foreclosure auction draws no serious bids Commercial real estate makes up 77% of troubled loans at failed banks Rising food costs spur massive US theft of produce, meat NM Symphony Orchestra Files Chapter 7 Bankruptcy Scovill Fasteners Seeks Bankruptcy Protection to Sell Assets (209 year old Company) Maronda Homes of Cincinnati files for bankruptcy Distressed Properties…


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Congressman Paul Ryan’s Big Lie

By John Galt April 18, 2011 Truly, this is one of those entries I did not wish to make. After returning from my trip this past week I decided to take the time to study Congressman Paul Ryan’s A Roadmap for America’s Future which even includes the flashy splashy easy to view front page for all to see:   There are marked differences between the original “roadmap” as proposed originally and the The Path to Prosperity: Restoring America’s Promise, most notably of which was the removal of the proposed Value Added…


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Don’t Worry, Be Happy, er, Never Mind, $3.6 Trillion Reasons to Panic

  April 14, 2011 Despite reassurances that they have the massive global financial forest fire under control, reality is speaking with a punishing story from Reuters last night: Banks Face $3.6 Trillion ‘Wall’ of Debt: IMF Published: Wednesday, 13 Apr 2011 | 11:59 PM ET REUTERS The world’s banks face a $3.6 trillion “wall of maturing debt” in the next two years and must compete with debt-laden governments to secure financing, the IMF warned on Wednesday. Oops. Maybe all those central banksters buying gold and silver are not so stupid after…


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Gas and Diesel Prices Indicate Another Economic Crash: 2008 Redux

  By John Galt April 11, 2011 The myth that the American consumer is back being perpetuated by the financial infomercial networks and our government is about to be shattered once again. The proclamations by Fed governors that we the people are participating more in the economic engine ignores the declines in compensation compared to inflation since 2002 when the Fed and U.S. government elected to inflate the system at all costs rather than face a necessary recession to flush the system. This policy continued unabated throughout the last decade with…


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The Housing Crisis will not End Until 2020

  By John Galt April 11, 2011 And 2020 might be conservative…. Despite the prognosis from the mouth flapping pantloads of D.C. and Wall Street, the American real estate market is close to a decade away from recovery; if not longer. The popular proclamations from the National Association of Realtors is that the existing home sales should increase 5 to 10% this year which is akin to saying we’ve climbed ten feet up from the bottom of a one hundred foot well we’ve fallen into. The reality of what the U.S….


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The Growing Cat Calls for a NWO, er, New World Currency

    April 10, 2011 John Galt The headlines and stories keep flying off the wires yet few listen or pay attention to the implications or their meaning. Bloomberg dropped a not so subtle hint as to the coming agenda of the power elite earlier today: Stiglitz Urges New Global Reserve Currency to Stem Imbalances By John Detrixhe and Sara Eisen – Apr 10, 2011 12:51 PM ET BLOOMBERG The world economy needs a new global reserve currency to help prevent trade imbalances that are reflected in the national debt of…


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The Municide Hysteria and Insane Attacks on Meredith Whitney

  By John Galt February 9, 2011 Meredith Whitney dared to commit an unpardonable sin in the financial analyst’s world: Speak out against the herd. This is quite amusing watching everyone attack her as there has been no opportunity for independent analysis of Whitney’s data from the report and the conclusions alluded to regarding that now infamous 60 Minutes episode on the upcoming municipal debt collapse, but this has not prvented every Tom, Dick, Harry, or Chuck from offering scathing commentary and an almost lopsided analysis of a report they have…


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The Wall Street Journal joins the Obama Propaganda Machine

  By John Galt February 8, 2011 It really is a pathetic indication when one of the nation’s allegedly conservative business publications decides to offer the Obamanation a bear hug and says “we’ll play ball even if our editorial pages never will” when a story is published with some seriously blatant overtones as is the case this morning. The Wall Street Journal published a story in this morning’s edition titled ‘Cash Buyers Lift Housing.’ The story by S. Mitra Kalita does paint a rosy picture for a real estate resurgence quoting…


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The Unemployment Numbers the BLS Doesn’t Want to Talk About

  By John Galt February 7, 2011 The “experts” sprung into action last Friday with the release of the hilarious piece of monthly fiction known as the Bureau of Labor Statistics’ Employment Situation Summary. The banter was to blame the weather, the lazy workers who didn’t try to find a job, and of course the recovery for the abysmal showing but the reality when one looks at it was stated best by of course, Rick Santell at CNBC: Needless to say Zandi (from the video above) must be shopping for a…


If you can leave the United States, I would suggest you GET OUT NOW

by John Galt March 29, 2010 While I was out playing happy camper in the Everglades and checking on my ‘local’ BOL, some news snuck through the system but thankfully good old Tyler Durden at ZeroHedge.com has the scoop: It’s Official – America Now Enforces Capital Controls This is not something I say lightly after reviewing this information and reinforcing the commentary from the Rangel rule which restricted and penalized voluntary emigration and/or renunciation of one’s citizenship from the United States. If you can, even if it means a 75% loss…


Broken Glass

By John Galt Sunday, September 14, 2008 The photo of the JP Morgan Chase building in Houston, TX with all of the broken windows thanks to Hurricane Ike is the perfect metaphor for our shattered financial system. The symbolism of the fractured chunk of a window in the photo above is the ultimate image for describing what is happening to our economy and worse an indication of the destroyed solvency of the Federal Reserve banking concept. The irony is that it was good old J.P. Morgan who concocted and promoted the…


Gold $2000 Thanks to Fannie and Freddie

By John Galt August 25, 2008 Here you go again! It does not take this author, blogger, semi-sane writer and all around nice guy (cough) much to imagine just what people are thinking when they read the title of this editorial. The emails will say “oh but you’re pimping gold because you are selling it into the highs and running for your mountain cave with 40 years of supplies to emerge only do discover the apes have taken over and you’re going to battle them as a bitter old man while…


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Municide

Municide By John Galt February 21, 2008 How the Suicidal Fiscal Behavior of Government at every level, Federal, State and Local will Crash the US Financial Markets “….In a report to the City Council last week, City Manager Joseph Tanner said the city faces a $10.1 million general fund operating deficit for the current fiscal year and a negative available fund balance of $5.9 million on June 30, 2008. “Based upon the updated financial projections, the current estimate for insolvency is late April 2008,” Tanner said. “It may become necessary for…


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