Wednesday, July 27, 2011

The Week in Words #4

To my Gentle Readers and Kind Fans,

This Thursday, July 28, at 9:00pm EST, we are having:

The Week in Words #4

A web seminar where we will be discussing the most important news items currently affecting the markets.

And remember: It’s free.

This week:

Charles Hugh Smith will be joining me, to discuss . . .

. . . guess.


Here is the link to register.

Do check it out—and remember to have a microphone plugged into your computer, as attendees will be able to ask questions, live.

Until this Thursday at 9pm EST, all the best,

GL
If you are interested, do check out the preview page of The Strategic Planning Group, and see what it’s about.

23 comments:

  1. GL ... perhaps you've noticed, but your blog participation has dropped to zero. You made the same mistake as Nouriel Roubini - you were tempted to make $$ off the blog. And instead the contributions from readers around the world has plummeted.

    Meanwhile, $ESDOW (Spanich stock market) and $ITDOW (Italian stock market) are leading the way to a plunge in global stock markets (see on stockcharts.com). And the ECB is trying to buy up Italian debt. Ridiculous! Citizens of the UK and Germany should be enraged, and calling their leaders to demand a dissolution of the ECB. Separate the union now, before southern Europe drags the whole system into ruin. It will be hard enough as it is to stabilize the banking systems in France and Germany.

    That CRUNCH sound you hear from outside your window is Europe breaking apart.

    PeteCA

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  2. It's interesting that the news today is reporting that the ECB is only buying Irish and Portugese bonds. I have trouble believing they will not buy Italian and Spanish debt in the near future. Spain and Italy are rapidly approaching the breakeven point on interest rates ... their national economies will not be able to hold their own against rising interest payments. Does anyone seriously believe that sometime next week or next month that tens of thousands of Spaniards and Italians will find good-paying jobs and make a fresh start? Give us a break.

    The ONLY question for the European Union - who to keep and who to jettison out of the union? And who exactly will make this grand decision??

    If it is not decided soon by (reluctant) politicians then it will be decided by the bond markets - with utter chaos happening.

    PeteCA

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  3. PeteCA,

    I have to agree with your first post. I rarely come back here.

    Too bad.

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  4. The New World Order is at our doorsteps

    Next up: New World Currency

    Where's DSK??

    ReplyDelete
  5. I just started a facebook (after years of berating my kids)

    Been screaming my fingers off in the blog-o-sphere for too long now.

    I think I've finally snapped -- been hanging out at the big picture the past few months trying to get a handle on the financial "situation". When this BR went to Maine for this annual fishing trip, I looked into the background of their host -- I went APE SHIT.

    time to wake these kids up

    THE STATUS QUO HAS TO GO

    How can I get you as a "friend"

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  6. Gonzalo,

    You are losing it. Stop smoking so much weed.

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  7. Looks like a very sharp wash-out in the markets. This move is a LOT more serious than just the typical down-side selling that sometimes happens (when the market is a bit oversold). I agree with Mike Shedlock that this has little to do with the S&P announcement about downgrading US debt to AA status. This market reaction shows real fear. My bet is that some traders are well aware that the crisis in the euro debt system is going to show that banks in France, Germany, etc. are overexposed to risky assets - and those assets are seriously overvalued. We appear to have a Lehman style crisis happening here ... but possibly tied to sovereign debt.

    One thing is for sure ... anyone who's looking for long-term asset preservation is not going to risk things in the current market (except for hard assets & precious metals, which are holding up very well this time). After the crises in 2000 and 2008 "normal" investors are going to be running scared. Only the wold-eyed speculators and the vulture funds can go after good buys in this kind of downturn.

    I'm not impressed with Warren Buffet's recent comments about the US economy bouncing back strong in the second half of 2011. He's lost his edge. Not a lot of credibility any more.

    PeteCA

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  8. 2'nd para above should have said ... "only the wild-eyed speculators and vulture funds".

    PeteCA

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  9. Wow!!! We're seeing a real piece of financial history being written today. Check out the stock prices for Bank of America (symbol: bac) and Citigroup (symbol: c) on www.stockcharts.com. See also the plunge in the important banking index $BKX.

    There's hardly any need to add that some kind of Fed response is likely post haste - most likely this week. But more printed money is not only going to drive the US money supply (and the price of gold) much higher, it will also drive the price of oil higher in the long term. Yes, temporarily in a market crash scenario the oil price does decline. But that is temporary. QE3 will push oil back up, and we are headed for gasoline at $5-$6 per gallon in America. Does that sound like a recovery??

    I can't help but note the great irony ... we have seen trouble on the streets in Greece and Spain this past year. But truly - it is GERMAN citizens who should be rioting right now. It is nothing short of ridiculous to set up transfer payments in Europe that steal the wealth of hard-working Germans and give it to countries in southern Europe.

    PeteCA

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  10. It was always nice to visit here and get GLs take on current events and hear others that I enjoyed from around the world chime in....GL please drop in from time to time and drop a paragraph on us during these very interesting times and keep the blog alive. Just a shout out from someone who used to enjoy this blog...hourly G to Gee Whizz to GL is MIA mostly....

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  11. First, it's interesting to see the riots in LOndon today - as the markets are tanking. It would be easy to dismiss these riots are purely teenage angst (which they are). But that misses the key point. How on earth can young people inherit a global economic system where their entire future has been robbed mercilessly? It's all very nice for the old people to drive Mercedes and make proclamations that "things will be alright". But in fact - things are not all right. And the levels of debt that have built up in the western world cannot simply be "worked through" over a few years, or plastered with monetary inflation. Perhaps its time that the Baby Boomers faced the reality that they really have destroyed the financial order with what they have done. In which case - we could see a lot more rebellion in the coming months and years.

    Meanwhile ... David Rosenberg had this to say about the financial picture ...

    "If we can agree that the problem is excessive indebtedness at a whole bunch of levels (each country seems to have its own unique situation, for example the nonfinancial private sector credit outstanding relative to GDP in Spain is around 200%!) in many countries then there is really only one answer. This is not really about the EFSF, which helps reduce debt servicing costs but does not help alleviate the problem of overall debt burdens — that is just a swap. I think the ECB and the Fed (watch for some big changes in the press statement today), but especially the ECB, has to buy bonds en masse and reduce the amount of European debt outstanding and sharply boost the money supply. I believe that is the only way out right now. The central banks have to be the ones to absorb the debt and bring debt ratios down to more comfortable levels."

    While _ have the greatest respect for Mr. Rosenberg - and he had made a lot of very good calls on the economy - this is one place where I disagree. Where exactly do the central banks get the money to bail out the system? Ohh yes - from the remaining taxpayers who are hard-working and tring to make a go of it. One way or another, the central bank actions get funneled into sovereign debt (to be paid off in the future by a handful of honest taxpayers), or to be handled by massive doses on monetary inflation. But who says this will work ... or even has a ghost of a show of working? Honest people who are trying to work in the current environment can barely get by, and they certainly won't be able to handle a tidal wave of tax increases, municipal fees, higher gasoline prices, etc. No-one in the central banks ever stops to look at the budget of a typical family - or this would b obvious. Likewise, doube-digit inflation leads to impoverishment. And that is what we are headin for ... people on the streets begging for crusts of bread.

    It doesn't all add up. And the interesting thing is ... this tome around in the market downturn - the market seems to really understand that it doesn't all add up. Someone has to go bankrupt. And maybe a lot of people. Meanwhile - young people have to riot and burn things down. Because they never created these problems.

    PeteCA

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  12. Good luck with your subscription-based blog. But there's NOTHING HAPPENING in the non-subscription based one other than an article every blue moon, so I've decided to remove you from my Favorites List.

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  13. I to rarely visit this site anymore, used to be good.

    It cant be that hard for you to write something once in a while.

    Is this the death of the GL Blog as we know it.

    SPG is really: Seriously Poor Blog

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  14. GL,
    ¿Dónde estás?

    KS

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  15. I would like an update to the hyperinflation forecast of yours. Specifically, CPI should now be running around 6-7% annualized in the US. Would like to hear your take on things and a look back at your forecast.

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  16. Gold soaring to almost $1800/oz on Wed morning (US Pacific time), and significantly this is happening even with a temporary rise in the US dollar. This indicates decoupling, and shows a strong level of fear (and desire for real asset protection) in the markets.

    Further drops in the markets show that "the market" is not buying the platitudes being uttered by politicians and central bankers. Injections of liquidity may have worked then ... but now now. The market smells blood in the form of bankruptcy. There must be losers in this process, including whole countries. It is not an issue of "contagion" of risk. That word gets bandied around. The disease is real, and it is called insolvency.

    PeteCA

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  17. Also noticeable today ... continued rioting and street violence in the UK. There's no doubt that a substantial amount of this violence is being carried out by street thugs, gangs, and anarchists who are taking advantage of the mayhem. No question about that.

    But it also points to a much deeper issue. The social contract has been torn up. It has been torn up by politicians, bank mangers, hedge fund managers, investment guru's, Baby Boomers, and retirement fund mangers. I am talking about the contract between young and old. I am talking about the fundamental agreement where old people leave the world in good shape - so that a new generation can take over to live their own lives. What happened to that social contract - which is as deep as humanity itself?? It is has been crumpled up and thrown in the waste paper basket. Everybody in the system is just trying to preserve their own handful of wealth, and their own piece of the "good life". Why should young people buy into the broken economic world that we are leaving them?

    PeteCA

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  18. Gotta' say one thing ... those fund managers really know how to sell a bear market these days. It's an acquired skill. They've got the sell signals perfectly aligned to defeat interventions :-)
    HAHAHA !!!

    Market reaction today confirms what I said above ... there is serious blood in the water out there. Wednesday close, Aug 10'th.

    PeteCA

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  19. We've discovered Blythe Masters' (yes, the wicked witch herself!) personal blog and facebook page!

    Feel free to express your feelings to Blythe at her personal blog
    http://silverdoctors.blogspot.com/2011/08/blythe-masters-blogspot.html

    Or on her personal Facebook page.
    http://silverdoctors.blogspot.com/2011/08/blythe-masters-facebook-page.html

    (Facebook comments are removed within minutes and expect to be permanently banned from Blythe's facebook page like we were!) ;)

    -Doc

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  20. Typical Southamerican, the gases already reach your brains.
    nada mas, ni nada menos que un vulgar "roto" chileno

    ReplyDelete
  21. Hey Anonymous without your name -- Didn't your mother ever teach you that all important rule? Maybe you weren't listening? Maybe you didn't have a mother around? If so, I'm sorry and I understand why you say what you say then.

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  22. It's interesting to watch the degree of volatility in the markets right now. Very clearly there are strong emotions of fear (panic) and boldness (greed) playing against each other. Apparently some people are tempted to buy in, with the hopes of catching the bottom of a correction - and so boosting their profits. In other words ... their strategy could be summarized as the following ... "I'm really hoping this is another correction like the one in April/May of 2010". But you know what they say about taking positions based on hope. Perhaps the questions that they should be asking is ... since when does the market simply repeat it's last play verbatim?

    One obvious clue that something is different this time is the price of gold - which did not plunge as many were expecting it to. Indeed, some quite influential players took short positions on gold over the last few days, expecting a repeat of the huge selloff that happened in Oct of 2008. But this did not materialize, and the losses on the short positions have reportedly been huge. This is just one anecdote ... but the message is clearly to be very careful about jumping in - just for the sake of jumping in.

    PeteCA

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Whether you agree with me or not, thank you for your comment.

If you liked what I wrote—or if it at least made you think—don’t be shy about making a payment. The PayPal button is there for your convenience.

If you have a question or a private comment, do feel free to e-mail me at my address expat229@gmail.com.

GL