Crisis mentality takes hold amid worries of renewed recession. If the recent wild leaps and plunges in financial markets have prompted you to cash out your stocks, you’re not alone. Individual investors are bolting for the exits. Thursday's big sell-off, which saw the Dow Jones industrial average move by triple digits for the ninth time this month, was the latest evidence of a crisis mentality that has taken hold on global financial markets, turning the usually quiet month of August into a nail-biter for small investors. A lot them have just one word for their broker: “Sell.”
The head of state-owned Chinese rating agency Dagong, Guan Jianzhong, 57, speaks to SPIEGEL about China’s economic model, why he believes the rating system used by the Big Three is a threat to the world and the twilight of Western dominance. SPIEGEL: You recently said that it would be a “catastrophe” if an American rating agency downgraded the United States’ credit rating. Now that Standard and Poor’s has taken that step, is the situation as bad as you imagined?
In addition to the nationalization of his gold insutry, Chavez earlier also announced that he would recover virtually all gold that Venezuela hold abroad, starting with 99 tons of gold at the Bank of England. As the WSJ reported earlier, "The Bank of England recently received a request from the Venezuelan government about transferring the 99 tons of gold Venezuela holds in the bank back to Venezuela, said a person familiar with the matter. A spokesman from the Bank of England declined to comment whether Venezuela had any gold on deposit at the bank." That's great, but not really a gamechanger. After all the BOE should have said gold.
The head of state-owned Chinese rating agency Dagong, Guan Jianzhong, 57, speaks to SPIEGEL about China’s economic model, why he believes the rating system used by the Big Three is a threat to the world and the twilight of Western dominance.
Not only is the United States slouching toward a double dip, but so is Europe. New data out today show even Europe’s strongest core economies – Germany, France, and the Netherlands – slowing to a crawl. [ Austerity is the wrong medicine.] Policy makers be warned: Austerity is the wrong medicine. We’re on the cusp of a global recession. We all know about the weaknesses in Europe’s “periphery” – Greece, Ireland, Spain, Portugal, and Italy. But the drop in Europe’s core is dizzying.
Iowa – Gov. Rick Perry did not back down on Tuesday, but he did not repeat his suggestion that the printing of money by the Federal Reserve during the election would be “treasonous,” and would warrant “ugly” treatment should the chairman, Ben S. Bernanke, pay a visit to Texas.
As China rapidly ascends in influence, its superpower rival seems unable to face up to its failings. For years we have been told not to worry about China's growing strength, because America is even stronger. No matter how far China rises, our leaders have said, America will be the world's omnipotent power. ''You can do anything,'' the Prime Minister told the US Congress just six months ago.
The Evils of Unregulated Capitalism Remedy for the US economy: end the wars, rein in military and drug costs, and raise taxes – at least on the very rich. In June 2009, the then President of the UN General Assembly Miguel d’Escoto Brockmann, and former chief World Bank economist and Nobel laureate Joseph E. Stiglitz had called together a “conference at the highest level” on the issue of the world financial and economic crisis and its impact.
Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret.
Last year $8.4 trillion was handled by the FRBNY from the auctions. There is NO information available as to how it was dispersed.” The headlines screamed that we needed to increase the National Debt to prevent an economic collapse. Wait a minute. Is that the whole story? Much is said of how the increase of the National Debt ceiling is inflationary, and it surely is. But the gain by the United States government is only temporary. The real profit goes to the Federal Reserve and Wall Street but that profit is hidden from Congress and the public.
They Got Bailed Out, We Got Sold Out: How the Banks Profit from the Lack of Jobs
Consumer borrowing hit its highest level since August 2007 this June; here's why that's not a good sign for the economy. Amidst a lot of indicators that say we could be heading for another round of recession—before the so-called recovery even reaches most people, let alone our millions of unemployed—June saw a jump in consumer borrowing, three times as much as expected, according to Bloomberg News. The $15.5 billion increase in credit was the biggest since August 2007, and revolving debt, which includes credit cards, was up by $5.21 billion, the most since March 2008. In a consumer-dependent economy, that's a good thing, isn't it? After all, borrowers must have some confidence in their ability to pay back their debt, right? Not so fast.
The downgrading of the credit rating of the United States last Friday means that August 5, 2011 will be recognised as one of the key turning points in the historic crisis of US and world capitalism along with September 15, 2008, the day Lehman Brothers collapsed, and August 15, 1971, the day President Nixon withdrew the gold backing from the US dollar.
The wild plunges of international markets in the past weeks are related to deeper economic and financial problems. PANIC RETURNED to Wall Street and financial markets worldwide in the first weeks of August. The specter of several new financial crises and fears that the economies of the U.S. and Europe could slump back into recession led to the biggest drop in the U.S. stock market since 2008, and worse than that in other countries.
I wrote an article called 5 Places NOT To Be When The Dollar Collapses. In it I wrote that societies that benefited the most from the dollar would be the worst places to be when it fell apart. While the dollar has not even collapsed yet, the strain in these areas is becoming more apparent. England is number 3 on the list has had 4 days of violent riots as people start to lose it. Israel is number 1 on that list has had massive protests. There is revolution in the air all over the world except in the US.
The whole thing is nuts. The economy is a shambles, saved from a free fall only by the Federal Reserve’s unprecedented promise of free money for banks for at least two years. That’s how long a seven-member majority of the Fed’s Open Market Committee expects it to take for significant relief to take hold for the 25 million Americans who can’t find full-time employment.
The weak economy is hitting Americans where they spend a lot of their free time: at the TV set. They're canceling or forgoing cable and satellite TV subscriptions in record numbers, according to an analysis by The Associated Press of the companies' quarterly earnings reports. The U.S. subscription-TV industry first showed a small net loss of subscribers a year ago. This year, that trickle has turned into a stream.
Britain saw its third consecutive night of widespread burning of properties and looting as riot police failed to contain gangs of masked youths marauding several parts of the capital, London. There were reports too of violence fanning out to other cities across Britain. And some commentators were even suggesting that the British Army might have to be redeployed from Northern Ireland to help restore order. Armoured police vehicles are now patrolling London streets amid calls in the media for the use of water cannons and plastic bullets.
Gold climbed to a third record in a row over $1,800 an ounce Wednesday, extending its biggest rally since 2008 as a dive in French bank stocks sent new shudders through anxious financial markets.
On June 13th, Trends Journalsubscribers and the global media received this Trend Alert® "Collapse It's Coming! Are You Ready?" In that Trend Alert®, Gerald Celente accurately predicted that a global economic collapse was imminent. "The economy is on the threshold of calamity another violent financial episode is looming," he wrote.
I’m huddled in the front room with some shell-shocked friends, watching my city burn. The BBC is interchanging footage of blazing cars and running street battles in Hackney, of police horses lining up in Lewisham, of roiling infernos that were once shops and houses in Croydon and in Peckham. Britain is a tinderbox, and on Friday, somebody lit a match. How the hell did this happen? And what are we going to do now?
For 150 million workers, Tea Partiers pushed through more cuts in the already starved federal programs that are aimed at diminishing the yearly 58,000 fatalities in workplace-related disease and trauma plus larger numbers injured and wounded.
Standard & Poor's today downgraded the debt of Fannie Mae, Freddie Mac and 10 of 12 Federal Home Loan Banks that were propped up by the federal government after the financial crisis of 2008. S&P reduced their ratings one notch, to AA+ from AAA, its very highest rating. The agencies guarantee or own more than half of the $5 trillion in U.S. mortgage debt.
Warning, in short, that we’re headed into a perfect storm rivaling the disastrous political insanity of the 1930s that prolonged the depression, driving the economy into far reaching global problems that added fuel to an irrational zeitgeist and world war. Over the past decade we predicted the 2000 crash, the 2008 meltdown and the short-lived 2009 rally, and now it seems quite clear that future historians will indeed look back on the 2011-20 decade as the “Worst Decade in American History.” Worse than the “Great Depression” of the 1930s. Totally predictable, totally denied.
Standard & Poor’s lowered the AAA ratings of thousands of municipal bonds tied to the federal government, including housing securities and debt backed by leases, following its Aug. 5 downgrade of the U.S. The rating company assigned AA+ scores to securities in the $2.9 trillion municipal bond market including school- construction bonds in Irving, Texas; debt backed by a federal lease in Miami; and a bond series for multifamily housing in Oceanside, California. Olayinka Fadahunsi, an S&P spokesman, said he couldn’t provide a dollar figure on the affected debt.
Will economic grievances bring down the government of Binyamin Netanyahu? On Saturday, more than 250,000 Israelis took to the streets in protest over the rising cost of living in the country and the growing social divide it is creating. This social movement of people demanding their share of Israel's new economic prosperity is posing an increasingly powerful challenge to Binyamin Netanyahu, the Israeli prime minister, and his coalition.
For the last 18 months, the euro has been in trouble. There have been a series of emergency meetings, crisis summits and rescue attempts but still the stench of death hangs around the currency. Its future should become clearer in the next month or so. Just two weeks ago, eurozone leaders were patting themselves on the back for creating the European Financial Stability Facility, a mechanism to help countries who found borrowing on the open markets much too expensive. The problem is that Italy is now in trouble and the EFSF simply is not big enough to bail out the world’s eighth largest economy. Italy has been in trouble for a while – but things started to get substantially worse in June when its credit rating was put on watch by global credit agencies.
Quadrillions of wealth will seek the safety of real tangible assets. Food, Energy, Gold and Silver are the premier asset to be in, but you will need goods to survive the violent transformation of society. This will collapse the faith of the currency and the markets as people panic to get out of free falling paper markets and dive into real things that they need. More money chasing after fewer goods will send the price of real things to unimaginable heights. (Read the 11 Mentality Shifts of Silver Investors.)
S&P's downgrade provides compelling evidence of the corruption eating away at the foundations of yet another key Wall Street institution. Standard and Poor's decision to downgrade our public debt tells us absolutely nothing about the probability of the federal government meeting its future obligations. The move really only offers us some compelling evidence of the corruption eating away at the foundations of yet another key Wall Street institution.
In the 1930s, the only thing we had to fear was fear, itself. Today, the main thing we have to fear is us, ourselves. Looking out over the horizon, I’m starting to wonder just how many shades of dark there are on the pallette. Lately, I get the feeling that we’re about to find out.
China has released a scathing op-ed in Xinhua, the official Chinese news agency, in which the authors waste no time to humiliate a "debt-ridden Uncle Sam" following the S&P downgrade, in the most violent surge in the recent war of words between the ascendent and descendent superpowers. Some choice selections: "Dagong Global, a fledgling Chinese rating agency, degraded the U.S. treasury bonds late last year, yet its move was met then with a sense of arrogance and cynicism from some Western commentators. Now S&P has proved what its Chinese counterpart has done is nothing but telling the global investors the ugly truth",
“It is a common theme” that the United States, which “only a few years ago was hailed to stride the world as a colossus with unparalleled power and unmatched appeal is in decline, ominously facing the prospect of its final decay,” Giacomo Chiozza writes in the current Political Science Quarterly.
Have you seen, anywhere, in any media, or even heard reported or repeated on NPR, the following sentence? “We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act.” It’s right there on Page 4 of the official Standard & Poors “Research Update” (pdf) – the actual report on what they did and why – published on August 5th as the explanation for why they believe Congress – and even the Gang of Twelve – will be unable to actually deal with the US debt crisis.
Jokes about the U.S. becoming “Europe’s Mexico” are commonplace, but now high-priced consultants are pushing the notion in all seriousness. They’re predicting that within five years certain Southern U.S. states will be among the cheapest manufacturing locations in the developed world—and competitive with China.
Standard and Poor's downgrades US rating to AA+ for the first time ever, as tension prevails for global stock markets. The United States has lost its top-notch AAA credit rating from Standard & Poor's, in a dramatic reversal of fortune for the world's largest economy. S&P cut the long-term US credit rating by one notch to AA-plus on Friday, citing the country's looming debt and deficit burden.
Federal Reserve bank lackey Gietner is a liar, and always was.
Joe Lieberman Says U.S. Should Cut Social Security To Pay For Fighting ‘The Islamist Extremists’ Right-wing war hawk John Bolton suggested during an interview on Fox News that the United States should cut Social Security and Medicare to finance the defense budget. During debate over the debt deal today on the Senate floor, Sen. Joe Lieberman (I-CT) appeared to endorse this call. Lieberman explained that he is working with Sen. Tom Coburn (R-OK) on a Social Security spending reduction plan and that “we can’t protect these entitlements and also have the national defense…to protect us…with Islamist extremists”: http://www.informationclearinghouse.info/article28742.htm
GMAC, one of the nation's largest mortgage servicers, faced a quandary last summer. It wanted to foreclose on a New York City homeowner but lacked the crucial paperwork needed to seize the property.
With 1% of Americans controlling 40% of the country's wealth, we examine the gap between the rich and the rest. The richest one per cent of Americans earn nearly a quarter of the country's income and control an astonishing 40 per cent of its wealth. Inequality in the US is more extreme than it has been in almost a century - and the gap between the super-rich and the poor and middle class people has widened drastically over the last 30 years.
Five ways media misreported deficit debate. There are specific patterns in corporate media coverage of political debates: Progressive ideas are generally marginalized. "Compromise" between the major parties is encouraged. Democrats should "move to the center," which in practical terms actually means moving to the right.
The hotly debated inner workings of the compromise must still be approved by US congress. President Barack Obama has announced a deal with congressional leaders to raise the legal level of US debt and avoid a potentially catastrophic default. Here are details of the plan, which was worked out late on Sunday but still requires approval of the US congress where a number of politicians have voiced concerns:
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