Tends to happen as you approach zero.

Comment by shill from thread 'Foreclosures and the Home ATM'

top 12 ways you know the economy is very bad, by shill

( yes im still here...reading......just dont have as much to say lately)

consensus was 45.0 per briefing.com

In Obstetrics fewer and shallower contractions is a bad thing. This economy will just go dead for another couple of years or so.

This will help the NMI. Nice pics ;

GARDEN GROVE, Calif. — Even as Starbucks shutters stores, some coffee shops in Southern California's Little Saigon are booming with a formula that seems to defy recession.
They are serving up strong Vietnamese brew, delivered to tables by young women in bikinis, spandex, fishnet sarongs or lingerie, displaying bountiful skin and cleavage.

Lots and lots of cleavage.
Scantily clad baristas give economic jolt to coffee shops - USATODAY.com

Fed buys $7.5 billion in Treasurys

Sovereign default alert:

"yesterday EU-member Latvia saw its overnight interbank rate surge to a record 16.4% while the overnight deposit rate double to 24% after the country was unable to sell any debt securities at a local debt auction, according to its main stock exchange. The Latvian Treasury had offered to sell 20 million lats ($20 million) of July maturities, 10 million of September, December and June 2010 paper. None of this paper found any buyers."

European banks have quite a bit of exposure to the Baltic countries and other Eastern European countries. Latvia will either have to drop its Euro peg and devalue; or hose away the rest of its FX reserves supporting the local currency, and then devalue. These countries borrowed a lot in Euros, which they have to trade in their domestic currencies to get, in order to pay back those borrowings. Obviously, when your currency plummets, that becomes a lot harder.

Bernanke and Paulson Conned CONgress into taking an insolvent financial system and spreading the insolvency across the entire eCONomy.

UnCONtained. I just can't wait to read about all the huge year end bonuses on wall street. What a sham.

Take a name asswipe,

I will have to stop in next time in little saigon....nice pics...Now thats a coffee shop....Makes me want to open one up here in bayarea....

Makes me want to open one up here in bayarea....

I had the same thought for here in Atlanta

time for a congressional group hug.

Geithner is an accidental landlord.  What a maroon. I'm so happy he's in charge of the treasury.

GARDEN GROVE, Calif. — Even as Starbucks shutters stores, some coffee shops in Southern California's Little Saigon are booming with a formula that seems to defy recession.
They are serving up strong Vietnamese brew, delivered to tables by young women in bikinis, spandex, fishnet sarongs or lingerie, displaying bountiful skin and cleavage.

Lots and lots of cleavage.
The requested document was not found - USATODAY.com...

All we need will be the sound of helicopters and vets will be flashbacking to Saigon 1968...

dryfly,

The only problem with that is the girls are a lot like the road between Ft Worth and Dallas....

before long starbucks will be selling handjobs.

I really don't think we have time for that, Charles.

So Bernanke is confident that Freddie and Fannie debt is guaranteed by the government and the government needs to deal with these bastard children.

Close....No curves.....

"All we need will be the sound of helicopters and vets will be flashbacking to Saigon 1968... "

.......my thoughts exactly, dryfly

If I were a Bull Spit artist and my name was B.S. Bernutty, would I be redundant?

Is lying to Congress a crime?

If so, what is the penalty?

T&A Coffee shop-We grind it the way men like it!

All we need will be the sound of helicopters and vets will be flashbacking to Saigon 1968... "

.......my thoughts exactly, dryfly

YouTube - Apocalypse Now..Ride Of The Valkyries

"So Bernanke is confident that Freddie and Fannie debt is guaranteed by the government "

He is the only one.

And technically, they do NOT have full faith and credit.

Lockhart's Fannie, Freddie Guarantee Remarks Stir Up Confusion - Bloomberg.com

Comrade Misean..the photos say otherwise.....

To continue on Misean's 'highway' theme... Those curves probably weren't originals... they were most likely put in by the Cali DOT to improve the 'driving experience'.

Ben: "Consumer spending increases are lowering the risk of deflation"

"The only problem with that is the girls are a lot like the road between Ft Worth and Dallas...."

Lumpy and dry?

Market showing a lot of indecision today...

As The Triumph of the Banking Oligarchs continues at huge taxpayer expense perhaps most Americans can look forward to being a much BIGGER version of Argentina or Mexico in the near future !

That's the whole F'd up thing about this. What would "normally" happen ie what was expected in the US historically?

In the world of investing its "who do you trust"? Why would anyone want to invest in the US auto sector again?

....there is nothing on the Obama horizon but HIGHER Federal spending - Not less!

It's fiscally impossible to write more and bigger checks and spend less money. My ex-wife tried that for a while - it didn't work for her either!

11-Day CMB Results:
CMB's normally are supposed to have a duration of several days to a couple of weeks. For the past year-and-a-half, the durations have increased to 5x, 7x, up to 300+ days.
The indirect bidders amounts accepted usually ranges from $7 to 15 Billion.

_____________________________ Tendered ___________ Accepted
Primary Dealer ____________ $71,450,000,000 _____ $21,468,945,000
Direct Bidder _______________ $9,160,000,000 _____ $3,598,025,000
Indirect Bidder ______________ $6,010,000,000 _______ $927,605,000
Total Competitive ___________ $86,620,000,000 ____ $25,994,575,000

Sterlingerl, linkorama, please! Did I miss something, or are you just teasing?

Oops, 4:25 is Engilsh time. Here is the link.

Geithner faces sluggish market, rents out NY home

Thanks! Tudor near leafy Larchmont, please proceed.....

Ah.....LBFM's and the joys of youth

......like most in politicians DC, they are so totally insulated from "Real-Life" - they have absolutely NO IDEA what occurs outside the Beltway - hence the softball "lets waste a couple hours" questions for BB. They just don't get the mood here in real America.

Global economy still shrinking...

Global PMI rises but service sector still struggles
| Reuters

....one of my "ex'es" has a cush FedGov job. FedGov vehicle, FedGov credit card, FedGov paycheck, FedGov insurance plan, FedGov retirement,.........she has NO IDEA what Real Life is all about either.......

"FedGov vehicle, FedGov credit card, FedGov paycheck, FedGov insurance plan, FedGov retirement,.........she has NO IDEA what Real Life is all about either......."

We all come to an understanding of that, sooner or later.

"'Ben regarding paying off AIG counterparties at full price:

"We had to, had no other choice"'

All right. Why not? And if so, what can we deduce? First of all, that the global financial system was, to some extent, out of control. Think about it."

It is as simple as this: if you repeat a LIE long enough, people will start to believe it. One of my professors used to call it "proof by assertion".

But, as usual, don't listen to what BB says, watch what he does.

As he was lying about monetizing the debt, his minions were buying another $7.5B in Treasuries.

The Non-Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: Agriculture, Forestry, Fishing & Hunting; Mining; Utilities; Construction; Wholesale Trade; Retail Trade; Transportation & Warehousing; Information; Finance & Insurance; Real Estate, Rental & Leasing; Professional, Scientific & Technical Services; Management of Companies & Support Services; Educational Services; Health Care & Social Assistance; Arts, Entertainment & Recreation; Accommodation & Food Services; Public Administration; and Other Services (services such as Equipment & Machinery Repairing; Promoting or Administering Religious Activities; Grantmaking; Advocacy; and Providing Dry-Cleaning & Laundry Services, Personal Care Services, Death Care Services, Pet Care Services, Photofinishing Services, Temporary Parking Services, and Dating Services).

Ahhh yes. The things that made America great.

I knew there'd be trouble when they put John Worfin in charge of Non-Manufacturing, monkeyboy

Reading about modern gold mining. Actually really depressing. The human, environmental cost is very high and I don't think I will own any gold mining stocks again even though they are not all horrible in practice it is the nature of the business.

Ghost,

I enjoy your insights, but I still do not see high inflation let alone hyper-inflation ahead.

The system is really sick. Too much toxic debt. Too many have spent too much and that will limit demand imo. My guess, is Bernanke will provide fed credit (or as you say print) just to keep deflation at bay.

The housing market will flounder for years on end. I think the TIP market has it right. Low real growth and low inflation.

All right. Why not? And if so, what can we deduce? First of all, that the global financial system was, to some extent, out of control. Think about it

So let's throw more money at an out of control global financial system, socalize all risks, privatize all profits. That'll show 'em

"Shadow precisely why runaway inflation is not in the cards at least not in the very short term. "

I wouldn't be so sure about that. Has anything BB done or said indicate that he won't take on any debt sent his way?

One day (or, half a day?) does not a trend make. I am still very comfortable with my oil position. I am betting that BB will bail out everything sent his way. He is already bailing out: Treasuries, Fannie/Freddie MBS, Fannie/Freddie Debt, Commercial Paper, Auto Loans, Student Loans, Credit Card Debt, Securitized MSR rights (that is a bizarre one), Small Business Loans, CRE, etc.

Next up? My bet is he and Geithner find a way to bail out the states like California. They won't let California fail for the mere price of printing more money.

Read BB's research and speeches. He is clearly willing to destroy the currency to prevent deflation. It is all he knows how to do.

The result will be runaway commodities prices.

For the record, I don't dabble in gold or PM, but I can understand the attraction.

I think what BB meant about the monetizing, is that the Fed is not going to permanently absorb those bonds and retire them...

That's like someone who runs off a bunch of $20 bills in his basement and buys gold coins with them saying he's not a "counterfeiter" because he intends to sell the gold someday in the future.

Did you create the money to buy the debt? Yes? Then you "monetized" it.

In the parlance of the National Parks, any Federal vehicle is referred to as a "G-Rig" and as the name fits. I think it should apply to all Federal financial vehicles as well...

Ghost,

Preventing deflation is a must in a debt money system. But it does not follow that preventing deflation leads to high or runaway inflation. That's the critical distinction.

High inflation will not solve our problems. It will exacerbate them by adding more debt to an excessive debt problem.

GREEN SHOOTS ! Awesome the economy will be back to normal in no time and the home ATM will be open in days.
I'm ordering the Hummer today !

Anyone in the MSM noticing the spiking of gas prices ? 14 cents in 4 days here is southern Caulifornia

• splat

Ah, my favorite leading indicator - along with Dirk noting that the long term unemployed outpaced the short term unemployed for the first time ever - more weakness in consumer spending, CC debt and increases in prime mortgage default rates...

Jobless rates rise in all US metro areas in April
Jobless rates rise in all 372 metro areas in April, part of Indiana again posts biggest gain
Jeannine Aversa, AP Economics Writer
On Wednesday June 3, 2009, 11:44 am EDT
WASHINGTON (AP) -- Jobless rates rose in all the largest U.S. metropolitan areas for the fourth straight month in April, according to government data released Wednesday.

The Labor Department reported all 372 metropolitan areas tracked saw their jobless rates increase in April from a year earlier. Indiana's Elkhart-Goshen's rate jumped to 17.8 percent, up 12.7 percentage points from a year ago. The Indiana region, which posted the largest increase from last year, has been pounded by layoffs in the recreational vehicle industry.

The second-highest jump occurred in Bend, Ore. Its rate rose to 15.6 percent, up 9 percentage points from last year. The region of North Carolina's Hickory-Lenoir-Morganton saw its unemployment rate rise to 14.9 percent, a gain of 8.8 percentage points from last year.

The figures aren't seasonally adjusted, making month-to-month comparisons far more volatile.
Yahoo! 404 - Page Not Found

"Yeah, that's b/c they are giving them to banks for crap in return. So he is not technically lying but he is being dishonest. "

It's all a sleight of hand. He will point to the overall size of the portfolio but not the composition. Oh, and BTW, that portfolio is audited by no one, so we have to take his word on its size.

Then he will use qualifying phrases like "As much as possible" and "great majority" in describing the incredible risks he is taking on. Or outright lie about its backing (i.e. Fannie/Freddie debt is backed by the US govt).

"As much as possible, we have sought to avoid both credit risk and credit allocation in our lending and securities purchase programs. As I will discuss further today, the great majority of our lending is extremely well secured."

Even the name Federal Reserve is a canard: it is neither Federal (i.e. part of the Federal govt), nor does it hold reserves.

FRB: Speech--Bernanke, The Federal Reserve’s Balance Sheet --April 3, 2009

Angry Saver,

My thesis at this point is that 1) we are seeing deflation and inflation at the same time, 2) we'll see more deflation than inflation for the next 1-3 years, 3) we'll see inflation down the road, whether or not it meets the symantics of "hyper" is irrelevant.

I cannot find historically where any country deflates at once with so much debt without overshooting into the inflation side as they mount more debt. If you're arguing that the hyper-zimbabwe inflation camp is wrong, o.k., I agree. But if you are arguing no inflation in the near term, a few years from now, I disagree.

--bh

Ghostface

I'd be a buyer of Gold under 940 but no I don't think general Commodities are good to own here. Demand is still falling at least til the end of the year.

Shadow

Large open pit mines in the desert are one thing but in the middle or virgin rain forest is another. But I see your point and not all miners are irresponsible its just the consequence of moving a lot of rock and dirt around.

Punchy

they had to take profits sometime.

ghostfaceinvestah (profile) wrote on Wed, 6/3/2009 - 9:35 am
My bet is he and Geithner find a way to bail out the states like California. They won't let California fail for the mere price of printing more money.

Comment of the morning. Excellent.

Read BB's research and speeches. He is clearly willing to destroy the currency to prevent deflation. It is all he knows how to do.
The result will be runaway commodities prices.

Inflation and deflation are vicious animals straining on their leashes. They are only controllable when there's tension on the rope. When the rope goes slack you lose control and they turn on you. I'm not so sure about runaway commodities however. Lumber up 20% but only back to the prices of January and still at decadal lows. I tend to think the commodities markets will merely become more chaotic.

Gross Says Diversify From Dollar as Deficits Surge
Gross Says Diversify From Dollar as Deficits Surge (Update4) - Bloomberg.com

Bill Gross, founder of Pacific Investment Management Co., advised holders of U.S. dollars to diversify before central banks and sovereign wealth funds ultimately do the same amid concern about surging deficits.

Treasury Secretary Timothy Geithner’s plan to bring the budget back into balance won’t be successful as consumers shrink spending and the U.S. growth rate slows, Gross said in a Bloomberg Radio interview today. The budget deficit will be narrowed to “roughly” 3 percent of GDP from a projected 12.9 percent this year, Geithner said June 1.

“I think he’ll fail at pulling a balanced rabbit out of a hat,” Gross said from Pimco’s headquarters in Newport Beach, California. “They are talking about -- once the economy in the U.S. renormalizes -- the move back toward balance or much less of a deficit. I suspect that will be hard to do.”

Higher savings rates and an increase in the cost to service the national debt will drag on the U.S. economy, likely meaning “trillion-dollar deficits are here to stay,” Gross wrote in his June investment outlook posted today on the firm’s Web site.

Gross, manager of the world’s biggest bond fund, said on May 21 the U.S. will “eventually” lose its AAA credit rating after Standard & Poor’s lowered its outlook on the U.K.’s AAA to “negative” from “stable” amid an escalating ratio of debt- to-gross domestic product. While U.S. marketable debt is at about 45 percent of GDP, annual deficits of 10 percent will push the amount to 100 percent within five years, a level that rating companies and markets view as a “point of no return,” he wrote.

It would not only leave open a possible liquidation of Chrysler, but would set the stage for a liquidation of GM. Liquidate, liquidate, liquidate.

Naw. Since no one is stupid enough to bid against the Administration, all it would mean is that the secured creditors get more for their claims. The Indiana Teachers can breathe easier.

For what it's worth, I like to prowl around the strip malls looking for an elusive cougar, and it turned out to be hippo season so I was out of luck.

Cougars are becoming endangered species. Especially now that there are so many unemployed swine out there... easy hunting for the discerning cougar.

RE: Above comment on Chrysler -

Eagerly awaiting Indiana's shot on appeal. (No, I do not have a direct stake in the outcome, I just think the whole fiasco is fascinating.)

My comment on this got pigged late yesterday -

To use a Hoosier-state basketball analogy, the Indiana Pensioners just hit a three at the buzzer to tie it up and send it into overtime.
No idea who will ultimately win this one, but the Hoosiers get the question into the appellate courts, who will now weigh in on the bankruptcy judge's application of the law in this case.

Could be an exciting overtime, if the Hoosiers keep droppin' threes like that. But, live by the three, die by the three.
Apologies to those uninitiated to the thrills of Indiana ball. (Watch the movie with Gene Hackman again.)

Agree just give them some freshly printed paper and it will shut them up

I cannot find historically where any country deflates at once with so much debt without overshooting into the inflation side as they mount more debt.

bh,

Here are two examples. One under a fiat regime. One under a gold standard (at least for part of the example).

1) Japan, from 1989 to the present.

2) The U.S. from 1929 through 1940.

" Ghost,

Preventing deflation is a must in a debt money system. But it does not follow that preventing deflation leads to high or runaway inflation. That's the critical distinction. "

Inflation isn't coming, it is here. Been to the pump lately?

BB is trying to prevent asset price deflation through doing the bidding of the financial oligarchs and buying their bad debt, cornering the MBS market and driving down mortgage rates, trying to keep a lid on Treasury rates, etc.

All while creating money. Higher money supply, less demand for money, dollar falls, commodities rise.

Every once in a while he will try to talk down the inflationary forces, like today, and claim he isn't printing money. At the EXACT same time his minions are buying Treasuries.

Mark my words, he WILL bail out the states, either directly by buying their debt, or allowing Geithner to give them bailout funds, funded by more govt debt, and he will increase his QE targets to soak it up.

Mark my words, he WILL bail out the states, either directly by buying their debt, or allowing Geithner to give them bailout funds, funded by more govt debt, and he will increase his QE targets to soak it up.

Ghost,

That's a possiblility, but I just don't see it happening for the simple reason that it will do more harm than good.

My guess is that after the financial system is bailed out, Americans will be forced to make tough budgetary decisions. The easy credit conditions of the past decade are gone. Sweet heart pension deals will be under attack.

There is plenty of wealth in America. The fight over the distribution of said wealth is about to heat up.

Thanks for that. Vietnamese coffee (which is French Press with condensed milk more or less) is heavenly. Vietnamese women are also gorgeous (and under appreciated) Its got to be better than they barely legal at the local Hooters.