Starting the day with a quote from the Bernank:
"Additionally, housing may no longer be viewed as the secure investment it once was thought to be, given uncertainty about future home prices and the economy more generally."
The above quote is from Federal Reserve Chairman Ben Bernanke's speech to the National Association of Home Builders International Builders show in Florida last week. Yes, the chairman of the Federal Reserve told the world U.S. housing is no longer a "secure investment."
*******************************************************************************
I thought this Buffett quote was interesting.
In his most recent annual letter to Berkshire Hathaway shareholders, Buffett called bonds "among the most dangerous of assets." He wrote…
Over the past century these instruments have destroyed the purchasing power of investors in many countries, even as these holders continued to receive timely payments of interest and principal.
His point: If the payments of interest and principal are created out of thin air, they're not as valuable. "High interest rates, of course, can compensate purchasers for the inflation risk they face with currency-based investments. And indeed, rates in the early 1980s did that job nicely," Buffett wrote. "Current rates, however, do not come close to offsetting the purchasing-power risk that investors assume. Right now bonds should come with a warning label."
******************************************************************************
So the news today is dominated by the joke of a budget that the Teleprompter in Chief sent out yesterday. He isn't even close to tackling the spending problem. He's actually wanting to increase it by 60%. This is from Zerohedge.
While Obama may or may not be on the way to winning his reelection, courtesy of a GOP field that is, to say the least, limited, and where the only worthy candidate is more ostracized by the right than even anyone on the left, the bottom line is that whoever wins the presidency, it will matter precisely didley squat. As the US debt clock shows, fast forwarding 4 years, or to February 2016, when the next presidential race will be in its final stretch, America will have $24.1 trillion in debt, about $9 trillion more than it does, now on $17.4 trillion in GDP, for a gross debt to GDP ratio of 138.9% (and Apple's $1 trillion market cap will account for 150% of the Nasdaq... just as IBM is 125% of the DJIA). Needless to say, it will be long past game over at that point confirming that the current presidential race, with its exciting tangential detours into female fertility, moon bases, LBO IRR maximization courtesy of cost-cutting, is completely and utterly meaningless. Also, keep in mind, "at current rates" for an endspiel that has now entered the exponential phase in virtually every category, is to say the least, optimistic. Yes, interest rates may be negative in 2016, but that means that the liquidity trap endgame has not only begun, but is well on its way to ending, and mercifully putting an end to this whole Keynesian "sustainability" charade. Remember: Japan's debt-deflation lasted for 30 years only thanks to new pockets of incremental global leverage and inflation: China and the PIIGS. This time, absent the levering of the entire continent of Africa, there is noone who can take the releverage baton and run. Which means the only "buyers" will be the central banks. At least back in the day, Weimar just one nation. This time, it will be the "Weimar World."
The budget and its projections assume a robust economy in the next presidential term. It assumes 2.8% GDP growth in 2012, increasing to 3% in 2012, 3.6% in 2013 and 4.1% in 2015. And then slowing back down to 2.5% in 2020.
By contrast the CBO assumes just 1% growth in 2013.
The deficits in this budget are massive too. Obama's budget team is projecting deficits $3.6 trillion higher over the next decade than in the Congressional Budget Office's baseline projection. And get ready for national debt of $25.9 trillion by 2022.
******************************************************************************
This is what our spending looks like in a chart.
*****************************************************************************
From Business Insider:
Greece needs money by next month. The troika makes demands it has to meet. Greek leaders resist and make some bold moves, fearing the domestic backlash to austerity. EU leaders bear down on their demands, and Greece grudgingly laments.
Sound familiar? If the fallout from former PM George Papandreou's referendum proposal in November is any indication, then this is the exact series of events we're seeing playing out in Greece right now.
And in fact, changes in the price of the euro versus the dollar would suggest that the Greek budget drama really is just a repeat of what we saw a few months ago—eerily so in fact. A few months ago, the euro gained steadily against the dollar after a crucial EU summit, but tanked sharply after Papandreou announced that Greece would hold a referendum on unpopular austerity measures. Papandreou finally gave into European demands, withdrew the referendum proposal, and said he would step down as prime minister, but it took a long time for the euro to recover after that.
While there are many reasons the euro might have been on the rise since early January, is that rally about to come to a close? See the striking similarities between September-November (red) and December to now (green):
******************************************************************************
In today's economic news...
And so the great American retail recovery continues being delayed following the third consecutive miss in headline retail sales in a row, despite what was ridiculous and erroneously touted as a record spending season. Well here come the 'product returns' as retailer margins shrink further into negative territory. Today's advance retail sales number came at 0.4% on expectations of a 0.8% increase, from a downward revised 0.0% (0.1% previously), which makes a mockery of both the car sales numbers in December which were the weakest link in today's retail sales, and of surging consumer credit as it proves beyond a shadow of a doubt that US consumers are now using credit cards for the most basic of staples, forget discretionary purchases! And while the number below the headlines was modestly better with ex autos and gas coming at 0.6% on expectations of 0.5%, the prior revision took December to a decline -0.2% from a previously unchanged number. In other words, expect today's ex cars and gas number to be revised to a miss next month as as the Census Bureau learns some key number fudging lessons from the BLS. Yet here is the punchline: there have not been three consecutive retail sales misses since... drumroll please... July 2008. And we all know what happened in the months following.
******************************************************************************
Yeah Government!
The FDA won its two-year fight to shut down an Amish farmer who was selling fresh raw milk to eager consumers in the Washington, D.C., region after a judge this month banned Daniel Allgyer from selling his milk across state lines and he told his customers he would shut down his farm altogether.
The decision has enraged Mr. Allgyer's supporters, some of whom have been buying from him for six years and say the government is interfering with their parental rights to feed their children.
But the Food and Drug Administration, which launched a full investigation complete with a 5 a.m. surprise inspection and a straw-purchase sting operation against Mr. Allgyer's Rainbow Acres Farm, said unpasteurized milk is unsafe and it was exercising its due authority to stop sales of the milk from one state to another.
Adding to Mr. Allgyer's troubles, Judge Lawrence F. Stengel said that if the farmer is found to violate the law again, he will have to pay the FDA's costs for investigating and prosecuting him.
His customers are wary of talking publicly, fearing the FDA will come after them.
"I can't believe in 2012 the federal government is raiding Amish farmers at gunpoint all over a basic human right to eat natural food," said one of them, who asked not to be named but received weekly shipments of eggs, milk, honey and butter from Rainbow Acres, a farm near Lancaster, Pa. "In Maryland, they force taxpayers to pay for abortions, but God forbid we want the same milk our grandparents drank."
The FDA, though, said the judge made the right call in halting Mr. Allgyer's cross-border sales.
"Intrastate sale of raw milk is allowed in Pennsylvania, and Mr. Allgyer had previously received a warning letter advising him that interstate sale of raw milk for human consumption is illegal," agency spokeswoman Siobhan DeLancey said.
Neither the FDA nor the Justice Department, which pursued the legal case, provided numbers to The Washington Times on the cost of the investigation and court fight.
Fans of fresh milk, which they also call raw milk, attribute all kinds of health benefits to it, including better teeth and stronger immune systems. Raw milk is particularly popular among parents who want it for their children.
*****************************************************************************
Why does this keep happening? Here is a note to people out there. QUIT TAKING NAKED PICTURES OF YOURSELF!
A longtime high school football coach in Maine has resigned after one of the more embarrassing and bizarre social media snafus in recent memory (if not of all time) when he accidentally posted a nude photo of himself on Facebook. The lewd photo was viewable by the general public and was recognized by a parent of a player on his football team, leading to the coach's self-imposed departure.
As reported by the Bangor Daily News, Associated Press and a handful of other Maine media outlets, South Paris (Me.) Oxford Hills Comprehensive High football coach Paul Withee tendered his resignation as both a football coach and math and science teacher in the Oxford Hills School District on Monday, days after he inadvertently sparked a major scandal by accidentally posting a completely nude photo of himself on his publicly viewable Facebook page.Withee allegedly claims the racy photos were only intended for his girlfriend, but the coach -- who has led Oxford Hills' program since the 2009-10 school year -- posted them to his general Facebook profile instead.
While Withee has refused public comment on the incident, Oxford Hills Superintendent Rick Colpitts told Portland ABC affiliate WMTW that the photo was only online for approximately 10 minutes before it was removed. Despite that brief air time, Withee's rather bare photo was seen by a football parent, who immediately reported the incident. It has not been divulged whether Withee removed the photo of his own accord or whether he was told that the shot could be seen by his entire Facebook network and then took it down.
Either way, the brief nude incident raised flags for the Oxford Hills School District because of a general policy stance that allows for teachers to be friends with students on Facebook. That means that students could have possibly seen Withee's nude photo in their own timeline, even if there is no indication that any did.
That concern of exposure to Oxford Hills students motivated the school district to open its own investigation into the incident, though WMTW reported that investigation had since been closed because of Withee's resignation.
While there are any number of common sense lessons that Withee's former students can take from their teacher and coach's fall (never post naked photos of yourself anywhere on the internet chief among them), the need for strong privacy settings on social media sites is certainly likely to sink in at this point. If that does, perhaps Withee's departure won't be for naught, even if it has brought on one of the strangest justifications for a coach's departure in recent memory.
No comments:
Post a Comment