Follow along with the video below to see how to install our site as a web app on your home screen.
Note: This feature currently requires accessing the site using the built-in Safari browser.
The 60-plus-day delinquency rate for US prime residential mortgage-backed securities (RMBS) rose in the 37th consecutive month in June, according to Fitch Ratings.
The credit-rating agency noted the "seriously" delinquent rate of 60 days or more within prime jumbo RMBS rose to 10.4% in June, up from 10.3% in May and 6.4% at the same time last year.
One-third reduce long-term savings plans to make ends meet. A majority of American employees are finding themselves hard-pressed to live up to their household budgets, according to a new report from CareerBuilder. The survey of more than 4,400 full-time U.S. staffers found that 61 percent of respondents reported that they always or usually live paycheck to paycheck, an increase from 47 percent in 2008.
One-in-five workers (21 percent) polled said they are taking money from their long-term savings to satisfy financial burdens and have decreased their personal savings or 401(k) contributions over the last six months.
One-third of employees have forgone long-term savings plans. They have increased their savings each month (33 percent) and do not participate in 401(k)s, IRAs or other retirement plans (36 percent). Of those who did attempt to save, 30 percent saved $100 per month and 16 percent saved less than $50 per month.
Dagong Global Credit Rating Co used its first foray into sovereign debt to paint a revolutionary picture of creditworthiness around the world, giving much greater weight to "wealth creating capacity" and foreign reserves than Fitch, Standard & Poor's, or Moody's.
The US falls to AA, while Britain and France slither down to AA-. Belgium, Spain, Italy are ranked at A- along with Malaysia. Meanwhile, China rises to AA+ with Germany, the Netherlands and Canada, reflecting its 2.4 trillion (£2 trillion) reserves and a blistering growth rate of 8pc to 10pc a year.
Dominique Strauss-Kahn, chief of the International Monetary Fund, agreed on Monday that the rising East is a transforming global force. "Asia's time has come," he said.
The IMF expects Asia to grow by 7.7pc in 2010, vastly outpacing the eurozone at 1pc and the US at 3.3pc. Emerging nations hold 75pc of the world's $8.4 trillion (£5.6 trillion) of reserves.
Dagong rates Norway, Denmark, Switzerland, and Singapore at AAA, along with the commodity twins Australia and New Zealand.
Chinese president Hu Jintao said in April that the world needs "an objective, fair, and reasonable standard" for rating sovereign debt. Dagong appears to have stepped into the role, saying its objective was to assess countries using methods that would "not be affected by ideology". "The reason for the global financial crisis and debt crisis in Europe is that the current international credit rating system does not correctly reveal the debtor's repayment ability,"
Despite repeated warnings going back several years from Moody's, S&P et al that the U.S. could lose its top credit rating with ongoing fiscal deficits and heavy debts, the platinum-plated AAA rating of the United States seems all untouchable.
The top notch rating certainly has helped with continuing debt financing and bolstered the confidence of some government officials. Secretary Geithner, for example, said in a February interview that the U.S. government "will never" lose its credit rating, despite big budget deficits and a newly raised debt ceiling of $14.3 trillion.
Along came a Beijing-based rating agency--Dagong International Credit Rating Co. Its first order of business is to downgrade sovereign debt ratings on some major Western nations, while slamming its Western counterparts.
"The reason for the global financial crisis and debt crisis in Europe is that the current international credit rating system does not correctly reveal the debtor's repayment ability."
Last month, the International Monetary Fund released its annual review of U.S. economic policy. Its summary contained these bland words about U.S. fiscal policy: Directors welcomed the authorities commitment to fiscal stabilization, but noted that a larger than budgeted adjustment would be required to stabilize debt-to-GDP.
But delve deeper, and you will find that the IMF has effectively pronounced the U.S. bankrupt. Section 6 of the July 2010 Selected Issues Paper says: The U.S. fiscal gap associated with todays federal fiscal policy is huge for plausible discount rates. It adds that closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 percent of U.S. GDP.
The fiscal gap is the value today (the present value) of the difference between projected spending (including servicing official debt) and projected revenue in all future years.
Slashing the deficit would destroy the president's political base.Robert Rubin and Joesph Stiglitz are warring again over US economic policy.
Rubin wants to slash the Deficit.
Stiglitz wants more stimulus spending on jobs.
Is it accurate to say that one of these choices is 100% wrong and the other 100% correct?
Not really
Jobs or Deficit
Not really certain looks more like Japan in the 90s to me. I expect a major crash and a recovery then rinse and repeat
Not really certain looks more like Japan in the 90s to me. I expect a major crash and a recovery then rinse and repeat
Seems more and more like Japan to me too.
A growing number of market watchers are beginning to draw parallels between the hardships that the Japanese experienced in the aftermath of their real-estate induced recession in the early 1990s and upcoming problems for Americans. Is the U.S. about to experience a Japanesestyle lost decade? Three years after the onset of the recession, it is reassuring to see that the timing and size of policy response in the U.S. has so far enabled its economy to fare much better than Japan did at the same point in the cycle on a number of fronts (production, money supply and inflation). Even if we do not deny that the Americans still face a period of deleveraging, we doubt that it will be as painful as that suffered by the Japanese. That’s because of a key difference between the two countries: demographic trends. It is important to keep in mind that Japan’s deflationary problems have been exacerbated by a decline in the population of prime-age house buyers (defined as the number of people in the 20-to-44 age group). Unlike Japan, the U.S. is at a positive inflection point for that specific age cohort. According to the U.S. Bureau of Census, the population of people aged 20-44 is expected to increase through the next twenty years (13 million people). Japan, for its part, has already experienced a decline of 6% for that cohort (or 3.2 million people).
It's 100% accurate to say the dithering by know-it-all central banksters and technocrats is a large part of the reason the economy is going nowhere fast right now.Robert Rubin and Joesph Stiglitz are warring again over US economic policy.
Rubin wants to slash the Deficit.
Stiglitz wants more stimulus spending on jobs.
Is it accurate to say that one of these choices is 100% wrong and the other 100% correct?
Jobs or Deficit
The Japanese faced the same thing in the early 1990s... Here's how it played out:
In 1995, the Bank of Japan did the unthinkable... and cut interest rates below 1%. Today, 16 years later, Japanese interest rates are STILL below 1%.
In the early 1990s, Japan was struggling to recover from an extraordinary real estate bubble (like we are today). Residential real estate prices there peaked in 1991. The Japanese government threw everything it could at the problem – it cut interest rates to zero and it went crazy borrowing and spending to try to keep the economy afloat.
We are doing those same things today in the U.S. You could easily argue these things didn't work in Japan... Today – two decades later – Japanese real estate prices and stock prices are still well below their peak.
Meanwhile, with interest rates below 1% for all this time, retirees in Japan earn next-to-no money on their savings. And the massive government debt is still there – it still has to be paid back, somehow. Japan's government debt is now at a crushing level... near 200% of the economy (GDP). That's the highest in the world, except for basket case Zimbabwe.
The U.S. isn't nearly in Japan's kind of trouble... yet. But the U.S. is heading down the same road. The Congressional Budget Office forecasts government debt will hit 180% of GDP by 2035.
So could interest rates in the U.S. stay below 1% for 16 years? Absolutely. In the U.S., rates went below 1% back in 2008. It is now 2010. And there is nothing on the horizon that suggests rates will be going up. The economy is not recovering as much as hoped. Interest rates will stay at record low levels until the economy shows signs of coming back to life and inflation starts to appear.
Not really certain looks more like Japan in the 90s to me. I expect a major crash and a recovery then rinse and repeat
Seems more and more like Japan to me too.
I was thinking this same thing, over a year ago I thought we were going to wind up like Japan has for the past 20 years. We still might with all the boomer's retiring.
I came across this article today with info on this very subject.
US: A key ingredient for lost decade is still missing
A growing number of market watchers are beginning to draw parallels between the hardships that the Japanese experienced in the aftermath of their real-estate induced recession in the early 1990s and upcoming problems for Americans. Is the U.S. about to experience a Japanesestyle lost decade? Three years after the onset of the recession, it is reassuring to see that the timing and size of policy response in the U.S. has so far enabled its economy to fare much better than Japan did at the same point in the cycle on a number of fronts (production, money supply and inflation). Even if we do not deny that the Americans still face a period of deleveraging, we doubt that it will be as painful as that suffered by the Japanese. Thats because of a key difference between the two countries: demographic trends. It is important to keep in mind that Japans deflationary problems have been exacerbated by a decline in the population of prime-age house buyers (defined as the number of people in the 20-to-44 age group). Unlike Japan, the U.S. is at a positive inflection point for that specific age cohort. According to the U.S. Bureau of Census, the population of people aged 20-44 is expected to increase through the next twenty years (13 million people). Japan, for its part, has already experienced a decline of 6% for that cohort (or 3.2 million people).
I have a little theory that I formed a few years ago, that is now playing out in high relief across the company.
During the go-go Dotcom-Tech-Y2K bubble days, a great many people in the private sector were making a lot of money from stock and options. The Federal, State, and Local Governments experienced much higher than expected tax receipts. Greedy & Envious public sector employees and politicians (who couldn't do a productive private sector job if their lives depended upon it) funneled the tax windfalls to their own benefit via enormous increases in the number of government jobs, and increased pay and benefits. They justified these permanent increases on an assumption that the bubble economy would last forever.
As such bubbles always burst, we would have all been better off if our public sector had not raided the public coffers and we had built up a reserve for a rainy day. Alas, they bled us out instead.
The End.
Yeah, that's true. Demographics work in America's favor. Unfortunately, the population doesn't grow fast enough to offset the deleveraging that is occurring.
BTW, Japan is on the brink of disaster, IMHO. I've started shorting the yen using long-term options and I want to short Japanese long-term bonds. If you think America is in trouble, Japan is far worse. It is mind-boggling to me that the yen it approaching all-time highs. That is absolute gift, in my opinion, one of the clearest long-term trades I have ever seen.
The Fed and other assorted technocrats along with most elected Republicans and Democrats are doing their parts; however, there's also the structural contradiction between The Real Economy and the Bubble Economy.It's 100% accurate to say the dithering by know-it-all central banksters and technocrats is a large part of the reason the economy is going nowhere fast right now.Robert Rubin and Joesph Stiglitz are warring again over US economic policy.
Rubin wants to slash the Deficit.
Stiglitz wants more stimulus spending on jobs.
Is it accurate to say that one of these choices is 100% wrong and the other 100% correct?
Jobs or Deficit
Yeah, that's true. Demographics work in America's favor. Unfortunately, the population doesn't grow fast enough to offset the deleveraging that is occurring.
BTW, Japan is on the brink of disaster, IMHO. I've started shorting the yen using long-term options and I want to short Japanese long-term bonds. If you think America is in trouble, Japan is far worse. It is mind-boggling to me that the yen it approaching all-time highs. That is absolute gift, in my opinion, one of the clearest long-term trades I have ever seen.
Wouldn't Gold be a safer alternative to shorting bonds. What if all western countries & Japan just inflate like crazy or monetize debt? You will just have a pile of paper. It is just a matter of time before a majority of the worlds producers have an epiphany about a whole host of currencies.
