A Chilling Vision

What's going to happen as we start running out of cheap gas to guzzle?
The Long Emergency

Truth is stranger than fiction

I guess when you're a lawyer, the solution to any problem is a lawsuit.

Senate allows U.S. to sue OPEC for oil price-fixing

Remember, you let them get (or stay) there.

The "Vig" is too big

"The mutual fund industry is now the world's largest skimming operation, a $7 trillion trough from which fund managers, brokers and other insiders are steadily siphoning off an excessive slice of the nation's household, college and retirement savings." - Sen. Peter Fitzgerald

Fund 'casinos' win a 'loser's game'

Sleepless in Las Vegas

"Posted by Brandon V. on June 09, 2005 at 17:59:54:

Help! Any ideas, comments welcome.

My partner and I are in a mess with a brand new house in Las Vegas. Here are the details.

1. AUG 2004, we paid $445,000 for a Pulte model in the community of Aliante, North Las Vegas.
2. 100% financed and still owe roughly the same.
2. Payment is $3000/month.
3. Currently could only sell for about $360,000.
4. Finally found tenants to lease out for $1100/month in APR to reduce neg cash flow to $1900/month.

We are running out of cash quickly. We desperately need some ideas on how to get out of this house immediately.

Thanks!"

Upside down on SFR in Las Vegas

But I thought real estate always increased in price?

Snap, Crackle and Pop

"In July 1929, about five months before the October crash, the US economy had already shown distinct signs of an emerging depression: manufacturing was slowing down, output was falling, layoffs rising and capital utilisation was declining."

When did the US economy begin to crack?

Is this the top?

A rose by any other name....

Speaking of roses. Guy from Quicken Loans on CNBC: "Don't call them interest-only, they're principal optional". ROFLOL.

Bloom off the rose in China?

"HONG KONG: Steel mills in China, the world's top steel producer, are deferring shipments of iron ore as profits are squeezed by overcapacity, Beijing's fresh measures to cool the economy and a global economic slowdown."

China defers iron ore shipments as surplus hurts

Are we there yet, Daddy?

ECRI was down again on Friday. ISM services was down and, of course, the jobs number was poor. However, the jobs number, like most government numbers, is so mangled I don't think it means anything anymore. For example, the birth-death model injected 207K jobs based on GDP growth. The problem is GDP growth is probably overstated due to understated inflation (those hedonic and substitution adjustments). So these adjustments interact and render the end result pretty meaningless, IMO.

What was pretty clear is that cracks are showing in some of the housing bubble locations, such as Las Vegas. Mortgage originations were down despite a continuing drop in mortgage rates. Layoff announcements were way up and the Big Three automakers are not doing well. If there is a slowdown in housing, as I've said before, it really is over. The grand experiment in managing the economy will move to its next stage. Will Al lower rates to reflate the housing bubble and risk runaway commodity inflation as a side-effect? Who knows...

Runaway debt growth, government and trade deficits, where does it end? Soon, please.

When will they ever learn?

Anyway, yet another rally in progress. Indexes still down for the year, but only slightly so. Today's rally was apparently based on the prospect of lower interest rates as US manufacturing growth is negligible, per the ISM index. This was underlined by all the big three automakers reporting lower sales. ECRI's leading index is down year-over-year. So the economy sucks but Big Al will lower rates and another bubble will be blown, so goes the theory.

Well we'll see. I think (hope?) this stupid game is about over, but if it is not I'm prepared to wait. I see that the chief of the Bank of Canada went so far as to publicly express concern about the huge imbalances resulting from US spending of the world's savings. A bit late, chum, in my opinion, the outcome is baked in the cake it is just how long and how bad that is yet to be seen.

Anyway, oil is back at $54 and the oil stocks and trusts are really cheap because the momentum players have gone back to playing with the tech stocks, believe it or not. Now the analysts (huh1) are competing to see who can raise their price target on Google the highest and fastest. $300. $350. Who'll say $400? Come on? Haven't we seen this before? Jerks.

Of course the main bubble is now the real estate bubble. Apparently it is not enough to let people ruin their retirement with tech stocks and Enrons, they are going to get to ruin their whole lives with mortgage debt.