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bkkandrew · 11-08-2008, 05:32 AM

Corporate debt default ‘could hit 10%’

By Nicole Bullock in New York

Published: August 8 2008 01:28 | Last updated: August 8 2008 01:28

Defaults on corporate debt are ratcheting up as economic weakness takes it toll on the financial health of companies.

The global default rate is expected to climb to 6.3 per cent over the next 12 months and it could reach 10 per cent should the US sink into a protracted recession, Moody’s Investors Service said on Thursday.

“The storm is gathering for default rates moving up,” said Kenneth Emery, Moody’s director of corporate default research.

Continued at:

FT.com / Capital markets - Corporate debt default â€˜could hit 10%â€™

Milkman · 02-09-2008, 08:03 PM

True the authors lean, but I think the facts speak for themselves. It's been reported elsewhere. SK? Around, bud? How is the private sector treating you?

Quote:

Work harder, take home less

From 2000 to 2007, worker productivity rose significantly in the United States, but real income fell for middle-class families, a group of economists says.

(CNNMoney.com) -- For most of the past decade, the economy grew much stronger - but middle-class Americans had little to show for it.

That's the conclusion of a trio of economists who on Thursday released a preview of their book The State of Working America in 2008/2009 due out next year.

Despite two periods of recession in the past decade, U.S. worker productivity still rose 18% in the 2000s - about 2.5% per year, according to author Jared Bernstein, a widely followed economist from the liberal-leaning Economic Policy Institute.

But inflation-adjusted income for the American middle-class family actually fell during the same period. The median real income for working-age middle-income families in the United States dropped $2,000 between 2000 and 2007, from about $58,500 to $56,500, the U.S. Census Bureau reported Tuesday.

As a result, the 2000-2007 business cycle was the first ever in which the nation's middle-class
families had less real income at the end than when they started.

"It's a compelling example of a large disconnect," said Bernstein. "Americans aren't being rewarded for their productivity."

Link and Entire: Productivity rose in 2000s, but middle class income fell - Aug. 28, 2008

Milkman · 05-09-2008, 09:09 AM

The 3 major market measures were down on average, 3% today. For the year they are down 15%. I don't care much about the markets. But the economy in the US will be soft for the next year or longer, IMO.

Quote:

Stocks tank — Dow ends day nearly 350 down

Quote:

Unemployment, retail news appears to dash hopes of recovery soon

Sept. 4, 2008The numbers released Thursday were a sign that despite some upbeat reports over the past month, the economy remains deeply troubled. Investors are not expecting any promising news in the August jobs report, particularly after the ADP National Employment Report said that private sector employment decreased in August by 33,000. Economists are predicting the government will report the eighth straight monthly payrolls drop, and a rise in the unemployment rate.

The market was so disheartened that it showed little reaction when the Institute for Supply Management said the service sector grew unexpectedly in August for the first time in three months as new orders increased and inflation moderated. The August reading of 50.6 was higher than the 50.0 expected, and the reading of 49.2 in July; but the sector’s edging above the threshold between contraction and expansion was hardly a sign of a robust economy.

An economic recovery appears to be far off to investors — and with the Dow down more than 15 percent for the year so far, they don’t appear to be holding out for a significant upturn in stocks, either.

Entire: Stocks tank â€” Dow ends day nearly 350 down - Stocks & economy - MSNBC.com

Milkman · 25-09-2008, 04:14 PM

Here's an interview with Jim Rogers discussing the value of the USD, and the future of the Fed. Interview is about 5-6 months old.

YouTube - The Dollar is Doomed and the Fed's Days are Numbered

Boon Mee · 25-09-2008, 05:31 PM

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

Power Line

bkkandrew · 25-09-2008, 07:09 PM

^I trust that some gentlement wearing white coats were waiting for the end of his speech to take him away...

Milkman · 02-10-2008, 01:52 PM

Hedge won't pay da money back.

Quote:

Hedge fund blocks client withdrawals

By James Mackintosh in London
Published: October 1 2008 23:43 | Last updated: October 1 2008 23:43

Guy Wyser-Pratte has blocked withdrawals from his hedge fund after the veteran New York arbitrageur and activist warned that the “calamitous” market conditions were the worst since he started trading in the 1960s.

Wyser-Pratte Eurovalue, a $500m fund campaigning for change at mid-sized companies across Europe, suspended withdrawals on Tuesday after some clients asked for their money back.

The fund is the latest to be hit by withdrawals amid a wave of redemptions that many in the industry are warning could prompt further sales of assets to raise cash to meet redemptions.

Link: FT.com / In depth - Hedge fund blocks client withdrawals

bkkandrew · 04-10-2008, 05:49 AM

Crisis Hits Main Street as Employers Cut More Jobs (Update3)

By Shobhana Chandra and Rich Miller

Oct. 3 (Bloomberg) -- U.S. payrolls plunged in September, signaling the economy may be heading for its worst recession in at least a quarter century as the 13-month-old credit crisis on Wall Street finally hits home on Main Street.

Employers cut the most jobs in five years in September as cash-squeezed companies pulled back in an effort to bolster pinched profits. In its last employment report before Americans choose their next president, the Labor Department said the unemployment rate was 6.1 percent, a climb of 1.4 percentage points from a year before.

``If credit markets remain dysfunctional, the current recession could turn out to be as severe as any in the postwar period,'' said former Federal Reserve governor Lyle Gramley, now senior economic adviser at the Stanford Group Co. in Washington.

Bloomberg.com: Worldwide

Milkman · 05-10-2008, 04:15 PM

Student loans for the cost of getting an education has risen more than 100%, or doubled in recent years.

The cost of getting bachelor's degree is growing faster than inflation.

Quote:

Yet the payoff is simply not as good as it once was.

Workers with bachelor's degrees do earn more — an average $51,000 a year, compared with $31,000 a year for high-school graduates, according to the U.S. Department of Labor. But the department also reports that college tuition now costs five times what it did in the early 1980s, and it is rising at more than twice the rate of inflation. Inflation-adjusted wages, meanwhile, have remained stagnant since 2002.

And experts say there are some worrying trends in the rising debt levels — particularly in the precipitous rise in private loans, at least until recent months. More and more of those loans are directly marketed to students, without any oversight or involvement from schools, and often at higher interest rates.

Entire & Link: Local News | Graduates drowning in debt from high cost of college | Seattle Times Newspaper

Don't worry....it's the "strongest economy in the world."

lom · 09-10-2008, 03:15 PM

Bump.
Where is Storekeeper?

bkkandrew · 09-10-2008, 04:45 PM

^In his store?

Spin · 10-10-2008, 03:49 AM

Dow down over 650 pts now. nearly 7% on the day at 8614.
S&P500 down 71 pts over 7.5% now at 911.

Scary stuff. Unless your short.

bkkandrew · 10-10-2008, 04:04 AM

Quote:

Originally Posted by Spin

Dow down over 650 pts now. nearly 7% on the day at 8614.

My prediction of 6000 is looking good.

Quote:

Originally Posted by Spin

S&P500 down 71 pts over 7.5% now at 911.

You suspect terrorist involvement?

Quote:

Originally Posted by Spin

Scary stuff. Unless your short.

Oh I have...

Boon Mee · 10-10-2008, 04:31 AM

Quote:

Originally Posted by Spin

Dow down over 650 pts now. nearly 7% on the day at 8614.
S&P500 down 71 pts over 7.5% now at 911.

Scary stuff. Unless your short.

Careful now, CMN may be listening...

Spin · 10-10-2008, 04:42 AM

^ He'll thank you with a red I reckon. I was talking about short selling

Quote:

Originally Posted by bkkandrew

You suspect terrorist involvement?

Yes I do, His name is Christopher Cox, chairman of the SEC and the twat responsible for the removal of the uptick rule.

bkkandrew · 10-10-2008, 05:16 AM

^Note on recalculation, the final DOW close was 8579. Futures market showing a further -100 from that.

I wonder who now disputes my prediction of complete financial collapse?

Milkman · 11-10-2008, 03:14 PM

Here is a debate between Art Laffer and Peter Schiff.

Laffer invented the "Laffer Curve," used by advocate of Supply-Side. Apparently the Laffer Curve was invented in a Washington, DC, bar on a napkin.

This brief debate took place on August, 2006.

Who turned out to be right?

YouTube - Peter Schiff - (Former Ron Paul Economic Advisor) Versus Art Laffer (Former Ronald McReagan Economic Advisor) - August 28, 2006 - Peter Schiff [Pimp]

bkkandrew · 11-10-2008, 04:25 PM

^The most recent article by the aforementioned Mr Schiff:

The Party is Over

Peter Schiff
Oct 11, 2008

More than just a mere liquidity or credit crisis, the current financial storm represents the death throes of the old global economic order, and perhaps the birth pains of a new one. The sun is setting on the borrow and spend culture that has defined us for a generation. Our long ride on the global gravy train is finally coming to an end, and once it does nothing will be the same. The sooner we come to grips with this the better.

Despite the myriad of proposals that are coming from Washington and other world capitals, we must understand that this crisis cannot be cured by governments. In the United States, credit is gone because savings are gone. Our shallow pool of savings has been depleted through bad loans, and we can no longer entice foreigners to lend us their available savings. Given that we are already too loaded up on existing debt they we cannot realistically repay, who can blame them for not wanting to lend us more?

As a result, the free market is trying to put an end to our spending spree. Without savings or home equity to fall back on, Americans struggling with rising prices are finally being forced to cut back. This has terrified our leaders and is causing them to dismantle the remaining structure of our free enterprise-based economic system.

The intention of all these daily federal interventions is to keep the credit spigots open so Americans can go even deeper into debt to buy more stuff they can't actually afford. This should be clear enough to anyone who listens to what our leaders are actually saying. When speaking about the need for an even larger fiscal stimulus package, Barney Frank, chairman of the House Financial Services Committee, said, "We have to prop up consumption." He has it backwards. The government has been propping up consumption for far too long, and the best thing they can do now is remove the props so spending can be replaced by savings.

The sad reality is that we borrowed and spent our way into this crisis, and we are not going to borrow and spend our way out of it. Legitimate credit can only be supplied if there are genuine savings to finance it. Savings can't be magically concocted into existence by a printing press, but can only be created by consumers who spend less than they earn. Efforts to fool the market will not work and will ultimately lead to a monetary disaster and runaway inflation.

Were the government to allow market forces to work, Americans would now have to pay cash for their consumption. That would mean no instant credit for new cars, plasma TVs, appliances, consumer electronics, clothing, furniture, etc. Unless buyers actually had the cash in their checking accounts these purchases would have to be deferred. From an economic perspective this is precisely what the doctor ordered. But for an economy based 72 percent on consumer spending, the medicine will go down hard.

Ultimately, a serious reduction in consumer and mortgage credit, combined with an increase in personal savings, would again provide a pool of needed capital for businesses to produce products and provide employment opportunities. However, the danger is that this potential credit could be completely crowded out by massive borrowing by the Federal Government. In addition, prices for such things as houses and college tuition will fall sharply, as the credit artificially propping them up disappears. People would still be able to buy houses and send their kids to college only they would pay much lower prices when they do.

However, if the government keeps creating inflation to artificially sustain consumer borrowing and spending, there will be no savings left to fund anything and prices will be so high that despite massive consumer spending there will be few goods that Americans could actually afford to buy.

11-08-2008, 05:32 AM	#681 (permalink)
bkkandrew Clingin' on... Join Date: Oct 2007 Location: BKK Posts: 4,003	Corporate debt default ‘could hit 10%’ By Nicole Bullock in New York Published: August 8 2008 01:28 \| Last updated: August 8 2008 01:28 Defaults on corporate debt are ratcheting up as economic weakness takes it toll on the financial health of companies. The global default rate is expected to climb to 6.3 per cent over the next 12 months and it could reach 10 per cent should the US sink into a protracted recession, Moody’s Investors Service said on Thursday. “The storm is gathering for default rates moving up,” said Kenneth Emery, Moody’s director of corporate default research. Continued at: FT.com / Capital markets - Corporate debt default â€˜could hit 10%â€™ __________________ The future of TeakDoor: To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts. A funny thing happened today - Ant trolls, stalks, prevokes and generally upsets approximately 15 members of the board, yet Noodles goes to jail. Perhaps it was a dream... To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.

25-09-2008, 05:31 PM	#685 (permalink)
Boon Mee Senior Member Last Online: Today 10:00 PM Join Date: May 2006 Posts: 9,749	''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." Power Line __________________ ผมเป็นคนบ้านนอก

04-10-2008, 05:49 AM	#688 (permalink)
bkkandrew Clingin' on... Join Date: Oct 2007 Location: BKK Posts: 4,003	I think we need to alter the title of this thread... Crisis Hits Main Street as Employers Cut More Jobs (Update3) By Shobhana Chandra and Rich Miller Oct. 3 (Bloomberg) -- U.S. payrolls plunged in September, signaling the economy may be heading for its worst recession in at least a quarter century as the 13-month-old credit crisis on Wall Street finally hits home on Main Street. Employers cut the most jobs in five years in September as cash-squeezed companies pulled back in an effort to bolster pinched profits. In its last employment report before Americans choose their next president, the Labor Department said the unemployment rate was 6.1 percent, a climb of 1.4 percentage points from a year before. ``If credit markets remain dysfunctional, the current recession could turn out to be as severe as any in the postwar period,'' said former Federal Reserve governor Lyle Gramley, now senior economic adviser at the Stanford Group Co. in Washington. Bloomberg.com: Worldwide

25-09-2008, 07:09 PM	#686 (permalink)
bkkandrew Clingin' on... Join Date: Oct 2007 Location: BKK Posts: 4,003	^I trust that some gentlement wearing white coats were waiting for the end of his speech to take him away...

09-10-2008, 03:15 PM	#690 (permalink)
lom Elite Member Last Online: Today 09:45 PM Join Date: Jan 2006 Location: Koh Samui Posts: 4,159	Bump. Where is Storekeeper?

09-10-2008, 04:45 PM	#691 (permalink)
bkkandrew Clingin' on... Join Date: Oct 2007 Location: BKK Posts: 4,003	^In his store?

10-10-2008, 03:49 AM	#692 (permalink)
Spin Senior Member Join Date: Jul 2006 Posts: 7,857	Dow down over 650 pts now. nearly 7% on the day at 8614. S&P500 down 71 pts over 7.5% now at 911. Scary stuff. Unless your short.

10-10-2008, 05:16 AM	#696 (permalink)
bkkandrew Clingin' on... Join Date: Oct 2007 Location: BKK Posts: 4,003	^Note on recalculation, the final DOW close was 8579. Futures market showing a further -100 from that. I wonder who now disputes my prediction of complete financial collapse?

11-10-2008, 04:25 PM	#698 (permalink)
bkkandrew Clingin' on... Join Date: Oct 2007 Location: BKK Posts: 4,003	^The most recent article by the aforementioned Mr Schiff: The Party is Over Peter Schiff Oct 11, 2008 More than just a mere liquidity or credit crisis, the current financial storm represents the death throes of the old global economic order, and perhaps the birth pains of a new one. The sun is setting on the borrow and spend culture that has defined us for a generation. Our long ride on the global gravy train is finally coming to an end, and once it does nothing will be the same. The sooner we come to grips with this the better. Despite the myriad of proposals that are coming from Washington and other world capitals, we must understand that this crisis cannot be cured by governments. In the United States, credit is gone because savings are gone. Our shallow pool of savings has been depleted through bad loans, and we can no longer entice foreigners to lend us their available savings. Given that we are already too loaded up on existing debt they we cannot realistically repay, who can blame them for not wanting to lend us more? As a result, the free market is trying to put an end to our spending spree. Without savings or home equity to fall back on, Americans struggling with rising prices are finally being forced to cut back. This has terrified our leaders and is causing them to dismantle the remaining structure of our free enterprise-based economic system. The intention of all these daily federal interventions is to keep the credit spigots open so Americans can go even deeper into debt to buy more stuff they can't actually afford. This should be clear enough to anyone who listens to what our leaders are actually saying. When speaking about the need for an even larger fiscal stimulus package, Barney Frank, chairman of the House Financial Services Committee, said, "We have to prop up consumption." He has it backwards. The government has been propping up consumption for far too long, and the best thing they can do now is remove the props so spending can be replaced by savings. The sad reality is that we borrowed and spent our way into this crisis, and we are not going to borrow and spend our way out of it. Legitimate credit can only be supplied if there are genuine savings to finance it. Savings can't be magically concocted into existence by a printing press, but can only be created by consumers who spend less than they earn. Efforts to fool the market will not work and will ultimately lead to a monetary disaster and runaway inflation. Were the government to allow market forces to work, Americans would now have to pay cash for their consumption. That would mean no instant credit for new cars, plasma TVs, appliances, consumer electronics, clothing, furniture, etc. Unless buyers actually had the cash in their checking accounts these purchases would have to be deferred. From an economic perspective this is precisely what the doctor ordered. But for an economy based 72 percent on consumer spending, the medicine will go down hard. Ultimately, a serious reduction in consumer and mortgage credit, combined with an increase in personal savings, would again provide a pool of needed capital for businesses to produce products and provide employment opportunities. However, the danger is that this potential credit could be completely crowded out by massive borrowing by the Federal Government. In addition, prices for such things as houses and college tuition will fall sharply, as the credit artificially propping them up disappears. People would still be able to buy houses and send their kids to college only they would pay much lower prices when they do. However, if the government keeps creating inflation to artificially sustain consumer borrowing and spending, there will be no savings left to fund anything and prices will be so high that despite massive consumer spending there will be few goods that Americans could actually afford to buy.