Thread: The strongest economy in the world

About time for some good news, for a change -

Existing home sales spike 5%

Realtors group says sales of existing homes rose in February. Prices tumble more than 15%.

Sales of existing homes unexpectedly rose in February, recovering from a sharp drop in the previous month, according to an industry report released Monday.
The National Association of Realtors said that existing home sales rose last month to a seasonally adjusted annual rate of 4.72 million million units, up 5.1% from a rate of 4.49 million in January. February sales were down nearly 5% from year ago levels.
Economists surveyed by Briefing.com were expecting existing home sales to decline to 4.45 million.
The report said first-time buyers made up half of all purchases in February, and that sales of distressed properties accounted for about 45% of all transactions.
Sales were unexpectedly strong in the West, with activity increasing more than 30% over last year.

Existing home sales rise - Mar. 23, 2009

Seems that was against all estimates.

The stock market is up well too, on this news plus Geithners toxic asset rescue plan.

I have it on good authority that BKKAndrew pronounced some while ago that the print-money policy respose would then result in those still with assets seeking an asset class that will avoid being hyper-inflated away.

Gold/land/property/guns/commodities

In fact, anything without a picture of a dead president on it.

Looks like this stage of the collapse is now commencing.

Originally Posted by sabang

The stock market is up well too, on this news plus Geithners toxic asset rescue plan.

Not to be one of those Nattering Nabobs of Negativism I've railed on about but the market being up today is simply a Bear Market rally....

This by an American from a blog I follow....

"Listen people…..the media is bought and paid for. anything that they say needs to be researched again and again to find the real truth. media today is a joke….CNBC is case in point. (I don’t watch it anymore)
Media makes it’s living by selling ads on the media and most of them are the same companies they talk about and interview so they will not piss them off with hard questions that expose anything that will have them pull their ads…

people right now “want” to hear good news so that is what the media (and all the paid off cronies therein) are going to say.

Housing is NOT better today than yesterday. Bank sales are up due to the overwhelming amount of property the banks now own and have to get rid of.

So let me ask you this. If a house that sold in 2002 for 500,000.00 dollars was re-sold in 2006 for 900,000.00 and then repossessed by the bank in 2008 and sold at auction for 375,000.00 3 weeks ago is that a “good” sign of housing getting better?
Fuck no, it is not. it is mearly a bank owned firesale.

No one but me apparently goes out in the real world and drives around and sees in person the houses that are still sitting with for sale signs that have had for sale signs in the yard over a year now…. still today, as I drove around yesterday to check all the ones in my town for progress, still there, unsold…..

get out people and look around and judge for yourself in your own towns.

any asshat in the housing sector that is going on the air and talking housing up and saying everything is looking up is just plain lying to you…..unless they consider a sale at auction from a bank repossession sold for 70% of it’s value a good sign….

anyone can have a firesale…..firesales of homes by banks is not what I consider good news"

Originally Posted by Muadib

MM, I predict over 600K jobs losses for March 2009...

Are there that many jobs left? The losses may go that high for March, but I think the next big round of cutting will come after 1Q09 earnings (losses) are announced.

As for the prop market, I heard rumours that many of the buyers are from overseas.

Originally Posted by Boon Mee

Not to be one of those Nattering Nabobs of Negativism I've railed on about but the market being up today is simply a Bear Market rally....

Yes a +7% single day rally means little. Daily market peaks and valleys are not an indicator of economic health. I await with interest for your post when the market drops 7% in one day.

Originally Posted by Norton

I await with interest for your post when the market drops 7% in one day.

Obama's fault. No question.

Panda's been saying it for ages. Now the Chinese are saying it.

This from their central bank website...

"China’s central bank on Monday proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund.

In an essay posted on the People’s Bank of China’s website, Zhou Xiaochuan, the central bank’s governor, said the goal would be to create a reserve currency “that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies”.

more

I'd really hate to be a small, poor nation under this scheme.

Originally Posted by Spin

Panda's been saying it for ages.... Now the Chinese are saying it.

so have the germans, the iranians, the russians... the whole world is tired of the U.S. using its currency for manipulating their budget.


China Urges New Money Reserve to Replace Dollar



SHANGHAI — In another indication that China is growing increasingly concerned about holding huge dollar reserves, the head of its central bank has called for the eventual creation of a new international currency reserve to replace the dollar.
In a paper released Monday, Zhou Xiaochuan, governor of the People’s Bank of China, said a new currency reserve system controlled by the International Monetary Fund could prove more stable and economically viable.
A new system is necessary, he said, because the global economic crisis has revealed the “inherent vulnerabilities and systemic risks in the existing international monetary system.”
While few analysts believe that the dollar will be replaced as the world’s dominant foreign exchange reserve anytime soon, the proposal suggests that China is preparing to assume a more influential role in the world. Russia recently made a similar proposal.
China’s bold idea, released more than a week before world leaders are to gather in London for an economic summit meeting, also indicates that Beijing is worried that its huge dollar-denominated foreign reserves could lose significant value in coming years.
China has the world’s largest foreign exchange reserves, valued at nearly $2 trillion, with more than half of those holdings estimated to be made up of United States Treasuries and other dollar-denominated bonds.
On March 13, China’s prime minister, Wen Jiabao, said he was concerned about the safety of those assets, particularly because huge economic stimulus plans could lead to soaring deficits in the United States, which could sink the dollar’s value.
Should China lose its appetite for Treasuries, the United States’ borrowing costs could rise, making it more costly for Washington to carry out economic stimulus packages and for Americans to pay off their mortgages.
Nicholas Lardy, an economist and China specialist at the Peterson Institute in Washington, said that through its proposal, China was indicating that the dollar’s long dominance was unfair, allowing the United States to run huge deficits by borrowing from abroad, and that the risks to holders of Treasuries were growing.
“Chinese are quite concerned that the large U.S. government deficits will eventually lead to inflation, which will erode the purchasing power of the dollar-denominated financial assets which they hold,” Mr. Lardy said. “It is a legitimate concern.”
The timing of the Chinese announcement, analysts said, could also be aimed at giving Beijing more leverage to negotiate with the United States and other nations in London on trade and on proposals about how to stabilize the global economy.
But China is cautious when it discusses buying or selling Treasuries, for fear of sending a signal that could significantly affect currency markets. So in a separate announcement on Monday, China said it would continue to buy Treasuries, something the United States has encouraged.
In Mr. Zhou’s essay, published in English and Chinese on the central bank’s Web site, he said the international community should consider expanding the International Monetary Fund’s Special Drawing Rights.
Such a proposal has been suggested before by developing countries. But the United States has always been wary that this could be inflationary and affect the central role of the dollar.
Special Drawing Rights are based on the value of the dollar, euro, pound and yen, but have been little used except as an accounting entry by international organizations.
Mr. Zhou said the goal of reforming the international monetary system was to “create an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run.”
Keith Bradsher contributed reporting from Beijing.

Originally Posted by Texpat

I'd really hate to be a small, poor nation under this scheme.

Leave England out of this

Originally Posted by Norton

Originally Posted by HermantheGerman

head of its central bank has called for the eventual creation of a new international currency reserve

I don't get it. What would this currency be? IMF pesos or something? When the EURO was adopted, the conversion from DM, Guilders etc. was damn near impossible. While I suppose in theory a global currency would be a good thing, I just don't see it happening.

This is only talk. And it will remain talk. What this talk really means is divesting foreign reserves holding out of the dollar while adding other currencies to the basket.

Any "new international currency" will be a basket of currencies and some commodities.

Any particular international currency suffers from false run-ups and being over-inflated. It's not doable.

^^Yes Norton it is not surprising that the US and Americans would like to keep the Dollar as the World reserve currency, I think it was Panda calling it the biggest scam in the history of the world, anybody coming to the US door and want to buy bonds is met with a "yes Sir how many" and then the US gets real money in return for a paper promising money the US don't have, the American people use those real money to finance their exuberant lifestyle all built on thin air, this of cause cant go on, the US have been promising much more money than production of commodities will ever be able to cover and the debt bubble have become to big, if it bursts all the foreign countries/institutions who have been investing in the US bonds believing that it was as good as solid gold will have to take giant losses, if they all today asked for their money the US would not be able to pay unless they created more money out of thin air thus rendering the greenback virtually worthless. Massive devaluation of the Dollar and hyperinflation in the US is still a real threat according to many analysts.

The US would like to continue the free ride on other's savings but the present situation have shown that it wont work, a new World reserve currency is not impossible in some form or other, and would not be replacing "Zimbabwe's" currency that is worthless no matter what you do with it. In any case the present situation where peoples hard work is transformed into virtual Dollars that only exists in cyberspace without any genuine value is doomed.

I hope

I could have put this in a couple of places, but chose to put it here:

Here is Ron Paul vs. Bernanke on March 24, 2009. Salient point by Paul, IMO.

Worth a watch. We love the boom, but we hate the bust:

Originally Posted by larvidchr

"Zimbabwe's" currency that is worthless no matter what you do with it.

Whats this guy paying for?

1) A house
2) A new car
3) Lunch.

Easy, its lunch, and the bill was 13U$D

^Soon to be a sight seen in the UK and US...

US gov wants to encourage lending & borrowing. But it's not happening.

03/24/09 06:51 AM
FINANCIAL

Number of small-business loans plunge by roughly 50 percent

By Jonathan D. Epstein
NEWS BUSINESS REPORTER

The volume of loans approved for U. S. Small Business Administration guarantees is down by about half from the same period a year ago, despite bank assertions that they’ve got money available and a willingness to lend it.

Bankers say the demand just isn’t there because businesses are battening down the hatches, and many firms’ financial condition and creditworthiness have deteriorated from what they were a year ago.

Link & Entire: Number of small-business loans plunge by roughly 50 percent : Local Business : The Buffalo News

I suspect the US governments plan is to inflate the currency to devalue its exchange value by 30% to 50% of current rates. USA has a long history of being innovative and productive. The country has relatitively cheap labour compared to most developed countries and the know how to get the wheels of export production turning again. Pouring new paper money into the system will not only devalue the $US and make exports more competitive, but also fund new, productive business enterprise. And, of course, reduce international debt.
Trouble is that all the international financial experts that control the worlds financial systems (AKA, -- Morons!), are still sinking their wealth into $USs in the hope this debt based party of the past 40 odd years will continue forever.
This is working pretty well for the USA as its like getting a loan while knowing you will only ever have to pay back 60% of the capital in value of goods and services if all goes to plan.

Its going to be a delicate balancing act for the US to create just enough worthless funny money to to discourage international investors in the $US, but not so much it causes hyper-inflation and a total collapse of the tradable value of the $US. If the US can pull this off, it will be like resetting the clock back 40 years in the world economic situation. A USA back on the rise economically re balance of trade and confidence restored in the $US as the worlds reserve and trading currency. Happy days for USA as they slowly bleed the wealth out of the rest of the world to finance their overindulgent lifestyles.

Can Obama re-inflate the American $ bubble by letting some air out of it and then starting the doomed irrational process of wealth by debt all over again? My guess is that the rest of the world wont fall for it again. But then again they just might if appears to be promoting a world financial recovery after a depression.
My guess is that there are too many smart people out there in places like China and Japan who will be a wake up to this spiral into economic collapse that they will force a move towards a production based multi-country world trading currency rather than a rerun of experiment of the debt based $US currency.

In the meantime, USA has everything to gain and nothing to loose by borrowing as much as possible while the going is good and printing wealth while the rest of the world is silly enough to accept it on current face value.

I truly hope that the Obama plan to reinstate the bubble by first letting some air out of it fails, because if he is successful in establishing a second round of world economics based on US debt we are only going to see another more devastating crash down the track in maybe another ten years or so.

Dybya's deficit versus BO's decicit: IN PICTURES



Let's see how the 'usual suspects' aboard here spin that, eh?

Originally Posted by Boon Mee

Let's see how the 'usual suspects' aboard here spin that, eh?

Would expect the deficit to increase given the economy. Obama's plan has far too much government spending on things which are not urgent to get the economy "kick started".

It may be argued many of his plans will, in the long term, strengthen the economy but now is not the time to introduce them. Fixing the immediate economic problem will be expensive enough and will drive up deficit.

I fully expect the plan as it currently stands will not get through congress without significant cuts.

^^ I would rather know about a problem and address it head-on as apposed to sticking my head in the sand and professing that there is no problem... Much as Dubya & his administration did for all those years while searching for the boogie man...

This crisis did not start in Jan 2009 and it seems asinine to lay the blame at the feet of the current administration... We've run out of fingers to put in the dyke and the foundation is crumbling...

Now if we only had that $3 Trillion back from chasing the boogie man around the middle east for the last 6 years, it might make dent in the deficit...

Three Trillion Dollar War: The True Cost of the Iraq Conflict