Tuesday, July 31, 2012

Peter Schiff: Phony GDP Growth, Farmer Bailouts, Sub-Prime Auto Loans

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Peter Schiff

Phony GDP Growth, Farm Subsidies, Sub-Prime Auto Loans

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Peter Schiff: America Heading Towards a Collapse Worse Than 2008!

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Peter Schiff

America Heading Towards a Collapse Worse Than 2008 AND Europe! Says Peter Schiff

According to CEO and Chief Global Strategist of Euro Pacific Capital Peter Schiff, the U.S. economy is heading for an economic crash that will make 2008 look like a walk in the park. Stimulus programs can delay this day of reckoning, but only for so long and only at the expense of making the eventual meltdown much, much worse.

Schiff, who famously warned investors about the housing and financial crisis in his 2007 book Crash Proof, says the Fed's palliative efforts during the housing meltdown have made the next crisis inevitable.

"We've got a much bigger collapse coming, and not just of the markets but of the economy," Schiff says in the attached clip. "It's like what you're seeing in Europe right now, only worse."

In this nightmare scenario detailed in The Real Crash: America's Coming Bankruptcy, the current economic pause is actually the beginning of a material slowdown or recession into year end. At that point, the Federal Reserve will unleash a third round of Quantitative Easing — weakening the dollar without jump-starting the economy. As a result of dollar weakness, import prices rise, pressing the margins of corporate America. Lower margins lead to heavy layoffs, sending millions of workers into unemployment during a time when they can least afford it. Banks fail, housing collapses, and taxes are raised in a futile effort to give the tapped-out government the capital to try yet more futile stimulus.

"That's when it really is going to get interesting, because that's when we hit our real fiscal cliff, when we're going to have to slash — and I mean slash — government spending," says Schiff.

Those cuts will not be at all unlike the draconian austerity measures in Greece, with programs like Social Security and Medicare being dramatically cut or possibly disappearing entirely. The easiest way to put it, is that everything you don't think could possibly happen in America will come to be.

"Alternatively, we can bail everybody out, pretend we can print our way out of a crisis, and, instead, we have runaway inflation, or hyper-inflation, which is going to be far worse than the collapse we would have if we did the right thing and just let everything implode," he offers.

So what should investors do to protect themselves? Schiff has three suggestions: 1 - Get Out of Treasuries 2 - Own the Right Stocks 3 - Buy Silver and Gold

Breakout with Jeff Macke

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Saturday, July 28, 2012

Global & USA Consumer Confidence Declines

Nielsen Global Online Consumer Confidence Survey

Global Consumer Confidence Declines

Global consumer confidence declined three index points to 91 in Q2 2012 amid a worsening Euro zone crisis, lackluster U.S. job growth and China’s downward GDP revision for 2012, according to consumer confidence findings from Nielsen, a leading global provider of information and insights into what consumers watch and buy. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism. Therefore, the current reading indicates a degree of pessimism.

“Consumers are clearly proceeding with caution in relation to their spending intentions,” said Dr. Venkatesh Bala, chief economist at The Cambridge Group, a part of Nielsen. “Consumer confidence lost momentum in the second quarter as global events, including a worsening Euro zone crisis coupled with slowing growth rates in China and India, impacted financial markets and consumer sentiment in many parts of the world. As renewed volatility entered global markets, consumers reacted by reining in spending and consumption intentions.”

Key Findings
● Discretionary spending and saving decreased globally across all sectors
● More than two-thirds (67%) of respondents changed spending habits to save on expenses
● Concern for the economy and job security remained top worries among global respondents
● More than half (57%) of global respondents said they are in recession and half of those believe it will continue for another year
● Indonesia reported the highest consumer confidence index in the survey

Global Online Consumer Confidence The current reading of 91 (-3) is above the chart average (90.4).

Global Online Consumer Confidence by Region Asia Pacific continues highest at 100 (-3), followed by Middle East/Africa at 98 (+1), and Latin America at 96 (-2). North America is next at 88 (+4). Europe continues trailing at 73 (+1).

Confidence by Country Indonesia 120 (+2) is now the most optimistic country, followed by India 119 (-4). Next are Philippines 116 (-2), Saudi Arabia 115 (-4), Malaysia 111 (+4), United Arab Emirates 108 (+3), Brazil 106 (-4), and China 105 (-5). Hungary continues as the most pessimistic country at 30 (-2), followed by Portugal 40 (+1), Italy 41 (-4), Greece 43 (+6), Croatia 45 (nc), South Korea 50 (+1), and Spain 52 (-1).

U.S. Consumer Confidence Consumer confidence in the U.S. plunged -5 to 87 and is mid-tier worldwide. Previous readings were 92 in Q1 2012, 83 in Q4 2011, 77 in Q3 2011, 78 in Q2 2011, 83 in Q1 2011.


Thursday, July 26, 2012

Peter Schiff: Fed Must Fess Up and Level With the American Public

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Peter Schiff

Bernanke Must Fess Up and Level With the American Public: Schiff

According to Peter Schiff, president of Euro Pacific Capital, those of you looking to learn what's happening in the U.S. are better off paying attention to almost anything other than Fed Chairman Ben Bernanke's Congressional testimony. "You might be able to to trade off what he has to say but it doesn't have any bearing on what's actually happening," he states.

It would be ideal for Bernanke to start pulling the plug on the monetary stimulus we have to allow the economy to detoxify. We have serious structural problems exacerbated, if not directly caused by fiscal and monetary intrusions already. Comparing our economy to Keith Richards, cancer patients and other terminal cases, Schiff thinks it's long past time to "'fess up, level with the American public and tell them what needs to be done."

Comparing the economy to a heroin addict avoiding withdrawal, Schiff says the only remedy is going cold turkey. The pain of such a move would be brutal for many Americans, but for working taxpayers picking up the tab the relief would be immediate and welcomed. Sounding like a more Draconian version of Ronald Reagan or even Bill Clinton, Schiff thinks reducing benefits will get more people off the dole, drive prices lower and eventually result in a more healthy economy.

None of which you'll hear from Bernanke. The testimony of today and yesterday bring out the worst instincts in everyone involved. Bernanke will evade and the politicians will pander while groping for that one soundbite that will be perfect for an campaign ad. Speaking into microphones and in front of cameras on the Hill is the best way on earth to ensure nothing useful gets done.

"Everybody is resisting the needed reform because it's bad politics," shouts Schiff. Whatever you think of his solutions it's hard to disagree with that assessment.

Breakout with Jeff Macke

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Tuesday, July 24, 2012

Nouriel Roubini: Perfect Storm for World Economy in 2013!

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Roubini's Devastating Diagnosis - Freeland File

Nouriel Roubini, the NYU economist nicknamed "Doctor Doom" for his prediction of the 2008 financial crisis, believes that events are again turning against the global economy.

Professor Nouriel Roubini forecasts a "global perfect storm" in 2013 for the world economy, if five events occur:
* Crisis in Europe intensifies, recession ensues
* USA reaches fiscal cliff (tax increases and spending cuts), recession ensues
* Chinese economy slows further, has hard landing
* A slowdown in emerging markets (notably Brazil, Russia, India)
* A military confrontation in Iran

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Friday, July 20, 2012

USA Consumer Sentiment Drops to 7-Month Low

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USA Consumer Sentiment: Thomson Reuters / University of Michigan

(Reuters) - U.S. consumer sentiment cooled again in early July to its lowest level in seven months as Americans took a dim view of their finances and job prospects, a survey released on Friday showed.

The Thomson Reuters/University of Michigan's preliminary reading on the overall index on consumer sentiment fell to 72.0 from 73.2 in June, frustrating economists' expectations for a slight gain to 73.4. It was the lowest level since December 2011.

Only 19 percent of consumers expected to be financially better off in the coming year, the lowest proportion recorded by the survey. Americans were also gloomy about their longer-term prospects with 39 percent anticipating their situation would be better in five years.

"The greatest concern to consumers is that wage and job growth will remain depressed over the foreseeable future, and that these meager gains are likely to be further diminished in the years ahead by rising taxes and benefit cutbacks," survey director Richard Curtin said in a statement.

USA Consumer Sentiment by Month

USA Consumer Sentiment by Year

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Tuesday, July 10, 2012

Saturday, July 7, 2012

CEO Confidence Turns Negative: Economy & Expectations Impact Attitude

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Measure of CEO Confidence = 47%

Economic Conditions Have Improved Compared to Six Months Ago = 17%

Economic Conditions Expected to Improve Over the Next Six Months = 20%

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Friday, July 6, 2012

Doug Kass Bearish on Stocks

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Doug Kass: Why I'm Bearish on Stocks Investor Doug Kass describes what he calls a "potentially toxic cocktail" of negative factors that are making him more bearish on stocks.

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Tuesday, July 3, 2012

Jim Rogers, War, Financial Mafia, LIBOR, Central Banks, JPMorgan!

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Jim Rogers, War and the Financial Mafia - LIBOR, Central Banks and JP Morgan!

Welcome to Capital Account. US manufacturing activity contracts for the first time in 3 years...the weak ISM data came as a shock to economists reportedly. Then orders placed with U.S. factories rose in May for the first time in three months, according to other data. We'll talk about where figures show global confidence, crises, and slowdowns are headed with famed investor Jim Rogers.

Also...Blackrock's Vice Chairman Byron Wien says he spoke to the smartest man in Europe, and what he had to say terrified him. He said, "basically, that massive amounts of debt will bring the decline of Western Civilization, but that in the meantime, before that happens, policy makers would pull every trick they could in order to stave off a catastrophic event."

Why do you have to be the un-named smartest man as christened by a Blackstone bigwig for that to hold weight? Just watch a lot of smart men and women who break this down openly any given day on Capital Account. Today, commodities guru Jim Rogers will do the honors.

And it's one, two, three strikes you're out - Barclays top three executives resign in the wake of the LIBOR manipulation scandal. Chairman. CEO. COO. Why haven't we seen this kind of fallout at big banks in the US from any settlements and scandals? We'll muse over it as what do you know - JP Morgan finds itself under investigation for manipulation of electricity markets.

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Monday, July 2, 2012

Art Cashin: Dangerous Week Ahead for Markets

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Art Cashin: It's Going to Be a Dangerous Week Arthur Cashin, UBS Financial Services, discusses what he's hearing "on trains and at watering holes" about the outlook on this week's market.

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