Archives: 2008 March

You might be wondering just how bad can the US housing crisis get? The short answer is that it will probably be much worse than you now think.

The National Association of Homebuilders, as you might suspect, keeps a close eye on the nation’s economic trends. Home building is an important part of the US economy, accounting directly and indirectly for about 10% of all economic activity. The following is from one of the NAHB’s recent reports.

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The Economy Skates Close to Recession

GDP revisions for the fourth quarter of 2007 left the overall economic growth rate at a meager 0.6%, but the estimated contraction in residential fixed investment deepened to a 25.2% annual rate and RFI subtracted a whopping 1.25 percentage points from the GDP growth rate.

The housing contraction weighed on GDP growth from other directions as well, including the reeling housing finance system and components of retail sales closely related to housing market activity.

Available data, including housing starts and building permits for January and February, point toward another sharp contraction in RFI and another very weak GDP growth rate in the first quarter of this year, a pattern that skates dangerously close to recessionary conditions.

We now view a mild recession as a nearly even bet, but we also believe that aggressive actions by the Fed and the recently enacted economic stimulus package virtually guarantee stronger growth by the second half of the year.

To see more go to NAHB
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Note that the NAHB forecasters still take the common view that things will pick up in the second half of the year. Most economists, government leaders, and the average consumer is, in my opinion, still in denial as to how deep and prolonged this downturn will be.

A new breakthrough secret is all you now need in order to get your Google AdWords pay-per-clicks FREE!

A gentleman from New York discovered what he calls an “oversight” on the part of 99.9% of all marketers that allows him to get otherwise paid-for advertising at Google as well as all other search engines that allow sponsored ads.

And no, nothing about his “secret” is illegal - nor does it require that you know someone on the “inside” at Google, Yahoo, MSN, Overture and others.

Instead, the New Yorker boasts proudly “…this is something that I caught onto just before 2000 when there was so much search engine craze running around, and started doing small just to test things at first … but which I later expanded on after getting the hang of it.”

This same fellow went on to start and operate sixteen separate online companies selling everything from pet food, DVDs, children’s toys & games, books, software, and sold not only his own manufactured products but became an affiliate for other web businesses - all the while applying his mastermind secret.

Over the course of nearly eight years the New Englander confesses “I’ve actually gotten over $87 million in advertising that using my secret I never had to pay for … and the largest share of which was more recently in Google pay-per-clicks as well as other forms of pad advertising at search engines … all of which I got for free …”

So powerful is his secret that he’s able to monopolize any niche online, and can always secure the top premium spots just above the usual organic results featured at most search engines.

While the Bear Stearns story is still unfolding it is obvious that the Federal Reserve Bank and Chairman Ben Bernanke have thrown caution to the wind and are now dancing with the Bear.

They are also dancing with a hot, really enraged, A group of shareholders who are claiming rape and who are wondering, with good reason, how they could have been practically wiped out in record time. From a high of over $170 a share only last year the generous price set by the Fed and JP Morgan for Bear Stearns was all of $2.00 a share.

Last week’s “buy out” of Bear Stearns really highlights the severity of the the possibility of a complete monetary system collapse. And not just by the investments banks, brokerage firms, and commercial banks but by the US Federal Reserve.

In order to induce JP Morgan to “buy” the Bear the Federal Reserve offered $30 billion dollars of taxpayer money to protect Morgan from nasty Bear portfolio surprises. No doubt here will be some in there as at $2.00 a share the Bear subprime “assets” must be toxic waste of the worse sort.

The Federal Reserve then did something totally unprecedented. The Fed, under Ben Bernanke’s throw the money from helicopters direction, made the same overnight lending facilities available to the brokerage firms as are available to the banks.

And the collateral for these loans? Why of course it is the impossible to evaluate toxic waste subprime paper that can’t be sold or even evaluated anyplace else. In effect the Fed has become the dumping ground for all of the contaminated near worthless paper that no one else will touch.

====== As Stated by the Taipan Publishing Group ====

Dollar Fall Places US Economy as Number Two Behind Eurozone

Under President George W. Bush the fall in the Dollar places the US economy behind the Eurozone. This means that the United States has lost it’s long held position as the world’s largest economy.

Is it fair to blame Bush for, from the American point of view, this sad fact? I sincerely think so.

Without his misguided and mismanaged war in Iraq and overall reckless spending it is unlikely that the economy or dollar would be in the crisis situation that it is today. Goldman Sacs has released an article that offers a lot more information about the US second place position.

=========== From Google News =========

Dollar’s plunge pushes Eurozone past US, Goldman Sachs says:

FRANKFURT (AFP) ”The dollar’s plunge has made the Eurozone the world’s biggest economy by one measure and has underscored shifts that are reorienting the 15-nation bloc towards Asia, Russia and oil-rich Gulf states, analysts say.

“With the Euro now trading around 1.56 against the dollar, the size of its annual output (at market value) has exceeded that of the United States,” US investment bank Goldman Sachs estimated last week.

Go to Google News for the rest of the story.

The more I think about the resignation of Admiral William Fallon this week the more concerned I become about the readiness of the US military to engage in anything other than senseless warfare.  Admiral Fallon was a brave seasoned warrior who knows that it is far better to talk and work out differences than to engage in warfare. 

During the Bush administration there have been a number of top rate career military officers who have been drummed out of the service because they questioned the wisdom and policies of men in Washington who have never experienced the bitter taste of combat. This buck really does stop with the man at the top.

George W. Bush is a man who does not like open debate nor disagreement with his plans. With Bush there is a low level of tolerance for those who disagree with his ridiculous behavior and policies.

You might recall Gen. Hugh Shelton, former Chairman of the Joint Chiefs of Staff, who argued that war in Iraq would distract from the war on terrorism. Then there was General Joseph Hoar, former Commander of U.S. forces in the Middle East who said the the war was a mistake.

In October of 2007, Lieutenant General Ricardo Sanchez, former commander of coalition forces in Iraq, called the 2007 “surge” a “flawed strategy”, and suggested that the political leadership in the US would have been court marshaled for their actions, had they been military personnel.

There are others, quite a few others, who said that the war in Iraq was the wrong war, in the wrong place, at the wrong time. The sinking of the US dollar in foreign exchange markets is partially caused by the drain on American resources caused by this badly conceived and executed war.