Wednesday, December 29, 2010

EndOf December2010 News

Illinois Governor Wants to Borrow $15 Billion to "Balance" the Budget; Illinois Total Unfunded Liabilities Exceed $200 Billion Already
28 December 2010
, by Mike Shedlock (MISH'S Global Economic Trend Analysis)


The state of Illinois elected a Keynesian nutcase of epic magnitude in Governor Quinn.

Quinn's latest brainstorm is to borrow $15 billion to "stabilize things".

Quinn has not said how he will pay back the loans.

Then again, he does want to raise taxes like mad and probably will do so.

Regardless of what he does, Quinn is so beholden to unions, Illinois will need to borrow again 12 months from now.

Almost Everything Is A Crime In America Now: 14 Of The Most Ridiculous Things That Americans Are Being Arrested For
28 December 2010
, (The Economic Collapse)


#1 A Michigan man has been charged with a felony and could face up to 5 years in prison for reading his wife's email.

#2 A 49-year-old Queens woman had bruises all over her body after she was handcuffed, arrested and brutally beaten by NYPD officers. So what was her offense? The officers thought that her little dog had left some poop that she didn't clean up.

#3 A 56-year-old woman who was once a rape victim refused to let airport security officials feel her breasts so she was thrown to the floor, put in handcuffs and arrested.

#4 In Milwaukee, one man was recently fined $500 for swearing on a public bus.

#5 Several years ago a 12-year-old boy in South Carolina was actually arrested by police for opening up a Christmas present early against his family's wishes.

#6 In some areas of the country, it is now a crime to not recycle properly. For example, the city of Cleveland has announced plans to sort through trash cans to ensure that people are actually recycling according to city guidelines.

#7 A 12-year-old girl from Queens was arrested earlier this year and taken out of her school in handcuffs for writing “Lex was here. 2/1/10" and “I love my friends Abby and Faith" on her desk.

#8 Back in 2008, a 13-year-old boy in Florida was actually arrested by police for farting in class.

#9 The feds recently raided an Amish farmer at 5 AM in the morning because they claimed that he was was engaged in the interstate sale of raw milk in violation of federal law.

#10 A few years ago a 10-year-old girl was arrested and charged with a felony for bringing a small steak knife to school. It turns out that all she wanted to do was to cut up her lunch so that she could eat it.

#11 On June 18th, two Christians decided that they would peacefully pass out copies of the gospel of John on a public sidewalk outside a public Islamic festival in Dearborn, Michigan and within three minutes 8 policemen surrounded them and placed them under arrest.

#12 A U.S. District Court judge slapped a 5oo dollar fine on Massachusetts fisherman Robert J. Eldridge for untangling a giant whale from his nets and setting it free. So what was his crime? Well, according to the court, Eldridge was supposed to call state authorities and wait for them do it.

#13 Once upon a time, a food fight in the cafeteria may have gotten you a detention. Now it may get you locked up. About a year ago, 25 students between the ages of 11 and 15 at a school in Chicago were taken into custody by police for being involved in a huge food fight in the school cafeteria.

#14 A few years ago a 70 year old grandmother was actually put in handcuffs and hauled off to jail for having a brown lawn.

Crude-oil futures close in on $90 a barrel - API says crude-oil inventories fell 5.8 million barrels last week
21 December 2010
, by Laura Mandaro and Steve Gelsi, MarketWatch

Lindsey Willams on AJS 15 December 2010

“Oil will go to $150 – $200 a barrel”, says Lindsey Willams from his high up sources.

“EU will have a major problem”, “The Euro will collapse first before the American Dollar” (No Timeframe)

Buzz Words 1 - from Lindsey Willams on IMF:

15 major devolpement countries have to raise $10.2 trillion on interest alone. That's 27% of their total economical output.

Buzz Word 2 - from Lindsey Willams on Silver:

"Comex Silver Exchange have only $107 miljoen ounces on hand but have gave out obligations in Silver paper to the amount of $720 miljoen ounces of Silver."

Silver & Gold gonna explode in price says the elite.

About the FED:

The FED is buying $140 Billion in treasuries every 40 days!

Keep an eye on the Insider Trading ratio!

Lindsey Williams Returns: Confessions of an Elitist - Alex Jones Tv 1/4

Lindsey Williams Returns: Confessions of an Elitist - Alex Jones Tv 2/4

[Lindsey Williams Returns: Confessions of an Elitist - Alex Jones Tv 3/4

Lindsey Williams Returns: Confessions of an Elitist - Alex Jones Tv 4/4

Furthermore, as we suggest earlier, now that $90 is in the history books, $100 is coming, and may be here within a few weeks.
22 December 2010
, by Tyler Durden (Zero Hedge)

Gaidamaka Says Oil at $80-$95 a Barrel `Quite Likely'

Kuwait's Sabah says $85-90/bl oil price acceptable
23 December 2010
, by Sherine El Madany - Cairo (Reuters)

5 hours ago - An oil price of $85-90 per barrel is fair and there are no plans to raise output in response to rising crude prices, Kuwait's oil minister said on Thursday.

"Current oil prices are fair and acceptable," Minister Sheikh Ahmad al-Abdullah al-Sabah told Reuters in Cairo ahead of a meeting of Arab oil exporting countries. "$85 to $90 -- that is the acceptable level," he said.

There was no plan to raise production, which was also at a "fair and acceptable" level, al-Sabah added.

Oil pushes closer to $100 as cold snap stokes demand
24 December 2010
, (The Telegraph)

Happ X-Maz Y'all!

Oil (Light Crude)
Feb. 2011 contract

$ / barrel Floor 91.51 s +1.03 +1.14% 1:29pm ET

Electronic 91.41 -0.10 -0.11% 5:14pm ET

Unleaded Gas
Feb. 2011 contract

$ / gallon Floor 2.43 s +0.0193 +0.80% 1:34pm ET

Electronic 2.43 -0.0011 -0.05% 5:14pm ET

World markets fall as oil price hits 26-month high after Chinese rate rise
27 December 2010
, by Garry White (The Telegraph)


Soaring oil prices, which hit a 26-month high, also unsettled investors, with losses seen from Shanghai to Wall Street.

It came amid mounting fears that China’s unexpected rise in interest rates could derail growth in Asia and damage an upturn for the world’s major exporters.


The oil price, which has jumped 27% since May, weighed heavily on market sentiment. The severe blizzard across the eastern seaboard of the US and continued cold temperatures in Europe are expected to push prices still higher as demand for heating oil grows.

Brent crude for February delivery hit $94.52 in morning tradingits highest level since the height of the banking crisis in October 2008 – before profit takers moved in. Although UK markets were closed, Brent crude contracts can still be traded electronically.

Oil prices are expected to rise steadily next year, with many analysts forecasting the price could cross the psychologically important $100 a barrel mark.

Analysts from Goldman Sachs, Morgan Stanley, Bank of America Merrill Lynch and JP Morgan Chase have all said they expect oil to move above $100 in 2011, with some raising the possibility that it could happen earlier in the year than many feared.

“The key risk is that we are being too cautious and that the threat of $100 per barrel oil that is implicit in our fourth quarter 2011 oil forecast arrives sooner than we expect – driven by not only a weak dollar, but also by rampant Chinese and emerging market demand,” Lawrence Eagles, an energy analyst at JP Morgan, said in a recent report.

“High oil prices were one of the contributors to the last global crisis,” according to analysts at JBC Energy. “The largest effect of an oil price shock on the economy occurs around three to four quarters after the price spike.” In July 2008, the oil price hit $147 a barrel before the financial crisis caused it to fall below $40.

Opec, the cartel which accounts for around 40% of global crude production, said that it does not intend to raise its production any time soon. Opec’s output quotas have remains steady since December 2008, when it curbed production to cope with the effects of the global recession.

Qatar’s oil minister, Abdullah al-Attiyah, said on Saturday that he did not expect the cartel to meet before its scheduled gathering in June 2011.

“I do not expect an OPEC meeting before June because oil prices are stable,” Mr al-Attiyah said on the sidelines of a meeting of Arab oil exporting countries in Cairo.

Mr al-Attiyah also said that he did not expect Opec would increase production at all during 2011, despite the prospect of rising demand if the recovery continues.

Lindsey Willams on AJS 15 December 2010: “Oil will go to $150 – $200 a barrel”, says Lindsey Willams from his high up sources.

Ex-Shell president sees $5 gas in 2012
27 December 2010
, by Laurie Segall (CNN Money)

The former president of Shell Oil, John Hofmeister, says Americans could be paying $5 for a gallon of gasoline by 2012.

Oil Trades Above $91 as U.S. Retail Sales Gain, Crude Stockpiles May Drop
29 December 2010
, by Margot Habiby and Ben Sharples (Bloomberg)


Oil traded above $91 a barrel in New York after a report showed U.S. retailers had their best holiday sales in five years and crude supplies were forecast to extend their biggest monthly decline since December 2006.

9 Signs That The Price Of Oil Is About To Soar Beyond $100 A Barrel
28 December 2010
, by Michael Snyder, The Economic Collapse (Business Insider)


Will we see the price of oil rise significantly in 2011? Unfortunately, that appears to be precisely where we are headed.

Lindsey Willams on AJS 15 December 2010: “Oil will go to $150 – $200 a barrel”, says Lindsey Willams from his high up sources.

Home Prices Probably Fell, Showing U.S. Economy's Weak Link
28 December 2010
, by Bob Willis (Bloomberg)


Home prices probably dropped in October, a sign housing will remain a weak link as the U.S. recovery accelerates into the new year, economists said before reports today.

Property values in 20 cities were down 0.25 from October 2009, the first year-over-year decline since January, according to the median forecast of 17 economists surveyed by Bloomberg News. Other data may show consumer confidence rose to a seven-month high this month.

A wave of foreclosures waiting to reach the market means home prices will remain under pressure in 2011, representing a risk to household finances. Rising stock values and an improving job market will probably help offset the damage, ensuring that confidence and spending continue to strengthen.

“It’s going to take a long time for this excess inventory to clear and that means further downward pressure on prices,” said Neil Dutta, an economist at Bank of America Merrill Lynch Global Research in New York. “Consumer confidence has recovered, but it’s not predicting a boom in the economy.”

S&P/Case-Shiller home-price index is due at 9 a.m. New York time.

Economists surveyed projected the gauge declined 0.6% in October from the prior month, when it fell 0.8%. The index was down 29% in September from its July 2006 peak.

Case Shiller Misses Consensus As Home Price Decline Continues For 4th Month
28 December 2010
, by Tyler Durden (Zero Hedge)


From the October print: the October SA Composite 20 came at 143.52%, a decline of 0.99% from September, and just down from a year earlier.

There was a sequential decline in 18 of the 20 MSAs, with just Denver and DC posting an increase.

The biggest drops were in Atlanta (-2.13%), Chicago (-1.80%), and Minneapolis (-1.76%).

The decline was even worse on a non-seasonally adjusted basis, where the sequential decline in the Composite 20 was -1.32%.

As the attached chart demonstrates, the double dip is accelerating, as the sequential drops are increasing in magnitude.

This data flatly continues to refute claims that there is any economic recovery going on, as the primary source of middle class wealth continues to decline in value.

U.S. Property Values Decline More Than Forecast in S&P/Case-Shiller Index
28 December 2010
, by Bob Willis (Bloomberg)


Home prices dropped more than forecast in October, a sign housing will remain a weak link as the U.S. recovery accelerates into the new year.

The S&P/Case-Shiller index of property values fell 0.8% from October 2009, the biggest year-over-year decline since December 2009, the group said today in New York. The decrease exceeded the 0.2% drop projected by the median forecast of economists surveyed by Bloomberg News.

A wave of foreclosures waiting to reach the market means home prices will remain under pressure in 2011, representing a risk to household finances. Federal Reserve policy makers this month said “depressed” housing and high unemployment remained constraints on consumer spending, reasons why they reiterated a plan to expand record monetary stimulus.

“We’ll remain in negative territory for several more months,” said Dean Maki, chief U.S. economist at Barclays Capital Inc. in New York, who forecast a year-on-year drop of 1.3%. “The housing market does remain weak and none of the recent data suggest a substantial pickup.”

After retreating briefly, stock-index futures remained higher after the report as a jump in holiday sales boosted the outlook for consumer spending. The contract on the Standard & Poor’s 500 Index maturing in March rose 0.2% to 1,255.5 at 9:23 a.m. in New York. The yield on the benchmark 10-year note rose to 3.36% from 3.33% late yesterday.

Survey Results

The median forecast was based on projections of 17 economists surveyed. Estimates ranged from an increase of 1.4% to a decline of 1.3%. Year-over-year records began in 2001. Prices rose 0.4% in the year ended September.

The gauge fell 1% in October from the prior month after adjusting for seasonal variations, matching September’s drop which was larger than previously estimated. Unadjusted prices decreased 1.3% from the prior month.

Eighteen of 20 cities showed a decrease in prices in October, led by a 2.1% drop in Atlanta, and decreases of 1.8% in Chicago and Minneapolis. Denver and Washington were the only two that posted gains.

Six markets, including Atlanta, Charlotte, Miami, Seattle, Tampa and Portland, Oregon, reached their lowest levels in October since prices started to retreat.

“The double-dip is almost here,” said David Blitzer, chairman of the index committee at S&P. Sales aren’t “giving any sense of optimism.”

U.S. house prices tumble in October - Prices in six cities move to lowest levels since housing bus
28 December 2010
, by Steve Goldstein (MarketWatch)


Home prices tumbled in October, according to data released Tuesday, with six cities setting new lows as the housing market remains divorced from the upturn seen in other parts of the U.S. economy.

The non-seasonally-adjusted S&P/Case-Shiller 20-city composite home-price index fell 1.3% on a monthly basis and 0.8% on an annual basis in October. Economists polled by Dow Jones Newswires had expected a 0.6% decline in the annual figure.

Prices hadn’t dropped on an annual basis since January and are 29.6% below their peak.

The double dip is almost here, as six cities set new lows for the period since the 2006 peaks,” said David M. Blitzer, chairman of the index committee at Standard & Poor’s. “There is no good news in October’s report. Home prices across the country continue to fall.”

Atlanta, Charlotte, Miami, Portland, Seattle and Tampa hit their lowest levels since home prices started to fall in 2006 and 2007.

“The tax incentives are over, and the national economy remained lackluster in October, the month covered by these data. Existing-home sales and housing starts have been reported for both October and November, and neither is giving any sense of optimism,” Blitzer added.

The Case-Shiller report is based on prices over a three-month period, so this report included prices from August, September and October.

Michelle Meyer, an economist at Bank of America Merrill Lynch, said prices will continue to slide until “reaching a fragile bottom next year.”

Including homes that are in or close to foreclosure, there’s inventory of 7.2 million homes, or roughly 21 months of supply, she said.

Roubini: "It's Pretty Clear The Housing Market Has Already Double Dipped"
29 December 2010
, by Tyler Durden (Zero Hedge)


Hopefully today's 4th consecutive decline in home prices, as per the earlier noted Case Shiller October data (and with both mortgage rates and foreclosure inventory surging, we are willing to bet that following the reported November and December CS data, the decline will be for half a year straight), makes it sufficiently clear that housing has double dipped, and that the primary goal of Bernanke, which is not to pad banker bonuses, but to reflate home prices and recreate that mythical HELOC "fake wealth effect" piggybank, has been a complete failure (he sure is succeeding in getting WTI about to soon hit $100/barrel).

Just in case there are any doubters left, Nouriel Roubini sat down with CNBC's netnet to confirm what virtually everyone else already knows: "It's pretty clear the housing market has already double dipped," per Nouriel, who recently took advantage of the NYC housing downturn and bought a $5.5MM pad.

"And the rate of decline is stronger than in previous months" - precisely what we pointed out a few hours back. In other words, the double dip is accelerating. Today's jump in 10 and 30 Y rates will not help.

Furthermore, another rather obvious observation by Roubini demonstrates precisely why the drop in home prices is just starting to be felt: "The shadow inventory of not-yet-foreclosed homes—due to the moratorium—will surge in the next year." In other words, "Supply will increase, demand will drop."

Also, keeping in mind that there are tens of millions of Americans who are underwater on their mortgages, and thus not incentivized to pay their bills, any ongoing price drops will create a vicious loop whereby more and more people walk away from mortgages, and otherwise stop paying, as a result of which, banks will be forced to REO at least some of these properties (it is well known that banks allow squatters to live under payment delinquency for up to 24 months: where else does America get the money for that 4th Kindle and 2nd iPad?), causing prices to drop even more, and make the Catch 22 even worse.

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