27% Don't Even Have $1000 for Retirement

Bifurcation of American Society Continues at Pace; Nearly Half Have Less than $10K for Retirement, :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website:

"The percentage of American workers with virtually no retirement savings grew for the third straight year, according to a survey released Tuesday. The percentage of workers who said they have less than $10,000 in savings grew to 43% in 2010, from 39% in 2009, according to the Employee Benefit Research Institute's annual Retirement Confidence Survey. That excludes the value of primary homes and defined-benefit pension plans.
Workers who said they had less than $1,000 jumped to 27%, from 20% in 2009."

Berkshire VC: "It's Over"

Charlie Munger, Warren Buffett's long time Partner writes in Slate:

"Long-time business partner of Warren Buffett, Charlie Munger, writes in a new article for Slate.com that “it’s basically over” for the United States economy.

In his article, the Berkshire Hathaway vice chairman constructs the parable of Basicland, whose economy just so happens to run parallel to that of America.

In the beginning of Basicland, people live within their means, debt is limited to mortgages and some consumer loans, speculation is discouraged, and taxes are limited and pay for only “basic services” like fighting fires, defense, and the court system.

As a result, the economy happily grows at a steady annual rate of 3 percent.

But things take a turn for the worse, Munger writes.

“The extreme prosperity of Basicland had created a peculiar outcome: As their affluence and leisure time grew, Basicland’s citizens more and more whiled away their time in the excitement of casino gambling,” and financial services soon grow to account for too big a portion of the economy."

The Coming Plunge, Now in BusinessWeek

Whether due to the slow apprehension descending upon US public, or perhaps a fast apprehension descending on news editors following today's, uh, plunge, , it's interesting to note Prechter's December ?) prediction made it to BusinessWeek by late February, as now it seems to be validated by several pundits (on top of the chart).

S&P 500 May Plunge in Last Elliott Wave: Technical Analysis - BusinessWeek

S&P 500 May Plunge in Last Elliott Wave: Technical Analysis - BusinessWeek: "Feb. 23 (Bloomberg) -- The U.S. stock market may be at the last stage of a retreat that will drive the Standard & Poor’s 500 Index below a 12-year low it reached last year, according to an Elliott Wave analysis by StockCharts.com."

Other notables who recently share the view include:

Richard Lehman
whoi seems to spot a channel break
Lehman's Channel analysis in StockCharts.com

A Part of NY
An honest view
http://www.apartofny.com/

Garry Shilling (from Jesse Felder)
"It's all just one big trade"
http://jessefelder.posterous.com/gary-shillings-one-big-trade

Robert Reich
Predicts a correction in 2010
Commonwealth club TV

Immanuel Wallerstein: Ah, Surprises, Surprises

Immanuel Wallerstein: "You know you’re living in a chaotic situation when (1) the mainstream media are constantly surprised by what is happening; (2) short-term predictions by various pundits go in radically different directions and are stated with many reserves; (3) the Establishment dares to say things or use words that were previously taboo; (4) ordinary people are frightened and angry but very unsure what to do. This is a good description of the past two years throughout the world, or at least in most parts of the world.

Consider the recent enormous “surprises” – the election of a Republican senator in Massachusetts; the financial collapse of Dubai; the near bankruptcy of various large states within the United States and four or five of the member states of the European Union; severe world currency fluctuations."

60 Minutes on Ponzi Schemes

Watch CBS News Videos Online

Roubini Abmushed by CNBC

This footage is amazing - Roubini is under collective fire by several anchors. What's noticeable here is they almost literally demand the Good News; and their ultimate rebuttal is that Roubini can't get us out of the mess. In other words, if you can't get us out of the mess, it measn that there is no mess. This little snippet offers a lot of insight on several levels. Such a public attack is very common in less democratic regimes.
 

Gary Shilling: forget diversification

Investment Banker caught looking at nude photos on TV

Just watch the guy to the left of the talking head.

Do Cloned Bulls Dream of Electric Sheep

TrimTabs Asks: Who Is Responsible For The Non-Stop Market Rally Since March; Gives Some Suggestions | zero hedge:

"As far as we know, it is not illegal for the Federal Reserve or the U.S. Treasury to buy S&P 500 futures. Moreover, several officials have suggested the government should support stock prices. For example, former Fed board member Robert Heller opined in the Wall Street Journal in 1989, “Instead of flooding the entire economy with liquidity, and thereby increasing the danger of inflation, the Fed could support the stock market directly by buying market averages in the futures market, thereby stabilizing the market as a whole.” In a Financial Times article in 2002, an unidentified Fed official was quoted as acknowledging that policymakers had considered buying U.S. equities directly, not just futures. The official mentioned that the Fed could “theoretically buy anything to pump money into the system.” In an article in the Daily Telegraph in 2006, former Clinton administration official George Stephanopoulos mentioned the existence of “an informal agreement among the major banks to come in and start to buy stock if there appears to be a problem.”"

Mish on America's recession diet

Mish's Global Economic Trend Analysis: Cereal ... It's What's For Dinner:

"Rising popularity of cereal among those looking for a cheap meal combined with plunging ingredient costs to boost the second-quarter profit of Cheerios maker General Mills Inc. 50 percent."

Newspeak mot du jour: nothing is more expected than the unexpected

The fresh thin lustre on last week's rosy unemployment numbers has hardly set when today's news sober us up with an "unexpected rise in unemplyment". Oh la la, the unexpected! Now who would have thought!

Running "unexpected" in Google Trends, we notice an, um, unexpected trend in the media, with many gems over the last year announcing unexpected February new home sales, Retail sales fall unexpectedly in March, Retail sales dip unexpectedly, jobless claims rise (in August), Consumer confidence unexpectedly falls in Sept., New home sales unexpectedly tumble (October) , and the more recent New jobless claims fall unexpectedly to 457K.

Things were never so unexpected!

This picture is worth a thousand words, assuming each of these words has more value than the inflated "unexpected" (the media mentions of the word are on the lower pane):

It's NEVER the right time to discuss top sovereign-ratings changes, and pass the borek please

Moody's: Still too soon to discuss top sovereign-ratings changes - MarketWatch:

"While several Aaa-rated countries have 'lost altitude' within their current ratings category, many countries lower down the ratings ladder have shown better-than-expected resilience to the economic crisis. In fact, Chile, Brazil, China, Hong Kong, Peru, Turkey, Indonesia have all received ratings upgrades during 2009."

Oh, so it's like credit rating inflation? Everybody else gets an upgrade instead of downgrading the elephant in the room?


Turkey is a nice one. Wikipedia tells us Turkey has taken a hit like everybody else - budget deficit swelling 13X and GDP shrinking by a record 13.8%. The Economist talked about Turkey's unemployment as "putting Turkey among the economies worst hit by the global recession." The IMF expects Turkish economy to shrink 5% in 2009.

But - but - not a single Turkish bank has gone under. OMG, here, take an upgrade for that, you resilient you!

No offense, but do you suppose there ever will be a proper time to discuss downgrades? It's just such an inappropriate topic.

Obama vs. Bush - Evil still Exists vs. Evil does Exist

Kali Yuga Here We Come

oftwominds quotes BusinessWeek (Dec. 16), in an interesting commentary:

"Almost half (46%) of 2,148 consumers surveyed recently said they weren't confident they could come up with $2,000 within a month in a crisis--from savings, family, friends, credit cards or other sources.

Even among those earning $100,000 to $149,000 a year. almost 25% doubted they could raise it, according to the survey conducted by research firm TNS with academics from Harvard Business School and Dartmouth College.

'We wanted to know if people could fix a broken car or furnace,' says Harvard finance professor Peter Tufano, who adds that most studies he has seen measure 'how much cash people have... not how much they can access.'

The survey results surprised him. 'The ability to cope with emergencies is much less strong than we might have thought.'"

"When the proles do appear brandishing pitchforks at the doors of Park Avenue"

Alice Schroeder, Bloomberg.com columnist, a former managing director at Morgan Stanley, talks about Goldman execs getting pistol permits. Interesting column for other reasons too - a use of the curtain metaphore (is it time for a Wizard of Oz remake?) and of the Orwellian/Bolshevik Proles. Talk about pitchfork-brandishing mobs of proles - on Bloomberg? Indeed, so many things have come to pass.

Arming Goldman With Pistols Against Public (Alice Schroeder on Bloomberg.com):

"He tried to buy a house elsewhere without attracting attention as the financial crisis unfolded in 2007, a move that was foiled by the New York Post. Then, Blankfein got permission from the local authorities to install a security gate at his house two months before Bear Stearns Cos. collapsed.

This is the kind of foresight that Goldman Sachs is justly famous for. Blankfein somehow anticipated the persecution complex his fellow bankers would soon suffer. Surely, though, this man who can afford to surround himself with a private army of security guards isn’t sleeping with the key to a gun safe under his pillow. The thought is just too bizarre to be true.

So maybe other senior people at Goldman Sachs have gone out and bought guns, and they know something. But what?"

Nassim Nicholas Taleb Withdraws from Wordly Life

When I grow up, I want to be just like Nassim Taleb - The renounciate trader. I love this guy. I get this guy. I hope I get his trades.

Nassim Nicholas Taleb: Good Bye!:

"No news, no press, no Davos, no suit-and-tie fraudsters, no fools. I need to withdraw as immediately as possible into the Platonic quiet of my library, work on my next book, find solace in science and philosophy, and mull the next step. I will also structure trades with my Universa friends to bet on the next mistake by Bernanke, Summers, and Geithner. I will only (briefly) emerge from my hiatus when the publishers force me to do so upon the publication of the paperback edition of The Black Swan"

Dude, Where's My Ambien?

Two weeks ago Harvard professor Elizabeth Warren, who's been heading up the congressional panel overseeing bailout money spending was interviewed on PBS. In her answer to the first question, Warren pointed out that while the catastrophe was stopped, the underlying Wall Street regulations aren't changing. In her words,

"nobody goes to bed now and worried that, when we wake up tomorrow morning—that—that markets will have disappeared"

This was aired on Friday, Nov. 13. Two weeks later we had the Dubai scare. The timing, the geo-location (western banks financing the middle east) and market segment (commercial real estate) of the Dubai event match the coordinates in recent warnings by Roubini and Prechter. Also, as one commentator has mentioned, large construction projects are where economies go to die. Commentators were enlisted to scribe duty out of their holiday vacations. Can you blame anyone for losing sleep?

No, markets have not disappeared. But two weeks after her worthy interview aired, I'll bet an Emirate Dinar Ms. Warren would have rephrased her "Not Losing Sleep Over Disappearing Markets" if she was to be interviewed today.

This is how much things have shifted in two weeks.

Upadana's Role in the Mortgage Crisis

An article in LA Times covers research on the effect of moral beliefs and emotional background on defaulting on a home loan. LAtimes.com:

"When push comes to shoving your loved ones out the door, Bob Hunt of Keller Williams O.C. Coastal Realty in San Clemente says the moral duty to protect your family outweighs the moral duty to repay the loan.

'Promise keeping is not the highest moral value,' said Hunt, who before his real estate career taught ethics and logic at the University of Redlands. 'If I promised to lend you my gun and you are now in a clearly dangerous psychotic stage, breaking my promise would be the right thing to do, not the wrong thing.'"

Another interesting aspect that comes up is the opportunity to measure attachment, a loaded term in the Hindu tradition and one of the causes of human suffering in Buddhism (Wikipedia on Upadana):

There are some interesting variables. For example, although the biggest determinant is equity shortfall, another major consideration is people's attachment to their homes, with folks who bought more than five years ago far less likely to default.

Interesting hat, thanks to the housing crisis, attachment and the suffering it causes can be so scientifically measured.

Who John Paulson Consulted With before Going for Gold

John Paulson - Wikipedia, the free encyclopedia:

"Paulson & Co., Inc. had assets under management (as of June 1, 2007) of $12.5 billion (95% from institutions), which leapt to $36 billion as of November 2008. Under his direction, Paulson & Co has capitalized on the problems in the foreclosure and mortgage backed securities (MBS) markets. In 2008 he decided to start a new fund that would capitalize on Wall Street's capital problems by lending money to investment banks and other hedge funds currently feeling the pressure of the more than $345 billion of write downs resulting from under-performing assets linked to the housing market. On May 15, 2008, Paulson & Co., which bought 50 million shares of Yahoo stock during the first quarter of 2008, said it is supporting Carl Icahn on a proxy fight to replace Yahoo's board. In early 2008, the firm hired former Federal Reserve Chairman Alan Greenspan."

How To Survive The Coming Global Economic Collapse

How To Survive The Coming Global Economic Collapse: Not just for the Argentina text... it's great, and reminded me of my very own hyperinflation traumas. But the image of Mad Max in the article above was even better. I was waiting for these images to come up. Ready for Bartertown?