Global Debt Time Bomb explodes soon

[NoAm]

A lot of these investment bankers know very little "Buy this" one minute "Sell it" the next.

Just glad I don't bank with UBS!

Exactly! We had an Edward Jones cheerleader get ahold of our portifolio about 16 years ago.
He had us sell our CSX stock and buy
Lucent (which is a total loss)
WalMart
Walgreens
GE
All of these have done little to nothing, while CSX has continued to split and thrive over the years.
One of the worst decisions we ever made was believing in him and following his computer screen advice

It was our decision, so we have to live with it, but it really has pissed us off over the years.

We now have searched credentials before working with a new advisor.

[TC]

China risks hard landing as global woes spread

China's carefully-managed soft landing is turning harder by the day, threatening to deflate the torrid credit bubble of the past three years.

"There is a large potential risk," said Zhu Min, the deputy managing director of the International Monetary Fund and a former Chinese official.

Mr Zhu said China had doubled the loan ratio from below 100pc of GDP before the Lehman crisis to roughly 200pc today.

The danger is that this excess could start to unwind just as the West goes into a sharp downturn, and possibly a double-dip recession.

China and emerging Asia are fundamentally in weaker shape this time, having used up their "fiscal cushions", leaving them with little leeway to cope with a fresh global shock. Their monetary policies are already loose.

"We're at a key moment. They need to make sure their economies don't slow down too fast," he said at the World Economic Forum in Dalian...(continued at link)

[Pilsung]

http://www.zerohedge.com/news/someone-d ... er-weekend" onclick="window.open(this.href);return false;

In the last few minutes of the European week, major financials have been crushed. It appears that someone (or perhaps a lot of 'someones') really do not want to be long into the weekend. Credit Agricole is -11% on the day, having fallen 12.3% in the last hour!!

[raptor]

Jefferson County, AL avoided filing bankruptcy over its sewer system fiasco. It appears as though everyone gets a "haircut". Bond holders lose and rate payers lose. But the bond holders get some money back and the rate payers do not lose their sewerage treatment facility in a bankruptcy. (Repossessing a sewerage system would have been interesting anyway )

The settlement proposal includes Wall Street agreeing to forgive about $1 billion in debt, the county refinancing about $2 billion, and a series of annual sewer rate increases.

http://www.nytimes.com/aponline/2011/09 ... ml?_r=1&hp" onclick="window.open(this.href);return false;

Why is this interesting? IMO this is a possible scenario for Greece and their current debt solution.

[NoAm]

Not too bad of a day, at least according to our portfolio #'s.

Come on baby, come on! Mama wants to pay the house off!

[Pilsung]

Not too bad of a week, possibly based on expectations that Bernanke is about to pump another few hundred billion dollars in "stimulus" into the stock market.

http://www.zerohedge.com/news/forget-op ... about-come" onclick="window.open(this.href);return false;

Rosenberg Says Bernanke Will Shock Everyone With What Is About To Come

"As we have been pointing out since the beginning of the week, the one defining feature of the past 5 days has been a relentless short covering rally. And while the mechanics were obvious, one thing was missing: the reason. Well, courtesy of David Rosenberg's latest, we may now know what it is. Bottom line: for all who think that Bernanke is about to serve just Operation Twist next week... you ain't seen nothing yet. "The consensus view that the Fed is going to stop at 'Operation Twist' may be in for a surprise. It may end up doing much, much more." Rosie continues: "Look, we are talking about the same man who, on October 2, 2003, delivered a speech titled Monetary Policy and the Stock Market: Some Empirical Results. I kid you not. This is someone who clearly sees the stock market as a transmission mechanism from Fed policy to the rest of the economy. In other words, if Bernanke wants to juice the stock market, then he must do something to surprise the market. 'Operation Twist' is already baked in, which means he has to do that and a lot more to generate the positive surprise he clearly desires "

[J.C.]

Not too bad of a week, possibly based on expectations that Bernanke is about to pump another few hundred billion dollars in "stimulus" into the stock market.

http://www.zerohedge.com/news/forget-op ... about-come" onclick="window.open(this.href);return false;

Rosenberg Says Bernanke Will Shock Everyone With What Is About To Come

"As we have been pointing out since the beginning of the week, the one defining feature of the past 5 days has been a relentless short covering rally. And while the mechanics were obvious, one thing was missing: the reason. Well, courtesy of David Rosenberg's latest, we may now know what it is. Bottom line: for all who think that Bernanke is about to serve just Operation Twist next week... you ain't seen nothing yet. "The consensus view that the Fed is going to stop at 'Operation Twist' may be in for a surprise. It may end up doing much, much more." Rosie continues: "Look, we are talking about the same man who, on October 2, 2003, delivered a speech titled Monetary Policy and the Stock Market: Some Empirical Results. I kid you not. This is someone who clearly sees the stock market as a transmission mechanism from Fed policy to the rest of the economy. In other words, if Bernanke wants to juice the stock market, then he must do something to surprise the market. 'Operation Twist' is already baked in, which means he has to do that and a lot more to generate the positive surprise he clearly desires "

But do they know he knows, that he knows they know he knows? You see what I'm saying?

[Pilsung]

Who knows? Point being, the markets are rigged and retail investors "invest" there at their own peril.

[ei8htx]

A yahoo article on China:

China Consolidates Grip on Rare Earths
China produces nearly 95 percent of the world’s rare earth materials, and it is taking the steps to improve pollution controls in a notoriously toxic mining and processing industry. But the moves also have potential international trade implications and have started yet another round of price increases for rare earths, which are vital for green-energy products including giant wind turbines, hybrid gasoline-electric cars and compact fluorescent bulbs.

General Electric, facing complaints in the United States about rising prices for its compact fluorescent bulbs, recently noted in a statement that if the rate of inflation over the last 12 months on the rare earth element europium oxide had been applied to a $2 cup of coffee, that coffee would now cost $24.55.

And I'd like to emphasize this, so everyone can see what we're up against:

Beijing authorities are creating a single government-controlled monopoly, Bao Gang Rare Earth, to mine and process ore in northern China, the region that accounts for two-thirds of China’s output. The government is ordering 31 mostly private rare earth processing companies to close this year in that region and is forcing four other companies into mergers with Bao Gang, said Li Zhong, the vice general manager of Bao Gang Rare Earth.

[NoAm]

A yahoo article on China:

China Consolidates Grip on Rare Earths
China produces nearly 95 percent of the world’s rare earth materials, and it is taking the steps to improve pollution controls in a notoriously toxic mining and processing industry. But the moves also have potential international trade implications and have started yet another round of price increases for rare earths, which are vital for green-energy products including giant wind turbines, hybrid gasoline-electric cars and compact fluorescent bulbs.

General Electric, facing complaints in the United States about rising prices for its compact fluorescent bulbs, recently noted in a statement that if the rate of inflation over the last 12 months on the rare earth element europium oxide had been applied to a $2 cup of coffee, that coffee would now cost $24.55.

And I'd like to emphasize this, so everyone can see what we're up against:

Beijing authorities are creating a single government-controlled monopoly, Bao Gang Rare Earth, to mine and process ore in northern China, the region that accounts for two-thirds of China’s output. The government is ordering 31 mostly private rare earth processing companies to close this year in that region and is forcing four other companies into mergers with Bao Gang, said Li Zhong, the vice general manager of Bao Gang Rare Earth.

Why am I feeling a whole "Godfather/loanshark/crack dealer theme" here?
We buy most everything from China, now they have a 'little sumthin special' that we need, so they price gouge us? Does this not leave us borrowing & printing more money? Devaluing the dollar even more, to ultimately paying even more? I think we all know the "moving to green" isn't going to stop at this, so is everyone just going to have to take it up the backside? Especially if the good old fashioned light bulbs aren't an alternative anymore.

I know this is just one instance but could it be a new trend? Yes, lord knows, I like to get a good deal, but at what expense?

[phil_in_cs]

I wouldn't read too much into that. Commie governments set up monopolies all the time - that's what they do. And since China started trying to corner the market on rare earth minerals there have been major discoveries outside of China. China previously bought up rights to most rare earths in Africa.

[NoAm]

I wouldn't read too much into that. Commie governments set up monopolies all the time - that's what they do. And since China started trying to corner the market on rare earth minerals there have been major discoveries outside of China. China previously bought up rights to most rare earths in Africa.

Yeah, I know you are right. It just seems like 'one more thing'
I've had my 2nd cup of coffee, doing much better now

[CaptBrainFreeze]

Greek PM cancels U.S. trip as debt crisis deepens


http://news.yahoo.com/greek-pm-cancels- ... 42150.html" onclick="window.open(this.href);return false;

[TC]

Greek PM cancels U.S. trip as debt crisis deepens

http://news.yahoo.com/greek-pm-cancels- ... 42150.html" onclick="window.open(this.href);return false;

Yup, very very interesting.

[SlobberToofTigger]

Greek PM cancels U.S. trip as debt crisis deepens

http://news.yahoo.com/greek-pm-cancels- ... 42150.html" onclick="window.open(this.href);return false;

Yup, very very interesting.

Not really. The EU got what they wanted which was access to Dollars. Now that they have them the PM has no reason to have a visit...

[ei8htx]

Greek PM cancels U.S. trip as debt crisis deepens

http://news.yahoo.com/greek-pm-cancels- ... 42150.html" onclick="window.open(this.href);return false;

Yup, very very interesting.

This sounds bad...

It's not that the PM never planned a trip to leave the country, but that he cancelled one that is. Maybe something is imminent.

It could be over speculation, but who knows.

[Lynxian]

Greek PM cancels U.S. trip as debt crisis deepens

http://news.yahoo.com/greek-pm-cancels- ... 42150.html" onclick="window.open(this.href);return false;

Yup, very very interesting.

This sounds bad...

It's not that the PM never planned a trip to leave the country, but that he cancelled one that is. Maybe something is imminent.

It could be over speculation, but who knows.

Or it might just be sending out a bad signal; going on an expensive overseas trip when your country is on the brink of bankrupcy.

[Liff]

http://online.wsj.com/article/SB1000142 ... 07002.html" onclick="window.open(this.href);return false;

"Rare" earth metal isn't all that rare. The problem is that it is at the bottom of the sea floor. Kinda like panning for gold, gold is found in creek beds at the bottom of valleys, because gold is dense, just like rare earth metals. The bitch of it is is that the sea floor is under a lot of water.

[TC]

Greece braces for more austerity to avert default

(Reuters) - Greece on Sunday pledged to take the tough decisions needed to avoid default but announced no new austerity measures to secure international bailout funds next month.

Prime Minister George Papandreou cancelled a visit to the United States to chair a cabinet meeting on Sunday, a day before European Union and International Monetary Fund inspectors hold a conference call with Finance Minister Evangelos Venizelos to hear how Greece will plug this year's budget shortfall.

Venizelos told reporters after the meeting Greece needed to fully meet 2011 and 2012 budget targets, stop generating debt and start producing surpluses next year, but did not outline how these would be achieved.

"If we want to avoid default, to stabilise the situation, to remain in the euro zone ... we must take big strategic decisions," he said.

The cabinet will meet again after talks with the EU and IMF inspectors to specify policy, he said. He hinted at steps to further shrink the public sector by saying Greece would focus on cutting state spending rather than generating revenues in 2012.

At stake is an 8 billion euro (6 billion pounds) loan tranche from a 110 billion euro bailout secured last year, which Greece needs by October before it runs out of money...(continued at link)

[TC]

Euro falls after S&P cuts credit rating on Italy

(Reuters) - The euro fell about 0.5 percent in early Asian trade on Tuesday after Standard and Poor's cut its rating on Italy, citing weakening economic growth prospects and fragile ruling coalition.

The euro fell to $1.36050 , while the Australian dollar also fell to one-month low of $1.0166 as traders expect investors to grow yet more risk-averse.

World stocks, euro fall on Greece worry

(Reuters) - World stocks snapped a four-day rally on Monday, while the euro and oil prices dropped on concern Greece may default on its debt and trigger economic fallout that would cascade throughout the euro zone and possibly beyond.

But U.S. stocks and the euro recovered from their worst levels in late trade after Greece's Finance Ministry said the country was near an agreement with its international lenders to continue receiving bailout funds. U.S. Treasury debt prices pared gains.

Fears that Europe's debt crisis was worsening had prompted investors to seek refuge in the U.S. dollar and government bonds. But gold, which often benefits from safe-haven flows, retreated more than $30 an ounce on the stronger dollar.

"For the time being it looks as though there is hope the conversation is going to take on a more positive and constructive tone," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

"A little reason for a little buoyancy in the market, but we've seen this before, just a reminder."

European officials had ended a weekend meeting without agreeing on new ways to tackle the debt crisis and international lenders urged Athens to shrink its public sector and improve tax collection to secure a vital eight-billion-euro rescue payment next month...(continued at link)

[raptor]

http://online.wsj.com/article/SB1000142 ... 07002.html

"Rare" earth metal isn't all that rare. The problem is that it is at the bottom of the sea floor. Kinda like panning for gold, gold is found in creek beds at the bottom of valleys, because gold is dense, just like rare earth metals. The bitch of it is is that the sea floor is under a lot of water.

Rare earth is actually a misnomer in most cases. The only thing rare about of of the minerals is the places that will:

1.) Accept the large scale mining that is required to extract these minerals.
2.) Accept the short cuts in environmental rules to make these mines profitable at normal prices.
3.) Actually have enough of the minerals to consider items 1 & 2.

This Wiki article is unusually good on the subject.
http://en.wikipedia.org/wiki/Rare_earth_element" onclick="window.open(this.href);return false;

[NoAm]

Interesting articles I found this morning.

Greek Default Could Tip US Into Recession
http://www.cnbc.com/id/44583151

UPDATE 1-S&P cuts Italy ratings one notch, outlook negative
http://www.reuters.com/article/2011/09/ ... 6920110919

[phil_in_cs]

IMF downgrades US and EU outlooks
http://finance.yahoo.com/news/IMF-downg ... 7.html?x=0" onclick="window.open(this.href);return false;

WASHINGTON (AP) -- The world economy has entered a "dangerous new phase," according to the chief economist of the International Monetary Fund. As a result, the international lending organization has sharply downgraded its economic outlook for the United States and Europe through the end of next year.

The IMF expects the U.S. economy to grow just 1.5 percent this year and 1.8 percent in 2012. That's down from its June forecast of 2.5 percent in 2011 and 2.7 percent next year.

To achieve even that still-low level of growth, the U.S. economy would need to expand at a much faster rate in the second half of the year than its 0.7 percent annual pace in the first six months.

More at link

[CaptBrainFreeze]

China bank stops FX swaps, forwards with some European banks -sources

http://www.reuters.com/article/2011/09/ ... 2K20110920" onclick="window.open(this.href);return false;