Friday, September 23, 2011

Signs of China Slowdown Add To Dim Global Outlook

The Chinese Economy is showing signs of slowing down and is affecting global markets and fears that the global economy is heading towards another recession.

Many forecasters are predicting that the economy will grow above nine percent this year and  next year.
Nations like Australia are heavily dependent on mineral exports from China. The Conference Board expects China to drive about a third of the increase in global GDP for 2011.

Andy Rothem, CLSA Analyst, stated, "If you look at other measures of what is happening in China ... everything is cooling down, but not dramatically, and there is still strong growth."

None the less, China is playing a huge role in world growth.

See Link:

Economy Update by Paul Buzby

Fannie Mae cited for failing to stop robo-signing

No Kidding. I hope they do more than citing.

Oil falls to $80 a barrel
End of summer oil spike.

Moody's downgrades 8 Greek banks
Greece could collapse in December.

A.M. Kitco Metals Roundup: Comex Gold Sharply Lower on Follow-Through Selling Pressure; Technical Damage Inflicted
Federal Reserve turning corner and starting to strengthen the dollar. Dollar up, gold down.

Thursday, September 22, 2011

Fed Expected To Take New Action To Lift Economy

The Federal Reserve said yesterday that it will shuffle $400 billion of its portfolio to try to lower interest rates to spike the economy. By the fed lowering interest rates helps people and companies save money on borrowing and spending on the economy. The economy relies heavy on consumer spending.

The interest rates are all ready at historic lows, however, Americans are still afraid that the economy is strengthening. Thus, Americans are not taking out new loans despite the aggressively low interest rates. Americans are fearful to buy houses when prices are still dropping.

Frank Sorrentino, CEO of North Jersey Community Bank in N.J. stated that he doesn't think the Feds decision will encourage people to buy homes or take out loans for vehicles.

The stock market fell rapidly after the announcement from the Fed, the Dow Jones dropping 300 points yesterday. The four highest ranking Republicans in Congress sent the Federal Reserve a letter urging them not to try to lower interest rates, any further then they all ready are, due to risks of creating higher inflation.

The past couple of years, inflation rates have been historically low. However, high prices for food and gas have caused inflation to spike this last year. Economists are putting a much higher concern on unemployment, rather than inflation.

See Link:

Economy Update by Paul Buzby

IMF: Financial risks rising in US and Europe
Spin tag line, the premeditated weakening of the U.S. Dollar by the U.S.Government and the Federal Reserve is killing the U.S. Economy. Europe is going down to 55% of the citizens are on the public dole and they have out of money to support it.

Oil is rising as tropical storm supply effects linger
Summer oil spike is over. There was no shortage. Oil is pulling commodities and stock market down. these industries are begging the Federal Reserve to weaken the dollar more to drive up commodities. 

Wednesday, September 21, 2011

Economy Update by Paul Buzby

Stocks rally on hopes for Fed stimulus measures

Stock Market begging for QE3. If Fed does do it, dollar down, gold up. If Fed does not do it, dollar up, gold down. Probably will not do anything.

EU, IMF raise concerns over bank capital
Dollar will start getting stronger in next year. Dollar up, Euro down.

August home building fell 5 pct., slide continues
More foreclosures, Public Employees being fired or laid off at the Fed, State, County and City leve.

US files complaint against Chinese chicken tariffs
Files a complaint. That will be effective.

United Auto Workers leaders endorse new contract
Anything the Unions endorse is not good for everybody else.

Stock buybacks rise for 8th consecutive quarter
Corporations are buying back control of their companies.

IMF: World economy enters 'dangerous new phase'

The world economy is entering a "dangerous new phase," for economic growth. The International Monetary Fund has lowered its expectations for economic growth for the United States from 2.5 percent to 1.5 percent and Europe from 2.7 percent to 1.8 percent.

Olivier Blanchard, Chief Economist for IMF stated, "The recovery has weakened considerably. Strong policies are needed to improve the outlook and reduce the risks."

The downgrade for Europe has sparked because of the fear that the countries debt crisis will continue to get worse, furthering destabilizing the nation. Banks in Europe are holding on to their cash and reducing the amount of lending.

The high stock market drops in the United States are hitting consumers and businesses belief in a strengthening economy causing a reduction in spending. This is causing investors to transfer money from stocks and move it into safer investments, such as Treasury. The U.S economy is also taking blows from high gas prices and disruptions from the Japan crisis. This slow economy is causing U.S. employers to stall the creation of new jobs while increasing wages for management. Homeowners in the U.S. are experiencing a drop in property values resulting in owing more on mortgages then homes are actually worth.  The outlook for the U.S. economy making a fast recovery is not good.

President Obama's plan to cut taxes and increase spending on infrastructure is highly needed for short-term stimulus. However, a long term plan for recovery is needed to reduce the deficit. There is a fine balance in economic growth. If budget cuts are too fast then they will kill economic growth. If budget cuts are too slow then they will kill creditably. Obama's tax increases and job proposal are facing strong opposition from the Republican party. Republicans strongly oppose tax increases and have little faith in Obama's plans.

See link:

Tuesday, September 20, 2011

Obama announces debt plan built on taxes on rich

Obama has proposed a tax hick on the rich to help cut U.S. deficits by  more then $3 trillion. He also promised to veto any effort by republicans to cut medicare benefits for the elderly without raising taxes at the same time.

Obama stated, "This is not class warfare. It's math.We can't just cut our way out of this hole."

This tax increase for the rich will also target loopholes and subsidies for large corporations and cut most of the spending in Medicare spending to health care providers.

Obama also stated, "I will not support any plan that puts all the burden for closing our deficit on ordinary Americans."

Republicans are thankful the beneficiaries are spared but are not necessarily pleased with some of the proposals by Obama.

The "Buffet Rule", named after billionaire Warren Buffet, will target familys who make over $1 million and prevent them from taking advantage of lower tax rates on investment earnings, then what the middle-income tax payers pay on their income taxes.

However, the wealthy, on average, pay more in income taxes the the middle-income tax payers by nearly 15%, according to the non-partisan Tax Policy Center.

The tax hike also hits federal workers. The plan would reduce federal workers paychecks by 1.2 percent over three years, saving the government over $21 billion over 10 years.

This issue could play a major role in re-election and the President is playing his winning hand.

See Link:

Monday, September 19, 2011

China Consolidates Grip on Rare Earths

China is on track to monopolize the rare earths industry by increasing prices on rare earth materials. This is causing companies in the United States and Europe to relocate to china, taking advantage of inexpensive raw materials.

China has caused the price of compact florescent light bulbs in the United States to soar by closing or nationalizing dozens of rare earth metals producers. China produces most of the world's rare earth materials, currently 95%, and is taking action to improve pollution controls in an effort to clean up the environment. However, by doing so, it is shutting down the infamously toxic mining industry, restricting the global supply of vital resources. The major green producers, like wind turbines, hybrid-gasoline electric cars and compact florescent bulbs, are the most heavily impacted by this action from china. Despite government subsidies, the high cost of rare earths is having a significant effect on green product companies. This is so drastic, that some companies are being reactive and buying and hoarding rare earths materials.

Even though china is stating that its reason for shutting down its rare earth industry was to "address" pollution problems, it is looking quite different to foreign trade companies. The European Union believes china is trying to dodge international trade rules by discriminating against foreign trade. The United States and Europe have been in in preparation of filing a case with the World Trade Organization saying the China is breaking W.T.O. Laws by imposing tariffs and quotas on rare earth exports. China is currently a member of the W.T.O. and promised that it would not enforce restrictions on exports, except a few small materials. Rare earth metals, was not one of those materials.

China is sticking to its story, saying that they are worried about high pollution in the environment. China says polluted water, air and radioactive residue is increasing. Especially with small private companies, since some of them operate without having a license.

A member of the Chinese Chamber of Commerce, Xu Xu stated, "The government is determined to clean up the industry. The entrepreneurs don't care about environmental problems, don't care about labor problems, and don't care about their social responsibility. And now we have to educate them."

One can only speculate that some hidden agenda is behind the green efforts from china. The Chinese government is creating a monopoly by shutting down private companies and forcing bigger companies to merge. China wants to consolidate 80 percent of the production from southern china and maintain 3 major companies. How ironic that these three major companies were once ministries of the Chinese government.

 See Link:

Friday, September 16, 2011

Dollar Up, U.S. Stock Market Up, Gold Down, Everyone Else’s Currency Down.

According to a statement from the ECB, "The Governing Council of the European Central Bank has decided, in coordination with the Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, to conduct three US dollar liquidity-providing operations with he maturity of approximately three months covering the end of the year."

What this means to us is that the world's central bankers are providing a temporary plug in the European crisis until the end of the year by pumping as much money as necessary into the European banks. This is due to two European banks being forced to ask the ECB for help because they were not able to get short-term dollar funding in private markets. Thus, the ECB giving them $575 million.

In a statement written by Miller Trabak strategist for Peter Boockvar,  "The stress is still there as long as sovereign debt issues aren't dealt with aggressively but this move eases short-term funding problems."

This was no surprise to Stanley Morgan, whose global economics team predicted this action would have to be done by global policy makers. Market participants are speculating that "someone" knew this was coming. According to Scott Bleier of Create Capital, " Between the government taking these actions and a market that moves before the news, we are living inside a giant insider trading machine."

It looks like, once again, that global policy makers calculating synchronized responses, in an effort to forestall a funding crisis in the banking sector. Meanwhile, Wall Street embraces the free money given to them, taking it openhanded, regardless of the reasons it was provided.

See link:

Wednesday, September 14, 2011

Today's Daily Economic Report

Pressure grows on Europe to do more to help euro
European socialism is hurting everyone in the world. The world is tired of it.

Retail sales flat in August, auto demand declined
Government spending has everyone worried and not spending and do not forget college tuitions were do (which are overly priced because of guaranteed government student loans which leads to colleges charging whatever they want).

Stock indexes edge higher on optimism about Greece
Stocks move higher? 34 points is nothing in this age of billion dollar buys and sells done in nanoseconds, total spin. Volatility and large swings in the stock market are the norm now. This is a manipulated market that donates 2/3 to the Democrats.

Wholesale prices flat, as inflation pressures ease
Spin. Inflation has been deferred until trillions of dollars of bonds and treasuries mature over the next 3, 5 and 10 years. Also, every other currency in the world is doing even worse than the dollar.

Business inventories and sales rose July
Private Business (70% of U.S. GDP) has been increasing since the Bush tax cut extensions were passed in Dec 2010. The total economic numbers are down because the public sector (30% of U.S. GDP) has been tanking since the Republican led house has stopped funneling Federal Dollars into the states. The public sector (public unions and publicly traded companies, stock market) has been insulated for the last three years by Pelosi, Reed, Bernanke and Obama. No longer. Now they are feeling what the rest of us have for the last three years.

House probing $528M loan to failed solar company
Eric Holder will not investigate. The rampant theft and corruption by Obama and his people will not change until we have a new president with a new attorney general.

Tuesday, September 13, 2011

Daily News

Greece, Europe struggle to contain debt crisis
Working on another patch, extension. This house of cards will fall.

Oil rises on expected drop in supplies
Summer oil spike ending. U.S. consumption is up because of private business (70% U.S. GDP).

Large US banks must show how they would wind down
Concern: Is this an attempt by government regulators to break up specific banks that are not towing the liberal progressive agenda?

Stocks mixed in another choppy session; banks rise
Stock market will be vary volatile from now on. Little guys (private citizens) are out of the market, leaving only the big guys who move billions in seconds.

Italy confirms China talks amid bond help reports
China is over extended. China will probably do very little.

Ahead of the Bell: Federal Budget

Monday, September 12, 2011

Daily Economic Articles

A.M. Kitco Metals Roundup: Comex Gold Lower amid Stronger U.S. Dollar Index
Buzby: In a global down turn the U.S. will come out on top. The U.S. is 25% of the world GDP with a robust and diversified economy.

Economists cut growth forecasts for 2011 and 2012
Buzby:The public sector (30% of U.S. Economy) is tanking, making the overall numbers down. The private sector (70% U.S. GDP) is growing.

Greek default fears slam banking sector
Buzby:Everyone is coming to the conclusion that saving Greece is a no win gamble.

Europe worries drag stocks lower in early trading
Buzby: One country defaults, six others will follow. Ten countries are doing ok.

Obama calls on Congress to act on jobs bill
Buzby: Spin and Politics.

Market Swings Are Becoming New Standard
Buzby: Twenty years ago the stock market and publicly traded companies donated 2/3 to the Republicans. Today 2/3 donate to the democrats. The U.S. stock market has become a manipulated market controlled by the very rich and buying democrats to do it legally.

Friday, September 9, 2011

Daily Economic Articles

Stocks plunge as worries about Europe intensify
Bernanke and Obama say and do nothing, same old, sale old. Europe tanks again because U.S. will not change direction.

Oil down more than 2 pct on Europe debt concerns
Bernanke and Obama say and do nothing, same old, sale old. Europe tanks again because U.S. will not change direction.

Top ECB official Stark resigns unexpectedly
Bernanke and Obama say and do nothing, same old, sale old. Europe tanks again because U.S. will not change direction.

Developed nations look to restore growth
Bernanke and Obama say and do nothing, same old, sale old. Europe tanks again because U.S. will not change direction.

Thursday, September 8, 2011

Economic Report - September 8, 2011

Stocks waver ahead of Bernanke, Obama speeches
They both are going to support anti business policies, but they will support their base (financial institutions and liberal progressives).

ECB chief signals rates firmly on hold
The velocity of money is stagnant. Until the U.S. and Europe both raise their interest rates, the velocity of the dollar and private business will remain stagnant.

More people applied for unemployment benefits
The results of stagnation caused by long term low rates leading to almost zero velocity on the dollar.

US, rich nations need to support growth, OECD says
Liberal progressives (socialist) demanding more money for their base. Socialism is great until you run out of money.

Tuesday, September 6, 2011

Daily Economic Update

After the Labor Day weekend, here are a few articles to catch up on what is happening in the economy.

Swiss central bank sets limit on franc's strength
Europe is in Trouble.

US stock futures fall to start short holiday week
Europe in trouble and the U.S. Government's anti-business policies are not changing.

Oil falls to near $84 on global slowdown fears
This shows that Europe is in trouble.  The U.S. Government's anti-business policies are not changing.

Starbucks plans to triple its China coffee shops
U.S. Private Businesses Expanding.

Hong Kong's first Apple Store nears completion
U.S. Private Businesses Expanding.

World Bank expects slow US growth but no recession
U.S. Public Sector down (30% U.S. GDP). U.S. Private Sector up (70% U.S. GDP).