"This time will be different," Ed Leamer, who heads the forecasting center
at the University of California at Los Angeles's Anderson School of Management,
predicts in a report."This time the problems in housing will stay in
housing."
December 15, 2006
Ignorant and laughable housing crash quote of the month
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Why would any trained economist ever utter the words "this time will be different"?
What happens in Vegas stays in Vegas.
Except you might be out many thousands when you get there.
The man stood in the middle of the tracks, and as the train bore down on him uttered these famous last words:
"This time it's different"
Don't panic and head for the doors until you hear an economist say, "this time it will be different".
Wait.
Uh-oh.
want to see the recession? just look at the 10 year bond yield vs. shorter term rates. It's called an inversion. And you know what that means.
this is so obvious it's not even worth discussing
When long term interest rates are lower than short term interest rates it means that there is a consensus that short term interest rates will be lowered in the future.
This consensus might have arisen from the belief that we are headed into a recession and liquidity will dry up thereby resulting in lower interest rates.
Lets get one thing straight, the rate inversion does no PREDICT recession in the "crystal ball" sense, it is merely an indication that people think thinks will get worse before they get better.
Long term rates are low in part because the world is awash in dollars and foreign governments know how weak the dollar is so they are recycling them at very low cost. The carry trade is the other part, which, actually, amounts to the same thing.
It is also possible that the U.S. government is manipulating the bond market downward by buying its own bonds. [/tinfoil hat]
Two hillarious quotes:
"This time will be different"
and
"Earnings don't matter"
-- Tech bubbke, c1998
maybe i ought to give las vegas another run, i remember, the one dollar, all you can eat, buffet breakfast, that included everything, whats it cost today?
Housing prices have reached a permanently high plateau!
It was just over a year ago (October 2005) that Ben Bernanke said that there was no housing bubble to burst and that prices were driven by fundamentals in his opinion.
Yes from the bunch who brought you the Katrina relief effort and Operation Iraqui Freedom, say hello to the best available person to run the Fed.
HAHAHHAHAHAHAAHAHAHAHAHAAHAHAHAAH!
Smug Bastard
i read ed leamer's statement awhile back and remembered him saying; "this time is different." if i'm not mistaken, he was referring to the manufacturing industry. in other words, as long as the manufacturing industry is doing well, recession in unlikely.
Given the large proportion of growth that real estate has accounted for in the last few years, I seriously doubt that real estate can be quarantined from the rest of the economy. But you never know, right?
Hey look, Greg Swann "Dive" is back! Nice picture -- did you sketch it out on the Etch-a-Sketch first? Do you sketch houses too?
Now, Now, children!
Published December 15, 2006 7:27 PM EST
*** BREAKING NEWS ***
CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
Tells visiting Bush administration officials they will not sit back and lose their shirts as U.S. Dollar collapses; they are getting out fast and large!!!!!!
BEIJING, CHINA — Sources with a U.S. Delegation in Beijing have told The Hal Turner Show the Chinese government has informed visiting Bush Administration officials they intend to dump One TRILLION U.S. Dollars from China’s Currency Reserves and convert those funds into Euros, gold and silver!
China was allegedly asked to withhold the announcement until Bullion Markets closed for the weekend to prevent an instant spike in gold and silver prices. This delay will give the world the weekend to consider appropriate actions rather than have a knee-jerk reaction which could see the U.S. Dollar totally collapse in value Monday.
According to this Senior source, China told the U.S. delegation they no longer have faith in U.S. Currency for several reasons:
1) The Federal Reserve Bank ceased publishing “M3″ data in March, making it nearly impossible for anyone to know how much cash is being printed. China said this act made it impossible to tell how much a Dollar is worth.
2) The U.S. Dollar has lost upwards of thirty percent (30%) of its value against other foreign currencies in the recent past, meaning China has lost almost $300 Billion simply by holding U.S. Dollars in its reserves.
3) The U.S. has no plans whatsoever to reduce deficit spending or ability pay down any of its existing debt without printing money to pay it off.
For these reasons China has decided to implement an aggressive sell-off of U.S. Dollars before the rest of the world does so. China reportedly told the US delegation; “we are the largest holder of U.S. Currency and if the rest of the world unloads theirs before we unload ours, we will lose our shirts.”
Early this week, in an unusual move, the Bush administration sent virtually the entire economic “A-team” to visit China for a “strategic economic dialogue” in Beijing Dec. 14 and 15.
Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke lead the delegation, along with five other cabinet-level officials, including Secretary of Commerce Carlos Gutierrez. Also in the delegation is Labor Secretary Elaine Chao, Health and Human Services Secretary Mike Leavitt, Energy Secretary Sam Bodman, and U.S. Trade Representative Susan Schwab.
The Bush administration wanted to get China’s cooperation in preventing a dollar collapse. The Hal Turner Show has been told the effort failed.
According to the source, Fed Chairman Bernanke left the meeting “pale and in a cold sweat” as the implications of China’s decision seemed to sink in.
The implications are enormous: The U.S. Dollar is likely to collapse in value against all other major currencies as early as Monday, December 18.
This would cause a worldwide sell-off of dollars, create almost immediate “hyper-inflation” in the US and also impact world markets at a level “worse than the Great Depression of 1929.”
Arabs to the rescue?
In a strange twist of fate, Arabs and OPEC may come to the rescue of the U.S.!
Senior officials in OPEC made clear that they too would be severely harmed if the U.S. Dollar collapsed, and hinted they “would not be inclined to sell oil to any particular nation that intentionally caused such a collapse.”
This was a thinly veiled threat to China, which depends heavily on OPEC oil for its rapidly developing energy needs.
The OPEC officials even went so far as to say “Since China lacks the ability to project their military power, OPEC nations need not worry about any Chinese military response to an oil cut-off.”
Such brutally candid remarks will not sit well with China; and signal ominous things for the U.S. .
Arabs and OPEC will want something in return for saving the U.S. from economic collapse and it is already widely speculated what they want will be a complete change in U.S. backing of Israel in the Middle East.
If such demands are made by the oil-rich Arabs, the U.S. would be left with little choice but to virtually abandon the jewish state to preserve itself.
source: http://www.halturnershow.com/ChinaToDumpUSDollars.html
Dear I Love Broadband over PowerLine
Waht an incredable Post and story.
This is what I have been watching for.
Are you ready?
Ricahrd is.
Hp better change its name to WP, World Panic.
According to the Wall Street Journal inflation YOY was 2.9% for the past twelve months in the US.
According to Business Week the housing market might not recover to its inflation adjusted peak for 15 years.
Think of all the money one might save by not putting all the funds into purchase of property, house, expensive landscaping and interior decorating. One is not gaurenteed a return on new wallpaper.
China is not guaranteed an ROI on USD either.
*** BREAKING NEWS ***
CHINA TO DUMP ONE TRILLION IN U.S. RESERVES!!!!
Tells visiting Bush administration officials they will not sit back and lose their shirts as U.S. Dollar collapses; they are getting out fast and large!!!!!!
BEIJING, CHINA — Sources with a U.S. Delegation in Beijing have told The Hal Turner Show the Chinese government has informed visiting Bush Administration officials they intend to dump One TRILLION U.S. Dollars from China’s Currency Reserves and convert those funds into Euros, gold and silver!
China was allegedly asked to withhold the announcement until Bullion Markets closed for the weekend to prevent an instant spike in gold and silver prices. This delay will give the world the weekend to consider appropriate actions rather than have a knee-jerk reaction which could see the U.S. Dollar totally collapse in value Monday.
According to this Senior source, China told the U.S. delegation they no longer have faith in U.S. Currency for several reasons:
1) The Federal Reserve Bank ceased publishing “M3″ data in March, making it nearly impossible for anyone to know how much cash is being printed. China said this act made it impossible to tell how much a Dollar is worth.
2) The U.S. Dollar has lost upwards of thirty percent (30%) of its value against other foreign currencies in the recent past, meaning China has lost almost $300 Billion simply by holding U.S. Dollars in its reserves.
3) The U.S. has no plans whatsoever to reduce deficit spending or ability pay down any of its existing debt without printing money to pay it off.
For these reasons China has decided to implement an aggressive sell-off of U.S. Dollars before the rest of the world does so. China reportedly told the US delegation; “we are the largest holder of U.S. Currency and if the rest of the world unloads theirs before we unload ours, we will lose our shirts.”
Early this week, in an unusual move, the Bush administration sent virtually the entire economic “A-team” to visit China for a “strategic economic dialogue” in Beijing Dec. 14 and 15.
Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke lead the delegation, along with five other cabinet-level officials, including Secretary of Commerce Carlos Gutierrez. Also in the delegation is Labor Secretary Elaine Chao, Health and Human Services Secretary Mike Leavitt, Energy Secretary Sam Bodman, and U.S. Trade Representative Susan Schwab.
The Bush administration wanted to get China’s cooperation in preventing a dollar collapse. The Hal Turner Show has been told the effort failed.
According to the source, Fed Chairman Bernanke left the meeting “pale and in a cold sweat” as the implications of China’s decision seemed to sink in.
The implications are enormous: The U.S. Dollar is likely to collapse in value against all other major currencies as early as Monday, December 18.
This would cause a worldwide sell-off of dollars, create almost immediate “hyper-inflation” in the US and also impact world markets at a level “worse than the Great Depression of 1929.”
Arabs to the rescue?
In a strange twist of fate, Arabs and OPEC may come to the rescue of the U.S.!
Senior officials in OPEC made clear that they too would be severely harmed if the U.S. Dollar collapsed, and hinted they “would not be inclined to sell oil to any particular nation that intentionally caused such a collapse.”
This was a thinly veiled threat to China, which depends heavily on OPEC oil for its rapidly developing energy needs.
The OPEC officials even went so far as to say “Since China lacks the ability to project their military power, OPEC nations need not worry about any Chinese military response to an oil cut-off.”
Such brutally candid remarks will not sit well with China; and signal ominous things for the U.S. .
Arabs and OPEC will want something in return for saving the U.S. from economic collapse and it is already widely speculated what they want will be a complete change in U.S. backing of Israel in the Middle East.
If such demands are made by the oil-rich Arabs, the U.S. would be left with little choice but to virtually abandon the jewish state to preserve itself.
source: http://www.halturnershow.com/ChinaToDumpUSDollars.html
So if China dumps it's US dollars, how do we protect our assets? Does that mean $ in savings becomes de-valued? How would this effect the housing market?
RE: assorted entries quoting the Hal Turner Show
Where's Keith ? O well, its a crappy job but somebody has to do it.
Lest somebody think that Hal is related to Ted "CNN" Turner and that its a subsidiary of TBS and thus that the quotes from his show and website have the same cred as say Fox News or AP or CNN:
According to the wikipedia entry about him,http://en.wikipedia.org/wiki/Hal_Turner
Hal is a white nationalist; he broadcasts from his front room. His Turner Radio Network isn't exactly CBS or Reuters ? Your local newspaper that reports on high school games and village Xmas parades probably employs more reporters and stringers than his network.
I've googled this crap about $1000 withdrawal limit - No hits; China dumping 1 Trillion $ on Monday - no hits. Arabs to the rescue - no hits with other news sources like Bloomberg, BBC.
So.. who you gonna believe ? the nutter who's adding these comments, the Hal Turner show that creates the original copy or the BBC, the British Telegraph, CBS, Reuters, marketwatch, Bloomberg.
-K
Who did he interview for the article? Who was Ted Turners 'inside' source? Just because he is a crackpot according to some, does not mean he does not have an inside souce.
I sent the articles to my source inside the DC beltway. More to follow....
The Nuke Power Plant deal with US and China is real.
Chinese dumping US dollars for gold.
By: Shenzhen Daily/Agencies on: 03.03.2006 [14:45 ] (1126 reads)
"Chinese people now hold more foreign currencies, mainly the U.S. dollar, and it will be easier for them to buy gold products directly by using dollars instead of going through a complicated conversion from the yuan," said an executive preparing for the new service at a Shanghai branch of Bank of China.
(1820 bytes) [c] Print
Top bank offers dollar-denominated paper gold
www.chinaview.cn 2006-03-03 10:49:54
BEIJING, March 3 — Bank of China, the country's top foreign exchange lender, will allow depositors to buy and sell gold products with their U.S. dollar accounts as part of a new service to retain wealthy clients, a bank official said Wednesday.
Some of the biggest domestic banks already allow depositors to buy and sell certificates linked to the price of gold, as part of a general expansion in the number of investment tools open to individuals.
The interest in gold has risen with its soaring price. Gold hit a 25-year high in early February.
"Chinese people now hold more foreign currencies, mainly the U.S. dollar, and it will be easier for them to buy gold products directly by using dollars instead of going through a complicated conversion from the yuan," said an executive preparing for the new service at a Shanghai branch of Bank of China.
The product is expected to be launched soon in Shanghai, where domestic banks often unveil their more sophisticated products to test the market, before extending the service to other cities later in the year, he said.
China will open its retail banking sector to foreign competition by the end of this year, and domestic lenders are stepping up efforts to retain wealthy clients.
The new product also helps the bank reduce its foreign exchange risk in gold trading, the Bank of China executive said.
"Ultimately we buy the gold on the international market by using dollars not yuan," he said.
Depositors must open a U.S. dollar-denominated account to be able to buy the new product. The paper gold certificates are denominated at 10 grams each.
(Source: Shenzhen Daily/Agencies)
http://news.xinhuanet.com/english/20...nt_4251921.htm
washingtonpost.com
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China Set To Reduce Exposure To Dollar
Move Would Probably Push Currency Down
By Peter S. Goodman
Washington Post Foreign Service
Tuesday, January 10, 2006; D01
SHANGHAI, Jan. 9 -- China has resolved to shift some of its foreign exchange reserves -- now in excess of $800 billion -- away from the U.S. dollar and into other world currencies in a move likely to push down the value of the greenback, a high-level state economist who advises the nation's economic policymakers said in an interview Monday.
As China's manufacturing industries flood the world with cheap goods, the Chinese central bank has invested roughly three-fourths of its growing foreign currency reserves in U.S. Treasury bills and other dollar-denominated assets. The new policy reflects China's fears that too much of its savings is tied up in the dollar, a currency widely expected to drop in value as the U.S. trade and fiscal deficits climb.
China now boasts the world's second-largest cache of foreign exchange -- behind only Japan -- and is on pace to see its reserves climb past $1 trillion later this year. Even a slight diminishing of the dollar as a percentage of those holdings could exert significant pressure on the U.S. currency, many economists assert.
In recent years, the value of the dollar has been buoyed by major purchases of U.S. Treasury bills by Japan, China and oil-exporting countries -- a flow of capital that has kept interests rates relatively low in the United States and allowed Americans to keep spending even as debts mount. Some economists have long warned that if foreigners lose their appetite for American debt, the dollar would fall, interest rates would rise and the housing boom could burst, sending real estate prices lower.
The comments of the Chinese senior economist, made on the condition of anonymity because the government disciplines those who speak to the press without express authorization, confirmed an analysis in Monday's Shanghai Securities News stating that China is inclined to shift some its savings into other currencies such as the euro and the yen, or into major purchases of commodities such as oil for a long-discussed strategic energy reserve.
In a report circulated this week, Stephen Green, senior economist with the bank Standard Chartered PLC in Shanghai, identified several signals that China is intent on limiting its exposure to the dollar -- not least, a recent pledge from the State Administration of Foreign Exchange to "actively explore more efficient use of our foreign exchange reserves."
"We believe this adds to the downside pressure the USD [U.S. dollar] is currently facing," Green wrote. "It is the first official expression from SAFE that they are looking at switching away" from the dollar.
The comments on SAFE's Web site reinforced earlier public warnings from Yu Yongding, an economist on the monetary policy committee of China's central bank, that the country's reserves are now vulnerable to a drop in the value of the dollar.
"The general trend for the U.S. dollar is continuously weakening," Yu said, speaking to reporters at a conference in Beijing last month. "Countries with huge foreign-exchange reserves will have their assets shrunken."
Last week, Hu Xiaolian, director of the foreign exchange administration, said China plans to "optimize the structure" of its reserves. Analysts took that to mean China would pursue a higher return than it can get from holding dollars by diversifying its reserves.
Not all economists anticipate negative repercussions for the U.S. economy. Were China and Japan to engineer a significant fall in the dollar, those nations also would suffer the consequences -- sharply diminished exports as Americans lose spending power, plus a drop in the value of their dollar assets.
"It is thus extremely unlikely that China would do anything to harm its own balance sheet," wrote Stephen Jen, an economist with Morgan Stanley, in a research note distributed Monday.
In 2005, the dollar rebounded against major foreign currencies as the Federal Reserve raised short-term interest rates -- making dollar assets relatively more attractive than others -- but has slid a bit early this year. Meanwhile, China continues to amass foreign-exchange reserves at a pace of roughly $15 billion per month.
Warnings about an impending Chinese sell-off in dollars emerged in July, as China slightly altered the way it sets the value of its currency, the yuan, bumping it up against the dollar by about 2 percent. At the time, China announced that it would gradually allow greater movement in the exchange rate -- something that has yet to materialize -- while also shifting from a system in which the yuan moves with changes in the dollar to one where it tracks a basket of currencies including the yen, the euro, the Hong Kong dollar and the South Korean won.
The move temporarily muted criticism on Capitol Hill from those who accuse China of currency manipulation, asserting that an artificially low yuan has made China's goods unfairly cheap on world markets. But as the implications of the new currency policy rippled out, some analysts suggested that China would thereafter have less need for dollars and greater need for the other currencies in the new basket, sending the greenback down and risking higher U.S. interest rates that would dampen economic growth.
China sought to quash such talk. In September, a senior central bank official told a ballroom full of international executives gathered in Beijing that China would not sell significant quantities of U.S. bonds, cognizant that such a move would "cause the price to plunge."
Even if a Chinese shift away from the dollar weakened the currency, that would probably not soothe tensions with those in Washington calling for an increase in the value of the yuan to help U.S. manufacturers. Unless China severs the link between the value of its currency and the dollar -- a move Beijing says could destabilize its economy -- then a weaker dollar would simply mean a weaker yuan as well, leaving in place the current debate over whether China's export earnings are being netted unfairly.
Special correspondent Eva Woo contributed to this report.
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