People are already used to it. It hasn't made people conserve 1 bit yet. Think you need to see 5 per gallon to get there.
As for the market today it is exactly what I thought a few days ago. Asset inflation is on the way in everything except housing. Bernie's going to cut a quarter b/c even he realizes how bad the dollar continues to get. I'm sorry but the economy doesn't need saving. The credit market might, the housing market might, but the bail out crowd doesn't have a fucking clue. That's not the Fed's job. Still calling for 14k by year end and it nothing else changes a dollar in the 1.42 level. Heck, the ECB didn't say anything about possibly lowering rates at all. Just staying pat while the U.S. cuts is enough to bring it there.
By the way this was the 9th revision down in the housing sales market in the past 12 months. Suuuuurrrrrreee its getting better.
forget gold...got wheat?
take a look at this chart wowzers
gone from $6.50 to $9.00 a bushel since aug 18th
http://quotes.ino.com/chart/?s=KCBT_KE.U07.E&v=dmax
------------------------------------------------------------------------------------------------------
Wheat Rises to Record $9 a Bushel on Australian Crop Concern
By Madelene Pearson
Sept. 12 (Bloomberg) -- Wheat prices rose to a record, passing $9 a bushel in Asian trading, as concerns for Australia's crop increase and inventories head toward a 26-year low.
Wheat for December delivery rose as much as 10.25 cents, or 1.2 percent, to $9.0075 a bushel in after-hours electronic trading on the Chicago Board of Trade. The contract was at $8.995 a bushel at 10:16 a.m. in Sydney. Prices have more than doubled in the past year.
take a look at this chart wowzers
gone from $6.50 to $9.00 a bushel since aug 18th
http://quotes.ino.com/chart/?s=KCBT_KE.U07.E&v=dmax
------------------------------------------------------------------------------------------------------
Wheat Rises to Record $9 a Bushel on Australian Crop Concern
By Madelene Pearson
Sept. 12 (Bloomberg) -- Wheat prices rose to a record, passing $9 a bushel in Asian trading, as concerns for Australia's crop increase and inventories head toward a 26-year low.
Wheat for December delivery rose as much as 10.25 cents, or 1.2 percent, to $9.0075 a bushel in after-hours electronic trading on the Chicago Board of Trade. The contract was at $8.995 a bushel at 10:16 a.m. in Sydney. Prices have more than doubled in the past year.
Stock up on your wheaties and beer while its still cheap
Wheat Rises to Record $9 a Bushel on Global Crop Concerns
-----------------------------------------------------------------------------------------------
Sept. 12 (Bloomberg) -- Wheat prices surpassed $9 a bushel for the first time as a drought in Australia threatened to further deplete inventories at a 26-year low.
The U.S. may cut its forecast for the crop in Australia to 18 million tons from 23 million metric tons in a report today. In Canada, the world's second-largest wheat exporter, reserves of the grain plunged 29 percent at the end of July from a year earlier, Statistics Canada said yesterday.
Wheat prices have more than doubled in the past year, raising costs at Premier Foods Plc, the U.K.'s biggest maker of cakes, Sara Lee Corp. and Nissin Food Products, the Japanese maker of Cup O' Noodles. The grain is used as livestock feed and to make cakes, noodles and bread, with one bushel enough to make 73 loaves.
``The market is in a real frenzy,'' said Tobin Gorey, commodity strategist with Commonwealth Bank of Australia Ltd. in Sydney. ``It is feeding through to the consumer, it's gone up high enough to do that.''
Wheat for December delivery rose as much as 10.5 cents, or 1.2 percent, to $9.01 a bushel in after-hours electronic trading on the Chicago Board of Trade. The contract was at $8.9725 a bushel at 12:12 p.m. in Sydney. Prices have surged 80 percent this year.
The advance comes as Egypt, Jordan, Japan and Iraq plan to buy some 460,000 tons of wheat at tenders.
Australian Crisis
Australian farmers face an unprecedented crisis within a month unless spring rains arrive, the Melbourne-based Age reported today, citing Agriculture Minister Peter McGauran.
The wheat harvest in Australia, expected to be the world's third-largest shipper of the grain this year, could be as low as 15 million tons, Rabobank Group has said. The government's key commodity forecaster, the Australian Bureau of Agricultural and Resource Economics, in June estimated the crop at 22.5 million tons, more than double last year's drought-ravaged crop. It is scheduled to give its next update on Sept. 18.
Barley prices in Winnipeg, Canada, have gained 41 percent in the past year on increased demand for animal feed and for brewing beer. Canada is one of the world's biggest barley producers. Corn has gained almost 50 percent in the same period, as demand for grain-based ethanol surged. :smoking:
Global wheat supplies are expected to decline to 114.8 million tons by the end of the marketing year on May 31, 2008, the U.S. Department of Agriculture said last month. Inventories have fallen as adverse weather cut harvests in Europe, the U.S., Canada and Australia. The U.S. is the world's largest wheat exporter.
Japan, Iraq Buying
Prices are rising as Egypt, the world's second-largest wheat importer, plans to buy at least 55,000 metric tons of hard wheat in a tender today for delivery in October. Japan seeks to buy 155,000 tons of wheat tomorrow at a tender, comprising 95,000 tons from the U.S., 20,000 from Canada and 40,000 from Australia.
The Grain Board of Iraq plans to buy at least 50,000 tons of wheat from any origin at a tender this month. Jordan is seeking to buy at least 200,000 tons of wheat at international tenders for delivery by Dec. 1.
The U.S. Department of Agriculture is scheduled to update crop estimates at 8:30 a.m. in Washington.
Prices could rise further if supply continues to tighten, said Justin Smirk, senior economist at Westpac Banking Corp. said today from Sydney.
Inflation Impact
``The more important impact for inflation is how long it lasts, because grain is a big input into other agri-products including meat,'' Smirk said. ``It will appear at the margin of consumer goods.''
General Mills Inc. began reducing the size of its cereal boxes in June, and will be able to charge more per ounce as it lowers the price of each box.
MY WORDS: HAHA GREAT TACTIC, SHRINK THE SIZE AND CHARGE LESS AND DUMB SHEEP WON'T EVEN NOTICE
Japan's Nissin, which last week decided to raise prices on Cup O' Noodles and instant noodles for the first time since 1990, fell 0.3 percent to 3,850 yen at 1 p.m. in Tokyo Stock Exchange trading, declining a second day. Daehan Flour Mills Co., South Korea's biggest flour miller, dropped 1.7 percent to 173,500 won.
Milling wheat futures for January delivery on the Australian Stock Exchange jumped as much as A$10, or 2.4 percent, to A$436 ($363) a ton and traded at A$430 a ton as of 1:47 p.m. in Sydney.
Wheat Rises to Record $9 a Bushel on Global Crop Concerns
-----------------------------------------------------------------------------------------------
Sept. 12 (Bloomberg) -- Wheat prices surpassed $9 a bushel for the first time as a drought in Australia threatened to further deplete inventories at a 26-year low.
The U.S. may cut its forecast for the crop in Australia to 18 million tons from 23 million metric tons in a report today. In Canada, the world's second-largest wheat exporter, reserves of the grain plunged 29 percent at the end of July from a year earlier, Statistics Canada said yesterday.
Wheat prices have more than doubled in the past year, raising costs at Premier Foods Plc, the U.K.'s biggest maker of cakes, Sara Lee Corp. and Nissin Food Products, the Japanese maker of Cup O' Noodles. The grain is used as livestock feed and to make cakes, noodles and bread, with one bushel enough to make 73 loaves.
``The market is in a real frenzy,'' said Tobin Gorey, commodity strategist with Commonwealth Bank of Australia Ltd. in Sydney. ``It is feeding through to the consumer, it's gone up high enough to do that.''
Wheat for December delivery rose as much as 10.5 cents, or 1.2 percent, to $9.01 a bushel in after-hours electronic trading on the Chicago Board of Trade. The contract was at $8.9725 a bushel at 12:12 p.m. in Sydney. Prices have surged 80 percent this year.
The advance comes as Egypt, Jordan, Japan and Iraq plan to buy some 460,000 tons of wheat at tenders.
Australian Crisis
Australian farmers face an unprecedented crisis within a month unless spring rains arrive, the Melbourne-based Age reported today, citing Agriculture Minister Peter McGauran.
The wheat harvest in Australia, expected to be the world's third-largest shipper of the grain this year, could be as low as 15 million tons, Rabobank Group has said. The government's key commodity forecaster, the Australian Bureau of Agricultural and Resource Economics, in June estimated the crop at 22.5 million tons, more than double last year's drought-ravaged crop. It is scheduled to give its next update on Sept. 18.
Barley prices in Winnipeg, Canada, have gained 41 percent in the past year on increased demand for animal feed and for brewing beer. Canada is one of the world's biggest barley producers. Corn has gained almost 50 percent in the same period, as demand for grain-based ethanol surged. :smoking:
Global wheat supplies are expected to decline to 114.8 million tons by the end of the marketing year on May 31, 2008, the U.S. Department of Agriculture said last month. Inventories have fallen as adverse weather cut harvests in Europe, the U.S., Canada and Australia. The U.S. is the world's largest wheat exporter.
Japan, Iraq Buying
Prices are rising as Egypt, the world's second-largest wheat importer, plans to buy at least 55,000 metric tons of hard wheat in a tender today for delivery in October. Japan seeks to buy 155,000 tons of wheat tomorrow at a tender, comprising 95,000 tons from the U.S., 20,000 from Canada and 40,000 from Australia.
The Grain Board of Iraq plans to buy at least 50,000 tons of wheat from any origin at a tender this month. Jordan is seeking to buy at least 200,000 tons of wheat at international tenders for delivery by Dec. 1.
The U.S. Department of Agriculture is scheduled to update crop estimates at 8:30 a.m. in Washington.
Prices could rise further if supply continues to tighten, said Justin Smirk, senior economist at Westpac Banking Corp. said today from Sydney.
Inflation Impact
``The more important impact for inflation is how long it lasts, because grain is a big input into other agri-products including meat,'' Smirk said. ``It will appear at the margin of consumer goods.''
General Mills Inc. began reducing the size of its cereal boxes in June, and will be able to charge more per ounce as it lowers the price of each box.
MY WORDS: HAHA GREAT TACTIC, SHRINK THE SIZE AND CHARGE LESS AND DUMB SHEEP WON'T EVEN NOTICE
Japan's Nissin, which last week decided to raise prices on Cup O' Noodles and instant noodles for the first time since 1990, fell 0.3 percent to 3,850 yen at 1 p.m. in Tokyo Stock Exchange trading, declining a second day. Daehan Flour Mills Co., South Korea's biggest flour miller, dropped 1.7 percent to 173,500 won.
Milling wheat futures for January delivery on the Australian Stock Exchange jumped as much as A$10, or 2.4 percent, to A$436 ($363) a ton and traded at A$430 a ton as of 1:47 p.m. in Sydney.
http://www.counterpunch.org/roberts09122007.html
September 12, 2007
American Economy: R.I.P.
By PAUL CRAIG ROBERTS
The US economy continues its slow death before our eyes, but economists, policymakers, and most of the public are blind to the tottering fabled land of opportunity.
In August jobs in goods-producing industries declined by 64,000. The US economy lost 4,000 jobs overall. The private sector created a mere 24,000 jobs, all of which could be attributed to the 24,100 new jobs for waitresses and bartenders. The government sector lost 28,000 jobs.
In the 21st century the US economy has ceased to create jobs in export industries and in industries that compete with imports. US job growth has been confined to domestic services, principally to food services and drinking places (waitresses and bartenders), private education and health services (ambulatory health care and hospital orderlies), and construction (which now has tanked). The lack of job growth in higher productivity, higher paid occupations associated with the American middle and upper middle classes will eventually kill the US consumer market.
The unemployment rate held steady, but that is because 340,000 Americans unable to find jobs dropped out of the labor force in August. The US measures unemployment only among the active work force, which includes those seeking jobs. Those who are discouraged and have given up are not counted as unemployed.
With goods producing industries in long term decline as more and more production of US firms is moved offshore, the engineering professions are in decline. Managerial jobs are primarily confined to retail trade and financial services.
Franchises and chains have curtailed opportunities for independent family businesses, and the US government’s open borders policy denies unskilled jobs to the displaced members of the middle class.
When US companies offshore their production for US markets, the consequences for the US economy are highly detrimental. One consequence is that foreign labor is substituted for US labor, resulting in a shriveling of career opportunities and income growth in the US. Another is that US Gross Domestic Product is turned into imports. By turning US brand names into imports, offshoring has a double whammy on the US trade deficit. Simultaneously, imports rise by the amount of offshored production, and the supply of exportable manufactured goods declines by the same amount.
The US now has a trade deficit with every part of the world. In 2006 (the latest annual data), the US had a trade deficit totaling $838,271,000,000.
The US trade deficit with Europe was $142,538,000,000. With Canada the deficit was $75,085,000,000. With Latin America it was $112,579,000,000 (of which $67,303,000,000 was with Mexico). The deficit with Asia and Pacific was $409,765,000,000 (of which $233,087,000,000 was with China and $90,966,000,000 was with Japan). With the Middle East the deficit was $36,112,000,000, and with Africa the US trade deficit was $62,192,000,000.
Public worry for three decades about the US oil deficit has created a false impression among Americans that a self-sufficient America is impaired only by dependence on Middle East oil. The fact of the matter is that the total US deficit with OPEC, an organization that includes as many countries outside the Middle East as within it, is $106,260,000,000, or about one-eighth of the annual US trade deficit.
Moreover, the US gets most of its oil from outside the Middle East, and the US trade deficit reflects this fact. The US deficit with Nigeria, Mexico, and Venezuela is 3.3 times larger than the US trade deficit with the Middle East despite the fact that the US sells more to Venezuela and 18 times more to Mexico than it does to Saudi Arabia.
What is striking about US dependency on imports is that it is practically across the board. Americans are dependent on imports of foreign foods, feeds, and beverages in the amount of $8,975,000,000.
Americans are dependent on imports of foreign Industrial supplies and materials in the amount of $326,459,000,000--more than three times US dependency on OPEC.
Americans can no longer provide their own transportation. They are dependent on imports of automotive vehicles, parts, and engines in the amount of $149,499,000,000, or 1.5 times greater than the US dependency on OPEC.
In addition to the automobile dependency, Americans are 3.4 times more dependent on imports of manufactured consumer durable and nondurable goods than they are on OPEC. Americans no longer can produce their own clothes, shoes, or household appliances and have a trade deficit in consumer manufactured goods in the amount of $336,118,000,000.
The US “superpower” even has a deficit in capital goods, including machinery, electric generating machinery, machine tools, computers, and telecommunications equipment.
What does it mean that the US has a $800 billion trade deficit?
It means that Americans are consuming $800 billion more than they are producing.
How do Americans pay for it?
They pay for it by giving up ownership of existing assets--stocks, bonds, companies, real estate, commodities. America used to be a creditor nation. Now America is a debtor nation. Foreigners own $2.5 trillion more of American assets than Americans own of foreign assets. When foreigners acquire ownership of US assets, they also acquire ownership of the future income streams that the assets produce. More income shifts away from Americans.
How long can Americans consume more than they can produce?
American over-consumption can continue for as long as Americans can find ways to go deeper in personal debt in order to finance their consumption and for as long as the US dollar can remain the world reserve currency.
The 21st century has brought Americans (with the exception of CEOs, hedge fund managers and investment bankers) no growth in real median household income. Americans have increased their consumption by dropping their saving rate to the depression level of 1933 when there was massive unemployment and by spending their home equity and running up credit card bills. The ability of a population, severely impacted by the loss of good jobs to foreigners as a result of offshoring and H-1B work visas and by the bursting of the housing bubble, to continue to accumulate more personal debt is limited to say the least.
Foreigners accept US dollars in exchange for their real goods and services, because dollars can be used to settle every country’s international accounts. By running a trade deficit, the US insures the financing of its government budget deficit as the surplus dollars in foreign hands are invested in US Treasuries and other dollar-denominated assets.
The ability of the US dollar to retain its reserve currency status is eroding due to the continuous increases in US budget and trade deficits. Today the world is literally flooded with dollars. In attempts to reduce the rate at which they are accumulating dollars, foreign governments and investors are diversifying into other traded currencies. As a result, the dollar prices of the Euro, UK pound, Canadian dollar, Thai baht, and other currencies have been bid up. In the 21st century, the US dollar has declined about 33 percent against other currencies. The US dollar remains the reserve currency primarily due to habit and the lack of a clear alternative.
The data used in this article is freely available. It can be found at two official US government sites: http://www.bea.gov/international/bp_web/simple.cfm?anon=71&table_id=20&area_id=3 and http://www.bls.gov/news.release/empsit.t14.htm
The jobs data and the absence of growth in real income for most of the population are inconsistent with reports of US GDP and productivity growth. Economists take for granted that the work force is paid in keeping with its productivity. A rise in productivity thus translates into a rise in real incomes of workers. Yet, we have had years of reported strong productivity growth but stagnant or declining household incomes. And somehow the GDP is rising, but not the incomes of the work force.
Something is wrong here. Either the data indicating productivity and GDP growth are wrong or Karl Marx was right that capitalism works to concentrate income in the hands of the few capitalists. A case can be made for both explanations.
Recently an economist, Susan Houseman, discovered that the reliability of some US economics statistics has been impaired by offshoring. Houseman found that cost reductions achieved by US firms shifting production offshore are being miscounted as GDP growth in the US and that productivity gains achieved by US firms when they move design, research, and development offshore are showing up as increases in US productivity. Obviously, production and productivity that occur abroad are not part of the US domestic economy.
Houseman’s discovery rated a Business Week cover story last June 18, but her important discovery seems already to have gone down the memory hole. The economics profession has over-committed itself to the “benefits” of offshoring, globalism, and the non-existent “New Economy.” Houseman’s discovery is too much of a threat to economists’ human capital, corporate research grants, and free market ideology.
The media have likewise let the story go, because in the 1990s the Clinton administration and Congress permitted a few mega-corporations to concentrate in their hands the ownership of the US media, which reports in keeping with corporate and government interests.
The case for Marx is that offshoring has boosted corporate earnings by lowering labor costs, thereby concentrating income growth in the hands of the owners and managers of capital. According to Forbes magazine, the top 20 earners among private equity and hedge fund managers are earning average yearly compensation of $657,500,000, with four actually earning more than $1 billion annually. The otherwise excessive $36,400,000 average annual pay of the 20 top earners among CEOs of publicly-held companies looks paltry by comparison. The careers and financial prospects of many Americans were destroyed to achieve these lofty earnings for the few.
Hubris prevents realization that Americans are losing their economic future along with their civil liberties and are on the verge of enserfment.
Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions.
http://www.counterpunch.org/roberts09122007.html
September 12, 2007
American Economy: R.I.P.
By PAUL CRAIG ROBERTS
The US economy continues its slow death before our eyes, but economists, policymakers, and most of the public are blind to the tottering fabled land of opportunity.
In August jobs in goods-producing industries declined by 64,000. The US economy lost 4,000 jobs overall. The private sector created a mere 24,000 jobs, all of which could be attributed to the 24,100 new jobs for waitresses and bartenders. The government sector lost 28,000 jobs.
In the 21st century the US economy has ceased to create jobs in export industries and in industries that compete with imports. US job growth has been confined to domestic services, principally to food services and drinking places (waitresses and bartenders), private education and health services (ambulatory health care and hospital orderlies), and construction (which now has tanked). The lack of job growth in higher productivity, higher paid occupations associated with the American middle and upper middle classes will eventually kill the US consumer market.
The unemployment rate held steady, but that is because 340,000 Americans unable to find jobs dropped out of the labor force in August. The US measures unemployment only among the active work force, which includes those seeking jobs. Those who are discouraged and have given up are not counted as unemployed.
With goods producing industries in long term decline as more and more production of US firms is moved offshore, the engineering professions are in decline. Managerial jobs are primarily confined to retail trade and financial services.
Franchises and chains have curtailed opportunities for independent family businesses, and the US government’s open borders policy denies unskilled jobs to the displaced members of the middle class.
When US companies offshore their production for US markets, the consequences for the US economy are highly detrimental. One consequence is that foreign labor is substituted for US labor, resulting in a shriveling of career opportunities and income growth in the US. Another is that US Gross Domestic Product is turned into imports. By turning US brand names into imports, offshoring has a double whammy on the US trade deficit. Simultaneously, imports rise by the amount of offshored production, and the supply of exportable manufactured goods declines by the same amount.
The US now has a trade deficit with every part of the world. In 2006 (the latest annual data), the US had a trade deficit totaling $838,271,000,000.
The US trade deficit with Europe was $142,538,000,000. With Canada the deficit was $75,085,000,000. With Latin America it was $112,579,000,000 (of which $67,303,000,000 was with Mexico). The deficit with Asia and Pacific was $409,765,000,000 (of which $233,087,000,000 was with China and $90,966,000,000 was with Japan). With the Middle East the deficit was $36,112,000,000, and with Africa the US trade deficit was $62,192,000,000.
Public worry for three decades about the US oil deficit has created a false impression among Americans that a self-sufficient America is impaired only by dependence on Middle East oil. The fact of the matter is that the total US deficit with OPEC, an organization that includes as many countries outside the Middle East as within it, is $106,260,000,000, or about one-eighth of the annual US trade deficit.
Moreover, the US gets most of its oil from outside the Middle East, and the US trade deficit reflects this fact. The US deficit with Nigeria, Mexico, and Venezuela is 3.3 times larger than the US trade deficit with the Middle East despite the fact that the US sells more to Venezuela and 18 times more to Mexico than it does to Saudi Arabia.
What is striking about US dependency on imports is that it is practically across the board. Americans are dependent on imports of foreign foods, feeds, and beverages in the amount of $8,975,000,000.
Americans are dependent on imports of foreign Industrial supplies and materials in the amount of $326,459,000,000--more than three times US dependency on OPEC.
Americans can no longer provide their own transportation. They are dependent on imports of automotive vehicles, parts, and engines in the amount of $149,499,000,000, or 1.5 times greater than the US dependency on OPEC.
In addition to the automobile dependency, Americans are 3.4 times more dependent on imports of manufactured consumer durable and nondurable goods than they are on OPEC. Americans no longer can produce their own clothes, shoes, or household appliances and have a trade deficit in consumer manufactured goods in the amount of $336,118,000,000.
The US “superpower” even has a deficit in capital goods, including machinery, electric generating machinery, machine tools, computers, and telecommunications equipment.
What does it mean that the US has a $800 billion trade deficit?
It means that Americans are consuming $800 billion more than they are producing.
How do Americans pay for it?
They pay for it by giving up ownership of existing assets--stocks, bonds, companies, real estate, commodities. America used to be a creditor nation. Now America is a debtor nation. Foreigners own $2.5 trillion more of American assets than Americans own of foreign assets. When foreigners acquire ownership of US assets, they also acquire ownership of the future income streams that the assets produce. More income shifts away from Americans.
How long can Americans consume more than they can produce?
American over-consumption can continue for as long as Americans can find ways to go deeper in personal debt in order to finance their consumption and for as long as the US dollar can remain the world reserve currency.
The 21st century has brought Americans (with the exception of CEOs, hedge fund managers and investment bankers) no growth in real median household income. Americans have increased their consumption by dropping their saving rate to the depression level of 1933 when there was massive unemployment and by spending their home equity and running up credit card bills. The ability of a population, severely impacted by the loss of good jobs to foreigners as a result of offshoring and H-1B work visas and by the bursting of the housing bubble, to continue to accumulate more personal debt is limited to say the least.
Foreigners accept US dollars in exchange for their real goods and services, because dollars can be used to settle every country’s international accounts. By running a trade deficit, the US insures the financing of its government budget deficit as the surplus dollars in foreign hands are invested in US Treasuries and other dollar-denominated assets.
The ability of the US dollar to retain its reserve currency status is eroding due to the continuous increases in US budget and trade deficits. Today the world is literally flooded with dollars. In attempts to reduce the rate at which they are accumulating dollars, foreign governments and investors are diversifying into other traded currencies. As a result, the dollar prices of the Euro, UK pound, Canadian dollar, Thai baht, and other currencies have been bid up. In the 21st century, the US dollar has declined about 33 percent against other currencies. The US dollar remains the reserve currency primarily due to habit and the lack of a clear alternative.
The data used in this article is freely available. It can be found at two official US government sites: http://www.bea.gov/international/bp_web/simple.cfm?anon=71&table_id=20&area_id=3 and http://www.bls.gov/news.release/empsit.t14.htm
The jobs data and the absence of growth in real income for most of the population are inconsistent with reports of US GDP and productivity growth. Economists take for granted that the work force is paid in keeping with its productivity. A rise in productivity thus translates into a rise in real incomes of workers. Yet, we have had years of reported strong productivity growth but stagnant or declining household incomes. And somehow the GDP is rising, but not the incomes of the work force.
Something is wrong here. Either the data indicating productivity and GDP growth are wrong or Karl Marx was right that capitalism works to concentrate income in the hands of the few capitalists. A case can be made for both explanations.
Recently an economist, Susan Houseman, discovered that the reliability of some US economics statistics has been impaired by offshoring. Houseman found that cost reductions achieved by US firms shifting production offshore are being miscounted as GDP growth in the US and that productivity gains achieved by US firms when they move design, research, and development offshore are showing up as increases in US productivity. Obviously, production and productivity that occur abroad are not part of the US domestic economy.
Houseman’s discovery rated a Business Week cover story last June 18, but her important discovery seems already to have gone down the memory hole. The economics profession has over-committed itself to the “benefits” of offshoring, globalism, and the non-existent “New Economy.” Houseman’s discovery is too much of a threat to economists’ human capital, corporate research grants, and free market ideology.
The media have likewise let the story go, because in the 1990s the Clinton administration and Congress permitted a few mega-corporations to concentrate in their hands the ownership of the US media, which reports in keeping with corporate and government interests.
The case for Marx is that offshoring has boosted corporate earnings by lowering labor costs, thereby concentrating income growth in the hands of the owners and managers of capital. According to Forbes magazine, the top 20 earners among private equity and hedge fund managers are earning average yearly compensation of $657,500,000, with four actually earning more than $1 billion annually. The otherwise excessive $36,400,000 average annual pay of the 20 top earners among CEOs of publicly-held companies looks paltry by comparison. The careers and financial prospects of many Americans were destroyed to achieve these lofty earnings for the few.
Hubris prevents realization that Americans are losing their economic future along with their civil liberties and are on the verge of enserfment.
Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions.
http://www.counterpunch.org/roberts09122007.html
:smoking:
ECB pumps 75 billion euros into banking system
AFP - Wednesday, September 12 12:53 pm
FRANKFURT (AFP) - The European Central Bank said Wednesday it was pumping another 75 billion euros (104 billion dollars) into the banking system, in a bid to calm chronic jitters sparked by the US high-risk mortgage market.
In a move aimed at giving euro money markets a bit more air, the ECB said in a statement to the markets that the cash had been made available via an exceptional three-month tender at a marginal or lowest rate of 4.35 percent and a weighted average rate of 4.52 percent.
The rates were high compared with the ECB's current main lending rate of 4.0 percent and the sum also exceeded the bank's normal refinancing amount of 50 billion euros.
Last Thursday, the bank had made another three-month injection of liquidity into euro markets, where rates have risen owing to uncertainty about the impact of the US high-risk home loan crisis on the global economy.
That move was supposed "to support a normalisation of the functioning of the euro money market," an ECB statement had said, a goal that has eluded several previous attempts.
The same day it pumped 42 billion more into the system via a one-day tender, the first in three weeks.
Several central banks, including the US Federal Reserve, the ECB and the Bank of Japan, have injected massive amounts into money markets since August 9 so that commercial banks continue to extend credit on which the global economy depends.
Institutional lenders tightened credit conditions last month following the collapse of the US market for high-risk mortgages, also known as the subprime market.
Following repeated interventions between August 9-14, the ECB had said it saw markets returning to normal, but was forced last week to acknowledge they remained volatile.
Experts nonetheless say the issue is less one of sufficient liquidity than fears the subprime crisis would turn out to have a much bigger effect than initially thought.
ECB pumps 75 billion euros into banking system
AFP - Wednesday, September 12 12:53 pm
FRANKFURT (AFP) - The European Central Bank said Wednesday it was pumping another 75 billion euros (104 billion dollars) into the banking system, in a bid to calm chronic jitters sparked by the US high-risk mortgage market.
In a move aimed at giving euro money markets a bit more air, the ECB said in a statement to the markets that the cash had been made available via an exceptional three-month tender at a marginal or lowest rate of 4.35 percent and a weighted average rate of 4.52 percent.
The rates were high compared with the ECB's current main lending rate of 4.0 percent and the sum also exceeded the bank's normal refinancing amount of 50 billion euros.
Last Thursday, the bank had made another three-month injection of liquidity into euro markets, where rates have risen owing to uncertainty about the impact of the US high-risk home loan crisis on the global economy.
That move was supposed "to support a normalisation of the functioning of the euro money market," an ECB statement had said, a goal that has eluded several previous attempts.
The same day it pumped 42 billion more into the system via a one-day tender, the first in three weeks.
Several central banks, including the US Federal Reserve, the ECB and the Bank of Japan, have injected massive amounts into money markets since August 9 so that commercial banks continue to extend credit on which the global economy depends.
Institutional lenders tightened credit conditions last month following the collapse of the US market for high-risk mortgages, also known as the subprime market.
Following repeated interventions between August 9-14, the ECB had said it saw markets returning to normal, but was forced last week to acknowledge they remained volatile.
Experts nonetheless say the issue is less one of sufficient liquidity than fears the subprime crisis would turn out to have a much bigger effect than initially thought.
countrywide employees restless
------------------------------------------------------------------------------------------
Countrywide workers sue over retirement plan
The mortgage lender's employees say the value of retirement accounts plummeted by millions as the company's stock fell.
September 12 2007: 1:43 PM EDT
<!--startclickprintexclude-->
<!--endclickprintexclude--><!-- CONTENT -->LOS ANGELES (AP) -- Some Countrywide Financial Corp. employees sued the mortgage lender Wednesday, claiming they suffered heavy losses in their 401k retirement accounts after the company failed to warn them about the depth of its financial troubles.
The lawsuit, filed in U.S. District Court in Santa Ana, seeks class-action status and names as defendants Countrywide Chairman and Chief Executive Angelo Mozilo and benefits committee members in charge of the retirement plan, according to attorney Steve Berman, who is representing the plaintiffs.
He said employees decided how much of their salary to set aside in their retirement plan based in large part on their understanding of the company's financial health.
But those overseeing the plan failed to warn workers or intentionally concealed key information, the lawsuit claims.
"Most of these employees weren't risk-takers, rather claims processors and line staff who go to work every morning, putting a little away every month for retirement, or to finance a child's education," Berman said in a statement.
"With Countrywide's demise, they've seen their retirement funds decimated," he said.
A call to Berman seeking further comment was not returned.
The lawsuit claims Countrywide employees lost millions of dollars in retirement savings. It seeks unspecified compensatory damages.
A call to Calabasas-based Countrywide was also not returned.
Countrywide has been struggling as the housing slump led to a sharp rise in mortgage defaults and foreclosures, particularly among borrowers with subprime loans.
Countrywide (down $0.41 to $16.47, Charts, Fortune 500) shares fell 2.3 percent by midday Wednesday on the New York Stock Exchange. Its shares plunged from a 52-week high of $45.26 in January to a low of $15 in mid-August.
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BOA bailout #1, who's number two?
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Countrywide said to eye another bailout
Facing cash crunch, embattled mortgage lender is looking to strike deal similar to Bank of America bailout, paper reports.
September 11 2007: 10:00 AM EDT
NEW YORK (CNNMoney.com) -- Troubled mortgage lender Countrywide Financial is putting together its second multi-billion dollar bailout plan in less than a month as it continues to face a cash crunch, according to a report published Tuesday.
Countrywide (down $0.57 to $16.64, Charts, Fortune 500) shares slipped nearly 5 percent in pre-market trading.
"Countrywide is in desperate need of cash right now to continue funding mortgages and the credit markets are still largely closed to them," one source told the New York Post.
Citing sources familiar with the matter, the Post reported that Countrywide was looking at creating a strategic investment similar to the deal it struck in August with Bank of America.
Last month, Bank of America provided $2 billion in financing to Countrywide in exchange for a stake in the company.
So far, JPMorgan Chase (Charts, Fortune 500), Citigroup (Charts, Fortune 500) as well as several hedge funds have expressed interest in assisting Countrywide, according to the paper.
Sources told the Post a deal could be reached by the end of the month.
The report is the latest woe for Countrywide. Last week, the company announced it planned to slash as many as 12,000 jobs over the next three months. And Monday, two of its largest shareholders revealed in a regulatory filing they cut their stakes in the mortgage lender. Top of page
------------------------------------------------------------------------------------------
Countrywide workers sue over retirement plan
The mortgage lender's employees say the value of retirement accounts plummeted by millions as the company's stock fell.
September 12 2007: 1:43 PM EDT
<!--startclickprintexclude-->
<!--endclickprintexclude--><!-- CONTENT -->LOS ANGELES (AP) -- Some Countrywide Financial Corp. employees sued the mortgage lender Wednesday, claiming they suffered heavy losses in their 401k retirement accounts after the company failed to warn them about the depth of its financial troubles.
The lawsuit, filed in U.S. District Court in Santa Ana, seeks class-action status and names as defendants Countrywide Chairman and Chief Executive Angelo Mozilo and benefits committee members in charge of the retirement plan, according to attorney Steve Berman, who is representing the plaintiffs.
He said employees decided how much of their salary to set aside in their retirement plan based in large part on their understanding of the company's financial health.
But those overseeing the plan failed to warn workers or intentionally concealed key information, the lawsuit claims.
"Most of these employees weren't risk-takers, rather claims processors and line staff who go to work every morning, putting a little away every month for retirement, or to finance a child's education," Berman said in a statement.
"With Countrywide's demise, they've seen their retirement funds decimated," he said.
A call to Berman seeking further comment was not returned.
The lawsuit claims Countrywide employees lost millions of dollars in retirement savings. It seeks unspecified compensatory damages.
A call to Calabasas-based Countrywide was also not returned.
Countrywide has been struggling as the housing slump led to a sharp rise in mortgage defaults and foreclosures, particularly among borrowers with subprime loans.
Countrywide (down $0.41 to $16.47, Charts, Fortune 500) shares fell 2.3 percent by midday Wednesday on the New York Stock Exchange. Its shares plunged from a 52-week high of $45.26 in January to a low of $15 in mid-August.
--------------------------------------------------------------------------------------
BOA bailout #1, who's number two?
-----------------------------------------------------------------------------------------
Countrywide said to eye another bailout
Facing cash crunch, embattled mortgage lender is looking to strike deal similar to Bank of America bailout, paper reports.
September 11 2007: 10:00 AM EDT
NEW YORK (CNNMoney.com) -- Troubled mortgage lender Countrywide Financial is putting together its second multi-billion dollar bailout plan in less than a month as it continues to face a cash crunch, according to a report published Tuesday.
Countrywide (down $0.57 to $16.64, Charts, Fortune 500) shares slipped nearly 5 percent in pre-market trading.
"Countrywide is in desperate need of cash right now to continue funding mortgages and the credit markets are still largely closed to them," one source told the New York Post.
Citing sources familiar with the matter, the Post reported that Countrywide was looking at creating a strategic investment similar to the deal it struck in August with Bank of America.
Last month, Bank of America provided $2 billion in financing to Countrywide in exchange for a stake in the company.
So far, JPMorgan Chase (Charts, Fortune 500), Citigroup (Charts, Fortune 500) as well as several hedge funds have expressed interest in assisting Countrywide, according to the paper.
Sources told the Post a deal could be reached by the end of the month.
The report is the latest woe for Countrywide. Last week, the company announced it planned to slash as many as 12,000 jobs over the next three months. And Monday, two of its largest shareholders revealed in a regulatory filing they cut their stakes in the mortgage lender. Top of page
UK home prices starting to fall now too
U.K. House Prices Decline for First Time Since 2005, RICS Says
By Brian Swint
Sept. 13 (Bloomberg) -- U.K. house prices fell for the first time since 2005 in August after five interest-rate increases in the past year discouraged buyers, the Royal Institution of Chartered Surveyors said.
The number of real-estate agents and surveyors saying prices declined outnumbered those reporting gains by 1.8 percentage points in August, London-based RICS said. That's the first negative balance since October 2005. Prices in the capital rose at the slowest pace in more than two years.
The U.K.'s decade-long property boom is showing signs of cooling after the Bank of England raised its benchmark rate to a six-year high in July. With the U.S. subprime mortgage slump pushing global borrowing costs higher still, pressure on property prices is likely to increase in coming months.
``The market will soften further,'' said Ian Perry, an RICS spokesman. ``Potential house buyers have become far more cautious as they wait and see what effect interest-rate rises will have on household finances.''
Price declines were largest in the West Midlands, the northwest of England and East Anglia. The house price index for London, the engine of the U.K. property market, fell to the lowest since June 2005.
``The interest-rate rises have eventually bitten and their sting is being felt across all but the highest-value properties,'' said Grant Robertson of Allied Surveyors in Glasgow, Scotland. ``Selling times are very slow.''
U.K. House Prices Decline for First Time Since 2005, RICS Says
By Brian Swint
Sept. 13 (Bloomberg) -- U.K. house prices fell for the first time since 2005 in August after five interest-rate increases in the past year discouraged buyers, the Royal Institution of Chartered Surveyors said.
The number of real-estate agents and surveyors saying prices declined outnumbered those reporting gains by 1.8 percentage points in August, London-based RICS said. That's the first negative balance since October 2005. Prices in the capital rose at the slowest pace in more than two years.
The U.K.'s decade-long property boom is showing signs of cooling after the Bank of England raised its benchmark rate to a six-year high in July. With the U.S. subprime mortgage slump pushing global borrowing costs higher still, pressure on property prices is likely to increase in coming months.
``The market will soften further,'' said Ian Perry, an RICS spokesman. ``Potential house buyers have become far more cautious as they wait and see what effect interest-rate rises will have on household finances.''
Price declines were largest in the West Midlands, the northwest of England and East Anglia. The house price index for London, the engine of the U.K. property market, fell to the lowest since June 2005.
``The interest-rate rises have eventually bitten and their sting is being felt across all but the highest-value properties,'' said Grant Robertson of Allied Surveyors in Glasgow, Scotland. ``Selling times are very slow.''
Increase margins on gold...free markets???....bahhh...gold spikes up change the rules
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NYMEX to Change Margins for Gold Futures Contracts
NEW YORK, N.Y., September 12, 2007 -- The New York Mercantile Exchange, Inc. today announced margin changes for its gold and COMEX miNYTM gold futures contracts, effective at the close of business tomorrow.
Margins for the gold futures contract will increase to $2,500 from $2,000 for clearing and non-clearing members and to $3,375 from $2,700 for customers.
Margins for the COMEX miNYgold futures contract will increase to $1,250 from $1,000 for clearing and non-clearing members and to $1,688 from $1,350 for customers.
_________________________
NEW YORK, N.Y., September 12, 2007 -- The New York Mercantile Exchange, Inc. announced today that it will change margins for its palladium and Asian palladium futures contracts, effective at the close of business tomorrow.
Margins for the palladium futures contract will increase to $1,500 from $1,250 for clearing members, to $1,650 from $1,375 for members, and to $2,025 from $1,688 for customers.
Margins for the Asian palladium futures contract will increase to $241 from $201 for clearing members, to $265 from $221 for members, and to $325 from $298 for customers.
_________________________
NYMEX to Change Margins for Silver Futures Contracts
NEW YORK, N.Y., August 20, 2007 -- The New York Mercantile Exchange, Inc. today announced margin changes for its silver and COMEX miNYTM silver futures contract, effective at the close of business tomorrow.
Margins for the silver futures contract will increase to $3,000 from $2,500 for clearing and non-clearing members and to $4,050 from $3,375 for customers.
Margins for the COMEX miNY silver futures contract will increase to $1,500 from $1,250 for clearing and non-clearing members and to $2,025 from $1,688 for customers.
----------------------------------------------------------------------------------------------------------------
NYMEX to Change Margins for Gold Futures Contracts
NEW YORK, N.Y., September 12, 2007 -- The New York Mercantile Exchange, Inc. today announced margin changes for its gold and COMEX miNYTM gold futures contracts, effective at the close of business tomorrow.
Margins for the gold futures contract will increase to $2,500 from $2,000 for clearing and non-clearing members and to $3,375 from $2,700 for customers.
Margins for the COMEX miNYgold futures contract will increase to $1,250 from $1,000 for clearing and non-clearing members and to $1,688 from $1,350 for customers.
_________________________
NEW YORK, N.Y., September 12, 2007 -- The New York Mercantile Exchange, Inc. announced today that it will change margins for its palladium and Asian palladium futures contracts, effective at the close of business tomorrow.
Margins for the palladium futures contract will increase to $1,500 from $1,250 for clearing members, to $1,650 from $1,375 for members, and to $2,025 from $1,688 for customers.
Margins for the Asian palladium futures contract will increase to $241 from $201 for clearing members, to $265 from $221 for members, and to $325 from $298 for customers.
_________________________
NYMEX to Change Margins for Silver Futures Contracts
NEW YORK, N.Y., August 20, 2007 -- The New York Mercantile Exchange, Inc. today announced margin changes for its silver and COMEX miNYTM silver futures contract, effective at the close of business tomorrow.
Margins for the silver futures contract will increase to $3,000 from $2,500 for clearing and non-clearing members and to $4,050 from $3,375 for customers.
Margins for the COMEX miNY silver futures contract will increase to $1,500 from $1,250 for clearing and non-clearing members and to $2,025 from $1,688 for customers.
This is why people that are only trading gold in futures and mining stocks do not understand that when they do this they own paper and not gold.
Its ok to do some speculating owning mining companies, but when the roof blows off the gold market, the feds will close the futures exchange and/or raise margin requirements to whatever.
I stand by my prediction made earlier this decade that gold is going to several thousand dollars per ounce.
Ill worry about calling a top when or near the time its reached. Nobody knows just how much money the govts around the world will print before they realize that markets cannot be indefinitely controlled.
Never have been and never will be.
:drink:
solar panel technology is becoming less expensive and depending on your state you can recive up to 50% back on initial investment...
after that you collect mroe than enough energy throughout the day to light your home, problem still in the technology is you cant store that energy.
however your local electric company is more than willing to use the current power grid as a bank. So the otherwise wasted energy that cant be stored will be used by them.
they will pay you up to 20 cents a unit of energy or click and sell it back to you for 10 cents.
also take into account that car batteries have advanced to be bale to push a car approx 200 miles www.teslamotors.com
we can have electricity moving everything with more R&D, and coal free electricity.
after that you collect mroe than enough energy throughout the day to light your home, problem still in the technology is you cant store that energy.
however your local electric company is more than willing to use the current power grid as a bank. So the otherwise wasted energy that cant be stored will be used by them.
they will pay you up to 20 cents a unit of energy or click and sell it back to you for 10 cents.
also take into account that car batteries have advanced to be bale to push a car approx 200 miles www.teslamotors.com
we can have electricity moving everything with more R&D, and coal free electricity.
solar panel's still not feasible unless subsidized by our government
plus pv panel prices on the rise due to supply demand issues
we'll get there eventually but doesn't make any economical sense quite yet, only for worthwhile for hippies that want to save the environment right now
plus pv panel prices on the rise due to supply demand issues
we'll get there eventually but doesn't make any economical sense quite yet, only for worthwhile for hippies that want to save the environment right now
Hehe was ranting about the debt ceiling earlier today, here's the increase, print biatches to infinity!! Well it hasn't officially passed yet i suppose senate will take action on it in early october.
two terms for bush and a 4 trillion dollar+ increase in the debt ceiling quite a economic conservative dubya is
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Senate panel okays $850 billion debt increase
Wed Sep 12, 2007 11:47AM EDT
WASHINGTON (Reuters) - The Senate Finance Committee on Wednesday approved an $850 billion increase in U.S. borrowing authority to $9.815 trillion in order to avoid a default as the government nears its credit limit of $8.965 trillion.
The committee approved the bill on a voice vote and it clears the way for the full Senate to take action most likely by early October. As of last Friday, the federal debt stood at $8.923 trillion and Treasury Secretary Henry Paulson has been urging Congress to act quickly to avoid unnerving financial markets that are already jittery over rising mortgage foreclosures.
The amount approved by the finance panel would allow the government to continue borrowing into 2009, well after next year's presidential and congressional elections. Finance Committee Chairman Max Baucus, a Montana Democrat expressed concern that the debt issue could "become a political football" during next year's campaigns.
"The increase of $850 billion would be the third largest debt limit increase in U.S. history," Baucus said.
The U.S. House of Representatives already approved the credit increase when it passed the 2008 budget blueprint earlier this year.
It will be the fifth increase in the U.S. credit limit since President George W. Bush took office in 2001 when the U.S. debt stood at $5.6 trillion.
two terms for bush and a 4 trillion dollar+ increase in the debt ceiling quite a economic conservative dubya is
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Senate panel okays $850 billion debt increase
Wed Sep 12, 2007 11:47AM EDT
WASHINGTON (Reuters) - The Senate Finance Committee on Wednesday approved an $850 billion increase in U.S. borrowing authority to $9.815 trillion in order to avoid a default as the government nears its credit limit of $8.965 trillion.
The committee approved the bill on a voice vote and it clears the way for the full Senate to take action most likely by early October. As of last Friday, the federal debt stood at $8.923 trillion and Treasury Secretary Henry Paulson has been urging Congress to act quickly to avoid unnerving financial markets that are already jittery over rising mortgage foreclosures.
The amount approved by the finance panel would allow the government to continue borrowing into 2009, well after next year's presidential and congressional elections. Finance Committee Chairman Max Baucus, a Montana Democrat expressed concern that the debt issue could "become a political football" during next year's campaigns.
"The increase of $850 billion would be the third largest debt limit increase in U.S. history," Baucus said.
The U.S. House of Representatives already approved the credit increase when it passed the 2008 budget blueprint earlier this year.
It will be the fifth increase in the U.S. credit limit since President George W. Bush took office in 2001 when the U.S. debt stood at $5.6 trillion.
www.prosper.com going nutso these days usually check in periodically for a good laugh never seen this many postings before
anyone want to float indebted sheeple 20% interest loans? this is your site
anyone want to float indebted sheeple 20% interest loans? this is your site
CME Group Fed Watch – September 12, 2007
In advance of next week's Federal Open Market Committee meeting on September 18, the CME Group will be reporting daily rate change probabilities in the FOMC's federal funds target rate, as indicated by the 30-Day Federal Funds futures contract. The 30-Day Federal Funds futures contract is a key benchmark interest rate barometer that reflects the forward overnight effective rate for excess reserves that are traded among commercial banks in the U.S. federal funds market.
Based upon the September 12 market close, the 30-Day Federal Funds futures contract for the October 2007 expiration is currently pricing in a 100 percent probability that the FOMC will decrease the target rate by at least 25 basis points from 5-1/4 percent to 5 percent at the FOMC meeting on September 18.
In addition, the 30-Day Federal Funds futures contract is pricing in a 74 percent probability of a further 25-basis point decrease in the target rate to 4-3/4 percent (versus a 26 percent probability of just a 25-basis point rate decrease).
Summary Table
September 11: 28% for -25 bps versus 72% for -50 bps.
September 12: 26% for -25 bps versus 74% for -50 bps.
September 13:
September 14:
September 17:
September 18: FOMC decision on federal funds target rate.
In advance of next week's Federal Open Market Committee meeting on September 18, the CME Group will be reporting daily rate change probabilities in the FOMC's federal funds target rate, as indicated by the 30-Day Federal Funds futures contract. The 30-Day Federal Funds futures contract is a key benchmark interest rate barometer that reflects the forward overnight effective rate for excess reserves that are traded among commercial banks in the U.S. federal funds market.
Based upon the September 12 market close, the 30-Day Federal Funds futures contract for the October 2007 expiration is currently pricing in a 100 percent probability that the FOMC will decrease the target rate by at least 25 basis points from 5-1/4 percent to 5 percent at the FOMC meeting on September 18.
In addition, the 30-Day Federal Funds futures contract is pricing in a 74 percent probability of a further 25-basis point decrease in the target rate to 4-3/4 percent (versus a 26 percent probability of just a 25-basis point rate decrease).
Summary Table
September 11: 28% for -25 bps versus 72% for -50 bps.
September 12: 26% for -25 bps versus 74% for -50 bps.
September 13:
September 14:
September 17:
September 18: FOMC decision on federal funds target rate.
Whoa Nelly! Not so sure they'll drop the rate there my brutha. I know, Kramer wants it so they'll abide right?
What is the chief, number one function of the FED?
There's a lot of bucks out there flying around and now they throw out some more?? As if inflation isn't already on the march. Hmmm.
Max .25 lowering, but I'm thinking they may leave it be and do nothing.
BTW, carded a nifty 68 yesterday. :toast:
