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CREDIT CRISIS: The Everyman's Guide to the Credit Crisis

Ok, this is beyond wonky, especially for something that purports to be "The Everyman's Guide," but print it out (all 177 pages of it), carry it around, read it during lunch brekas and (eventually) impress your friends at happy hour with your fierce command of esoteric (and toxic) financial acronyms.

Read more at Prism Group (via Zero Hedge)  Posted on 08-12-2009 11:08 pm

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RESOURCE WARS: India's Water Use 'Unsustainable'

Parts of India are on track for severe water shortages according to results from Nasa's gravity satellites, the BBC reports. From an investing standpoint, what is interesting is water access is a tremendous source of tension between India and Pakistan. As well, DeMark indicators, according to Minyanville's Kevin Depew will likely record a long-term TD Sequential Sell Signal this quarter. 

Read more at BBC  Posted on 08-12-2009 10:59 pm

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BUBBLE ECONOMICS: The Illusion of Wealth

"Inflation...lowers the general standard of living. In the very course of creating a tinsel atmosphere of prosperity, people have to work harder. They have to have two-income families just to keep up. We all think we're doing better: we're buying more stuff, and we're buying bigger houses to put our stuff in. But we're really getting less prosperous, and that's what inflation does during a boom." Hence, the circa 1999 saying, "prosperity never felt so poor."

Read more at Mises.org  Posted on 08-12-2009 1:04 pm

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SOCIAL MOOD SHIFT: Healthcare Town Halls Reveal American Anger

According to the Associated Press, "Sen. Arlen Specter said Wednesday he thinks people who have been angrily disrupting town hall meetings on overhauling the health care system are "not necessarily representative of America,"... much like our elected senators and representatives if you really think about it.

Read more at Associated Press  Posted on 08-12-2009 11:47 am

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HERDING BEHAVIOR: Short Selling of S&P 500 Drops to Lowest Level Since February

"Short interest on the S&P 500 declined to 8.77 billion shares as of July 31, a 12 percent decrease from two weeks earlier, according to data compiled by U.S. exchanges and Bloomberg yesterday. That’s the steepest drop since Sept. 30. Investors reduced bearish bets on financial stocks the most, slashing them by 31 percent to 2.05 billion shares."

Read more at Bloomberg  Posted on 08-12-2009 11:25 am

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CORPORATE STEALTH: Corporations Take a Low-Key Approach to Event Sponsorship

There's a new fad in marketing: stealth. Banks are still paying big bucks to entertain clients at events like the US Open, but now they don't want anyone to know they're doing it. The latest trend in corporate event planning is “is having an event, but no one knowing whose it is,” said one planner.

“Clearly, they did not want to be identified,” said one volunteer at the Heritage Club, who also declined to be identified because he was not authorized to talk publicly for the club. “I thought maybe I’d just put a generic ‘TARP Recipient’ sign at the center of each table.”

Read more at New York Times  Posted on 08-12-2009 8:54 am

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CHINA SYNDROME PT.2: China Rising, Rent-Seeking Version

"The reason real to worry about China, however, has very little to do with external balances, China’s dollar holdings, or even capital flows.  It’s about productivity and rent-seeking," Simon Johnson for The Baseline Scenario writes. "Rent-seeking means effectively a tax extracted by one sector from the rest of the economy... Finance is rent-seeking.  The sector has devoted great resources to tilting all playing fields in its direction.  Consumers are taken advantage of; consumer protection is vehemently opposed.  And great risks are taken, with the downside handed off to the government (and the consumers again, as taxpayers).  This downside protection allows an overexpansion of debt-financed finance – reaching the preposterous levels seen in mid-2008 and now re-emerging. Finance in its modern American form is not productive."

Read more at The Baseline Scenario  Posted on 08-12-2009 8:51 am

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DAILY DEFLATION DATAPOINT: Electricity Prices Plummet

On Friday, the Journal reports, the nation's largest wholesale power market serving parts of 13 states east of the Rockies is expected to report that electricity demand fell 4.4% in the first half of the year, which helped to push down daily market prices by 40% during the same period.

Read more at Wall Street Journal  Posted on 08-12-2009 8:51 am

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FOMC MEETING PREVIEW: Fed's Quantitative Easing in Focus

All eyes are on the FOMC meeting today. Most market participants aren’t expecting any moves in the overnight Fed funds target rate, but will be focused on what signals the Fed may give on its quantitative easing program which is set to expire in September.

According to Bloomberg, former Fed governor Laurence Meyer (1996-2002) predicts the central bank will announce an end to the program. Meanwhile other economists such as Lee Hoskins (Cleveland Fed president 1987-1991) think the Fed is likely to leave the QE option open, taking a hint from the Bank of England last week when it expanded its quantitative easing program by 40%. The FOMC statement is due out at 2:15 PM EST.

Read more at Minyanville  Posted on 08-12-2009 8:44 am

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CHINA SYNDROME: Credit Tightening Threatens China's 'Giant Ponzi Scheme'

Ambrose Evans-Pritchard, writing in the Telegraph, tracks down former Morgan Stanley economist Andy Xie to put China's "boom" in perspective: "Andy Xie, a leading consultant, said China's boom was a "giant Ponzi scheme" that was likely to "bring very bad consequences" for the country."

Read more at Telegraph (UK)  Posted on 08-12-2009 8:34 am

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ANNALS OF MEDIA DECAY: Financial Media Coup d'Etat

"What is going on? This is clearly the way the Old World Order of media has abused it’s opponents and competitors for centuries. But we are now living in an age when every statement can be researched with a few clicks. We can obtain direct responses from anyone without relying on major media outlets to force-feed us heavily edited and manipulated information. So why do these media goliaths continue insulting our intelligence and laughing at us by calling their misinformation and entertainment “news,” “objective,” “fair and balanced,” or “trustworthy”? Because we still point our eyeballs and ears toward them (which they in turn sell to advertisers)!"

Read more at Wall Street Cheat Sheet  Posted on 08-12-2009 8:31 am

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SHADOW ECONOMY: Lenders Hesitating to Repossess California Homes

Sounds relatively good, right? Perhaps homeowners who are behind on their mortgages are getting a bit of a break in terms of a time extension. Unfortunately, the reality speaks to a different story. The problem is lenders are increasingly reluctant to take repossess these properties, this creating a "shadow inventory" of supply that is understated by reported housing supply figures. Moreover, consider what Capital One reported recently about cardholders who are falling behind on their accounts; they're increasingly not even trying to get current. If a similar mindset is occurring among California homeowners, and with prices continuing to decline our bet is it is, a new wave of problems are on the horizon.

Read more at LA Times  Posted on 08-12-2009 8:23 am

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