DailyFinance http://www.dailyfinance.com DailyFinance http://www.blogsmithmedia.com/http://www.dailyfinance.com/media/feedlogo.gif DailyFinance http://www.dailyfinance.com en-us Copyright 2009 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/Is the market topping out? Technical and fundamental headwinds say yeshttp://www.dailyfinance.com/2009/11/16/is-the-market-topping-out-some-technical-and-fundamental-headwi/http://www.dailyfinance.com/2009/11/16/is-the-market-topping-out-some-technical-and-fundamental-headwi/http://www.dailyfinance.com/2009/11/16/is-the-market-topping-out-some-technical-and-fundamental-headwi/#commentsFiled under: ,

Numerous analysts have questioned the foundations of the current stock market rally, but the sagging economy hasn't stopped the rally from chugging into its ninth month. On Monday, the market charged out of the gate and held on to a three-digit gain all day.

Though the rally has ground down all who have dared bet against it, there are technical and fundamental reasons to suspect the rally is topping out -- not in a few months, but in a matter of days or weeks.

Continue reading Is the market topping out? Technical and fundamental headwinds say yes

Is the market topping out? Technical and fundamental headwinds say yes originally appeared on DailyFinance on Mon, 16 Nov 2009 17:30:00 EST. Please see our terms for use of feeds.

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]]>divergenceDOGDow Jones IndustrialsDowJonesIndustrialsfundamental analysisFundamentalAnalysisin focusInFocusinverse ETFsInverseEtfsprobabilitiesrelative strengthRelativeStrengthshort sellingShortSellingstochasticsstock marketStockMarkettechnical analysisTechnicalAnalysistrend reversalTrendReversalvolumeCharles Hugh SmithMon, 16 Nov 2009 17:30:00 ESTWhy the coming natural gas boom isn't all it's 'fracced' up to behttp://www.dailyfinance.com/2009/11/08/the-coming-natural-gas-boom-is-not-all-its-fracced-up-to-be/http://www.dailyfinance.com/2009/11/08/the-coming-natural-gas-boom-is-not-all-its-fracced-up-to-be/http://www.dailyfinance.com/2009/11/08/the-coming-natural-gas-boom-is-not-all-its-fracced-up-to-be/#commentsFiled under:

the-coming-natural-gas-boom-is-not-all-its-fracced-up-to-bePlease pardon my poor punning, and let me explain: "Fraccing" (rhymes with "cracking") is the oil and natural gas industry's an informal contraction for the technology called hydraulic fracturing, in which water (and in some cases, a chemical mixture) is pumped deep underground to fracture shale and rock and thus free up trapped oil and gas deposits.

The financial media has been buzzing with stories proclaiming a new era for America's natural gas industry as new fraccing technology has enabled the tapping of vast dispersed fields in the Eastern U.S. and the "oil patch" states of Oklahoma and Texas. These advances have caused analysts to raise their estimates of America's natural gas reserves to an astounding 1.8 trillion cubic feet, the equivalent of about 320 billion barrels of oil -- far more than Saudi Arabia's proven reserves of around 260 billion barrels of oil.

Continue reading Why the coming natural gas boom isn't all it's 'fracced' up to be

Why the coming natural gas boom isn't all it's 'fracced' up to be originally appeared on DailyFinance on Sun, 08 Nov 2009 15:30:00 EST. Please see our terms for use of feeds.

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]]>dont missDontMissfraccingfracturing fluidsFracturingFluidsfuture productionFutureProductionground water contaminationGroundWaterContaminationhydraulic fracturingHydraulicFracturingIn FocusInFocusmineral rightsMineralRightsnatural gasNaturalGaspetroleum engineersPetroleumEngineersprice of natural gasPriceOfNaturalGastoxic wasteToxicWastewater rightsWaterRightsCharles Hugh SmithSun, 08 Nov 2009 15:30:00 ESTThe Crash of 2008: It's the Panic of 1825 all over again (also 1837, 1847, 1866 ... )http://www.dailyfinance.com/2009/11/08/the-crash-of-2008-its-the-panic-of-1825-all-over-again-also-1/http://www.dailyfinance.com/2009/11/08/the-crash-of-2008-its-the-panic-of-1825-all-over-again-also-1/http://www.dailyfinance.com/2009/11/08/the-crash-of-2008-its-the-panic-of-1825-all-over-again-also-1/#commentsFiled under:

the-crash-of-2008-its-the-panic-of-1825-all-over-againA freeze in lending triggers a panic in a Western financial capital which then spreads around the globe, eventually tipping several South American countries into default. In a desperate attempt to stem the panic, the central bank steps in as "the lender of last resort" and unleashes a flood of new money into the palpitating financial system.

Gee, was that 1998, or 2008? Neither -- try 1825 London.

You might think an era of gas lighting, slow sailing ships and horse-drawn carriages has little to teach us about modern finance, but much of what we consider advanced capitalism has been in place since the 1500s: stock markets, portfolio insurance, options, commercial paper and global banking.

Continue reading The Crash of 2008: It's the Panic of 1825 all over again (also 1837, 1847, 1866 ... )

The Crash of 2008: It's the Panic of 1825 all over again (also 1837, 1847, 1866 ... ) originally appeared on DailyFinance on Sun, 08 Nov 2009 14:00:00 EST. Please see our terms for use of feeds.

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]]>asymmetric informationAsymmetricInformationBank of EnglandBankOfEnglandCDOscollateralized debt obligationsCollateralizedDebtObligationscredit bubbleCreditBubbleexpansionist monetary policyExpansionistMonetaryPolicyFederal ReserveFederalReservefinancial panicFinancialPanicMBSmortgage backed securitiesMortgageBackedSecuritiesPanic of 1825PanicOf1825recessionstock market crashStockMarketCrashU.S. TreasuryU.s.TreasuryCharles Hugh SmithSun, 08 Nov 2009 14:00:00 ESTJust how dangerous are stimulus-driven deficits in the long run?http://www.dailyfinance.com/2009/11/07/wake-up-people-funding-stimulus-through-deficits-is-dangerous/http://www.dailyfinance.com/2009/11/07/wake-up-people-funding-stimulus-through-deficits-is-dangerous/http://www.dailyfinance.com/2009/11/07/wake-up-people-funding-stimulus-through-deficits-is-dangerous/#commentsFiled under:

Most mainstream academic and government economists -- elites, we should note, who are generally well-protected from the vagaries of the real world -- are united in the view that massive federal deficits to fund stimulus programs are not just a good thing but a necessary thing.

Economist J. Brad DeLong, for example, recently raked a journalist over the coals for suggesting deficits might cause long-term harm to the economy. Accusing the journalist of "not doing the arithmetic," the economics professor at the University of California, Berkeley launched into a questionable string of assumptions to reach the dubious conclusion that massive federal borrowing will add a mere $5 per year to every taxpayers' future tax burden.

Continue reading Just how dangerous are stimulus-driven deficits in the long run?

Just how dangerous are stimulus-driven deficits in the long run? originally appeared on DailyFinance on Sat, 07 Nov 2009 09:30:00 EST. Please see our terms for use of feeds.

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]]>Brad DeLongBradDelongdefacto nationalizationDefactoNationalizationdeficit spendingDeficitSpendingexternal debtExternalDebtFederal budgetFederal ReserveFederalBudgetFederalReservein focusInFocusinterest on national debtInterestOnNationalDebtJ. Bradford DeLongJ.BradfordDelongjobs savedcreatedJobsSavedcreatedlow interest ratesLowInterestRatesnational debtNationalDebtstimulusT-Billstax creditstax revenuesTaxCreditsTaxRevenuesTIPsTreasury DirectTreasuryDirectU.S. TreasuryU.s.TreasuryCharles Hugh SmithSat, 07 Nov 2009 09:30:00 ESTSkyrocketing traffic fines cause some drivers to lose their cars -- or worsehttp://www.dailyfinance.com/2009/10/28/skyrocketing-traffic-fines-cause-some-drivers-to-lose-their-cars/http://www.dailyfinance.com/2009/10/28/skyrocketing-traffic-fines-cause-some-drivers-to-lose-their-cars/http://www.dailyfinance.com/2009/10/28/skyrocketing-traffic-fines-cause-some-drivers-to-lose-their-cars/#commentsFiled under: ,

Highway robbery has taken on a whole new meaning with local and state governments now jacking up the fines to such an extent that it's leaving people destitute, and in some cases, homeless or even incarcerated.

In California, the cost of a ticket for a broken headlight nearly tripled to $100 this year, according to a report by Fox News. Meanwhile, fines for parking in front of a fire hydrant in Pensacola, Fla. were jacked up 900% to $100.

Local and state governments have long turned to issuing traffic and parking fines as a way of raising more revenue, but doubling or tripling the amount of traffic fines for modest violations seems less like "enforcing the law" and more like a form of extortion aimed at filling the dwindling coffers of local government.

Continue reading Skyrocketing traffic fines cause some drivers to lose their cars -- or worse

Skyrocketing traffic fines cause some drivers to lose their cars -- or worse originally appeared on DailyFinance on Wed, 28 Oct 2009 19:50:00 EST. Please see our terms for use of feeds.

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]]>DrivingWhilePoorfox newsFoxNewslaw enforcementLawEnforcementlocal governmentLocalGovernmentparking ticketparking ticketsParkingTicketParkingTicketsraising revenuesRaisingRevenuesstate governmentStateGovernmentTha Atlantic MonthlyThaAtlanticMonthlytraffic finesTrafficFinesvehicleCharles Hugh SmithWed, 28 Oct 2009 19:50:00 ESTGDP release this week could trigger stock sell-off, even with positive numberhttp://www.dailyfinance.com/2009/10/26/gdp-release-could-trigger-stock-sell-off/http://www.dailyfinance.com/2009/10/26/gdp-release-could-trigger-stock-sell-off/http://www.dailyfinance.com/2009/10/26/gdp-release-could-trigger-stock-sell-off/#commentsFiled under: ,

gdp-release-could-trigger-sell-offThe much-awaited third-quarter gross domestic product number to be released Thursday is expected to show a 3.5 percent increase. In the view of most economists, a positive number will mark the end of the recession which began in late 2008. But a positive print in the GDP is so widely expected that it is now old news, and as a result, the market is primed for a "buy the rumor, sell the news" moment.

Though this increase in GDP is almost universally viewed as "proof the recession is over," the market may not play along. Why? The federal borrow-and-spend stimulus and bank bailout was intended to act like lighter fluid on the real economy's damp logs: contracting credit, declining employment and tax revenues, and a housing market that is still weak.

Continue reading GDP release this week could trigger stock sell-off, even with positive number

GDP release this week could trigger stock sell-off, even with positive number originally appeared on DailyFinance on Mon, 26 Oct 2009 11:00:00 EST. Please see our terms for use of feeds.

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]]>50-day moving average50-dayMovingAverageemploymentFederal deficitFederal stimulusFederalDeficitFederalStimulusfinancial sectorFinancialSectorGDPgross domestic productGrossDomesticProductrecessionstock marketStockMarketWells Fargo BankWellsFargoBankWFCCharles Hugh SmithMon, 26 Oct 2009 11:00:00 ESTBig bonuses and bigger deficits are driving new waves of populist angerhttp://www.dailyfinance.com/2009/10/25/big-bonuses-and-bigger-deficits-are-driving-new-waves-of-populis/http://www.dailyfinance.com/2009/10/25/big-bonuses-and-bigger-deficits-are-driving-new-waves-of-populis/http://www.dailyfinance.com/2009/10/25/big-bonuses-and-bigger-deficits-are-driving-new-waves-of-populis/#commentsFiled under:

As reports about record payouts for Wall Street and record deficits trade off on the front page, millions of Americans are wondering what's going on with their economy and their political system. Many of the nearly 200 reader comments made in response to my recent piece, Middle class squeeze: The deep roots of an economic and social transformation, expressed disgust and anger with both Big Finance and Big Government.

At least some of this populist dissatisfaction can be traced back to the 2008 government bailout of big banks, the TARP program. Email and phone calls to congressional offices ran about 300-to-1 against TARP, but Congress approved the massive bailout with very few strings attached. Add in the bailouts extended to other crippled financial institutions such as AIG and Fannie Mae and the government's plans to rework the U.S. health care insurance system, and the sense that the government and the nation's financial elites are failing the citizenry has reached new highs.

Continue reading Big bonuses and bigger deficits are driving new waves of populist anger

Big bonuses and bigger deficits are driving new waves of populist anger originally appeared on DailyFinance on Sun, 25 Oct 2009 10:00:00 EST. Please see our terms for use of feeds.

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]]>American RevolutionAmericanRevolutionBig BusinessBig GovernmentBigBusinessBigGovernmentcapitalismfinancial ElitesFinancialElitesGilded AgeGildedAgehealthcare costshealthcarecostsMedicaremiddle classMiddleClasssocialismTea partiesTeaPartiesTom PaineTomPaineVeterans AdministrationVeteransAdministrationCharles Hugh SmithSun, 25 Oct 2009 10:00:00 ESTHousing prices forecast to fall in 2010 -- and could keep falling for yearshttp://www.dailyfinance.com/2009/10/21/housing-prices-forecast-to-fall-in-2010-and-could-keep-fallin/http://www.dailyfinance.com/2009/10/21/housing-prices-forecast-to-fall-in-2010-and-could-keep-fallin/http://www.dailyfinance.com/2009/10/21/housing-prices-forecast-to-fall-in-2010-and-could-keep-fallin/#commentsFiled under:

Fiserv, a financial information and analysis firm, is forecasting that national median home prices will fall 11.3 percent by summer 2010. The recent surge in home sales and new homes under construction have launched a feeding frenzy in the hardest hit Sunbelt and California markets as investors believe "the bottom is in." The Fiserv forecast -- and the fundamentals of supply and demand -- are throwing cold water on that confident enthusiasm.

Foreclosures are still rising as defaults rise in prime mortgages, which were once viewed as immune to the high defaults hitting subprime loans. As I have reported here before, the foreclosure pipeline -- not just homes that have been foreclosed, but those in default -- is bulging.

Continue reading Housing prices forecast to fall in 2010 -- and could keep falling for years

Housing prices forecast to fall in 2010 -- and could keep falling for years originally appeared on DailyFinance on Wed, 21 Oct 2009 08:30:00 EST. Please see our terms for use of feeds.

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]]>bubble symmetryBubbleSymmetrydefaultsFHAFiservforeclosureshousinghousing bubbleHousingBubblein focusInFocusIRS investigationIrsInvestigationlow-down payment loansLow-downPaymentLoansmedian home pricesMedianHomePricesmortgagesnew home buyer creditNewHomeBuyerCreditprime mortgagesPrimeMortgagesshadow inventoryShadowInventoryCharles Hugh SmithWed, 21 Oct 2009 08:30:00 ESTDow 10,000: What's next?http://www.dailyfinance.com/2009/10/19/dow-10-000-whats-next/http://www.dailyfinance.com/2009/10/19/dow-10-000-whats-next/http://www.dailyfinance.com/2009/10/19/dow-10-000-whats-next/#commentsFiled under:

The Dow Jones Industrial Average ($INDU) has reclaimed the psychologically important 10,000 level. So is this the first leg of a new bull market? Should we expect the Dow to continue rising, perhaps to its old high above 14,000? Or maybe there will be a sharp snapback that will send the market spiraling down to its March lows of 6,547.

History suggests three basic possibilities (see accompanying chart).

1. A return to a Bull market, similar to the 1990s market after the 1991 recession.

2. A Bear market rally which fizzles out, retesting the recent low and then rising and falling in range-bound trading for years, similar to the 1970s.

3. A Bear market rally which runs out of steam, leading to new lows, akin to the sharp rallies in the early 1930s which led to new lows in the Dow.

Continue reading Dow 10,000: What's next?

Dow 10,000: What's next? originally appeared on DailyFinance on Mon, 19 Oct 2009 14:40:00 EST. Please see our terms for use of feeds.

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]]>000Baby BoomersBabyBoomersbear marketbear market rallyBearMarketBearMarketRallybull marketBullMarketcredit marketsCreditMarketsDow 10dow industrialsDow JonesDow10DowIndustrialsDowJoneseconomic malaiseEconomicMalaisegovernment stimulusGovernmentStimulushousehold wealthHouseholdWealthhousingin focusInFocusorganic demandOrganicDemandretest of recent lowsRetestOfRecentLowsstock marketStockMarketCharles Hugh SmithMon, 19 Oct 2009 14:40:00 ESTMiddle class squeeze: The deep roots of an economic and social transformationhttp://www.dailyfinance.com/2009/10/10/middle-class-squeeze-the-deep-roots-of-an-economic-and-social-t/http://www.dailyfinance.com/2009/10/10/middle-class-squeeze-the-deep-roots-of-an-economic-and-social-t/http://www.dailyfinance.com/2009/10/10/middle-class-squeeze-the-deep-roots-of-an-economic-and-social-t/#commentsFiled under:

The current recession has stoked deep-seated fears about a declining middle class. A great collective anxiety about such a decline has been floating around for years now, and for good reason. As abundant data make clear, middle class families are being squeezed by stagnant incomes and rising expenses, and have been since the 1970s.

This week, Elizabeth Warren, chair of the Congressional Oversight Panel that is monitoring the TARP bailout funds given to banks, jumped into the debate on the topic. In an interview with The Washington Post, she said: "I believe that the middle class is under terrific assault."

An astute political player, she added: "And I don't want to play this as a capitalism issue." Actually, capitalism has quite a bit to do with the squeezing of the middle class -- but so do other factors, including government policy and deep structural changes in the global economy.

Continue reading Middle class squeeze: The deep roots of an economic and social transformation

Middle class squeeze: The deep roots of an economic and social transformation originally appeared on DailyFinance on Sat, 10 Oct 2009 12:00:00 EST. Please see our terms for use of feeds.

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]]>financial Elitesfinancial innovationsFinancialElitesFinancialInnovationsFIRE economyFireEconomyglobalizationin focusincome disparityincome inequalityIncomeDisparityIncomeInequalityInFocusmiddle class wealthMiddleClassWealthsecuritizationCharles Hugh SmithSat, 10 Oct 2009 12:00:00 ESTEven with the stimulus, we could still see 15 percent unemploymenthttp://www.dailyfinance.com/2009/10/08/even-with-the-stimulus-15-percent-unemployment-is-a-real-possib/http://www.dailyfinance.com/2009/10/08/even-with-the-stimulus-15-percent-unemployment-is-a-real-possib/http://www.dailyfinance.com/2009/10/08/even-with-the-stimulus-15-percent-unemployment-is-a-real-possib/#commentsFiled under:

In my previous column, I argued that the business cycle has more pain in store, even as unemployment grows. My goal in this column is to make a realistic appraisal of the possibility that unemployment could continue to rise after the $787 billion Federal stimulus spending runs its course next year.

The Federal government has taken truly unprecedented measures to reverse the recession and spark a new round of consumer and business borrowing and spending. It has borrowed almost six percent of the nation's GDP (the $787 billion stimulus) to spread "free money" in every city, county and state in the land. At the same time, it has essentially taken over the entire mortgage market, underwriting almost all new mortgages originated this year.

Both the massive stimulus spending and the $1.25 trillion mortgage support are slated to end next year. The trillion-dollar question is: will this $2 trillion re-inflate housing values, consumer confidence and thus consumer borrowing and spending?

Continue reading Even with the stimulus, we could still see 15 percent unemployment

Even with the stimulus, we could still see 15 percent unemployment originally appeared on DailyFinance on Thu, 08 Oct 2009 14:00:00 EST. Please see our terms for use of feeds.

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]]>Bureau of Labor Statisticsbureauoflaborstatisticsbusiness cycleBusinessCycleFederal stimulusFederalStimulusin focusInFocusunemploymentunemployment rateUnemploymentRateCharles Hugh SmithThu, 08 Oct 2009 14:00:00 ESTThe business cycle has more pain in store, even as unemployment growshttp://www.dailyfinance.com/2009/09/29/the-business-cycle-has-more-pain-in-store-even-as-unemployment/http://www.dailyfinance.com/2009/09/29/the-business-cycle-has-more-pain-in-store-even-as-unemployment/http://www.dailyfinance.com/2009/09/29/the-business-cycle-has-more-pain-in-store-even-as-unemployment/#commentsFiled under: ,

As my colleague Douglas McIntyre described in "Unemployment problems are worse than meet the eye," unemployment in this recession is different -- what many are calling structural unemployment, meaning a decline in the jobs base, which is not going to bounce back quickly due to deep structural problems in the U.S. economy.

Having been unemployed in the last three major recessions -- 1974, 1981 and 1991 -- I have experienced the gamut of wrenching emotions first-hand and know how those running low on money and hope feel.

The deepest downturns since the Great Depression, the 1974-75 and 1981-83 recessions caused widespread unemployment and misery. In the '70s, the problem was stagflation, a combination of tepid growth and rising inflation which eventually required a direct frontal attack on inflation by President Reagan and Federal Reserve Chairman Paul Volker, who jacked up interest rates to 16 percent. This tightening of credit slayed the inflation monster but at the cost of millions of jobs.

Continue reading The business cycle has more pain in store, even as unemployment grows

The business cycle has more pain in store, even as unemployment grows originally appeared on DailyFinance on Tue, 29 Sep 2009 14:00:00 EST. Please see our terms for use of feeds.

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]]>1970s stagflation1970sStagflationalan greenspanAlanGreenspanBureau of Labor StatisticsBureauOfLaborStatisticsbusiness cycleBusinessCycleeconomic expansionEconomicExpansionFederal stimulusFederalStimulushome equityHomeEquityhousing bubbleHousingBubblein focusinfaltioninflationInFocusorganic growthOrganicGrowthPaul VolkerPaulVolkerstagflationstructural unemploymentStructuralUnemploymentunemploymentunemployment rateUnemploymentRateCharles Hugh SmithTue, 29 Sep 2009 14:00:00 ESTNo more California dreamin': State's six key industries all in big troublehttp://www.dailyfinance.com/2009/09/22/no-more-california-dreamin-states-six-key-industries-all-in-b/http://www.dailyfinance.com/2009/09/22/no-more-california-dreamin-states-six-key-industries-all-in-b/http://www.dailyfinance.com/2009/09/22/no-more-california-dreamin-states-six-key-industries-all-in-b/#commentsFiled under:

The saying "as California goes, so goes the nation" may not always be true, but any recovery in the U.S. economy will face strong headwinds if its largest state remains a financial basket case.

Despite the happy headlines proclaiming the "recession is over," California's malaise continues to deepen: California unemployment is over 12 percent, the worst since the Great Depression, and a recent report from Moody's Investors Service suggests California real estate may not recover until 2030. California homes sales declined 12 percent in August -- a continuation of a downtrend which optimists had hoped had finally reversed.

The big question: Are these data points short-term hiccups or evidence of deeper structural decline?

Continue reading No more California dreamin': State's six key industries all in big trouble

No more California dreamin': State's six key industries all in big trouble originally appeared on DailyFinance on Tue, 22 Sep 2009 08:30:00 EST. Please see our terms for use of feeds.

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]]>aerospaceagriculturecaliforniaconstructioneconomyin focusInFocusinternetsilicon valleySiliconValleyteslaunemploymentCharles Hugh SmithTue, 22 Sep 2009 08:30:00 ESTOne Year Later: Housing hits bottom?http://www.dailyfinance.com/2009/09/18/one-year-later-housing-takes-a-wild-ride/http://www.dailyfinance.com/2009/09/18/one-year-later-housing-takes-a-wild-ride/http://www.dailyfinance.com/2009/09/18/one-year-later-housing-takes-a-wild-ride/#commentsFiled under: ,

A year after the global financial and credit markets melted down, the U.S. housing market is in a good-news, bad-news equilibrium. The good news: prices in many markets have fallen to pre-bubble valuations, home values nationally have stabilized, sales are rising, mortgage rates are low and loans are readily available to qualified buyers.

The bad news: as I recently described here, the foreclosure "pipeline" -- mortgages that are delinquent or in default--is full: since the "cure rate" of those homeowners who get current on their late payments has plummeted, the majority of these mortgages will enter the foreclosure process.

Continue reading One Year Later: Housing hits bottom?

One Year Later: Housing hits bottom? originally appeared on DailyFinance on Fri, 18 Sep 2009 09:30:00 EST. Please see our terms for use of feeds.

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]]>cure rateCureRateFederal tax creditFederalTaxCreditFHAfirst-time home buyerFirst-timeHomeBuyerforclosuresGSEshousing bubblehousing speculationHousingBubbleHousingSpeculationin focusInFocusleveragemortgage delinquenciesMortgageDelinquenciesmortgagesmortrgage defaultsMortrgageDefaultsREOsrisk of defaultRiskOfDefaultCharles Hugh SmithFri, 18 Sep 2009 09:30:00 ESTTough talk on tariffs, but little risk of trade warhttp://www.dailyfinance.com/2009/09/16/tough-talk-on-tariffs-but-little-risk-of-trade-war/http://www.dailyfinance.com/2009/09/16/tough-talk-on-tariffs-but-little-risk-of-trade-war/http://www.dailyfinance.com/2009/09/16/tough-talk-on-tariffs-but-little-risk-of-trade-war/#commentsFiled under:

The tiff over tariffs on Chinese tires has sparked a tug-of-war among pundits: Some are rushing to reassure us that China and the U.S. wouldn't be foolish enough to let this little spat blow up into something nasty, while others are labeling this the opening shot of a long-brewing trade war.

Predictably, a smattering of voices on both sides of the Pacific are reacting with passion. But without wading too deeply into the murky political and economic waters this trade kerfuffle has churned up, we might profitably consider this old proverb: Be careful what you wish for.

Continue reading Tough talk on tariffs, but little risk of trade war

Tough talk on tariffs, but little risk of trade war originally appeared on DailyFinance on Wed, 16 Sep 2009 10:00:00 EST. Please see our terms for use of feeds.

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]]>China and U.S. bondsChinaAndU.s.BondsChinas price advantagesChinasPriceAdvantagesdollardollar weakeningDollarWeakeningglobal manufacturingGlobalManufacturinggross marginsGrossMarginsin focusInFocusmanufacturingMexico manufacturingMexicoManufacturingtariffstariffs on tiresTariffsOnTirestrade warTradeWaryuanCharles Hugh SmithWed, 16 Sep 2009 10:00:00 ESTFor China, moving away from the dollar makes sensehttp://www.dailyfinance.com/2009/09/09/for-china-downplaying-the-dollar-makes-sense/http://www.dailyfinance.com/2009/09/09/for-china-downplaying-the-dollar-makes-sense/http://www.dailyfinance.com/2009/09/09/for-china-downplaying-the-dollar-makes-sense/#commentsFiled under:

China's leaders make no secret of the thinking behind their well-publicized moves to diversify their county's massive foreign exchange reserves away from the U.S. dollar. Being so dependent on the greenback's value is simply imprudent, they say, given the size of their reserves -- some $2.1 trillion -- and the global nature of their exports and imports.

While some see this diversification as dooming the dollar, there are plenty of good reasons to believe China's leadership isn't singling out the United States but lessening their dependence on all currencies other than their own.

Continue reading For China, moving away from the dollar makes sense

For China, moving away from the dollar makes sense originally appeared on DailyFinance on Wed, 09 Sep 2009 14:00:00 EST. Please see our terms for use of feeds.

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]]>chinadollarforeign exchangeForeignExchangein focusInFocusrenminbireserve currencyReserveCurrencyyuanCharles Hugh SmithWed, 09 Sep 2009 14:00:00 ESTDeja vu all over again: Fueling the next housing meltdownhttp://www.dailyfinance.com/2009/09/08/deja-vu-all-over-again-fueling-the-next-housing-meltdown/http://www.dailyfinance.com/2009/09/08/deja-vu-all-over-again-fueling-the-next-housing-meltdown/http://www.dailyfinance.com/2009/09/08/deja-vu-all-over-again-fueling-the-next-housing-meltdown/#commentsFiled under:

Low down payments, risky mortgages guaranteed by government entities, rising defaults -- haven't we been here before? Isn't this the same mix of easy money and poor risk-management that blew up the housing market in 2007 and 2008?

You'd think the mortgage industry and the federal government would have learned their lesson since the housing bubble's collapse. But you'd be wrong. Essentially, nothing has changed, except the names of the government-sponsored enterprises.

Continue reading Deja vu all over again: Fueling the next housing meltdown

Deja vu all over again: Fueling the next housing meltdown originally appeared on DailyFinance on Tue, 08 Sep 2009 16:00:00 EST. Please see our terms for use of feeds.

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]]>Fannie MaeFannieMaeFHAfirst-time buyer tax creditFirst-timeBuyerTaxCreditforeclosuresFreddie MacFreddieMacGinnie MaeGinnieMaehousing bubbleHousingBubblein focusInFocuslow down paymentLowDownPaymentmortgage defaultsMortgageDefaultsmortgagesrisk managementRiskManagementVA mortgagesVaMortgagesCharles Hugh SmithTue, 08 Sep 2009 16:00:00 ESTHousing bottom premature. The clue? Foreclosure pipeline fullhttp://www.dailyfinance.com/2009/08/28/housing-bottom-premature-the-clue-foreclosure-pipeline-full/http://www.dailyfinance.com/2009/08/28/housing-bottom-premature-the-clue-foreclosure-pipeline-full/http://www.dailyfinance.com/2009/08/28/housing-bottom-premature-the-clue-foreclosure-pipeline-full/#commentsFiled under:

A case could be made that the housing market has bottomed. As my colleague Joseph Lazzaro recently explained in Could the end be in sight? Housing guru Shiller senses home price rebound, there have been three recent improvements:

1. Home prices edged up.

2. Sales of new homes increased.

3. Inventories of new homes declined.

Ready for the buzzkill? Though certainly more positive than the recent trend of declining sales and valuations, these reports fail to take into consideration what's in the housing-market pipeline: more delinquencies and foreclosures, which will increase inventories and depress prices.

Continue reading Housing bottom premature. The clue? Foreclosure pipeline full

Housing bottom premature. The clue? Foreclosure pipeline full originally appeared on DailyFinance on Fri, 28 Aug 2009 08:30:00 EST. Please see our terms for use of feeds.

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]]>cure rateCureRatedelinquenciesforeclosureshousing markethousing salesHousingMarketHousingSalesin focusInFocusmortgagesnew home salesNewHomeSalesunderwater mortgagesUnderwaterMortgagesCharles Hugh SmithFri, 28 Aug 2009 08:30:00 ESTThe health care elephant in the room: Medicarehttp://www.dailyfinance.com/2009/08/25/the-health-care-elephant-in-the-room-medicare/http://www.dailyfinance.com/2009/08/25/the-health-care-elephant-in-the-room-medicare/http://www.dailyfinance.com/2009/08/25/the-health-care-elephant-in-the-room-medicare/#commentsFiled under: ,

If you want to read an article on the future of health care in America with a Hollywood ending, stop reading now because this isn't it.

Since we all know Medicare and its sibling Medicaid are financially precarious, perhaps we should fix these existing health care programs before launching any new ones.

Medicare is generally described as a social insurance program administered by the United States Government to provide health insurance coverage to people 65 and over. But it isn't really insurance, and here's why. Insurance is essentially protection against the lottery wheel of life: the cost of fire insurance on our homes is relatively low because only one in a 100 houses will burn down in any given number of years --odds which can be actuarially assessed.

But getting old and dying of some disease or illness is not something that only happens to a few unfortunates -- it happens to all of us. And with modern medicine's constant advances, there is almost always some test, treatment or procedure that can be administered to stem the disease or illness.

Continue reading The health care elephant in the room: Medicare

The health care elephant in the room: Medicare originally appeared on DailyFinance on Tue, 25 Aug 2009 08:00:00 EST. Please see our terms for use of feeds.

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]]>Federal budgetFederalBudgethealth insurancehealthcareHealthInsurancein focusInFocusMedicaidMedicaremedicare costsMedicareCostsCharles Hugh SmithTue, 25 Aug 2009 08:00:00 ESTIs end-of-the-recession optimism misleading?http://www.dailyfinance.com/2009/08/19/is-end-of-the-recession-optimism-misleading/http://www.dailyfinance.com/2009/08/19/is-end-of-the-recession-optimism-misleading/http://www.dailyfinance.com/2009/08/19/is-end-of-the-recession-optimism-misleading/#commentsFiled under:

BusinessWeek's August 24 cover blares: "The Case for Optimism." As magazines and papers hemorrhage ink in their cheerleading for a supposed end to the recession, it seems like time to take a step back and ask if these are merely "feel-good" features, or if there is any substance to the notion that "the worst is over," the recession is done, and "green shoots" are taking root in key places.

Ultimately, it seems like skepticism is in order, as the rousing optimism neglects to mention a few grim realities. To begin with, while many have noted that the jobless rate has declined, they seem less inclined to point out that this is because the work force shrank. This is typical smoke-and-mirrors statistics: as people lose extended unemployment benefits, they are classified as "discouraged" and are no longer counted in the "headline" unemployment number.

Continue reading Is end-of-the-recession optimism misleading?

Is end-of-the-recession optimism misleading? originally appeared on DailyFinance on Wed, 19 Aug 2009 14:00:00 EST. Please see our terms for use of feeds.

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]]>BusinessWeekconsumer creditConsumerCreditEconomic Policy InstituteEconomicPolicyInstituteFederal spendingFederalSpendinginterest on national debtInterestOnNationalDebtrecessionThomas LaubachThomasLaubachCharles Hugh SmithWed, 19 Aug 2009 14:00:00 EST