FDIC's Bair Warns of Government "Exposure" in Mortgages

http://abcnews.go.com/Business/wireStory?id=11589815

Melrose Avenue blues

http://www.latimes.com/business/la-fi-melrose-avenue-20100911,0,3944812.story

Gold wars

Gold at $36,000? I thought I was bullish.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/9/9_Ben_Davies__Gold_Wars_-_A_Golden_Renaissance.html

New Jersey Governor Christie responds to teachers' uniion

http://www.youtube.com/watch?v=PkuTm-ON904&feature=player_embedded

Harry Dent on demographics, debt, and deflation

http://seekingalpha.com/article/223886-harry-dent-s-outlook-on-demographics-debt-and-deflation

Interesting site for statistics

Thanks to Kitty for mentioning this site for statistics presented in visual form. Apparently, I had a blog entry which included one of their charts.

http://wallstats.com/

Bubble psychology

Click on chart to enlarge.

This is a re-post, but still relevant.

How to tell if gold is in a bubble

http://www.dailywealth.com/169/The-Easiest-Way-to-Tell-If-Gold-Is-in-a-Bubble

"What do you think about gold or silver as an investment?" and if they answer in a positive manner, further ask: "What are the best ways to own it? How do you own it? What percentage of your assets do you have in the precious metals area?" If this seems too invasive, ask, "What percentage of a person's assets do you think should be in the precious metals area?"

That's what I do. The people I ask have no idea what I think about gold or silver. I ask just as a sort of person – maybe on the slow side and not that bright – who wants to know about the area.

From what I'm told, almost no one is in gold or silver. Maybe a few shares of Newmont Mining, but as a percentage of their total net worth, we are talking tiny here.

People who think gold is in a bubble are often people who did not see real bubbles when they happened. In the real estate boom, the easy profits were on everyone's lips. Same with the Internet bubble 10 years ago.

When I mentioned gold back in 2001 and 2002, when I accumulated it, I got looks from people as if I were crazy.

These days, the crazy looks are gone. But now I often only get answers that gold or silver may be a good investment, but they don't have any themselves.

David Rosenberg refutes Erin Burnett on a "recovery"

http://www.zerohedge.com/article/david-rosenberg-refutes-erin-burnetts-misconceptions-about-recovery

Anti-Keynesian rant

http://www.zerohedge.com/article/dylan-grice-economists-perpetuation-illusion-control-and-focusing-what-we-know?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

Visual inflation/deflation for dummies

http://www.zerohedge.com/article/visual-inflationdeflation-dummies

China and Russia bypass USDollar

I told you this would happen. The USDollar's reign as the world's reserve currency is being eroded. Hello, gold and silver.

http://www.bloomberg.com/news/2010-09-08/china-russia-push-yuan-ruble-trading-to-diminish-dominance-of-u-s-dollar.html

China and Russia plan to start trading in each other’s currencies as the world’s second-biggest energy consumer and the largest energy supplier seek to diminish the dollar’s role in global trade.

“Given the risk to the dollar and U.S. assets from their fiscal position they want to reduce their dependence on the dollar as an invoicing currency,” Bhanu Baweja, global head of emerging markets fixed income, currency and credit research at UBS AG, said in a phone interview from London. “It makes sense for two large economies to exclude a third, overly dominant economy from their trading equation.”

In the wake of the global financial crisis, which forced the U.S. economy into recession, both China and Russia have called for the dollar’s role in the financial system to be diluted. Volatility in major currencies is putting the global recovery at risk Zhang Ping, the head of China’s National Development and Reform Commission, said last month. President Dmitry Medvedev last year suggested Russia, holder of the world’s third-largest foreign-currency reserves, reduce its holdings of dollar.

Dollar Elimination

“China wants to reduce the volatility in its access to primary goods,” he said. “They want to reduce their dependence on the dollar in trade transactions.”

“Gradually the dollar is being eliminated from the foreign-trade settlement flows,” said Dariusz Kowalczyk, a Hong-Kong based senior economist at Credit Agricole CIB. “People are beginning to trade Asian currencies without intermediation via the dollar.”

The recession of 1920 and how Warren Harding ended it

Bernanke, Geithner, Frank, and Obama, please take note.

http://amellon.wordpress.com/category/recession-of-1920/

Why we're in a depression

http://www.zerohedge.com/article/what-depression-anyway-and-why-we-continue-be-it

ALXA and FDA inspection

This press release is potentially bullish for ALXA and AZ-004 FDA approval. Again, PDUFA date is October 11, 2010.

http://finance.yahoo.com/news/Alexza-Pharmaceuticals-to-prnews-2569073814.html?x=0&.v=1

"The PDUFA goal date for our AZ-004 (Staccato loxapine) NDA is October 11, 2010. During the past several months, the FDA has conducted and completed NDA-based inspections of our manufacturing facility, and several clinical and non-clinical sites, which appear to be part of the normal course of the ongoing NDA review," said Thomas B. King, Alexza President and CEO. "As we approach the PDUFA goal date, we expect continued interaction and contact with the FDA regarding our NDA submission. We are not planning on making any specific comments on the details of these interactions unless we feel we have material information that will impact our PDUFA date."

See disclaimers in the side bar.

Disclosure: long shares of ALXA.

Smackdown on CNBC over US Treasury bonds

Some advice to Erin Burnett, CNBC anchor: you are no longer just a moderator when you inject your government spoon-fed propaganda.



http://www.zerohedge.com/article/mike-pento-kicked-cnbc-telling-truth-dumb-money-manager-says-nothing-bubble-when-people-want

Note: Michael Pento now works for Peter Schiff's Euro Pacific Capital. Schiff was unceremoniously dumped on CNBC for predicting a housing collapse and financial crisis BEFORE they occurred. Stating the ugly truth on CNBC apparently doesn't give you an invite back.

Krugman recommended a housing bubble in 2002

So why do government leaders still listen to this Economics Nobel Laureate from Princeton?

http://www.zerohedge.com/article/how-keynesian-archduke-krugman-recommended-housing-bubble-solution-all-americas-post-tech-bu

Greenspan, the Fed, and gold

http://www.economicpolicyjournal.com/2010/09/alan-greenspan-hedge-against-federal.html

The multi-billion dollar hedge fund run by John Paulson has a huge position in gold. Zero Hedge reprints a portion of a Paulson letter sent to investors. In that letter, Paulson explains who is advising them to buy so much gold :

Lastly, and perhaps most important, from a monetary policy perspective in developing an ability to forecast the timing and future price of gold we believe we have an unparalleled team. Former Federal Reserve Chairman Alan Greenspan has been extremely helpful to us in understanding the relationship between the monetary base, the money supply, inflation and gold prices.

John Paulson's hedge funds made $20 billion in profits betting against the subprime mortgage industry in 2008. He went long gold in 2009. His recent bets on an economic recovery have soured, but his bets on gold and gold-related equities have continued to outperform.

One nation, two deficits

Now that he resigned as Obama's director of the White House Office of Management and Budget, Peter Orszag can speak the truth about tax cuts and fiscal responsibility.

http://www.nytimes.com/2010/09/07/opinion/07orszag.html?_r=3&adxnnl=1&ref=opinion&adxnnlx=1283889626-5ZrOmPgijJsqBxNVvTB9CA

Gold entering a virtuous circle

http://www.zerohedge.com/article/matterhorn-asset-management-sets-three-gold-price-targets-6000-%E2%80%93-7000-%E2%80%93-10000

Michael Burry on markets, real estate, farmland and gold

http://www.zerohedge.com/article/michael-burry-long-farmable-land-and-agrees-paulson-gold-not-other-recovery-themes

Chinese Renminbi: the new USDollar?

http://www.gata.org/node/8961/print

In the be-careful-what-you-wish-for category, Congress, US Treasury Secretary Geithner, Fed Chairman Bernanke, the Obama Administration, along with the blessing of the G-20 countries, have accused the Chinese of manipulating their currency down in order to maintain unfair export competitiveness. The international banking community doesn't realize it's the Fed that is manipulating the USDollar, in a similar desperate attempt to devalue the greenback, and that the Chinese are merely pegging the Yuan to the USDollar. Hence, if the Fed stopped debasing the USDollar, the Yuan would also stop its devaluation trajectory.

But the unintended consequence of appreciating the Yuan would include the Chinese dumping US Treasury bonds from their reserves (i.e. Chinese sales of US Treasuries would devalue the USDollar and appreciate their native currency, the Yuan). This dumping would cause US Treasury bond prices to crash and cause yields (and interest rates) to soar. This would completely eliminate any chance the US has of a recovery from an already fragile economy.

Again, US government economists and policymakers are chasing their tails, and don't realize their latest "solution" will only create much bigger problems down the road.

China warns of depreciation

http://www.reuters.com/article/idUSTRE6820G520100903

China is diversifying away from USDollar-denominated assets into other foreign currencies--and gold.

Dangerous economic misconceptions

http://www.zerohedge.com/article/guest-post-dangerous-economic-misconceptions

Treasury bills: the new opium

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/9/7_Jim_Rickards_-_Treasury_Bills__The_New_Opium.html