12 July 2007

Hartmann Economy Discussion

Summary of a great segment Thommie did on 11th about American econony.

S&P and Moody' announced down grade of 100 of bonds backed by risky loan from the garbage in mortgage sub prime market. As Moodys referred to it "the challenged" market.

Aden forecast summary - monthly summary Thommie reported some unbelievable statistics they just released it their monthly summary. Aden is a subscription based system run by 2 sisters I believe. http://www.adenforecast.com/

  • Literally trillion of dollars lent to people whom were unworthy of mortgages
  • Foreclosures are 90% higher than year ago
  • 1 Trillion dollars of ARM will be reset in the next year (fucking yikes)
  • Fixed rate mortgage rates in a year from now were be crazy which will result in more foreclosure.
  • Banks are pulling back - they have made their money.
  • Rates will go up as in one year from now ARM due to reset.
  • Inventory of homes highest it has been in 15 years
  • Ratio between supply & demand of homes worst in 35 years
  • 10 yrs housing prices soared more than any period since 1890
  • Last quarter home prices dropped 1st time in 16 years in 20 metro areas
  • The mortgage debt created in last 6 years is equal to mort debt created in the entire previous 50 years.
Will this result in a stock market crash? Thommie thinks not. That the NYSE / NASDAQ is reflecting the interests of global financial companies which are doing great. Hey why not, they are exporting to cheap labor markets, not paying US taxes, the Bush White House is their solo customer & Human Resource department - all is grand. That the NYSE is not reflecting the interests of the average American.

China & Trade & Currencies
  • China reported a record high trade surplus with US.
  • 85% increase in last month alone.
  • Chart in FT - exploded in the last six years - Bush years.
  • 8% of China's entire economy showing up in US retail stores.
  • China has 1.2 people (4 times people as America) 8% of their entire output are in our stores.
  • If we were making these goods here in the USA that could be approximately 32% of American work force!
Bi-Partisan bill introduced - currency - discussion.

Senators Baucus and Charles Schumer, a New York Democrat, and Republicans Lindsey Graham of South Carolina and Charles Grassley of Iowa introduced legislation last month that would allow American companies to petition for steeper anti-dumping duties against countries that keep their currencies undervalued.

FT letter to editor published against this idea.

Currency realignment is no way to save US jobs By Michael Woolfolk http://www.ft.com/cms/s/97c10f90-2f4a-11dc-b9b7-0000779fd2ac.html

Thommie's closing comments.

It is not about revaluing currencies - it is about what we are importing & exporting. Do away with insane trade policies & stop saying it is the "currency".

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