{"id":193684,"date":"2008-11-24T21:36:00","date_gmt":"2008-11-25T02:36:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/11\/24\/economics-update-336\/"},"modified":"2008-11-24T21:36:00","modified_gmt":"2008-11-25T02:36:00","slug":"economics-update-336","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/11\/24\/economics-update-336\/","title":{"rendered":"Economics Update"},"content":{"rendered":"<p><img decoding=\"async\" src=\"http:\/\/img399.imageshack.us\/img399\/1687\/staypuftmarshmallowman1jj2.jpg\" style=\"margin: 0px 10px 10px 0px; float: left; cursor: pointer;\" \/>I think that we have to start with the fact that <a href=\"http:\/\/www.reuters.com\/article\/marketsNews\/idUSN2446382720081124\">U.S. Treasury Credit Default Swaps risk premiums just hit record levels<\/a>.<\/p>\n<p>If that sounds arcane and obscure, that&#8217;s because it <span style=\"font-weight: bold;\">is<\/span>, because the brokers <span style=\"font-weight: bold;\">like it that way<\/span>, but here is a slightly clearer statement, returns on insurance against a defaults on <span style=\"font-weight: bold;\">US Treasuries<\/span> hit a new high&#8230;.Meaning that investors are pricing in the possibility of a <span style=\"font-weight: bold;\">US government default<\/span>.<\/p>\n<p>This means that a <span style=\"font-weight: bold;\"><span style=\"font-variant: small-caps;\">Lot<\/span><\/span> of people are betting that the full faith and credit of the United States of America means <span style=\"font-weight: bold;\">nothing<\/span>.<\/p>\n<p>The US defaulting is the Stay-Puft Marshmallow man moment of US society, and an increasingly large segment of the investing world is betting on it.<\/p>\n<p>At its core, the problem is that <span style=\"font-weight: bold;\">this<\/span> bubble is something that people cannot walk away from, housing and shelter, and the realtor-pimps are now saying that <a href=\"http:\/\/www.realtor.org\/press_room\/news_releases\/2008\/ehs_soften_on_economic_volatility\">existing home sales are softening<\/a>, though the staid <span style=\"font-style: italic;\">New York Times<\/span> is saying that <a href=\"http:\/\/www.nytimes.com\/2008\/11\/25\/business\/economy\/25econ.html\">home prices are plunging<\/a>.<\/p>\n<p>Existing home sales down over 3.1%, and prices down 11.3% year over year.<\/p>\n<p>In the mean time, the Citi bailout is pushing on both currency and energy, with<br \/><a href=\"http:\/\/money.cnn.com\/2008\/11\/24\/markets\/dollar\/index.htm\">the dollar falling<\/a>, because people realize that the printing presses are running non-stop.<\/p>\n<p>That being said, the falling dollar is <a href=\"http:\/\/www.iht.com\/articles\/2008\/11\/24\/business\/ruble.php\">not helping the ruble<\/a>, where the Russian central bank has reduced support for the currency for the 2nd time in as many weeks.<\/p>\n<p>It also <a href=\"http:\/\/money.cnn.com\/2008\/11\/24\/markets\/oil\/index.htm\">drove oil up about a fin spot<\/a>, though <a href=\"http:\/\/money.cnn.com\/2008\/11\/24\/news\/economy\/gas_prices_sink\/index.htm\">retail gasoline prices fell for 68th straight day<\/a>.<\/p>\n<p>It&#8217;s not going to get better any time soon, because <a href=\"http:\/\/www.reuters.com\/article\/businessNews\/idUSTRE4AM2TB20081123?feedType=RSS&amp;feedName=businessNews\">MasterCard is reporting falling retail sales<\/a>.<\/p>\n<p>Meanwhile, <a href=\"http:\/\/calculatedrisk.blogspot.com\/2008\/11\/credit-crisis-indicators_24.html\">Calculated Risk&#8217;s Credit Crisis Indicators<\/a> are slightly worse today.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>I think that we have to start with the fact that U.S. Treasury Credit Default Swaps risk premiums just hit record levels. If that sounds arcane and obscure, that&#8217;s because it is, because the brokers like it that way, but here is a slightly clearer statement, returns on insurance against a defaults on US Treasuries &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1080,973,1135,1004,1088],"tags":[],"class_list":["post-193684","post","type-post","status-publish","format-standard","hentry","category-currency","category-economy","category-energy","category-finance","category-real-estate"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/193684"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=193684"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/193684\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=193684"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=193684"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=193684"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}