Wednesday, October 10, 2012

Thursday October 11 Housing and Economic stories



TOP STORIES:

Dow will repeat 2007-2008 peak-crash cycle - (www.marketwatch.com) Dow skyrockets near 20,000 by 2014? In two years? Then crashes near 10,000 by 2016 presidential elections? Possible? You bet. Déjà vu 2007-2008. So what’s your biggest risk as an investor? Listening and acting on the relentless manipulative B.S. from Wall Street’s media bulls in the next few years. Last week USA Today suggested the stock market will soon set a new record high, “How high? How about an all-time high in six months, 16% higher in 12 months, almost 40% higher two years from now.” Yes, 40% said one bullish technician with a mega-bullhorn sounding the rally call for all bulls: “Now is the time to finally break out” of today’s secular bear market.

America's hidden unemployed: too discouraged to count - (www.reuters.com)  When Daniel McCune graduated from college three years ago, he was optimistic his good grades would earn him a job as an intelligence analyst with the government. With a Bachelor of Science degree from Liberty University in Virginia, majoring in government service and history, McCune applied for jobs at the National Security Agency, the Federal Bureau of Investigation and other agencies. But after a long hunt that yielded only two interviews, the 26-year-old threw in the towel last fall, joining millions of frustrated Americans who have given up looking for work. "There's nothing out there and there probably won't be anything for a while," said McCune, from New Concord, Ohio. He has moved back home to live with his parents, who are helping him pay off his college debt of about $20,000.

Germany Losing Patience With Spain as EU Warns on Crisis - (www.bloomberg.com) Germany’s governing coalition showed growing exasperation with Spain, as a senior ally of Chancellor Angela Merkel said Prime Minister Mariano Rajoy must stop prevaricating and decide whether Spain needs a full rescue.  “He must spell out what the situation is,” Michael Meister, finance spokesman for Merkel’s Christian Democratic Union, said in an interview in Berlin today. The fact he’s not doing so shows “Rajoy evidently has a communications problem. If he needs help he must say so.” Meister’s comments underscore Europe’s crisis-fighting stalemate amid discord over a banking union, Greece’s ongoing debate on how to meet bailout commitments and foot-dragging by Spain on a possible aid bid. European Union President Herman Van Rompuy warned today against “a tendency of losing the sense of urgency” in fighting the debt crisis three years after it erupted in Greece.

The US Federal Reserve caused the Great Recession. - (www.telegraph.co.uk)  Monetarists from across the world can mostly agree on one thing. The US Federal Reserve caused the Great Recession. Fed chair Ben Bernanke kept policy far too tight after the US economy buckled in early to mid 2008. He allowed a collapse in the money supply to run unchecked, causing avoidable disasters at Fannie, Freddie, Lehman, and AIG later that year. Call it the "Bernanke Depression" if you want, a term gaining traction in elite circles. The indictment is a little unfair. The European Central Bank was worse. It raised rates into a deflationary oil shock in August 2008, and worsened a run on the dollar that constrained Fed actions.

Bernanke wants you to buy stocks, but risk is high - (finance.yahoo.com) Ben Bernanke hopes his latest plan to stimulate the economy will get you to buy stocks and other risky assets. Maybe you should. People who did that after two similar Federal Reserve efforts are sitting on big gains today. But the odds of fat profits aren't looking as good this time, and seem to be getting worse. Stocks rose sharply before the Fed chairman announced his plans Sept. 13 instead of falling, as they did before the two previous efforts, suggesting less room for gains now. Meanwhile, the world economy is slowing and Wall Street analysts are cutting estimates for future corporate profits. They expect them to fall this quarter from a year earlier, the first drop since just after the Great Recession ended 3½ years ago.




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