Commentary   ||   Reader Roadmap    ||   Swap Sentinel   ||   Today's Tipping Points

TIPPING POINTS

 
INVESTMENT RESEARCH
Bookstore

Bookmark and Share 

 

"Extend & Pretend" Read the Series...



Stage 1 Comes to an End!
A Matter of National Security
A Guide to the Road Ahead 
Confirming the Flash Crash Omen
It's Either RICO Act or Control Fraud
Shifting Risk to the Innocent
Uncle Sam, You Sly Devil!
Is the US Facing a Cash Crunch?
Gaming the US Tax Payer
Manufacturing a Minsky Melt-Up
Hitting the Maturity Wall
An Accounting Driven
Market Recovery

For upcoming show times...
See
Reader Roadmap

"SULTANS OF SWAP"
Read the series...

 

"EURO EXPERIMENT"
Read the series...

"UR all PIGS from HELL

For upcoming show times...
See
Reader Roadmap

FREE COPY...

Current Thesis Advisory:
"EXTEND & PRETEND"

PDF, 62 pages
Published November 2009


Click to view Index

CONTACT US
Use Promo Code: INTRODUCTION
in the Email Subject


Bookmark and Share

"INNOVATION"
Read the series...

For upcoming show times...
See
Reader Roadmap

 

"PRESERVE & PROTECT"
Read the series...

For upcoming show times...
See
Reader Roadmap

 

 
POSTS: Monday, 01-10-2011
Last update:  01/11/2011 7:17 AM Postings begin at 5:30am EST
and updated throughout the day
Latest Research Publications RSS 
External Articles Articles open in new window
ARTICLE Mouse
Over
Source Tipping
Point
EU SOVERIGN DEBT CRISIS     1

Independent 1

Telegraph 1

Bloomberg 1
       
PORTUGAL     1

AP 1

Reuters 1
  FT 3
NY Times - Morgenson 6
  Dr Housing Bubble 6
NY Times 6
  Bloomberg 9
 

Fabius Maximus

9

Salmon 9
Harding 9
  Mish 9

Mish 9
Gary North 11
  G&M 15
  AP 19
  Federal Reserve 19
  China Daily 22
  AP 22
  China Daily 22
  AFP 22
  Standard 30
       
Other News Items of Importance
CENTRAL BANKING MONETARY POLICIES, ACTIONS & ACTIVITIES      
  Bernanke Speech  
  Reuters  
2011 OUTLOOKS      
  Mauldin  
COMMODITY CORNER      
  CNBC  
  Zeal  
  CNBC  
TECHNICALS & MARKET ANALYTICS      

Swenlin  

EW  
MARKET WARNINGS      
  MSN  
MARKET MANIPULATION      
  Counter Punch  
  Investors  
2010 IN REVIEW      
  BMO Focus  
GENERAL INTEREST      
  Noland  
  Scotia  
  FT  
       
Featured Audio / Video
  Real News  
  Hunt - Stansberry  
  Hunt - Stansberry  
  Fora TV  
  U-Tube  
     
Briefs
     
     
READER ROADMAP & GUIDE:   2010 Tipping Points and commentary


 
Tipping Points Life Cycle - Explained

Click on image to enlarge

   

Quote Of The Week

“An optimist stays up until midnight to see the new year in. A pessimist stays up to make sure the old year leaves.” – Bill Vaugh

  BUY ANY BOOK
Get a 2-Month Subscription to
...

Monthly Market Commentary
Promotion Details   

 

 

 

 

FAIR USE NOTICE

This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.

COPYRIGHT & DISCLAIMER

Gordon T Long is not a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, he recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments.

© Copyright 2010 Gordon T Long. The information herein was obtained from sources which Mr. Long believes reliable, but he does not guarantee its accuracy. None of the information, advertisements, website links, or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. Please note that Mr. Long may already have invested or may from time to time invest in securities that are recommended or otherwise covered on this website. Mr. Long does not intend to disclose the extent of any current holdings or future transactions with respect to any particular security. You should consider this possibility before investing in any security based upon statements and information contained in any report, post, comment or recommendation you receive from him.

EMAIL US

  

Fractal Research  ||  Secrets of the Pyramids  ||  Φ Research  ||  Platonic Solids   ||  6T Development Site

 

  
         

ARCHIVES 

JANUARY
S M T W T F S
            1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31    
  
Complete Archives
 
  

TIPPING POINTS

Research Process

Process of Abstraction

1 - Sovereign Debt & Credit Crisis
2 - EU Banking Crisis
3 - Bond Bubble
4 - State & Local Government
5 - Risk Reversal
 
6 - Residential Real Estate -
Phase II
7 - Commercial Real Estate
8 - Central & Eastern Europe
9 - Chronic Unemployment
10 - US Banking Crisis II
11 - Pension - Entitlement Crisis
12 - North & South Korea
 
13 - Public Policy MIscues
14 - Rising Interest Pressures
15 - Food Price Pressures
16 -US Stock Market Valuations
17- Finance & Insurance Balance Sheet Write-Offs
18 - Japan Debt Deflation Spiral
19 -Cedit Contraction II
 
20 - US Reserve Currency
21 - US Fiscal, Trade and Account ImBalances
22 - China Bubble
23- Government Backstop Insurance
24 - Corporate Bankruptcies
25 - Slowing Retail & Consumer Sales
26 - Public Sentiment & Confidence
27 - Shrinking Revenue Growth Rate
28 - US Dollar Weakness
29 -Global Output Gap
30 - Oil Price Pressures
31 -Natural Disaster
32 - Pandemic
33 - Iran Nuclear Threat
34 - Crisis Programs Expiration
35 - Terrorist Event

Reading the right books?
No TIme?

We have analyzed & included
these in our latest research papers!


Accepting Pre-orders

Book Review- Five Thumbs Up for Steve Greenhut's Plunder!

 

 

 

Germany and France want Portugal to accept an international bailout as soon as possible in order to prevent its debt crisis spreading to other countries, German magazine Der Spiegel reported on Saturday.

Without citing its sources, the magazine said government experts from both European heavyweights were concerned Lisbon will soon not be able to finance its debt at reasonable rates, after its borrowing costs rose at the end of last year.

Berlin and Paris also want euro zone countries to publicly commit to do whatever it takes to protect the bloc's single currency, including topping up a 750 billion euro (623 billion pound) rescue fund if necessary.

Portugal is viewed by many economists as the peripheral euro zone country that is most likely to follow Ireland and Greece to seek an international bailout as it grapples to cut its debts and borrowing costs. It holds its first bond auction of the year next week.

“Despite the recent drama, we believe we have only seen the opening and second act, with the rest of the plot still evolving...There is no absolutely safe sovereigns."

"'both Japan and US public finances are unsustainable"

... former Bank of England policy maker & Citigroup Economist Willem Buiter

 

The team has published a note forecasting much more strife to come in the wake of Greece and Ireland's recent bail-outs and eurozone governments' borrowing costs hitting record highs.

"Despite the recent drama, we believe we have only seen the opening and second act, with the rest of the plot still evolving," the team wrote. "There is no absolutely safe sovereigns."

There are likely to be several sovereign debt restructurings in the next few years, the analysts said, with Portugal likely to need to access the emergency funding facilities soon.

Against this backdrop, the US and Japan - dubbed the "fiscal sustainability deniers" - cannot keep ignoring the question of how safe their public finances are, the team said.

The fears about default will encompass the two economies "before long", they argued - particularly if a default is defined not just as a failure to meet the debt contract, but also as inflicting severe losses on debt holders through deliberately-engineered inflation or weakening the currency.

"Both Japan and US public finances are unsustainable, in our view, and in the absence of credible and substantial fiscal tightening both would eventually face painful discipline through the markets," the economists wrote.

It is only a matter of time before the US will have to raise funds by issuing debt offering "significantly higher" returns to bondholders, to reflect the level of risk surrounding it, they added.

While the break-up of the eurozone was seen as very unlikely, the analysts believe there is a risk that a lagging member state could leave the monetary union "in a fit of populist and nationalist rage" if they do not get enough external support, despite the high costs of exiting the euro.

There is also a risk that if a weaker member seems to get too much financial help, a major player could depart "on a wave of domestic populist outrage" about having to fund bail-outs.

The economists called for a much bigger liquidity support facility and for a restructuring of the debt of the EU's failing banks and insolvent nations.

 

 

 

International Monetary Fund First Deputy Managing Director John Lipsky said U.S. government finances will present policy makers with a “major challenge” for years.

“The challenges facing U.S. public finances shouldn’t be underestimated,” Lipsky said during a conference panel discussion today on the U.S. role in the world economy. There is a “brief window of opportunity” for fiscal-policy adjustments, and “the U.S. needs to make the most of this window of opportunity.”

Treasury Secretary Timothy F. Geithner this week said lawmakers must raise the $14.29 trillion federal borrowing limit in the first quarter of 2011 or risk a default on U.S. debt. The U.S. had a $1.3 trillion budget deficit in fiscal year 2010, which ended Sept. 30. President Barack Obama’s debt-reduction panel failed last month to agree on recommendations for ways to reduce the annual deficit to about $400 billion in 2015.

“Fiscal adjustment is going to be one of the major challenges for U.S. policy makers for some time to come,” Lipsky said at the annual meeting of the Allied Social Science Associations in Denver. While “supportive fiscal and monetary policies” should remain in place for the near term to boost a “sluggish” recovery, they are leaving behind a “legacy of high debt,” he said.

U.S. employers added 103,000 jobs in December, fewer than the median projection of 150,000 in a Bloomberg News survey, Labor Department figures showed yesterday. The report affirmed Federal Reserve Chairman Ben S. Bernanke’s view that it could take “four to five more years” for the labor market to completely mend.

Portugal aims to raise euro1.25 billion ($1.64 billion) next week by auctioning off 3-year and 9-year bonds in a key test of investor confidence.

Borrowing rates edged up across much of the rest of Europe after a eurozone growth figure was revised down, but traders were by far most worried about Portugal -- its 10-year government bond yield spiked above 7.1 percent. The nervousness triggered a steep drop in Portuguese share prices. The Lisbon benchmark stock index closed down 3 percent, dragged lower by a sharp fall in shares in Portuguese banks which are exposed to national debt.

The Bank of Tokyo-Mitsubishi noted that whereas Ireland's loan maturity average is seven years at an average cost of 5.8 percent, Portugal's 7-year bonds are now trading at 6.6 percent.

Prime Minister Jose Socrates said Friday that state revenue was higher than forecast last year and spending was lower than expected, helping Portugal to meet its budget deficit target of 7.3 percent. Meanwhile, the economy is estimated to have grown by at least 1.3 percent in 2010.

Jobless rate that has risen to 11 percent.

Portugal is one of the 17-nation eurozone's smaller members, accounting for less than 2 percent of the bloc's gross domestic product. But its difficulties could stoke the continent's debt crisis, especially by placing pressure on its much larger neighbor Spain, which also has debt problems.

Rumours swept international markets yesterday that some banks were no longer prepared to accept Portuguese government bonds as collateral against lending. The simmering tensions could come to the boil as soon as Wednesday next week, when Portugal hopes to raise up to €1.25bn through a bond issue. Any failure to get the auction away would trigger a new panic about the ability of the EU's most indebted nations to stay on top of their borrowings. And while Portugal is a relatively minor eurozone member in economic terms, accounting for just 2 per cent of the bloc's GDP, turmoil could trigger a crisis in its next-door neighbour Spain, which would be much harder to contain.

"The European governments have to fulfil their duties in full: monetary policy cannot substitute for government irresponsibility. Europe cannot afford to rest halfway. We need to be more ambitious. The proposals we have seen in Brussels do not go far enough in the ECB's view."

Jean-Claude Trichet - President ECB

The anxiety was heightened yesterday by official data revealing that the eurozone's economic recovery during the second half of last year had not been as strong as previously thought. The eurozone economy grew by 0.3 per cent during the third quarter of 2010, the EU said, rather than 0.4 per cent as it had previously recorded.

 

The December jobs report turns recent history on its head. We’ve been used to healthy increases in employment making no dent in the unemployment rate, but this time a mediocre jobs figure—just 103,000 new jobs were created—coincides with a gratifyingly large fall in unemployment, to 9.4% from 9.8%. For those keeping track at home, that’s employment up by 103,000 and unemployment down by a whopping 556,000.

There’s no doubt that the headline payrolls number is a disappointment. The economy just doesn’t seem to be creating jobs: we need to see 150,000 new jobs a month just to keep pace with population growth. But is there some good news, at least, on the unemployment front?

I’m not sure. While unemployment is down from both December 2009 and December 2010, it’s down only for those who have been out of work for less than 26 weeks. The ranks of the long-term unemployed are still rising:

Meanwhile, the numbers of “discouraged” people continue to rise very fast indeed: these are the people who’d love a job but have given up looking for one and therefore don’t count as unemployed.

Among the marginally attached, there were 1.3 million discouraged workers in December, an increase of 389,000 from December 2009. Discouraged workers are persons not currently looking for work because they believe no jobs are available for them.

The headline unemployment rate is important, and it’s great that it’s coming down. But if you’ve been out of work a long time, there’s little hope in these figures for you.