Announcement

Collapse
No announcement yet.

GEAB N12: Impact phase of the Global Systemic Crisis: April 2007: Inflexion point

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • GEAB N12: Impact phase of the Global Systemic Crisis: April 2007: Inflexion point

    GEAB N12: Impact phase of the Global Systemic Crisis: April 2007: Inflexion point of the phase of impact US economy enters recession

    The View from Europe

    Summary of GEAB N12 - February 2007

    Subscribe for the complete report. Use iTulip referral code 754HT7 for a 20% discount.

    As anticipated last January in GEAB N11, the fog of statistics is now clearing and US economic trends appear clearly (retail sales at a standstill in January 2007, record high trade deficit in 2006, downward revision of US growth for 2006, Fed's confirmation of economic slowdown, serial defaults among mortgage lending organisations, continued collapse of US housing market...). Therefore, according to LEAP/E2020, and contingent on the specific evolution of each component of the US economy, the month of April will account for the inflexion point of the impact phase of the global systemic crisis, that is to say the moment when all negative consequences of the crisis pile up exponentially. More precisely, April will be the time when negative trends will converge, transforming many sectorial crises into a generalised crisis, a very great depression , involving all economic, financial, commercial and political players.

    In April 2007, nine practical consequences of the unfolding crisis will converge:
    1. Acceleration of the pace and size of bankruptcies among US financial organisations: from one per week today to one per day in April
    2. Spectacular rise of US home foreclosures: 10 million Americans out on the street
    3. Accelerating collapse of housing prices in the US: - 25%
    4. Entry into recession of the US economy in April 2007
    5. Precipitous rate cut by the US Federal Reserve
    6. Growing importance of China-USA trade conflicts
    7. China's shift out of US dollars / Yen carry trade reversal
    8. Sudden drop of US dollar value against Euro, Yuan and Yen
    9. Tumble of Sterling Pound
    In this February issue of the GlobalEurope Anticipation Bulletin LEAP/E2020 details the nature and sequence of these developments meant for all concerned players (currency or financial market operators, investors, international traders, political and economic decisions-makers or analysts) to better anticipation events. Strategy is time mastery! In the present issue of GEAB, our teams endeavoured to build a device to overcome this quarter's accelerating developments.

    In this public announcement, LEAP/E2020 describes one of these nine direct consequences otherwise detailed in GEAB N12 i.e.:

    Spectacular rise of US home foreclosures: 10 million Americans out on the street

    In 2006, US foreclosures increased by 42%, directly affecting an average of 1 US household out of 92. In states such as Colorado, California, Ohio, or Texas, 1 household on 35 or 40 falls victim of foreclosure. In October through December 2006 in Ohio, 3.3% of homes and apartments were filed in foreclosure . The pace of foreclosures accelerates as the number of insolvent US households increases (cf. GEAB N10 on the issue of insolvency): in 2006, over 1.2 million foreclosures affected 4 to 5 million US citizens (counting between 3 and 4 persons per household).



    Level of foreclosures in the US in December 2006

    According to LEAP/E2020, the year 2007 will register at least a doubling in the number of foreclosures (3) due to the surge of record high numbers of mortgage loan refinancing on the market (close to 2,000 billion USD). 2 to 3 million homes will probably be filed in foreclosure and about 10 million US citizens thrown out of their homes in the course of this year. All those who doubt whether the US actually entered a “very great depression” should pay a visit to field reality and observe the devastating effect of the housing and financial crisis for millions of Americans (4). Scores of blogs appeared on the web trying to review the on-going housing disaster and the stream of human tragedies (5). Taking into account that a US citizen has three months between initial default on interest repayment and actual foreclosure, LEAP/E2020 estimates that it is indeed in April that the second wave of foreclosures will hit the US market.

    Subscribe for the complete report. Use iTulip referral code 754HT7 for a 20% discount.

    ------------------------------------
    Notes:
    1.“Home foreclosures are highest in Ohio”, Beacon Journal, 11/01/2007
    2. “More than 1,2 million foreclosures reported in 2006”, Yahoo Finance, 25/01/2007
    3. “Foreclosures increase 19% in January”, United Business Media, 12/02/2007
    4. “Texas riddled by foreclosures”, Austin Business Journal, 26/01/2007
    5. For instance,My Real Estate Money or Foreclosure Pulse.
    Last edited by FRED; 02-22-07, 05:48 PM.
    Ed.

  • #2
    Re: GEAB N12: Impact phase of the Global Systemic Crisis: April 2007: Inflexion poin

    these guys have impressive cajones [sp?] to make such specific predictions. we will see if they're right within 2.5 months.

    Comment


    • #3
      Re: GEAB N12: Impact phase of the Global Systemic Crisis: April 2007: Inflexion point

      sad to see that you promote on your web first page site these guys. They look fantastic on paper. but so secretive and convinced by all complot theories that one should be critical on their precise forecasts. look back to their historircal publications... The end of the world is imminent everyday

      Comment


      • #4
        Re: GEAB N12: Impact phase of the Global Systemic Crisis: April 2007: Inflexion point

        I went to their web site and read their bios. Not one has any real business experience to speak of. All the bios looked like fluff to me. Now that does not mean that they could not be right, I think the country is in terrible shape and have been expecting a recession for 2 years and the place just keeps cooking on. Too much liquidity slushing around. The thing that is going to cause a recession is the credit sector and due to the unusual nature of banking, things can unfold slowly.

        Having lived and worked in Europe, after reading their bios I just figured it was some left wing Red Brigade wantabes who sit around on the left bank and drank coffee and decided to put together a web site to make some money.

        When I lived in Europe in the mid 80's the Herald Tribune was so Socialist and proUSSR I just stopped reading it. Switched to the European edition of the WSJ. The WSJ here has become so Neocon that I now read the FT's. Europe is full of marxist always thinking the end of capitalization is coming, but it is still a great place to live if you have a decent salary.

        I now say the "End of the World as we know it" at least for Americans is coming. The American focused world is going to end soon because of our over indulgent, over spending, lazy ass (can I say ass here) life style, but who knows what the timing is going to be. And when it does end it will be traumatic for the world just as it was in the late 20's and the world moved away from the UK centric world.

        Hold on to your seats.

        Comment


        • #5
          Re: GEAB N12: Impact phase of the Global Systemic Crisis: April 2007: Inflexion poin

          I agree. Still, even on their own terms, their predictions are "contingent on the specific evolution of each component of the US economy," which leaves quite a bit of wiggle room.

          Comment


          • #6
            Re: GEAB N12: Impact phase of the Global Systemic Crisis: April 2007: Inflexion point

            I live in Europe and I think your pr-analysis of GEAB is correct. There is no problem with the quality of their brains, oviously very high level. but as you say the probably make a typical intelletual mistake : confusion between the analysis and the secrective political will. Following my own experience, it seems that among critics of the US economy there is a mix of professional people correctly pointing problems and others following their emotion and hoping finally that the economic problems will end in the final days of the US model. As profesionnals we have to concentrate only on the fist aspect and put aside our own political views and hopes

            Comment


            • #7
              Re: GEAB N12: Impact phase of the Global Systemic Crisis: April 2007: Inflexion poin

              Originally posted by miju
              I live in Europe and I think your pr-analysis of GEAB is correct. There is no problem with the quality of their brains, oviously very high level. but as you say the probably make a typical intelletual mistake : confusion between the analysis and the secrective political will. Following my own experience, it seems that among critics of the US economy there is a mix of professional people correctly pointing problems and others following their emotion and hoping finally that the economic problems will end in the final days of the US model. As profesionnals we have to concentrate only on the fist aspect and put aside our own political views and hopes
              There is indeed a world of difference between expecting a crisis to result from the current imbalances and accumulated errors in the U.S. economy and wishing for one. Some critics of the U.S. system appear to be rooting for a crash. Hudson doesn't exactly root for one, but at one point during a speech at a college said that he was optimistic that the current system will collapse and be replaced by a more stable, just, and equitable economic system. I reminded him that this is not usually how it goes, that the kind of collapse he seems to expect are usually followed by populist democratic or dictatorial regimes. Such expectations of a death and rebirth are Utopian.

              I have a few theories about the range bearish personalities. For starters...

              1) The Invested Bear

              Bought a lot of gold in 1980 and has been waiting for the financial system to collapse ever since, so he can re-coupe his losses.

              2) The Jilted Bear

              Believes there is a big party going on at which everyone is making a lot of money... but he was not invited. He hopes all the party goers drown in their drinks, or fall sleeep smoking and their houses burn down. Serves them right.

              3) The Moral Bear

              Believe the U.S. is going to hell in a hand basket because it no longer looks like the nation of their youth. We need the current system to collapse so the scum will in the process be cleansed from our society.

              4) The Worried Bear

              This is our Jane Burns' phrase. I'm one of these. It refers to those of us who have done well under the current system but worry that it has become excessive, corrupted, and crisis-prone. Message to our leaders: we like capitalism, so don't break it. We are mostly worried about the political fallout of a systemic failure of an out-of-control, and structurally flawed, credit and money system.

              Maybe readers can think of others.

              I agree with Hudson's observation that there is no Left anymore, at least as far as economics goes; the Left is now only political and ideological. It has no alternative economic model to offer, no success stories, only critique of existing capitalist regimes under various political systems, ranging from republican as in the U.S. to state run as in China.

              iTulip attempts to take a non-idealogical approach to understanding the current system. The challenges are in discounting one's own biases and distancing oneself from accepted belief in order to more clearly see what is really going on around us. A human weakness is to adapt and become accustomed to–normalize–even the most perverse social circumstances, especially in an atmosphere of fear. How else to explain Nazi Germany? The stock market and housing bubbles are also social belief systems. I worry that the entire credit system is based on beliefs that are as well grounded as the idea that pets.com is worth hundreds of dollars a share and that housing prices only go up.

              So the first thing we shed at iTulip is our fear; we're not afraid to look at anything, to find the truth of it, even if what we find contradicts our beliefs. The second thing is to always question our beliefs. The third is to question everything we are told, and always consider the source.
              Last edited by EJ; 02-25-07, 05:08 PM.

              Comment


              • #8
                Re: GEAB N12: Impact phase of the Global Systemic Crisis: April 2007: Inflexion point

                Originally posted by EJ
                The third is to question everything we are told, and always consider the source.
                Who is this dude: EJ?

                Originally posted by EJ
                The Moral Bear

                Believe the U.S. is going to hell in a hand basket because it no longer looks like the nation of their youth. We need the current system to collapse so the scum will in the process be cleansed from our society.
                These are pretty good definitions of bears, EJ. I liked this one, particularly because it used "scum."

                Have you considered that 50 years from now, those now in their "youth" might look back with fond recollections of today and wish things then are as they are now.

                My father, died in '77, was born in 1900. More than ever now, I wish he were alive and could again tell me things he did tell me but which I have forgotten. I think as kid and teenager he may have picked cotton for 50 cents a day, and I remember as a child his buying me a Coke for a nickel and the same for a Hershey bar and he would say something like "I remember when these cost a penny." I guess I could use Finster's FDI to go back and see if that was true, but I always accepted he was not joshing me.

                Yep, I'm a moral bear, and I expect my dad was too when I was a kid.
                Jim 69 y/o

                "...Texans...the lowest form of white man there is." Robert Duvall, as Al Sieber, in "Geronimo." (see "Location" for examples.)

                Dedicated to the idea that all people deserve a chance for a healthy productive life. B&M Gates Fdn.

                Good judgement comes from experience; experience comes from bad judgement. Unknown.

                Comment


                • #9
                  Re: GEAB N12: Impact phase of the Global Systemic Crisis: April 2007: Inflexion poin

                  Originally posted by Jim Nickerson
                  Who is this dude: EJ?



                  These are pretty good definitions of bears, EJ. I liked this one, particularly because it used "scum."

                  Have you considered that 50 years from now, those now in their "youth" might look back with fond recollections of today and wish things then are as they are now.

                  My father, died in '77, was born in 1900. More than ever now, I wish he were alive and could again tell me things he did tell me but which I have forgotten. I think as kid and teenager he may have picked cotton for 50 cents a day, and I remember as a child his buying me a Coke for a nickel and the same for a Hershey bar and he would say something like "I remember when these cost a penny." I guess I could use Finster's FDI to go back and see if that was true, but I always accepted he was not joshing me.

                  Yep, I'm a moral bear, and I expect my dad was too when I was a kid.
                  My Dad told me about buying lunch for a quarter during the Depression. It wasn't so bad for him. An entrepreneur, he drove around TX fixing radios out of the back of his car. Saved enough money to help send my Uncle Herb to medical school.

                  If he were alive today (he died in 1992), I expect he'd be shocked to see Americans driving around in huge trucks. He'd marvel at the nearly maintenance-free cars we take for granted, with their safety features, like ABS and airbags. He'd be shocked that borrowing to buy a car is common place. He'd be horrified at the high cost of a public college education, health insurance, and medical care, but marvel at how cheap it is to fly cross country. He'd wonder why millions of people ever thought to pay more for a house than they could earn by renting it. He'd wonder how TV could evolve to such a high level as to create a show like "Band of Brothers" and at the same time stoop to air "reality" shows that dwell on the lowest and the cruelest aspects of human nature. In short, he'd see the paradoxes and mixed blessings. Don't know if he'd say that the world, on balance, was better or worse.

                  Some other bear categories:

                  - Dirty Harry Bear

                  Goes around asking 24 year old hedge fund managers, "Feeling lucky punk? Well, do ya?"

                  - Obsessive-Compulsive Bear

                  Checks Fiendbear.com and the Fall Street Feed for new links every ten minues.

                  Comment


                  • #10
                    Re: GEAB N12: Impact phase of the Global Systemic Crisis: April 2007: Inflexion point

                    Hey, you guys sure know how to make a guy feel old. I remember when I was 7 or 8 and you could get a soda pop for five cents (lived in a small town like Mayberry).

                    There is another bear, let us call it the analytical bear or the probability bear and says what does this look like and where do you want to put your money.

                    I live in fear of what will happen if things continue down the road but also wonder what else could happen when you have this large of a bubble in credit. My father (in his 80's) still does not have a credit card. They could have wrote Grapes of Wrath about him. He came out to California to pick cotton when he was 15. My Grandfather who just died a couple of years ago came to Texas in a covered wagon in 1895.

                    The Oklahoma and Texas real estate bubble collapsed. The savings and loan bubble collapsed. The Soviet Union bubble collapsed. Could it really be that different this time. I have been inside a lot of public companies the last few years and I hear a lot of whispers in fear by the CEO's. To be forewarned in forearmed.

                    Comment


                    • #11
                      Re: GEAB N12: Impact phase of the Global Systemic Crisis: April 2007: Inflexion poin

                      Originally posted by Ishmael
                      Hey, you guys sure know how to make a guy feel old. I remember when I was 7 or 8 and you could get a soda pop for five cents (lived in a small town like Mayberry).

                      There is another bear, let us call it the analytical bear or the probability bear and says what does this look like and where do you want to put your money.

                      I live in fear of what will happen if things continue down the road but also wonder what else could happen when you have this large of a bubble in credit. My father (in his 80's) still does not have a credit card. They could have wrote Grapes of Wrath about him. He came out to California to pick cotton when he was 15. My Grandfather who just died a couple of years ago came to Texas in a covered wagon in 1895.

                      The Oklahoma and Texas real estate bubble collapsed. The savings and loan bubble collapsed. The Soviet Union bubble collapsed. Could it really be that different this time. I have been inside a lot of public companies the last few years and I hear a lot of whispers in fear by the CEO's. To be forewarned in forearmed.
                      Good one. We shall add:

                      - Probabilistic Bear

                      Believes that the chances are low that asset prices can forever remain at levels which are a multiple of historical levels. (Also known as a Sane Bear.)
                      Last edited by EJ; 02-25-07, 06:52 PM.

                      Comment


                      • #12
                        Re: GEAB N12: Impact phase of the Global Systemic Crisis: April 2007: Inflexion poin

                        bipolar bear - doesn't know whether to laugh or cry when he reads the financial pages.

                        Comment


                        • #13
                          Re: GEAB N12: Impact phase of the Global Systemic Crisis: April 2007: Inflexion poin

                          Originally posted by jk
                          bipolar bear - doesn't know whether to laugh or cry when he reads the financial pages.
                          Depending on how you spell that, could be a Polar Bear that goes both ways.

                          Comment


                          • #14
                            Re: GEAB N12: Impact phase of the Global Systemic Crisis: April 2007: Inflexion poin

                            Originally posted by EJ
                            Good one. We shall add:

                            - Probabilistic Bear

                            Believes that the chances are low that asset prices can forever remain at levels which are a multiple of historical levels. (Also known as a Sane Bear.)
                            what about the Inflation Adjusted Probabilistic Bear - believes what you said but in REAL value terms, while believing that chances are high that asset prices can forever increase in NOMINAL terms.

                            (forever until the current money approaches its assymptotic zero value and is replaced by something else.)

                            Steve Saville pointed out in a commentary that stocks *always* were over-valued when their dividend yields were less than bonds' yields for any length of time. It was a truism that stocks had to pay higher yields than bonds to reward holders of stock for their extra risk.

                            Until 1959 that is when this rule got tossed out the window. Inflation put that one to rest.

                            The "crash" of the housing market could be a REAL value crash but a NOMINAL period of prices tending lower for awhile then picking up with no crash of nominal prices.

                            Inflation Adjusted Probabilistic Bears expecting the stock market to crash may be right in real terms but they understand that in nominal terms this won't happen because the virulent inflation makes "this time is different" really true!

                            Comment


                            • #15
                              Re: GEAB N12: Impact phase of the Global Systemic Crisis: April 2007: Inflexion point

                              I hope DanielLCharts finds this, because there is some real humor here.

                              And who would've guessed jk would come up with a bear with a psycho problem, nor would I have guessed EJ would come up with one with a gay problem. Hmm? You guys are quick-witted. Good.
                              Jim 69 y/o

                              "...Texans...the lowest form of white man there is." Robert Duvall, as Al Sieber, in "Geronimo." (see "Location" for examples.)

                              Dedicated to the idea that all people deserve a chance for a healthy productive life. B&M Gates Fdn.

                              Good judgement comes from experience; experience comes from bad judgement. Unknown.

                              Comment

                              Working...
                              X