Shipping Flashing Early Warning Signal - Again?... A leading indicator before the collapse was port statistics... Amrita Sen at Barclays Capital says the number of Baltic Dry ships waiting to berth — mostly in China & Australia — has begun to fall after peaking at 154 in mid-June... The Capesize Iron Ore Port Congestion Index is replicating the pattern seen a year ago just before the commodity boom tipped over...“The anecdotal evidence we are hearing is that vessel queues have been falling. There are reports of cancelled tonnage from China pointing to a slowdown in Chinese buying of coal and iron ore. We are definitely expecting a correction"... http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100000188/shipping-flashes-early-warning-signals-again/

Roger Altman discusses the growing US budget deficit & escalating US debt... says it is the "most serious & fascinating fiscal policy challenge I've ever seen"... writes "The administration is in a nearly impossible situation. Growth,.... is going to be distinctly subnormal for 2010 & 2011...the deficit outlook will emerge as much worse....you can’t withdraw stimulus, i.e., pursue deficit reduction, when the economy is so weak. But...the public & financial markets will be rebelling over $1 trillion deficits as far as the eye can see. This will be Gettysburg for Obama. Hopefully he’s in a blue uniform..."

Advice from a 93-yr old Economist Who Saw 1929... Anna Schwartz says "The Obama Administration should stop bailing out corporate disasters and abandon plans to move health care onto the backs of taxpayers"... emphasizes there is an implicit belief that fiscal stimulus will give a recovery, but from Anna's observation expansions have come to an end "always in terms of monetary stimulus. And that has not been the program of this administration"...

1. article - http://www.time.com/time/business/article/0,8599,1909115,00.html
2. dangers of printing $ http://www.time.com/time/photogallery/0,29307,1879735,00.html

Mark Hulbert on Investor Sentiment...

The People's Republic of Credit...

Former Lehman Brothers CEO; Blackstone co-founder & Peter G. Peterson Foundation founder (whose mission Cliff Küle firmly supports) Pete Peterson is focused on the U.S.'s threat of national insolvency. He has committed $1 billion of his personal fortune to raise awareness....(gets interesting after 9 minutes)

"I must say, I never expected to see the day where I would be talking about anything other than reducing the debt, I'm running into the tyranny of zero, which is where you can't reduce (the debt) any more." - Alan Greenspan

Easing & Credit Measures Aren't Working (?)... William Buiter explains:-- quantitative easing , credit easing , & enhanced credit support are useful when the problem facing the economy is illiquidity - "It is useless when the binding constraint is the threat of insolvency. Today, liquidity is ample, even excessive. Capital is scarce. Capital is scarce first and foremost in the banking sector"...
http://blogs.ft.com/maverecon/2009/07/quantitative-easing-credit-easing-and-enhanced-credit-support-arent-working-heres-why/

the Consumption of China

Chris Puplava: Chinese government is taking steps to support its internal consumption...first Wal-Mart Supercenter opened in 1996..now 77 in the country, not to mention the many more Carrefour (French version of Wal-Mart) stores in China (Cliff Note: Cliff was almost trampled by the many shoppers at one Carrefour store in Beijing)...

Chris mentions "Even amidst the global crisis over the last year [Wal-Mart] retail sales in China have remained in double-digit territory and are already rebounding"...ALSO China has lowered its reserve requirements for banks to spur lending & lowered interest rates for deposits to discourage citizens from saving & foster greater consumption... "Their efforts are working as total loans of financial institutions has risen to more than a ten-year high of 30.6% YOY"...

http://www.financialsense.com/Market/cpuplava/2009/0708.html

Boone's Gas & Wind Power Plan - 1yr Later

Cartoon Courtesy of Clay Bennett,

Chattanooga Times Free Press

Click to Enlarge

Now France Joins In... first it was China, then Russia, then India, and now France calling for an alternative to the US $ as the global reserve currency... French Finance Minister Christine Lagarde challenged the dollar's supremacy "in a world that has changed because of the crisis and the growing role of emerging countries"... http://www.globeinvestor.com/servlet/story/GAM.20090706.RCURRENCY06ART1940/GIStory/

Visit msnbc.com for Breaking News, World News, and News about the Economy

The $ Demise: China Signaling Beginning of the End?... Charles Ortel points out China is already diversifying away from the $ - "They are quietly snapping up petroleum assets, raw materials, copper, etc"...recommends piggybacking on China's investment strategy by buying international timber, natural gas and petroleum... http://finance.yahoo.com/tech-ticker/article/275551/The-Dollar

Big Banks Don't Want California's IOUs... a group of the biggest US banks said they would stop accepting California's IOUs on Friday, adding pressure for California to close its $26.3 billion annual budget gap... http://online.wsj.com/article/SB124692354575702881.html

Hyperinflation or Deflation?... Neither says Puru Saxena (Cliff Küle M-AA*)... what is more likely is another deflationary scare over the short-term... "Any sell-off in the markets later this year will be met by an even larger stimulus from the policymakers and this will ultimately result in high inflation"... http://www.321gold.com/editorials/saxena/saxena070809.html

Allen Sinai and Jeffrey Saut on the Markets and the Economy...

"Avoid... the accumulation of debt, not only by shunning occasions of expense, but by vigorous exertions in time of peace to discharge the debts which unavoidable wars have occasioned, not.... throwing upon posterity the burden which we ourselves ought to bear" - George Washington (1732-1799)

US State Budget Gaps, April 2009

Click to Enlarge

Courtesy of QVMGroup

Proprietary Trading May Cause October Crash... says Economist von Pfeil... thinks by October it will be clear that economic recovery is not materializing, stimulus not working, and proprietary trading desks will decide to go short then... "The governments have run out of ammunition, they cannot go on stimulating the economies ... On top of which, you will find that China itself will be running out of ammunition"... http://www.cnbc.com/id/31773276

Why the Recent Fall in Oil Prices?