Wednesday, July 27, 2011

Weather Forecast Wednesday- Stormy With a Chance of Economic Chaos; Durable Goods, Not So Durable; Delta Airlines Net Income Drops 58%, Goes to Plan F; Credit Suisse Cutting 2,000 More Jobs; Fed's Beige Book Turning Brown; Radiation is Not Healthy For You; More

And now, today's weather: stormy with a chance of economic chaos. High 14.294 Trillion. Low -127.89 Trillion. Ultra Violent index 9.7. People are urged to seek shelter in gold and silver.

The economic storm clouds have been gathering for some time now, but because they have been lingering for so long, people have grown accustomed to the sight of them. And that is where the danger rests.

Today's June Durable Goods Orders plummeted 2.1% while inventories increased 0.4% to the highest level ever recorded. Demand down, inventory up - this points to a clear contraction in 2Q GDP and might put the U.S. back "officially" in recession. Oops. Then again, in the real world, we've been living in an economic depression since 2008 and now are entering the second leg of that depression so "officially" what they report "officially" doesn't matter one way or another.

Delta Airlines announced further cuts in flights as net income dropped 58%, which was blamed on higher oil prices. Now, they are planning for sustained higher fuel costs which they will pass on to the passengers. Delta gets an "F" for Failing.

Speaking of failing, another TBTF&TCTS bank named Swiss Debt Credit Suisse, is looking to cut 2,000 more jobs - which should be announced this Thursday. Keep an eye on that. On top of another wave of job cuts from the banksters industry, which we predicted three months ago.

Being that today we got a very late start, we're able to incorporate the Fed's Beige Book of inactivity, which showed "the economy" (or whatever remains of it) slowed down, ahem, more than "expected." Eight out of 12 regions experienced contraction and all of it was blamed mostly on Japan. Well, that and floods and droughts. Oh and maybe some snow for good measure. Don't bother wasting your time reading the 40 pages of blah, blah, blah when we can summarize it for you in two words - crumbling economy. Next.

As the drama in Washington roars on, we see gold and silver going up, up and away. More and more people are catching on to the fact that fiat currency is worthless. Now, combine what we predicted three months ago when we said the Comex is dry on physical, and it's setting up to be a long hot summer for those holding fiat and no gold.

Finally, as the financial world continues to burn and crumble, we present to you a video that proves what we have always known - radiation is not healthy for you. Take that, Ann Coulter.

Tuesday, July 26, 2011

Wormwood Tuesday- One Week Later and Already Greek Contagion is Spreading; PIIGS Bond Yields Remain Elevated; Great Quote From Obama for the History Books; Debt Ceiling Talks Continue; New Home Sales, Plunge Another 1% on Top of Last Year's Record Low; Fukushima Updates; Much More

Not one week ago, Greece was granted a final wish a new bailout worth $140 Billion (on top of last years $140 Billion bailout) which despite all of the drama, solved absolutely nothing. As we reported, this band-aid solution which hyped "the markets" into typical KoolAid hysteria, would eventually wear off and reality would once again come back to bite - ever harder, ever deeper. (Thank you WB7 of ZeroHedge for the Hitchcock graphic!)

Sure enough, one week later, nothing has changed. Italian and Spanish bonds remain at elevated levels not seen since the inception of the EU and these levels are to be closely watched as investors doubt the solvency of the entire EU. Spain's 10yr continues to float just above the 6% threshold as does Italy's 10yr. We'll continue to monitor this rate and see what it predicts for the EU. On the heals of yesterday's moot Greek downgrade, Moody's noted that the new bailout would make it easier for Greece (exactly what the last bailout was supposed to do) to reduce its debts but debt to GDP will remain "well in excess of 100 per cent of its GDP" for years. Again, as we have been highlighting since forever, ratings agencies are good for "after-the-fact" events, but as with the whole 2008 debacle, they failed to forewarn the whole world of the pending doom. That's why you have Fiat's Fire!

In the meantime, the drama across the pond in the U.S. continues, as Obama fights a Boehner over a debt ceiling increase. More theatrics, more smoke and mirrors, more bread and circuses for the masses. While you watch the continuing circus, we want you to keep this quote from a 2006 Obama in mind:

"The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the U.S. Government can not pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government's reckless fiscal policies. Increasing America's debt weakens us domestically and internationally. Leadership means that, "the buck stops here.' Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better." - Senator Obama, March, 2006

What changed since 2006? Did debt all of a sudden in 2008 become necessary to keep the pyramid scheme going? Did Obama become privy to new information?

You know, he was 100% correct when he spelled it out in very plain terms then - raising America's debt limit is a sign of leadership failure. It is a sign that the U.S. Government can not pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government's reckless fiscal policies. Increasing America's debt weakens us domestically and internationally

We couldn't have said it any better. Now, with that being said, let's check the price of oil and the profits for the top oil companies. Oh, what a surprise! Record profits for the oil companies - and for Wall Street. But no soup for you, Main Street USA. Instead, you'll have to fight over the fewer and fewer jobs that Wall Street chooses to keep here. Remember, there is no quicker way for a company to cut costs than to cut jobs. Going "green" is costly in the short term but cost effective long term, so in this economic depression recession, they chose not to make that investment. What else can they do if they are to keep bonuses? How else can they keep this rigged casino operating for another month? 

The bottom line - raising the debt ceiling or not is inconsequential in the long term. Period. Allow that to sink in. 

If an agreement was reached tonight for example, it would only postpone one of two inevitable outcomes: 1) a U.S. default or 2) hyperinflation. We firmly believe they will choose hyperinflation as that buys them time, versus defaulting which would spell immediate disaster for them. It's a mathematical certainty.

Also certain, is the current U.S. cash burn rate (which has increased exponentially) will now only buy 6-8 months if the proposed $1.6 Trillion increase is passed, at which point they will have to decide to raise it again or not. Which is why so many Wall Street banksters "experts" are calling for abolishing the debt ceiling altogether, because they know, come 6-9 months from now it will need to be raised again. So if this giant scam global economy is to continue, that ceiling has to be abolished. If it's not raised, Wall Street's free money comes to an end. They can't have that now, can they? 

Further, and this is the real kicker - any and all catastrophes (man made or naturally occurring) will be met with unprecedented fiat printing, which in turn equals more inflation for you and bigger bonuses for Wall Street. Which is certainly why immediately following the triple catastrophes of Japan in March, the talking bimbos on CNBS were celebrating this disaster. No joke. It was touted as "bullish for the economy," and one old filthy fleabag went as far as saying, "thank goodness the monetary toll is not as bad as the human loss." Remember that? Our blood is still boiling from that. 

We will say, another major disaster such as the one in Japan, might just push oil up to $150pb and jump "real time inflation" from the current 11% to 18% or more. It's coming. Given 2011's record earthquake activity, our anti-Goldman HF data mining supercomputer is putting the odds of another major quake in 3 months time at 80%. And we're already 1/4 the way on a Level 6 GEES. Things are speeding up. 

Fresh off the presses today is the New Home Sales data which, (surprise, surprise) "unexpectedly" dropped another 1% in June to a three month low, on top of last year's sales which were the worst recorded sales in over 50 years. Oops. June also now makes two consecutive months of "unexpected" drops. Of course, Fiat's Fire readers are not surprised and this news is not unexpected. Only Wall Street's finest found this "unexpected" as they awaken from their KoolAid induced comas. Then again, they also thought silver and gold were not monies, but traditions. We all know where gold and silver are today. 

Update 1: As if they couldn't see that the FHA was going to need a bailout. Oops. 

Update 2: Birmingham AL, readies for going bust. Who could have known?

Update 3: Crude oil, back over $100. Very bullish for the economy. Or not. Got gold? Got radioactive-free Milk?

Monday, July 25, 2011

Short & Sweet Monday- Add BlackBerry Maker RIM to List of Companies Making Big Job Cuts, 11% of Workforce; Add National Association of Realtors to that List as Well, 10% of NAR Workforce Cut as Jobless Recovery Swings Into High Gear; Greek Debt, Junked; Cesium Spreads Across Japan

As we have pointed out 14.249 Trillion a dozen or so times already (one of our very first articles was on this topic), it bares worth repeating that real, organic economic growth is long dead and has been officially since 2008. Currently, the only way for things to appear as normal is to pump endless amounts of fiat into the system - which happens to be exactly what the Central Banks of the world have been doing since that dark day in 2008, to "fill the gaps" as companies cut jobs, and close stores and factories, etc. What this creates, besides the obvious inflation, is a perpetual system of economic destruction. No wonder then, why gold and silver, exactly as we predicted, have been and will be going "to the moon, Alice!" in the coming weeks and months ahead. Daily fluctuations are inconsequential - what matters are the long term trends.

By now, you know that the MSM has coined the term "jobless recovery" and made it a household term, which was supposed to be used in a positive KoolAid induced sense. However, it's backfired terribly on them in part because it's obvious that this "jobless recovery" is a "recovery" for Wall Street and it's "jobless" for everyone else. However, we know the worst is yet to come; this "jobless recovery" is far from over so get ready for more "jobless" on your street and more "recovery" for Wall Street CEOs.

We begin this week with more bull...ish news, by adding BlackBerry's RIM with an 11% workforce reduction (2,000 jobs) and the National Association of Realtors (NAR) with a 10% reduction (somehow the NAR tried to spin this news into something positive despite giving numbers but we'll guess that 10% reduction equals 150-200 employees). We were hoping the spinmaster of horrific housing news, L. Yun, would be on that list, but we're sad to report that he will get a bigger bonus for his mastery of spinning. Looks like housing is about to drop off a cliff, again. This should be worth a few hundred points on the Dow(n) Jones. Like tomorrow's Case-Shiller/S&P Housing data.

Not that it matters, but Greek debt was downgraded again, this time to triple junk status; somehow we already knew Greek bonds were junk since 2009. Oops. The "markets" should rally on this news and the now 100% certain default. You have to like the way they eased you into this Greek default, though. Good job on the spin.

Just don't forget that Italian and Spanish bonds are looking ugly today, as once again, contagion is back. Over 6% on the 10yr for Italy. Clearly unsustainable. "Wwwwhat? I thought they fixed that problem last week!" says you. Nope. For some reason, band-aids on gangrene infested amputations never seem to work out too well for the patient. And just now we learn, courtesy of ZeroHedge, that Italy, in addition to Austria, has suspended August bond auctions. [insert Goofy voice] "Well gee! Who could have known?"

Like, who could have known that cesium-137 contamination would continue to spread across Japan? Japan has been so busy in a massive cover up forgot to provide standardized testing for radiation and now look what happens. It looks like Japan doesn't care much about its people, nor the people of the world as they are making it too obvious that their "thrown in the towel, the end is near" agenda has just gone full power.

Told you. Short and sweet and painless on this slow news day.