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Hang on, it's gonna be a bumpy ride!..............

The similarities between the subprime mortgage crisis and that of the coming collapse of the U.S. bond market are uncanny. In fact, Mark Twain may have had the U.S. debt market and the previous debt-fueled real estate crisis in mind when he said that "History does not repeat itself--but it does rhyme." The housing and credit crisis first became evident to most in 2007 with the distress in the subprime mortgage market. The foundation for the housing bubble was low interest rates, which were provided by the Fed, and passed along to consumers via commercial banks and the shadow banking...

The yield on 10-year Treasuries – the benchmark price of global capital – surged 30 basis points in just two days last week to over 3.9pc, the highest level since the Lehman crisis. Alan Greenspan, ex-head of the US Federal Reserve, said the abrupt move may be "the canary in the coal mine", a warning to Washington that it can no longer borrow with impunity. He said there is a "huge overhang of federal debt, which we have never seen before". David Rosenberg at Gluskin Sheff said Treasury yields have ratcheted up 90 basis points since December in a "destabilising...

It Begins: Cash Strapped Cities Begin To Crumble John Carney Feb. 4, 2010, 10:25 AM Our nascent economic recovery may come too late to save many American cities from bankruptcy, which in turn will deal heavy losses to municipal bond investors and the companies that insure munis. The latest fright comes from Harrisburg, the capital of Pennsylvania. The city is considering seeking bankruptcy protection—as well as tax hikes and asset sales—to address $68 million in debt service payments due this year. Harrisburg does not stand a chance at making its payments. The $68 million in debt service payments is four...

WASHINGTON — Nearly one in five Americans said they lacked the money to buy the food they needed at some point in the last year, according to a survey co-sponsored by the Gallup organization and released Tuesday by an anti-hunger group. The numbers soared at the start of the recession, but dipped in 2009 despite the continuing rise in unemployment. The anti-hunger group, the Food Research and Action Center, attributed that trend to falling food prices, an increasing use of food stamps and a rise in the amount of the food stamps benefit. More than 38 million Americans — one...

Gold continues to be a wildly popular global obsession, but the winds may be changing a little. Why? Platinum is undervalued, out of the public eye (compared to gold), and production is set to expand as auto manufacturers begin producing more vehicles. Investors are even beginning to go long platinum while simultaneously shorting gold: Bloomberg: Even after a record 57 percent rally last year, platinum is cheap relative to gold, signaling more gains as demand grows from carmakers and exchange-traded funds. “We are long platinum and short gold,” said Jonathan Barratt, the Sydney-based managing director with Commodity Broking Services Pty,...

Dow in 5.2% Three-Day Slide By PETER A. MCKAY And DONNA KARDOS YESALAVICH Stocks suffered a third straight day of steep losses Friday, led by technology shares, which suffered from analyst downgrades and sky-high earnings expectations. The selling picked up in the afternoon as fears swirled regarding the possibility that Ben Bernanke might not get confirmed to a second term as Fed chairman. The Dow Jones Industrial Average slid 216.90, or 2.1%, to 10172.98, off 5.2% over its three-day slide. For the week, the Dow was off 4.1%.

Worst Debt Crisis Since The Great Depression To Claim 200 More U.S. Banks During 2010 Economics / Credit Crisis 2010 Jan 18, 2010 - 03:56 AM By: Martin D Weiss Washington has so thoroughly botched its supervision of the banking industry that 200 banks are likely to fail this year — easily surpassing last year’s 140 bank failures … inevitably involving the greatest bank losses in history … and already costing the FDIC ten times more than the great S&L and banking crisis of the 1980s did. I am not basing these conclusions on conjecture. They come straight from official...

The Recession Is Over, The Economic Depression Just Beginning Economics / Great Depression II Jan 12, 2010 - 07:30 AM By: Stephen Lendman In late 2009, former Merrill Lynch economist, now with the Canadian firm, Gluskin Sheff, said the following: "The credit collapse and the accompanying deflation and overcapacity are going to drive the economy and financial markets in 2010. We have said this repeatedly that this recession is really a depression because the (post-WW II) recessions were merely small backward steps in an inventory cycle but in the context of expanding credit. Whereas now, we are in a prolonged...

Get Ready For 11% Unemployment In January David Kotok | Jan. 11, 2010, 3:11 PM To be blunt: in our view the jobs data were plainly miserable and disappointing. Like many of our readers, I listened to the debate on CNBC and read numerous analyses. We will set aside the perennial optimists who find positive outcomes in any data set. Simply put: a 10% unemployment rate and a 17.3% underemployment rate are two extremely serious numbers. They help explain the market’s immediate reaction, which was a Treasury bond price rally and a drop in the 2-year note yield to an...

The US has formidable strengths that will allow its government to be profligate for far longer than other nations could get away with. But if the US keeps running huge deficits, sooner or later the country will start flirting with bankruptcy.

The labour force contracted by 661,000. This did not show up in the headline jobless rate because so many Americans dropped out of the system. The broad U6 category of unemployment rose to 17.3pc. That is the one that matters. Wall Street rallied. Bulls hope that weak jobs data will postpone monetary tightening: a silver lining in every catastrophe, or perhaps a further exhibit of market infantilism. The home foreclosure guillotine usually drops a year or so after people lose their job, and exhaust their savings. The local sheriff will escort them out of the door, often with some sympathy...

A Recession of Fear By Bill Bonner 01/08/10 Baltimore, Maryland – Uh oh… The wind chill is 50 below in North Dakota. And the storm is headed our way. What happened to global warming? This report from colleague Chris Hunter in Ireland, where we have our Family Office: “Ireland is under snow – lots of it. The media have dubbed it the ‘Big Chill.’ It hasn’t been colder since 1962. I stupidly tried to drive to a nearby village yesterday evening in said snow and got my car stuck in a ditch. “I’m now holed up in a friend’s house...

The Gates Of Financial And Economic Hell Have Opened Stock-Markets / Credit Crisis 2010 Jan 06, 2010 - 02:20 AM By: Bob Clark The abyss is widening, many have already fallen in. The Fat Boys at Goldman say they are doing God's work, do they really believe that. Maybe they know dark secrets we are not privy to. What does God's work entail? Stopping fear and panic? Holding up asset prices and presenting the illusion of a stable, recovering economy? If they fail, then hell will follow. PHONY FUNDINGOn the surface it appears that the Feds are creating a recovery...

If governments continue to pile on more and more debt, when will they reach the tipping point? The Greeks appear to be close to the tipping point, and it is only a matter of time before other European countries, and eventually even the United States, begin their fiscal death spiral. The Greek government's unwillingness to make the hard choices necessary to put its fiscal house in order in the past few weeks has caused investors to demand a 2.5 percent premium on its government-issued Eurobonds over those issued by the German government. First, a little background. Eurozone governments have a...

The United States Economy has become like those sub-prime mortgages that almost brought down the banking system last year. We have borrowed more than we can afford but as long as interest rates stay low, we will be able to make payments. Once rates go up, the federal government will have to "default on its homes." Even the NY Times is predicting economic problems for America: ... With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this...

Harder to buy US Treasuries Created: 2009-12-18 0:13:35 Author:Zhou Xin and Jason Subler IT is getting harder for governments to buy United States Treasuries because the US's shrinking current-account gap is reducing supply of dollars overseas, a Chinese central bank official said yesterday. The comments by Zhu Min, deputy governor of the People's Bank of China, referred to the overall situation globally, not specifically to China, the biggest foreign holder of US government bonds. Chinese officials generally are very careful about commenting on the dollar and Treasuries, given that so much of its US$2.3 trillion reserves are tied to their...

ADP Job Loss Report Is Worse Than Expected Joe WeisenthalDec. 2, 2009, 8:17 AM We've still got previous few green shoots on the jobs front. The private ADP jobs report indicated a loss of 169,000 private sector jobs in November, which was worse than the 150,000 that analysts had estimated. Also not good: October was revised to a worse 195,000. ------ According to today's ADP National Employment Report®, private sector employment decreased by 169,000 in November. The ADP National Employment Report, created by Automatic Data Processing, Inc. (ADP®), in partnership with Macroeconomic Advisers, LLC, is derived from actual payroll data...

It's one of those numbers that's so unbelievable you have to actually think about it for a while... Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that's not counting any additional deficit spending, which is estimated to be around $1.5 trillion. Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That's an amount equal to nearly 30% of our entire GDP. And we're the world's biggest economy. Where will the money come from? How did we end...

And if this is a recovery, it's the worst recovery of all time. David Rosenberg -- who has been getting into fights with other pundits left and right -- digs in and argues that what we're really looking at is a depression. MORE ON THE DEPRESSION Last week, we received some classic guffaws when we responded to whether or not the recession has ended with this: “We’re not convinced, but even if it is statistically over, the depression is ongoing”. We were reprimanded by former Fed Governor Mishkin for breeding “fear”. The eyes were rolling among the Squawk Box crew...