Tuesday, July 19, 2011
Hundreds of thousands of observant Jewish families begin the "Three Weeks" of gradually-increasing mourning over the destruction of the Holy Temples and Israel's exile on Tuesday, with the fast of the 17th of the Hebrew month of Tammuz.
This is the day on which Nebuchadnezzar and his Babylonian forces breached the walls of Jerusalem in 422 BCE, after 18 months of siege, on their way to destroying the First Temple three weeks later. (Note: Some date the destruction of the first Temple 586 B.C.E.)
The Three Weeks end on the 9th of Av - Tisha B'Av - the date on which both the First and Second Temples were destroyed, roughly 2,500 and 2,000 years ago respectively, the second destruction by Roman forces taking place in the year 70 C. E.
The 17th of Tammuz marks other calamities in Jewish history as well. It is the date on which Moses, having descended from Mount Sinai for the first time, saw the people sinning with the Golden Calf and broke the first set of Ten Commandments. In addition, the priests of the First Temple era were forced on this day, a year before the Temple's destruction, to stop offering the daily sacrifice due to the shortage of sheep.
The Talmud also teaches that on this date some decades earlier, the evil King Menasheh had an idol placed in the Temple's Holy Sanctuary. Later, during Second Temple times, a Roman general placed an idol in the same place and publicly burned the Torah.
The fast begins in the early dawn hours and not the night before, unlike the Yom Kippur and 9th of Av fasts. It ends after the evening Maariv prayer shortly after 8 p.m. in Israel; for other locations .Note that in may cities an hour must be added for Daylight Savings Time.
Mourning customs such as no weddings, parties, or haircuts, continue until the morning after Tisha B'Av; there are slight differences between Ashkenazi and Sephardic customs.
Maimonides (Rambam) explains that the purpose of days of fasting and mourning is not to remember the hardships suffered by our ancestors, in the same way that we remember days of joy, but rather to “awaken [our] hearts and clear the paths to repentance. This reminds us of our evil deeds and those of our forefathers [that] brought these calamities upon them and us. Recalling these matters causes us to better ourselves, as it is written, They shall confess their transgressions and the transgressions of their fathers.’”
Like other fast days, the morning prayers on the 17th of Tammuz include special selichot prayers, mourning our losses and asking for forgiveness. Excerpts from the selichot of the 17th of Tammuz:
"We rebelled against Him Who dwells in heaven, therefore we were scattered in all directions... We acted rebelliously before Thee with slandering tongues, therefore our tongues were made to learn to utter lamentation... The tempest-tossed afflicted people were utterly broken up and dispersed; the dry land became a boat wrecked for lack of a captain; she received [punishment] for her sins with principal and double interest, with mourning and moaning... Their adversaries assailed them on that day and... drove the nation like a chased gazelle, and there was none that sought to protect it... Turn to us, O Thou that dwellest on high, gather our dispersed from the four corners of the earth. Say to Zion, Arise! And we shall arise. Convert the 17th of Tammuz into a day of salvation and comfort." (translation by Rev. Abraham Isaac Jacob Rosenfeld).
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Yields on two-year Portuguese debt rose to a fresh record of 20.3pc on Monday, reflecting fears by investors that the country would struggle to pull itself out of downward spiral without some form of debt restructuring.
Mr Passos Coelho also appeared to caution the European authorities that his government will not tolerate heavy-handed interference in the country.
"We want to take part in an ambitious European project and make our contribution so Europe can confront its problems in the most ambitious way, but as prime minister I will not stand by and let Europe govern Portugal," he told a party gathering.
There is growing rancor in Lisbon over the term of the €78bn rescue by the EU and the International Monetary Fund, and the sweeping powers of the inspectors as they impose a "structural adjustment" on the economy.
The penal rate of interest charged by the EU is expected to top 5.5pc and risks trapping the country in debt-deflation. At the same time fiscal austerity, without offsetting monetary stimulus or devaluation, may tip the economy into an even deeper downturn.
EU officials are pushing hard for a 100 basis points reduction in rates on rescue loans, hoping to win backing from a reluctant Germany at an EU summit on Thursday.
The revelation of a budget hole in Portugal has echoes of what occurred in Greece in late 2009, when an audit by the new Pasok government exposed a budget deficit twice the level previously declared to the European Commission.
Portugal's government will have to cover the gap with another round of spending cuts, mostly in the civil service and state-owned industries. The sacrosanct Christmas Bonus is already being slashed, effectively cutting salaries.
Portugal is obliged to cut the budget deficit to 5.9pc of GDP this year under its rescue terms. This looks like a Sisyphean task since the deficit was still 8.7pc in the first quarter, and further austerity will have the side-effect of choking tax revenue. The experience of Greece is that the country can find itself chasing its tail, with the deficit remaining stubbornly high in a shrinking economy. Portugal's central bank said the economy will contract a further 1.8pc next year.
"There are limits to cutting: you can't just cut blindly," said Mr Passos Coelho.
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Expectations that ratings agencies will strip the US of its top notch credit rating because of the impasse over its borrowing needs were raised on Monday amid little sign of agreement between President Obama and his Republican opponents.
With a deadline of 2 August for an increase in the $14.3tn (£9tn) borrowing limit, Gary Jenkins, head of fixed income research at brokers Evolution, said there was a "high probability" of the Standard & Poor's rating agency downgrading the US from its coveted triple A rating.
"Probability of the debt ceiling being raised – high. Probability of the US achieving a credible solution to the rising debt burden in the foreseeable future – low. Probability of S&P downgrading the US sovereign rating over the next three months – high," Jenkins said.
S&P and Moody's have warned that they could downgrade the debt if the US defaults on its payments in a move that could cause global market turbulence, forcing rates higher and stripping the US dollar of its status as a reserve currency.
Fitch Ratings also warned on Monday that if the US debt ceiling is raised before the August deadline it would consider whether to downgrade the US within three to six months.
"Agreement on a credible fiscal consolidation strategy will secure the US AAA status; failure to do so will inevitably weaken the sovereign credit profile and may result in a sovereign rating downgrade," Fitch said. It has put the US on so-called ratings watch negative once before – in November 1995 – where it remained for almost six months when some federal agencies ran out of funding.
While Jenkins believes the debt ceiling will eventually be raised despite 11th hour posturing by US politicians, his concern is that the solution will not be credible in the long term which could still effectively lead to a downgrade.
"I think it is clear that the US will be downgraded by the middle of September 2011. Indeed, I would put the probability of such an event at around 80%," Jenkins said. He cited the debt ceiling and the more medium term fiscal position as the reasons for S&P warning of the potential for a downgrade. S&P said that it could maintain the AAA rating if an agreement could be reached on about $4tn of cuts and that this needed to be maintained throughout the decade. "That reads to me like it's a downgrade unless certain events happen." Jenkins said.
"For the short term then it is all eyes on the debt ceiling negotiations. But if a compromise is reached which does not include some determination to lower the general level of US debt then mark your diary for the middle of September – I accept they may move earlier – and at that stage we will find out if there are any differences in a world where the ultimate 'risk free' instrument is not even rated AAA," Jenkins said in a note to clients.
The White House rejected the latest plan by the Republicans to force through spending cuts and rule out tax rises, as negotiations over the country's debt burden continued. The White House described the Republicans as potentially causing a "severe blow to the economy".
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PHOENIX - A giant wall of dust rolled through the Phoenix area on Monday, turning the sky brown, creating dangerous driving conditions and delaying some airline flights.
The dust, also known as a haboob in Arabic and around Arizona, formed in Pinal County and headed northeast, reaching Phoenix at about 5:30 p.m.
The dust wall was about 3,000 feet high and created winds of 25 to 30 mph, with gusts of up to 40 mph, said Austin Jamison, a meteorologist with the National Weather Service. Visibility was down to less than a quarter-mile in some areas, he said.
"You have suddenly very poor visibilities that come on with all the dense dust in the air," he said. "With poor visibilities, that makes for dangerous driving conditions and that's arguably the biggest impact."
There were no immediate reports of accidents on roadways because of the storm, which began to clear within an hour of moving in. The Arizona Department of Public Safety did not immediately return a request for information about road conditions.
Some departing flights at Phoenix Sky Harbor International Airport were delayed because of the storm, said airport spokeswoman Julie Rodriguez.
Incoming flights from nearby cities including Los Angeles were being held until the storm cleared, she said. She did not know how many flights were delayed or whether any were canceled.
Another giant dust storm in Arizona caught worldwide attention on July 5. That storm brought a mile-high wall of dust that halted airline flights, knocked out power for hundreds of people and turned swimming pools into mud pits.
Jamison said Monday's storm was not as powerful or as large as the last one, and didn't last as long.
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Syria will recognize a Palestinian state with East Jerusalem as its capital, the foreign ministry said Monday.
"Syria recognizes a Palestinian state within the June 4, 1967 borders and East Jerusalem as its capital, and on the basis of the preservation of Palestinian legitimate rights," a statement said.
Syria "will view the Damascus office of the PLO (Palestine Liberation Organization) as an embassy upon the publication of this statement," the ministry said.
Palestinian President Mahmoud Abbas began a visit to several European countries on Sunday to gather support for a UN vote on an independent Palestinian state.
According to the official Syrian News Agency (SANA), Abbas welcomed Syria's recognition of the Palestinian state and described it as "a major step which supports the Palestinian efforts to attain UN recognition in September."
Abbas' tour, will include visits to Norway, Spain and Turkey.
Israel and the United States oppose the Palestinian move as a unilateral step, saying the recognition of a Palestinian state should be the result of a negotiated peace agreement.
Iran says it is installing centrifuges with "better quality and speed" to improve the uranium enrichment process at its nuclear plants.
The foreign ministry statement comes despite international demands for Iran to halt its nuclear activities.
It said the UN atomic watchdog had "full supervision" of the centrifuges.
The US, UK and other Western nations have long believed Iran's nuclear programme is aimed at developing atomic weapons - a claim rejected by Tehran.
Tehran says it is refining uranium for electricity generation and medical applications.
Enriched uranium can be used for civilian nuclear purposes, but also to build atomic bombs.'Peaceful' activity
"By installing the new centrifuges progress is being made with more speed and better quality," said spokesman Ramin Mehmanparast.
He said the move showed Iran's success in pursuing its "peaceful nuclear activity".
Six world powers are negotiating with Iran over its nuclear programme, and the country is subject to United Nations Security Council sanctions over its refusal to halt uranium enrichment.
Last month, the British government accused Iran of testing missiles capable of carrying a nuclear warhead, in contravention of a UN resolution.
The Iranians openly test-fired 14 surface-to-surface missiles with a range of 2,000km (1,250 miles) as part of a 10-day programme of military exercises.
Its foreign ministry said none of these missiles had had nuclear capability.BBC
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Not even 2 weeks after quantitative easing (QE) ended, the Federal Reserve (FED) has announced that it is currently working on another major stimulus (should the economy slow down), which it absolutely will due to significant structural imbalances caused by decades of government involvement in our economy and nearly a century of central bank planning. For the past 3 years, the FED has cut rates, predicted summer recoveries, provided liquidity to markets, secret bailouts, public bailouts, and QE (monetization of debt). The printing press has been working overtime.
However, despite government, media, college, and ALL of conventional wisdom propaganda, the economy just can't turn around. The Keynesian economists just can't figure it out, they continue to try and cure an economy that suffers from too much debt, regulation, and central planning (manipulation) with even more debt, regulation, and central planning. Now for over 3 years we have been told by Ben Bernanke and friends that things were okay, a recovery was just around the corner, and just a little more stimulus was needed to get us over the hump. The media continues to treat his predictions and assessments as the most accurate source in the world, when his assessments couldn't have a worse track record.
Here is a link to a great video of Bernanke assessing the economy from 2005 to 2007. As you watch this, remember that we are literally heading into the largest crisis since the 1930's.
For those that don't have the time to watch it, let us give you some of the highlights.
- 2005 Bernanke states that housing: is fundamentally strong, will not see a national decline, will not impact the economy in a negative way, and is positioned well demographically. Really? Demographically, 2005 just so happens to be the EXACT year baby boomers peaked in their home buying habits making housing "demographically" going forward a complete disaster.
- 2006 The economy will grow and the drag from the housing sector will significantly diminish.
- 2007 Sub prime is NOT an issue and we expect moderate growth. We should see strength in the economy starting in the summer.
Of course we all know what comes next, 2008 summer recovery, 2009 summer recovery, 2010 summer recovery, and 2011 summer recovery. Trillions from the government and the FED have been pumped into the economy, so much so that the U.S. government borrows 45 cents for every dollar it spends. We have been told that this is for our own good, that the spending and borrowing is what saved us from another depression. We have been told that prices becoming more affordable, homes falling in price, and a strong dollar would hurt us. Central planners have created a deflation boogie man that is going to get us even as a record 44 million people apply for food stamps. We can't help but wonder if they wouldn't mind food prices coming down?
We have also been told that gold and silver are in a bubble, that the evidence is all the "we buy gold" stores popping up. You know, the ones that Americans go to in order to sell their gold for 10 cents on the dollar!!! Yep, that sounds like a bubble to us.
Central banks are net buyers of gold, in fact, they are loading up a record amount of gold for 2011. We should note that central banks did not purchase tech stocks in the 1990's or real estate in 2000.
China, the #1 producer of gold, is also now the #1 importer of gold. Oh and they are also encouraging their citizens to purchase the yellow metal too.
Yesterday, Bernanke was asked if gold was money by Congressman Ron Paul, his response was "no." Just to be clear, gold has been used and stored as money for over 5,000 years. In fact, as already stated, central banks are regularly buying gold, yet in the land of fiat currency, where for the past 40 years the world has been on a fiat currency experiment, the most important central banker of all is willing to look the world in the face and state that central banks buying gold is part of tradition. Maybe this is the part of the same tradition when it comes to devaluing the currencies they are in charge of and bailing out the "too big to fails." All just a part of banker family tradition, almost makes you feel warm and cozy.
For those that are not familiar with gold, our analysis has shown us that gold is still a store of value around the world. It is only in the west where it is treated as a speculative commodity. Most Americans, especially those who consider themselves experts in economics or business, have no idea that for every 100 ounces of gold sold on the COMEX, there is only 1 ounce of gold to back it up, something that has obviously distorted the gold markets and suppressed the price.
FutureMoneyTrends.com believes that gold buying is not a banker tradition, it is a bankers hedge, a hedge against their own system of fiat currency that is literally LOANED into existence. Yes we know, we often mention how they love to print, but before they hit a single button, the currency created by the bankers is always loaned out with an interest rate. Making an increase in the currency supply inevitable because in order to pay back the banks, there will have to be new currency created in order to cover the interest for the original loan. This entire fraudulent banking system and government run economics has run a muck in the last 40 years. It's no coincidence that 97% of U.S. debt has been accumulated since the death of the dollar's tie to gold in 1971. With the world now backed by the full faith and credit of the United States, who is literally borrowing to service previous borrowing, the game is almost up.
Not a dime has been repaid by the U.S. government since 1960, not a single penny. Debt ceilings year after year are increased without debate, spending, stimulus, and a constant expansion of government is pushed by both parties, no matter who is in power. Government statistics and forecast are nothing but pure propaganda, yet they are presented as trusted information by the media. Not one major news agency has EVER questioned government data or absurd government forecasts. According to John Williams of ShadowStats.com, senior citizens' social security checks are 44% less than what they should be, by excluding things that go up in the official inflation rate, and including government hedonics. The cost of living increase according to Mr. Williams has become the cost of survival index.
Debt Ceiling Propaganda, a Complete Distraction
Today, the big news is the debt ceiling with congress and the president arguing over fake cuts that will supposedly happen over the next 10 years. Of course these cuts and savings are all dependent on government data and forecasts. Currently, Obama is spouting out numbers that project a FED funds rate that will average 2.5% until 2020, even though the actual average FED funds rate for the past 30 years has been around 6%. Obama is also projecting 4.2% growth over the next 3 years, something that is simply impossible due to the change in our demographics and lack of a driver for jobs. Anyone (hint hint media) that would simply apply realistic GDP growth or debt interest payments would see that any planned cuts are going to be completely offset by lower revenues and higher interest payments. Plus, even if congress and the president agree to cut 2 trillion over the next 10 years, we are adding an "official" 1.5 trillion in new debt on an annual basis.
FutureMoneyTrends.com always makes it a point to say "official" any time we mention government debt, since the actual real debt is much higher. If the government included total new debt (all unfunded liabilities that will have to be paid) our annual deficit for 2011 would be 4 trillion and our total national debt is around 100 trillion dollars. Of course remember, if we actually paid our seniors what was promised, the situation would be even worse. We should note that FutureMoneyTrends.com is NOT advocating for entitlements, in fact, we oppose them all as they are highly destructive to society. We are just merely pointing out that the only way those who do advocate for entitlements can argue "that they work or aren't bankrupt," is to manipulate the numbers and screw the very people they say they want to protect.
The End Game
Call it a reset, collapse, crisis, or doom and gloom, FutureMoneyTrends.com believes that yesterday's official announcement by Chairman Bernanke showed the world, specifically the bond markets, that the FED has been checkmated by the natural forces of economics. No matter what the government or the FED do, unemployment is rising, long term unemployment is getting worse, and faith in the dollar is waning. The first round of quantitative easing saw a 70% rally in the Dow Jones, the second round of quantitative easing saw only a 6% increase. Meanwhile, despite precious metals trading on the COMEX (100 paper ounces vs 1 actual physical ounce) silver continues to make 30 year highs, while gold is breaking all time highs in all currencies.
The FED has thrown everything it possibly can at trying to jump start the economy, yet the engine just won't turn over. The imbalances that the FED has created, the bubbles that they have inflated, and the fraud that has infected the entire financial system due to fiat currency, has finally checkmated the FED. The entire system is completely dependent on the FED injecting more liquidity and keeping rates low, even the U.S. government is dependent on the FED to satisfy its borrowing needs. The FED from November to June accounted for 70% of U.S. treasury purchases. In our opinion, this week was a major turning point and wake up call to the world. The course the U.S. is on is simply unstoppable.
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When will we reach bottom in the housing market? With lenders filing foreclosures more slowly and an excess inventory of homes, housing prices could fall another 20 percent next year, says one economist. Gary Shilling, one of the economists who predicted the subprime mortgage crisis, says the "depressing effect" of two to 2.5 million homes in excess inventory will push prices down.
"This would push underwater mortgages from 23 percent to 40 percent of the total, seriously depressing consumer spending, and wreak havoc among mortgages and related securities," he wrote in the July newsletter of his consulting firm, A. Gary Shilling & Company, Inc., based in Springfield, N.J.
Foreclosure filings, in which lenders take back homes with delinquent mortgage payments, decreased 30 percent in the first half of 2011 compared to the same period last year. Banks seized 421,212 homes in the first six months of the year, down from 529,633 in the first half of last year, foreclosure listing company, RealtyTrac Inc. said Thursday.
But questions that began last fall about hastily-signed foreclosure filings, in part, have led to slower approvals. RealtyTrac estimates that 1 million foreclosure-related notices that should have been filed by banks this year will be pushed to next year.
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With only 18,000 jobs added in June, the country also has a high unemployment rate at 9.2 percent. Also contributing to a decrease in housing demand is an overleveraged consumer base and home prices that have already seen a double-dip decline, according to the Case-Shiller Index, Shilling said.
"In the past, almost everyone was sure that house prices would never fall, and on a national level, they hadn't since the 1930s," Shilling wrote. "Now everyone knows prices can fall, have collapsed and continue to drop. Who wants to buy an asset that is highly likely to continue dropping in price?"
Shilling said a place to live and a great investment "are no longer contained in the same package," an owner-occupied home. He added the "zeal" to buy the biggest house one can afford is gone and households are seeking smaller abodes.
"So the trade-up housing market is dead," Shilling said.
Steven Leslie, lead analyst with Economist Intelligence Unit's Financial Services Briefing, said he agrees that housing is in a long-term slump.
"We don't think the construction sector is going to come back or industries associated with it, because there is huge overhang," Leslie said.
Leslie said he has "a lot of respect" for Shilling, who is a "big bear on the housing market," but he points out that rent prices have increased. Leslie said rental prices typically have more influence on housing prices than housing inventory.
According to the Consumer Price Index for June, the rent index rose 0.1 percent and the index for owners' equivalent rent increased 0.2 percent.
"With rents going up and people's own economic calculations, it does come to make more sense to buy at some point," Leslie said. "Of course, renting is a very liquid transaction. You can get out of renting quickly. Buying is something you can lose money on, if you get out of it."
While Leslie said he does not forecast a double dip recession, he does foresee a long period of slow growth in the U.S. Leslie said the Economist Intelligence Unit has not calculated a specific percentage by which housing prices could decrease further, though he is "not very bullish either."
"They could go down again, but 20 percent seems like an awful lot to me," Leslie said.