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This one also was making the rounds over the weekend. It seemed like a good idea to hoist it up here as well since, aside from being pretty funny, it gives you a very good idea about who actually owes who how much money over in troubled Europe.
Of course, the question of where all the bailout money is going to come from is even funnier. Was it just me, or was anyone else expecting someone to say, “Who’s on first!”
Not to worry. The nation’s best and brightest economists think that we’ll pull through these tough times, revising their economic growth projections upward and all but ruling out another slowdown or a dreaded “double-dip” recession as reported by the AP today.
Economists forecast the pace of U.S. growth to pick up in the year ahead as consumers and businesses alike accelerate spending, according to a new survey.
The assessment by leading forecasters is set to be released Monday by The National Association for Business Economics. It finds them more bullish than when the survey was last surveyed in February, with a majority expecting the economy’s performance to exceed the long-term norm in 2010 and 2011.
The outlook amounts to an encouraging report card on the economy at nearly the one-year mark of the recovery, which the experts date to June 2009 when the recession hit bottom.
…
The panel of forecasters boosted its expectations for growth in 2010 to 3.2 percent real gross domestic product, up from 3.1 percent in its February outlook. It also pegged the 2011 growth rate at 3.2 percent.Household spending, while still lagging the overall economy, is still expected to grow significantly this year. The forecasters attribute part of that to consumers being less thrifty, with the saving rate for 2010 seen dropping to 3.4 percent from the 4.6 percent they predicted just three months ago.
Since the vast majority of economists probably go through their entire career without ever predicting a recession, it seems unlikely that anyone other than Nouriel Roubini will predict a double-dip recession. The Fed just rasied their growth forecast too, so, at least they’re all singing from the same hymnal.
The NAR (National Association of Realtors) reported that sales of existing homes rose 7.6 percent last month to an annual rate of 5.77 million units, a five-month high, but the inventory of unsold homes rose even more, surging 11.5 percent to a nine-month high of 4.04 million units, the important “months of supply” metric rising from 8.1 to 8.4 months.
The median home price during April was $173,100, up 4.0 percent from a year ago, and distressed sales accounted for 33 percent of all sales, down from 35 percent in March.
Since the NAR reports sales at the time of closing, there should be two more months of even higher sales totals before the effect of the home buyer tax credit vanishes and we see another slump similar to the one late last year. Come July, among other things, it should be interesting to see if we get a price slump commensurate with the amount of free money given by the government to each new homebuyer over the last nine months.
It looks like it’s going to be another wild week for financial markets. Stocks are tumbling around the world as another big bank failure in Spain echos the late-2008 U.S. banking crisis. The price of gold is rising smartly, right along with the trade-weighted dollar (which is almost never a good sign), as more and more investors around the world question the durability of the global monetary system that consists exclusively of paper money.
Here’s one more investor who doesn’t think much of the current system – mild mannered billionaire Thomas Kaplan - from a weekend feature article in the Wall Street Journal.
A Billionaire Goes All-In on Gold
Gold is setting records again, boosting the holdings of central banks, Armageddon worrywarts, and ordinary people who own gold bars, coins and jewelry.
But few individuals stand to benefit as much as low-profile billionaire Thomas Kaplan. A New York-born commodities magnate who earned a doctorate in British colonial history at Oxford, Mr. Kaplan oversees an empire devoted largely to gold.
Many fund managers and high-rollers have allocated small percentages of their portfolios to gold as a hedge against inflation. But Mr. Kaplan is the bull of bullion. He has gone further than perhaps any other major investor, betting the majority of his wealth on gold and other precious metals. And it reflects his deeply held conviction that global economic instability could bring rising demand for gold.
Through his firm, Tigris Financial Group, and affiliates, Mr. Kaplan has loaded up on bullion and bought up properties in 17 countries on five continents, where geologists are exploring for more.
…
Together, his holdings amount to a nearly $2 billion bet on gold, more than the Brazilian central bank’s bullion is currently worth.
It’s funny to think that, a few years ago, anyone saying, “I keep the bulk of my personal wealth in gold bullion and mining stocks” would have been looked upon as some sort of a nut – either of the tin-foil hat or black helicopter variety. But, not so much anymore.
Deflation-minded individuals are no doubt cheering the recent M3 data featured today in a Bloomberg “Chart of the Day” along with other measures of the money supply.
(By the way, does anyone know how to actually get the chart of the day at Bloomberg? I’ve yet to find a link to a chart in any of these pieces, the graphic above coming from this FT Alphaville report where, apparently, they were somehow able to find it.)
As for M3, it’s not all good. The broadest measure of the money supply (abandoned by the Federal Reserve back in 2006 but reconstructed elsewhere, for example by Capital Economics above) is now down 5.4 percent from a year ago and the fear of fewer dollars chasing the same amount of goods has more than a few economists thinking that we’ll be seeing lots of minus signs in front of the inflation numbers for some time to come.
TOP STORIES
Stocks tumble as Spanish bank failure weighs – Reuters
No Reform for Fannie and Freddie, Despite Costs – DealBook
Libor Shows Strain, Sales Dwindle, Spreads Soar: Credit Markets – Bloomberg
China Gives Green Light For Property Speculators For Three Years – Business Insider
Nouriel Roubini said the bubble would burst and it did. So what next? – Telegraph
China’s president stresses willingness to reform currency – MarketWatch
Europe’s deflation torture is a gift to the Far Left – Telegraph
Legendary Investor Is More Worried Than Ever – WSJ
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MARKETS/INVESTING
Oil futures wobble around $70 mark – MarketWatch
Gold price climbs as risk aversion persists – Reuters
A trio of Crash predictors don’t buy Friday’s rally – MarketWatch
Gold ETFs soar to record $40 billion – Commodity Online
Don’t Mess with Aunt Minnie – Hussman Funds
Year-Long Rally Is Over: Charts – CNBC
By Tim Iacono, Since 2005
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