The Mess That Greenspan Made - Part 414

Greek Children Scarred for Life?

Conditions are deteriorating rapidly in Greece where, not only is the current generation undergoing forced austerity, but the next generation may have been scarred for life by this image of Prime Minister George Papandreou as related in this story at The Economist.

For all I know, maybe Greek children have a universal love for clowns, but, if they are anything like kids in the U.S., this sort of imagery could have a long lasting impact.

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China to Install 2,000 Gold ATMs

You can buy gold bars at hundreds of post offices in India, so, it shouldn’t come as too big of a surprise that you’ll soon be able to buy the metal at 2,000 ATMs in China, the nation now battling India for the top spot in global gold demand. Details are in this Mineweb story.

China has joined the United States, Germany, Italy and the United Arab Emirates, in hosting an ATM machine that dispenses bullion and gold coins. In Beijing’s 800-year old Wangfujing shopping district, shoppers can use bank cards and cash to buy certified gold bars and coins.

China’s first ATM dispensing gold bars and coins was switched on over the weekend of September 25, and then swiftly switched back off again. The equipment had to be shut down the same day because it was not producing receipts due to a small technical glitch, said an industry observer.

The German-imported gold vending machine was then officially installed during the Chinese National Day holidays, which fell in the first week of October.

Despite the initial hiccup, there are plans to roll out 2,000 more ATMs nationwide. The machines are operated by Beijing Agricultural Commercial Bank and a gold trading German firm. Plans call for installing more of them in secure locations and in private clubs at banks and at landmark buildings in large cities across the Asian country.

There’s more than a little bit of irony in a German company manufacturing and exporting gold vending machines to the rest of the world, China now being their biggest customer. You’d think that some Chinese company would have figured out how to it by now.

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Are We Going to Have Another Recession?

[Following are excerpts from the current issue of the Weekend Update at Iacono Research.]

The latest batch of economic reports from around the world have called into question what had been, in the late-summer up until about a week ago, a growing consensus that the U.S. and other important parts of the global economy are either about to enter another recession or, in the view of some, are already in a new recession.

While clearly affected by the latest moves by European officials to stem the sovereign debt crisis, last week’s impressive bounce for stocks and commodities was also influenced by a fading sense of imminent calamity for economic growth following an increasing number of comparisons between 2011 and 2008 in recent months.

It’s worth taking a closer look at the question of whether the world is now facing another recession – the likelihood and, more importantly, the severity – as it is of utmost importance for any investor. Was last Monday’s low for stocks and commodities an enduring low or will another economic contraction produce even lower price levels in the period ahead?

One thing is clear – the U.S. economy today is much different than it was three years ago and the soaring unemployment rate is a key reason why.

(Continue reading this article at Seeking Alpha.)

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Investor Optimism Plunged Last Month

If yesterday’s big rally did signal that markets have put in their lows for the year, someone should tell retail investors to get on board because, according to this Gallup poll , they were pretty shaken up last month, investor confidence plunging to early-2009 levels.

It should come as no surprise that two-thirds of the survey respondents said they feel “little or no control in their efforts to build and maintain their retirement savings in the current environment”, but Fed Chief Ben Bernanke’s low interest rates have forced many of them to hold their nose and stay in the market in hopes of higher returns.

The potential good news here is that confidence last reached current levels in February 2009 just before one of the biggest stock market rallies in history that began in March.

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Tuesday Morning Links

Iceberg spotted, summit convened – Economist
Trichet Sees Risk as Greek Writedowns Split EU – Bloomberg
Slovakia PM links EU bailout vote to government survival – Washington Post
China sees trade war if U.S. passes currency bill – CNN/Money
China faces US punishment for “controlling yuan” – Channel News Asia
Debt committee could raise risk of U.S. downgrade – CNN/Money
Goldman Sachs may post third-quarter loss: Citi – Reuters
Amid Protests, Blankfein Cancels College Talk – DealBook
Listen to the Occupy Wall Street Movement – HuffPost
Occupy Wall Street Protests Rankle the Rich – ABC News
5 myths of Occupy Wall Street – Weidner, MarketWatch
Why Not to Scorn Occupy Wall Street – The Freeman

Oil below $85 amid hope for EU debt crisis plan – AP
Gold eases after ECB comments, trade volatile – Reuters
Currency Forecasters Say Best Over for Dollar – Bloomberg
Are institutional investors joining the rally? – MarketWatch
Stocks May Have Seen Their Lows For The Year – CNBC
Why Jim Rogers is right about commodities – MarketWatch
Politicians, Regulators, Banking Officials and Gold – Mineweb
Scoach OKs first gold currency derivative trading – Reuters
China installs gold vending machine, plans 2,000 more – Mineweb
Gold Can’t Be a Risk Asset for Long – WSJ

Keynes and Hayek, the Great Debate (Part 4) – Bloomberg
Roubini: Double-Dip Recession a Foregone Conclusion – CNBC
Millions to lose jobless benefits if Congress doesn’t act – CNN/Money
Alberta jobs-increase figures are “stunning” – MarketWatch
ECB Backs Bond Guarantees to Magnify Bailout Fund – Bloomberg
Greece’s woes: Debts, downturns and demonstrations – Economist
China Record Boosts Confidence This Is No Bubble – Bloomberg
Survey Finds a Gloomy Outlook on Home Prices – WSJ
Where To Find Housing Demand – CNBC
Greenspan – Burn the Homes Down = Low Cost Strategy – 4closurefraud
The mystery of US banks’ second mortgage exposure – FT Alphaville
Too Early to Sound the All Clear? – Fed Watch

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