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HERMANN MISSOURI OKTOBERFEST 2010
HERMANN MISSOURI OKTOBERFEST 2010 - CLICK ON PHOTO FOR THIS YEARS SCHEDULE OF EVENTS
Well, we did it — we just wrapped up the first five-week losing streak for the stock market in seven years.
It could have been worse – the Dow will likely end the day down less than 100 points, or less than 0.8%. At its worst today, it was down 144.
But the internals, as it were, did not look good. Sectors that could be called forward-looking fell hard. The Nasdaq ended down nearly 1.5%, and the small-cap Russell 2000 fell more than 1.5%.
Worse, the Dow transports fell 1.7%. The industrials make, the transports take, remember.
If there was a bright spot, it was the energy sector, which was up a bit on the day. Every other S&P 500 sector was lower, and usually by a lot.
Thus endeth the worst week for the stock market since last August, just ahead of Ben Bernanke’s Jackson Hole rescue. Another such rescue is not likely forthcoming any time soon.
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US house price fall 'beats Great Depression slide'
By Stephen Foley
June 4, 2011 www.independent.co.uk___________________________________________________________________________
The ailing US housing market passed a grim milestone in the first quarter of this year, posting a further deterioration that means the fall in house prices is now greater than that suffered during the Great Depression.
The brief recovery in prices in 2009, spurred by government aid to first-time buyers, has now been entirely snuffed out, and the average American home now costs 33 per cent less than it did at the peak of the housing bubble in 2007. The peak-to-trough fall in house prices in the 1930s Depression was 31 per cent – and prices took 19 years to recover after that downturn.
The latest Case-Shiller house price index was just one of a slew of disappointing economic data from the US yesterday, which suggested ebbing confidence in the recovery of the world's largest economy. The Chicago PMI manufacturing index showed a sharp slowdown in the pace of expansion in May, missing Wall Street forecasts and sending the index to its lowest since November 2009.
And in the latest Conference Board consumer confidence survey more people expressed uncertainty over their future economic prospects. The confidence index fell unexpectedly to 60.8 from a revised 66.0, when economists had expected it to rise to 67.0. Falling house prices and negative equity combined with high petrol and food prices and a still-weak jobs market to raise consumers' fears for the future.
Thomas Di Galoma, the managing director of government securities at Oppenheimer & Co, said: "Based on the weakness in housing prices, Chicago PMI and consumer confidence, it appears as though the economy could be headed for a double dip, especially as federal and state spending slows rapidly over the next six months."
Economists warned not to expect any immediate relief to the gloom from the housing market. Banks continue to demand high deposits from potential buyers and are pressing on with foreclosures against those who have fallen behind on mortgages, adding to the glut of unsold homes on the market.
Prices are back to their 2002 levels, according to the Case-Shiller National House Price Index out yesterday. "The national index fell 4.2 per cent over the first quarter alone, and is down 5.1 per cent compared to its year-ago level," David Blitzer, the chairman of the Index Committee at S&P Indices, said. "Home prices continue on their downward spiral with no relief in sight."
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In less than 24 hours, HHS will be making its second trip to New Orleans to help rebuild houses. This year, they have 21 students and 5 adults volunteering. Once again they will be working with the Saint Bernard Project.
You can follow their progress on the following Blog link:HHS in NOLA
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President Obama: Economy on bumpy 'road to recovery'
By ABBY PHILLIPJune 04, 2011 www.politico.com
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President Barack Obama on Friday told workers at a Chrysler plant in Toledo, Ohio, that the economy is on a bumpy “road to recovery,” hours after the release of a lackluster jobs report.
“This economy took a big hit,” Obama said. “Just like if you have a bad illness … it’s going to take a while for you to mend, and that’s what’s happening to our economy.”
Without mentioning the Labor Department’s May jobs report that showed the unemployment rate increasing from 9 percent to 9.1 percent, Obama said the economy has faced “headwinds” in recent months, including rising gas prices, the earthquake in Japan and instability in the Middle East.
“We’re going to pass through some rough terrain that even a Wrangler would have a tough time with,” Obama said, in reference to the Jeep truck produced at the Toledo plant. The quip was met with boos from the otherwise supportive employees in the audience.
Obama’s visit to the Chrysler plant was supposed to hammer home the point that his administration’s bold rescue of the auto industry prevented the loss of millions of jobs.
Amid a rising unemployment rate and a tepid 54,000 jobs created in May, though, Obama also sought to ease fears that the country could be slipping back into recession.
“We’ve got to rebuild this whole economy for a new age so that the middle class doesn’t just survive, but it thrives,” Obama said.
In Toledo, where manufacturing job losses have accelerated during the economic downturn, Chrysler employs more than 1,700 workers producing Jeep and Dodge vehicles.
Obama said that because the government stepped in to stabilize the auto industry, thousands of Chrysler jobs and employees of local businesses were saved — including local restaurant Rudy’s Hot Dog, where Obama stopped for a quick meal en route to the plant.
“We had a few options: we could have followed the status quo and kept the automakers on life support … but that would have just kicked the problem down the road,” Obama said. “Or we could have done what lots of folks in Washington thought we should do, and that is nothing. That would have triggered a cascade of damage across the country.”
On Thursday night, just ahead of Obama’s visit to Ohio, the Treasury Department took final steps to divest itself of Chrysler stock, selling its remaining stake to Italian automotive and finance company Fiat. The U.S. government will recoup more than $11.2 billion in federal dollars committed as part of the Troubled Asset Relief Program’s automotive financing initiative. Treasury expects to collect an additional $560 million in proceeds from the transaction with Fiat.
Obama praised Chrysler for repaying “every dime and more of what it owes the American taxpayer” six years ahead of schedule. And with Treasury’s sale of its stock, Obama said the company soon will be 100 percent privately owned (in Italy).
Now, the president said, the industry is thriving.
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Leaked U.S. cable lays out North American ‘integration’ strategy
Postmedia News Jun 4, 2011 By Robert Hiltz
___________________________________________________________________________ Copies of the WikiLeaks documents can be seen at this link...
Leaked Secret WikiLeaks Documents about Integration www.alipac.us/ftopicp-1226350.html#1226350
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. This is a clip from Endgame concerning the North American Union. You can find the viewing links below, including the CFR's plan to have an embryonic NAU in place by 2010. This film is even more relevant at the current time, what with the bankers having a feeding frenzy and politicians calling for a new world order in the mainstream media every five seconds.
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OTTAWA — The integration of North America’s economies would best be achieved through an “incremental” approach, according to a leaked U.S. diplomatic cable.
The cable, released through the WikiLeaks website and apparently written Jan. 28, 2005, discusses some of the obstacles surrounding the merger of the economies of Canada, the United States and Mexico in a fashion similar to the European Union.
“An incremental and pragmatic package of tasks for a new North American Initiative (NAI) will likely gain the most support among Canadian policymakers,” the document said. “The economic payoff of the prospective North American initiative … is available, but its size and timing are unpredictable, so it should not be oversold.”
Many different areas of a possible integration are discussed throughout the cable, but the focus is on improving the economic welfare of the continent. It suggests one of the main benefits to Canada would be easier access across the U.S. border, calling it a “top motive” for this country.
The cable states Canada and the U.S. already share perimeter security “to some degree,” the question is then how “strong” the two countries want to make that bond.
Discussions are currently underway about increasing co-operation between the two countries when it comes to perimeter security. A broad-based document was released by Prime Minister Stephen Harper and U.S. President Barack Obama in February of this year, laying the groundwork for a deal that would see improved intelligence communication for security concerns and trade.
The details are currently being hashed out by officials from both countries. The proposed deal aims to improve the flow of cross-border traffic and increase security against terrorist threats.
Opposition parties have expressed a certain wariness over the lack of transparency of the talks and say they worry Harper will be too willing to make concessions to the U.S. over security issues, in order to gain an advantage in cross-border trade.
In the cable, U.S. diplomats focused on a number of key areas to move forward with continental integration, including a possible common currency, labour markets, international trade and the borders of the three countries.
The cable said Canadian economists were split on whether a fixed exchange rate, or a move to adopt the U.S. greenback, would benefit this country.
The document states Canadian economists point to labour markets as one of the areas which could have the greatest benefit for all three countries.
“They advocate freeing up professional licensing laws, and developing a quick, simple, low-cost work permit system, at least for U.S. and Canadian citizens,” the cable said.
It goes on to say North America would be well served by implementing a single, continent wide, tariff or a customs union arrangement.
The proposed customs union would eliminate the North American Free Trade Agreement’s “restrictive” rules of origin.
“NAFTA’s (rules of origin) are so restrictive that importers often prefer to pay the tariff rather than try to prove North American origin,” the cable said.
The cable concludes with a caveat: “There is little basis on which to estimate the size of the ‘upside’ gains from an integration initiative concentrating on non-tariff barriers of the kind contained in NAI. For this reason we cannot make the claims about how large the benefits might be on a national or continental scale.”
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McDonald’s ran a big hiring day on April 19 — after the Labor Department’s April survey for the payrolls report was conducted — in which 62,000 jobs were added. That’s not a net number, of course, and seasonal adjustment will reduce the Hamburglar impact on payrolls. (In simpler terms — restaurants always staff up for the summer; the Labor Department makes allowance for this effect.) Morgan Stanley estimates McDonald’s hiring will boost the overall number by 25,000 to 30,000. The Labor Department won’t detail an exact McDonald’s figure — they won’t identify any company they survey — but there will be data in the report to give a rough estimate.
If Morgan Stanley is correct, about half of last month's job growth came from the venerable fast-food chain. That is hardly the sign of a healthy economy.
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China Has Divested 97 Percent of Its Holdings in U.S. Treasury Bills
Friday, June 03, 2011 By Terence P. Jeffrey cnsnews.com
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(CNSNews.com) - China has dropped 97 percent of its holdings in U.S. Treasury bills, decreasing its ownership of the short-term U.S. government securities from a peak of $210.4 billion in May 2009 to $5.69 billion in March 2011, the most recent month reported by the U.S. Treasury.
Treasury bills are securities that mature in one year or less that are sold by the U.S. Treasury Department to fund the nation’s debt.
Mainland Chinese holdings of U.S. Treasury bills are reported in column 9 of the Treasury report linked here.
Until October, the Chinese were generally making up for their decreasing holdings in Treasury bills by increasing their holdings of longer-term U.S. Treasury securities. Thus, until October, China’s overall holdings of U.S. debt continued to increase.
Since October, however, China has also started to divest from longer-term U.S. Treasury securities. Thus, as reported by the Treasury Department, China’s ownership of the U.S. national debt has decreased in each of the last five months on record, including November, December, January, February and March.
Prior to the fall of 2008, acccording to Treasury Department data, Chinese ownership of short-term Treasury bills was modest, standing at only $19.8 billion in August of that year. But when President George W. Bush signed legislation to authorize a $700-billion bailout of the U.S. financial industry in October 2008 and President Barack Obama signed a $787-billion economic stimulus law in February 2009, Chinese ownership of short-term U.S. Treasury bills skyrocketed.
By December 2008, China owned $165.2 billion in U.S. Treasury bills, according to the Treasury Department. By March 2009, Chinese Treasury bill holdings were at $191.1 billion. By May 2009, Chinese holdings of Treasury bills were peaking at $210.4 billion.
However, China’s overall appetite for U.S. debt increased over a longer span than did its appetite for short-term U.S. Treasury bills.
In August 2008, before the bank bailout and the stimulus law, overall Chinese holdings of U.S. debt stood at $573.7 billion. That number continued to escalate past May 2009-- when China started to reduce its holdings in short-term Treasury bills--and ultimately peaked at $1.1753 trillion last October.
As of March 2011, overall Chinese holdings of U.S. debt had decreased to 1.1449 trillion.
Most of the U.S. national debt is made up of publicly marketable securities sold by the Treasury Department and I.O.U.s called “intragovernmental” bonds that the Treasury has given to so-called government trust funds—such as the Social Security trust funds—when it has spent the trust funds’ money on other government expenses.
The publicly marketable segment of the national debt includes Treasury bills, which (as defined by the Treasury) mature in terms of one-year or less; Treasury notes, which mature in terms of 2 to 10 years; Treasury Inflation-Protected Securities (TIPS), which mature in terms of 5, 10 and 30 years; and Treasury bonds, which mature in terms of 30 years.
At the end of August 2008, before the financial bailout and the stimulus, the publicly marketable segment of the U.S. national debt was 4.88 trillion. Of that, $2.56 trillion was in the intermediate-term Treasury notes, $1.22 trillion was in short-term Treasury bills, $582.8 billion was in long-term Treasury bonds, and $521.3 billion was in TIPS.
At the end of March 2011, by which time the Chinese had dropped their Treasury bill holdings 97 percent from their peak, the publicly marketable segment of the U.S. national debt had almost doubled from August 2008, hitting $9.11 trillion. Of that $9.11 trillion, $5.8 trillion was in intermediate-term Treasury notes, $1.7 trillion was in short-term Treasury bills; $931.5 billion was in long-term Treasury bonds, and $640.7 billion was in TIPS.
Before the end of March 2012, the Treasury must redeem all of the $1.7 trillion in Treasury bills that were extant as of March 2011 and find new or old buyers who will continue to invest in U.S. debt. But, for now, the Chinese at least do not appear to be bullish customers of short-term U.S. debt.
Treasury bills carry lower interest rates than longer-term Treasury notes and bonds, but the longer term notes and bonds are exposed to a greater risk of losing their value to inflation. To the degree that the $1.7 trillion in short-term U.S. Treasury bills extant as of March must be converted into longer-term U.S. Treasury securities, the U.S. government will be forced to pay a higher annual interest rate on the national debt.
As of the close of business on Thursday, the total U.S. debt was $14.34 trillion, according to the Daily Treasury Statement. Of that, approximately $9.74 trillion was debt held by the public and approximately $4.61 trillion was “intragovernmental” debt.
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