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If this is your first visit, welcome! This site is devoted to my life experiences as a Filipino-American who immigrated from the Philippines to the United States in 1960. I came to the US as a graduate student when I was 26 years old. I am now in my early-80's and thanks God for his blessings, I have four successful and professional children and six grandchildren here in the US. My wife and I had been enjoying the snow bird lifestyle between US and Philippines after my retirement from USFDA in 2002. Please do not forget to read the latest national and International News in this site . I have also posted some of my favorite Filipino and American dishes and recipes in this site. Some of the photos and videos in this site, I do not own. However, I have no intention on infringing on your copyrights. Cheers!
Friday, July 6, 2012
Poor Economic Projection for US this Fall
I have been watching closely the economic and other news around the world the last couple of months. I am not a worrier but I have a feeling the worst is not over for the US economy and something will happen this Fall. My personal concern is now amplified by this recent article published at http://the economiccollapse.blog.com.
17 Reasons To Be EXTREMELY Concerned About The Second Half Of 2012
What is the second half of 2012 going to bring? Are things going to get even worse than they are right now? Unfortunately, that appears more likely with each passing day. I will admit that I am extremely concerned about the second half of 2012. Historically, a financial crisis is much more likely to begin in the fall than during any other season of the year. Just think about it. The stock market crash of 1929 happened in the fall. "Black Monday" happened on October 19th, 1987. The financial crisis of 2008 started in the fall. There just seems to be something about the fall that brings out the worst in the financial markets. But of course there is not a stock market crash every year. So are there specific reasons why we should be extremely concerned about what is coming this year? Yes, there are. The ingredients for a "perfect storm" are slowly coming together, and in the months ahead we could very well see the next wave of the economic collapse strike. Sadly, we have never even come close to recovering from the last recession, and this next crisis might end up being even more painful than the last one.
The following are 17 reasons to be extremely concerned about the second half of 2012....
#1 Historical Trends: A recent IMF research paper by Luc Laeven and Fabián Valencia showed that a banking crisis is far more likely to start in September than in any other month. So what will this September bring?
#2 JP Morgan: Do you remember back in May when JP Morgan announced that it would be taking a 2 billion dollar trading loss on some derivatives trades gone bad? Well, the New York Times is now reporting that the real figure could reach 9 billion dollars, but nobody really knows for sure. At some point is JP Morgan going to need a bailout? If so, what is that going to do to the U.S. financial system?
#3 Derivatives: Last week, Moody's downgraded the credit ratings of 15 major global banks. As a result, a number of them have been required to post billions of dollars in additional collateral against derivatives exposures.... The worldwide derivatives market is starting to show some cracks, and at some point this is going to become a major disaster. Remember, the 9 largest U.S. banks have a total of more than 200 trillion dollars of exposure to derivatives. When this bubble completely bursts it is going to be impossible to fix.
#4 LEAP/E2020 Warning: LEAP/E2020 has issued a red alert for the global financial system for this fall. They are warning that the "second half of 2012" will represent a "major inflection point" for the global economic system....
#5 Increasing Pessimism: One recent survey of corporate executives found that only 20 percent of them expect the global economy to improve over the next 12 months and 48 percent of them expect the global economy to get worse over the next 12 months.
#6 Spain: The Spanish financial system is basically a total nightmare at this point. Moody's recently downgraded Spanish debt to one level above junk status, and earlier this week Moody's downgraded the credit ratings of 28 major Spanish banks. According to CNBC, Spain's short-term borrowing costs are now about three times higher than they were just one month ago....
#7 Italy: The situation in Italy continues to deteriorate and many analysts believe that it could be one of the next dominoes to fall. The following is from a recent Businessweek article. A recent Fortune article detailed some of the economic fundamentals that have so many economists deeply concerned about the Italian economy right now.
#8 Greece: I have written extensively about the financial nightmare that is unfolding in Greece. Unemployment has soared past the 20 percent mark, youth unemployment is above 50 percent, the Greek economy has contracted by close to 25 percent over the past four years and now Greek politicians are saying that a third bailout package may be necessary.
#9 Cyprus: The tiny island nation of Cyprus has become the fifth member of the eurozone to formally request a bailout. This is yet another sign that the eurozone is rapidly falling apart.
#10 Germany: German Chancellor Angela Merkel continues to promote an austerity path for Europe and she continues to maintain her very firm position against any kind of eurozone debt sharing. In fact, Merkel says that there will be no eurobonds "as long as I live". This means that there will be no "quick fix" for the problems that are unfolding in Europe.
#11 Bank Runs: Every single day, hundreds of millions of dollars is being pulled out of banks in southern Europe. Much of that money is being transferred to banks in northern Europe. In a previous article I included an extremely alarming quote from a CNBC article about the unfolding banking crisis in Europe. How long can these bank runs continue before banking systems start to collapse?
#12 Preparations For The Collapse Of The Eurozone: As I have written about previously, the smart money has already written off southern Europe. All over the continent major financial institutions are preparing for the worst. For example, just check out what Visa Europe is doing.
#13 Global Lending Is Slowing Down: All over the globe the flow of credit is beginning to freeze up. In fact, the Bank for International Settlements says that worldwide lending is contracting at the fastest pace since the financial crisis of 2008.
#14 Sophisticated Cyber Attacks On Banks: It is being reported that "very sophisticated" hackers have successfully raided dozens of banks in Europe. So far, it is being estimated that they have stolen 60 million euros. What happens someday if we wake up and all the money in the banks is gone?
#15 U.S. Municipal Bankruptcies: All over the United States there are cities and towns on the verge of financial disaster. This week Stockton, California became the largest U.S. city to ever declare bankruptcy, but the reality is that this is only just the beginning of the municipal debt crisis.
#16 The Obamacare Decision: The U.S. economy is already a complete and total mess, and now the Obamacare decision is going to throw a huge wet blanket on it. All over America, small business owners are saying that they are going to have to let some workers go because they cannot afford to keep them all under Obamacare. It would be hard to imagine a more job killing law than Obamacare, and now that the Supreme Court decision has finally been announced we are going to see many businesses making some really hard decisions.
#17 The U.S. Election: It is being reported that Barack Obama is putting together an army of "thousands of lawyers" to deal with any disputes that arise over voting procedures or results. It certainly looks like this upcoming election is going to be extremely close, and there is the potential that we could end up facing another Bush v. Gore scenario where the fate of the presidency is determined in court. This campaign season is likely to be exceptionally nasty, and I fear what may happen if there is not a decisive winner on election day. The possibility of significant civil unrest is certainly there.
We definitely live in "interesting" times. Personally, I am deeply concerned about the September, October, November time frame.