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..There's a little Samuel Pepys in all of us..

Monday, September 05, 2011

Ahh well.. it's a development we've been awaiting for months..
Stock market indices fell around the world today, with a report of flat U.S. job growth in August spooking investors in Europe and North America..
In Toronto, the S&P/TSX declined 98.33 points, or 0.77%, to 12602.41, led by selloffs in industrials, energy and basic materials.. Shares of Silvercorp Metals dropped almost 10%, Sherritt International more than 6% and Precision Drilling by 5%.. Gold producers showed the best gains.. Golden Star Resources surged 12%, NovaGold Resources gained 7% and Barrick Gold added 3%.. as investors scramble to find a safe haven for their money.. Gold prices climbed by $55/ounce to $1,884.10 while crude oil prices dipped by $2.33, or almost 3%, to $86.60..
In New York, the Dow Jones lost 253.31 points, or 2.2%, to close at 11240.26.. The Dow is now back into negative territory for the year, off 2.9%..
Financials and industrials led the selloff in the U.S.. Bank of America fell more than 8% after a report that a dozen U.S. banks will be sued by the Federal Housing Finance Agency for allegedly misrepresenting the quality of mortgage securities they assembled and sold at the housing bubble’s peak..
This has all the earmarks of a cold winter..
The greatest fear is.. that the US is rapidly falling into recession again..
The lack of hiring in the U.S. last month surprised economists, who were expecting about 93,000 jobs to be added.. Previously reported hiring figures for June and July were revised lower.. The unemployment rate held steady at 9.1%, the U.S. government reported today..
In Asia, indexes closed sharply lower.. Japan's Nikkei 225 stock average sank 1.9%..with sentiment also undermined by the persistent strength of the yen, which hurts exporters..
Australia's S&P/ASX 200 fell 2.4%, and South Korea's Kospi slid 4.4 %.. Hong Kong's Hang Seng slid three%.. Benchmarks in Singapore, Taiwan, New Zealand and the Philippines also were down..
Mainland Chinese investors worried about the economic outlook dumped shares, dragging Shanghai's benchmark Composite Index down two%, its lowest close in 13 months.. The Shenzhen Composite Index lost 2.4%..
Traders waited for signs that the U.S. Federal Reserve might take action at its September meeting to support the economy.. perhaps a third round of bond purchases, dubbed 'Quantitative Easing III'.. or QE3..
"Right now the possibility has increased," said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. "I think they have to do something. The markets are expecting QE3."..
An international debt inspectors' review of Greece's finances was interrupted today amid disagreements over the country's deficit figures.. The review will be resumed in about 10 days and must be completed in order for the country to receive the next tranche of bailout loans at the end of the month..
Signs that the Italian government's commitment to its austerity program is wavering have also shaken investors.. Prime Minister Silvio Berlusconi's government has backtracked on some deficit-cutting measures, prompting EU economic officials to urge it to stick to its promised plan..
Ex-Chancellor Lord Lawson has thrown in his tuppence here.. he says David Cameron should use the EuroZone crisis as an opportunity to tear up the Lisbon Treaty..
The Tory peer accuses the architects of the Euro of "grotesque irresponsibility" for embarking on a "misbegotten and predictably disastrous venture"..
And he urges the Prime Minister to tell them "enough is enough"..
And that's the best advice offered of late.. Lord Lawson was chancellor under Margaret Thatcher in the 1980s..
And truth be told, we've built entire economies on nebulous computer generated unimaginable figures.. Sums utterly beyond comprehention, even to those who administer the 'money'.. Such has been the depth of our follies, that it has come down to affecting us all..
While it is difficult to get a mortgage without a sizeable downpayment.. there are those who will never have the wherewithall to save ten or fifteen thousand.. and who's income is taken entirely for the simple basics..
We will watch this play out, as the next tranche for Greece approaches.. but nations aside, we're all in for hard times ahead.. Interest rates are being kept low to rein inflation, yet we still have a rate of 5% and rising.. Unemployment is going to bankrupt us, and that includes the EuroZone and the US..
Barack has to follow the plan we set out some months ago.. a new 'New Deal'.. or as one Nobel Lauriate said, 'restructure the nations infrastructure'..
American highways are notoriously bad..

In the early days of the Obama administration, organized labor had grand visions of pushing through a sweeping agenda that would help boost sagging membership and help revive union strength.. Now labor faces this reality: Public employee unions are in a drawn-out fight for their very survival in Wisconsin, Ohio and other states where GOP lawmakers have curbed collective bargaining rights..
Also, many union leaders are grousing that the president they worked so hard to elect has not focused enough on job creation and other bold plans to get their members back to work..
"Obama campaigned big, but he's governing small," said Larry Hanley, president of the Amalgamated Transit Union..
Labor remains a core Democratic constituency and union leaders will stand with Obama in Detroit this Labor Day, where he will address thousands of rank-and-file members during the city's annual parade Monday.. But how long this support will last, is entirely dependant on the next moves by the President.. It is of paramount importance that he get unemployment down, and not a little, but a lot..
And to add to Baracks woes..
The United States Postal Service has long lived on the financial edge, but it has never been as close to the precipice as it is today.. the agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances.. According to the Postmaster General, Patrick R. Donahoe..“Our situation is extremely serious..If Congress doesn’t act, we will default.” In recent weeks, Donahoe has been pushing a series of painful cost-cutting measures to erase the agency’s deficit, which will reach $9.2 billion this fiscal year.. They include eliminating Saturday mail delivery, closing up to 3,700 postal locations and laying off 120,000 workers.. nearly one-fifth of the agency’s work force.. and this in the face of a no-layoffs clause in the unions’ contracts..
The post office’s problems stem from one hard reality.. it is being squeezed on both revenue and costs..
As any computer user knows, the Internet revolution has led to people and businesses sending far less conventional mail..

It was a brief lesson from American history that served as a not so subtle suggestion for contemporary Europe.. When an official from a European central bank met recently with a financial official in Washington, his host pulled out the Articles of Confederation, the 1781 precursor to the U.S. Constitution, to use as talking points..
The message was clear.. join together in a stronger union, or risk collapse..
The story of America’s failed early effort to operate as a loose confederation of 13 states is increasingly relevant for many European officials who are grappling with the drastic problems of their own flawed 17-nation currency union.. The lack of strong central coordination of the EuroZone’s debt and spending policies is a key reason Europe has been unable to resolve its financial crisis despite more than 18 months of trying..
And that is why, despite all the political obstacles, Europe appears to be inching closer to a more centralized fiscal union that would eventually turn the Euro Zone into something resembling a United States of Europe..
Now.. where have we read that before..
With the new bailout for Greece that was agreed upon by European leaders in July still awaiting approval from each country in the EuroZone, the fractionalized way that Europe runs fiscal decision-making risks setting off yet another crisis at each step along the way.. Every plan requires agreement among finance ministers and the Parliament of any member country can veto the deal..
Many economists say that the Continent’s debt crisis, which began in early 2010 with the threat that Greece might have to default on its loans, could have been resolved far more quickly if there were some sort of central financial body, akin to the Treasury Department in the United States..
What is it we have come to.. and how fortunate Britain has kept the EuroZone at arms length..

Japan braced for more heavy rain and floods come Monday as the death toll from the worst typhoon to hit the country in seven years climbed to 34.. Rescuers searched for 55 others who remained missing, and tens of thousands of families struggled without power or telephone service..
Typhoon Talas.. which was later downgraded to a tropical storm.. lashed coastal areas with destructive winds and record-setting rains over this past weekend before moving offshore into the Sea of Japan.. Thousands were stranded as it washed out bridges, railways and roads..
The destruction added more misery to a nation still reeling from a catastrophic earthquake and tsunami six months ago.. In one of his first acts in office.. Prime Minister Yoshihiko Noda, sworn in just one day before Talas made landfall.. vowed the government would provide as much assistance as quickly as it could..
Still with weather.. Gulf Coast residents from Texas to Florida braced for a third day of severe weather as the remnants of Tropical Storm Lee continued to lash the region as it moved inland..
The National Weather Service indicated flood and flash flood watches and warnings were in effect from coastal Texas into the Gulf states, with 10 to 15 inches of rain expected..
Heavy rains will continue to expand northeastward into the Tennessee Valley and southern Appalachian mountains through next week, with rainfall amounts of 4 to 8 inches expected and isolated amounts of 12 inches possible..
"These may cause life threatening flash floods and mudslides," the weather service said..

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