The end crisis will be postponed until the sovereigns go bankrupt

China’s rise has been fueled since 2007 by a bubble in credit there. Faber was vague on when it would burst — now or in three years? — but it’s unsustainable. What’s more, foreigners should beware investing in China’s ongoing construction boom.

Dr. Faber pointed to virtually all U.S. canal and railroad companies going bust in the 19th century, ruining many a foreign investor but leaving North America with an enviable set of infrastructure. He said the Chinese don’t issue shares in companies to “enrich foreigners” but to “impoverish foreigners.” If a foreigner wants to make money in China, Faber said, they should go work there."

I think that the super bulls and super bears will be disappointed that we're in a trading range of 900 on the S&P 500 Index (SPDR S&P 500 ETF SPY) and 1350, something like this. i don't think i don't think we will make a new high above the may 2nd high on the S&P 500 Index (

Not one country in existence today has had the same borders and government for as long as two hundred years. The world will continue changing.

I suspect it will be in 2012, 2013 because if nothing else, every 4 to 6 years through out history we have had an economic slowdown in the United States for many, many different reasons. So we are overdue, 2012, 2013...

When the next slowdown comes what is America going to do? We cannot quadruple our debt again, we cannot print staggering amounts of money again. So the next slowdown is going to be worse than 2008 that was worse than 2001/2002.

So things just keep getting worse, the debts keep going higher and highe

n 1990, Germany's Constitutional Court ruled that the country could withdraw from the Euro if: 1) the currency union became an "inflationary zone," or 2) the German taxpayer became the Eurozone's "de facto bailout provider."  Mayer proposes a "Chapter 11 for Eurozone countries," which would place troubled members under economic supervision until they put their house in order

One major fear in Germany is that "saving" Greece would lead to other needy Eurozone members expecting the same treatment.  Another concern is that extending an explicit guarantee for Greece could weigh on Germany's own good standing in the markets, ultimately raising its borrowing costs

Deputy Head of the Financial Stability Department at the European Central Bank (ECB), the likelihood that the IMF will be asked to bail out Greece is "zero."

S and P estimates that Greece's rating in the case of an exit would drop to "BB " or lower, i.e. below investment-grade.  Even today, Greece's rating of "BBB " is higher than it was in 1997 ("BBB-") before joining the common currency.

The Italian yield curve has flattened over 100bps since the end of the EU Summit - inching perilously close to inversion which hasn't been seen since 1994.

Three of the smartest strategists at Goldman, Huw Pill, Francesco Garzarelli, and Peter Oppenheimer, have released what one could tentatively call a white paper on the "next steps" for Europe

The note focuses on three key aces: 1) fiscal consolidation and the ongoing role of the ECB in the future of a Eurozone which still has no fiscal cohesion

o in Europe the ECB wants a federal union, complete with Eurobond issuance powers, so it is not in the cross hairs: alas, European politicians realize this is career suicide and the question remains: when push comes to shove, and saving the Euro requires career harakiri from politicians, will they step up to the plate?); 2) Italy, of course, as the country under the spotlight now and going forward; and 3) what the above two mean for BTPs and thus the European (and Global) equity markets. The sense we get from the Goldman trio is that while the company which has just spawned Europe's latest central banking head, while cautiously neutral is pushing for a downside case: after all what better way to unlock the Heidelberger Druckmaschinen true potential, than with a full blown crisis...

Against this background, the ECB Governing Council surprised both us and financial markets by lowering its repo rate by 25bp to 1.25% at last Thursday’s meeting. While the timing of this move was unexpected, it remained consistent with our medium-term view, which foresees rates being lowered to 1% in the coming months and held there through the end of 2012 – as the market now also fully discounts. We forecast a mild recession in the Euro area this quarter and next, also involving the ‘core’ countries.

  Since the start of August, the ECB has bought roughly EUR 100bn of Italian and Spanish government bonds

China bought gold !!!

http://www.gizmag.com/dissolving-food-stickers-wash-fruit/20392/

Cisco Systems [CSCO  18.01    -0.02  (-0.11%)   ] is a good example, trading at only 11 times its earnings estimates

Household-cleaning-products company Clorox [CLX  65.80

Hands down the single best investment you can make now is in multi-family housing. The data backing up the booming demand for rental housing are overwhelming.

The single-family home market has collapsed and is going to be underwater for years to come. But where are all those people who have been foreclosed on or who can't qualify for the now tough-to-get home mortgage loans going to live? They're becoming renters.

According to a recent study by Harvard University's Joint Center for Housing Studies, the number of renter households increased by an average of about 692,000 per year, from 2006 to 2010, while the number of owner households fell by about 201,000 annually.

This is a great opportunity for someone willing to put up with the challenges of being a live-in landlord because lenders give a big break on the down payment to owner-occupiers. And mortgage interest rates are at historical lows.

Given the outlook for inflation and increasing demand, there is great leverage to raise rents, so it's conceivable that a multi-family owner-occupier could cover the building mortgage payments with rent income and live for free within a few years, while getting a tax break on depreciation.

ohn Malone, one of the nation's wealthiest individuals, with a net worth of $4.5 billion made as a multimedia mogul, this year bought nearly 1 million acres of timberland in Maine, ad

The combination of higher revenues for crop and livestock production has been an impetus for the significant increases in agricultural-land values seen this year," the Fed reported. "Demand for farmland remained strong from both farmers and investors

Given the very weak labor market conditions and the low expected inflation rate, the Federal Reserve should in my view continue to take action to aggressively try to reduce the stubbornly high U.S. unemployment rate,

GS notes forward EPS reductions, high correlations, fund under-performance, and basic fundamentals around the business cycle

Earning / share decreasing

GS believes is more reflective of the low cost of equity than any improvement in fundamentals

They explain that 20-to-1 and even higher leverage is common in the banking system

. A 900 million ounce silver supply simply cannot cope with a 380 million ounce increase in demand and maintain current prices. Eric also explains that investment sales of silver are 50 to 1 in volume compared to gold and that this means a decreasing gold/silver ratio.

Congressional Democrats and Republicans are trillions of dollars apart on a deficit reduction deal as the supercommittee nears its Nov. 23 deadline.

This would represent the worst scenario for markets, in our view. Since President Napolitano is aware of this, he will probably try to resist dissolving Parliament at this juncture. Also, most centrist parties would want to change the electoral law before a new vote takes place

PM Berlusconi offered to resign once Parliament approves new austerity measures, possibly towards the end of next week.

Most likely scenario: In the coming weeks, the current centre-right coalition of the Northern League and PdL moves to rally round another candidate who can gain wider acceptance domestically and internationally. In order to broaden its support, the new government may reach out to smaller centrist parties which can advance their own political agenda. ‘troika’s' economic platform could eventually stabilize markets reforming the pension system could meet resistance from the Northern League. we would expect BTPs to remain capped at around current levels (400-450bp) over the average of Germany, France and the Netherlands until measures are gradually approved.

Second most likely scenario: The centrist parties ultimately turn down the offer to join a broader coalition. In this case, more MPs from Berlusconi’s PdL party could join forces with formations at the centre of the political spectrum. This could pave the way for a government of national unity of sorts, led by a highly reputable ‘outsider’. Like during the crisis of the early 1990s, the advantage of such a ‘technocrat’ government is that it would be sworn in after some ‘initial contracting’ on its programme (economic reforms agreed with the ‘troika’, plus a new electoral law), which should lower the implementation risk. A technocrat government could use its credibility to introduce more growth enhancing measures that would pay off further down the road. Lastly, it could focus on improving governance

We view this as the most market-friendly outcome, as it would lead over time to a decline in sovereign spreads and in Italy’s risk premium more broadly. The front-end would re-price more than intermediate- and long-term maturity bonds because investors would likely take advantage of the rally to reduce exposure at higher prices. Nevertheless, we would expect BTPs to fall to around 350bp over Bunds in fairly short order.

Least likely scenarios: After Berlusconi’s resignation, general elections are called. These could be held in mid-January at the earliest, although they would most likely be postponed until the Spring amid market turmoil.
This would represent the worst scenario for markets, in our view.

In conclusion, we are most probably approaching the highs in Italian yields (currently around 500bp over German Bunds in the bellwether 10-yr sector, and 600bp in 2-yr maturities), but a volatile and unsettled market remains our base case until Italy’s sovereign creditors can be reassured that long-awaited structural reforms to lift the country’s growth rate will be put in place.

We do think it is an interesting way to look at it, and confirms who really has the problem with a Greek default - and it's not Greece.