No defence left against double-dip recession, says Nouriel Roubini

Nouriel Roubini said the US growth rate was likely to fall below 1pc in the second half of the year Photo: BLOOMBERG

“The US has run out of bullets,” said Nouriel Roubini, professor at New York University, and one of a caste of luminaries with grim forecasts at the annual Ambrosetti conference on Lake Como.

“More quantitative easing (bond purchases) by the Federal Reserve is not going to make any difference. Treasury yields are already down to 2.5pc yet credit spreads are widening again. Monetary policy can boost liquidity but it can’t deal with solvency problems,” he told Europe’s policy elite.

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Dr Roubini said the US growth rate was likely to fall below 1pc in the second half of the year, despite the biggest stimulus in history: a cut in interest rates from 5pc to zero, a budget deficit of 10pc of GDP, and $3 trillion to shore up the financial system.

The anaemic pace compares with rates of 4pc-6pc at this stage of recovery in normal post-war recoveries.

“We have reached stall speed. Any shock at this point can tip you back into recession. With interbank spreads rising, you can get a vicious circle like 2008-2009,” he said, describing a self-feeding process as the real economy and the credit system hurt each other.

“There is a 40pc chance of double-dip recession in the US, and worse in Japan. Even if it is not technically a recession it will feel like it,” he added.

Hans-Werner Sinn, head of Germany’s IFO Institute, said the US would have to purge its debt excesses the hard way.

“The bitter truth is that there is no way out of this with monetary and fiscal policy. They will just have to see their living standards go down. I see a decade of difficulties for the US,” he said.

Dr Sinn said the US the market for mortgage securities (CDOs) had collapsed from $1.9 trillion in 2006 to just $50bn last year, leaving the US property market reliant on federal agencies.

“The world is simply not willing to buy these dubious financial products again. Germany is leaving, China is no longer there, and Japan is pulling away. The US system of mortgage finance is on government life support and that cannot drive a sustainable upswing,” he said.

Harvard Professor Niall Ferguson said the US has exhausted fiscal stimulus given warnings from the Congressional Budget Office that interest payments as a share of tax revenues will reach 20pc by 2020 and 36pc by 2030 without drastic retrenchment.

“The fiscal crisis seems to be out of control. The 'big crossover’ is approaching when the US spends more on debt service costs than on security, and historically that is the tipping point for any global power,” he said.

Mr Ferguson said the “Chimerica” marriage of recent years is on the rocks. China is no longer willing to fund the US Treasury bond market, cutting its share of holdings from 13pc to 10pc of the total debt stock.

While China must find ways to recycle its trade surplus and hold down the yuan, it is doing this by stockpiling commodities, buying hard assets around the world, or rotating into Asian bonds.

Dr Roubini said US companies have plenty of cash but are boosting profits by a policy of “slash and burn” on labour costs. “We’ve lost 8.4m jobs and if you include the loss of hours worked it is equivalent to another 3m. We need to generate an extra 450,000 jobs every month for three years to get it back,” he said.

The US non-farm payrolls data released on Friday was better then expected but still showed a net loss of 54,000 jobs.

Dr Roubini said average public debt in the rich countries would rise to 120pc of GDP by 2015 in the rich countries, leaving no scope for a further fiscal stimulus. If they push their luck, they too risk the sort of bond crises seen in Southern Europe this year.

In the US, the fiscal boost has faded, switching to tightening over coming months The lift from the inventory cycle is finished. Capex spending by companies has held up well, but this slowed sharply in July. Housing is already in a double dip. The last support for the US economy is consumption, barely growing at 1pc.

“All we did was kick the can down the road and stole demand from the future,” he said.

via telegraph.co.uk

that doesn't look too good.
government spending obviously went to elite who won't reinvest. they should of let these companies fail

noahdavidsimon's posterous

US group says it plans to send plane to Gaza

If there can be no boarding then it is an attack.  Israel will have to shoot it down with activists, journalists and politicians.  I hope they bring plenty of celebrities.

BETHLEHEM (Ma'an) -- A pro-Palestinian group based in the US will send a plane loaded with aid to the Gaza Strip in defiance of Israel's air and sea blockade, an official said Sunday.
"We intend to send an aircraft to Gaza in much the same way boats were used -- without going through Israeli or Egyptian airspace," said Paul Larudee, an organizer with the California-based Free Palestine Movement sponsoring the flight.
Authorities in Gaza are supportive of the initiative and are working to locate a landing site, Larudee said. Gaza's now-defunct Yasser Arafat International Airport is not being considered, he said.
In the meantime, Free Palestine Movement officials will look for a plane designed for rough landings and takeoffs such as those used in Alaska and other locales lacking proper aviation facilities, Larudee said. The plan is to send a light aircraft equipped with material sometime in the spring of 2011, after the next sea voyage.
"Breaking the blockade by air may be even more feasible than by sea. An aircraft cannot be boarded while in flight, and the right aircraft can land almost anywhere in Gaza," a statement on the group's website says.
In May, Israeli navy commandos raided a six-boat flotilla loaded with humanitarian aid in international waters off the coast of Gaza. Nine Turkish citizens including a dual US national were killed in the operation. Israel says its soldiers came under fire from the activists, a claim Free Gaza Movement officials deny.
The years-long military blockade against Gaza is enforced by Egypt and Israel. Israel says the siege prevents weapons from entering the coastal enclave, but Palestinians as well as the UN and human rights groups say it amounts to collective punishment against the civilian population in addition to Hamas.

via maannews.net

they can start a new T.V. series... Celebrity Boom Boom.
I'm taking bets about who will be on the plane.  I'm guessing that Roseanne Barr won't be on board because she would be too heavy.

these are not impartial moderators

via sultanknish.blogspot.com

noahdavidsimon's posterous

Is rape under Sharia Law a religious right in America?

The trial judge found that most of the criminal acts were indeed proved, but nonetheless denied the permanent retraining order. This judge held that the defendant could not be held responsible for the violent sexual assaults of his wife because he did not have the specific intent to sexually assault his wife, and because his actions were “consistent with his [religious] practices.” In other words, the judge refused to issue the permanent restraining order because under Sharia law, this Muslim husband had a “right” to rape his wife.

via littlebytesnews.amplify.com

noahdavidsimon's posterous

...but of course the feminists are worried about my opinions and censor me online

AP Editor Defends Ground Zero Mosque Linked to Holy Land Foundation and Hamas

Dear Editor,
Your “Backer of NYC mosque gave to Hamas-linked charity” describes the case of a wealthy Hamas backer. AP gives him the last, nasty word.
“When you see people surrounded by tanks and F-16s, you ask how can we help?” he is quoted saying innocently. AP will not comment that these tanks and F-16s are there to protect, not to attack.
Palestinians are Israel’s victims and Israel is the aggressor, always. Sure. In AP’s war book.
Shalom,   via apisraelwatch.wordpress.com

Last week we wondered aloud about the very mysterious Hisham Elzanaty, the money man behind the criminal Sharif El-Gamal, the so-called developer of the Ground Zero Mosque., the holy man who's been arrested seven times and who owes $224,000 in back taxes.
Well, now we know a little more about Elzanaty, no thanks to the lamestream media who has no interest in his ties to radical Islamists.

An Egyptian-born businessman who lives on Long Island — and who once gave thousands of dollars to a Hamas front group — is a major investor in the proposed mosque near Ground Zero, it was reported last night, in the first disclosure of the money behind the controversial project.
Hisham Elzanaty was a “significant investor” in developer Sharif el-Gamal’s $4.8 million purchase of the former Burlington Coat Factory building, where the mosque and Islamic cultural center will be built, the donor’s lawyer, Wolodymyr Starosolsky, told Fox 5 News.
El-Gamal himself has refused to disclose where he got the money to buy the building in July 2009. Elzanaty owns a $2 million home in Roslyn Heights, and operates medical companies out of a building in The Bronx. He also owns the New York Neuro and Rehab Center in Morningside Heights.
State records show he was ordered to repay $331,000 after an audit revealed Medicaid had overpaid him in 2004-2005.
Elzanaty didn’t return calls last night. Starosolsky would not discuss the Fox 5 report with The Post.
Shortly after the Burlington building was acquired, Elzanaty also co-signed a $39 million mortgage so that el-Gamal’s company, Soho Properties, $45.7million building in Chelsea from developer Stei k ff money man,” a source told The Post.
In 1999, he donated $6,000 to the Texas-based Holy Land Foundation for Relief and Development, which was later shut down because of its ties to terrorism.
The foundation was the largest Islamic charity in the US until the feds froze its assets and designated it a terrorist organization following an FBI probe after 9/11.
In 2008, five of its leaders were convicted of providing material support to Hamas.
Elzanaty’s contribution to the Holy Land Foundation was uncovered by the DC-based Investigative Project on Terror.
Elzanaty believed he was spending $500 a month to help orphans, his lawyer told The Post.

Sure, thaty's believable. Well, if your name is Michael Bloomberg, that is. Does anyone have a concern here?

So now it transpires that a key money- man behind the proposed Ground Zero mosque is a one-time supporter of a group shut down by the feds because it was a front for Hamas.
No wonder the mosque's principal imam, Feisal Abdul Rauf, refuses to discuss the project's finances.
Or, for that matter, refuses to speak harshly of Hamas -- an Iranian cat's-paw that's long been one of the deadliest Islamist terrorist organizations operating in the Mideast.
It was reported last night that Hisham Elzanaty -- an Egyptian-born businessman from Long Island -- provided a big chunk of the $4.8 million needed to buy the building that will be demolished to make way for the mosque.
Among other things, Elzanaty runs a Bronx-based medicial supply company that had to refund more than $300,000 in Medicaid payments in 2004-2005.
In 1999, he donated thousands to the Holy Land Foundation, later shuttered by the feds because of its Hamas ties.
All of this is, as they say, enough to give one pause.
But we doubt it will truly surprise any among the 71 percent of New Yorkers found this week by Quinnipiac University pollsters to oppose the mosque.
Mayor Mike and others think they are bigots, but most seem to have asked -- and answered to their own satisfaction -- a fair question:
How close to the scene of that deadly Islamist attack on America is too close to build a mosque?
Answer: The proposed site was close enough to have been hit by a landing-gear assembly from one of the crashed airliners -- and that's way too close.
They're also nervous about the project's backers -- even before Elzanaty popped up -- deciding that, with those folks involved, anywhere might be too close.
As The Post reported yesterday, Rauf has been catching iffy tax breaks since 1998 for an organization run from his wife's Upper West Side apartment.
How'd he do it? By telling the IRS the one-bedroom digs were actually a mosque where 500 people prayed daily.
These are only the latest revelations about the mosque's backers, who've run up a cumulative record of petty crime, slumlording and tax-scamming.
And that's being generous.
Rauf, who's due back in New York this weekend after a long trip abroad, has plenty of explaining to do to the people he's been thumbing in the eye for weeks.
First there is Elzanaty's role, of course.
Then there's the elephant in the room: Whence the $100 million needed for the mosque?
And then there is this.
At a forum in Dubai on Tuesday, Rauf appeared to call the 71 percent of New Yorkers who oppose his project religious "extremists."

via jammiewearingfool.blogspot.com

noahdavidsimon's posterous

La Shana Tova

how about these apples?