# Optical Forums > General Optics and Eyecare Discussion Forum >  The crashing of the US.......most interesting

## Chris Ryser

*The Crashing U.S. Economy Held Hostage* 
*Our Economy is on an Artificial Life-support System*
by Richard C. Cook

................................The question is not when will the system start to come down, because this has already begun. It’s shown most clearly by the fact that according to Federal Reserve data, M1, the part of the money supply most readily available for consumer purchases, is not only lagging behind inflation but has actually decreased in eleven of the last twelve months. This means that the producing economy is already in a recession.

The federal government is trying to figure out what to do. Their biggest concern is that foreign investors have started to pull out of dollar-denominated markets.
The government’s “plunge protection team”—known officially as the President’s Working Group on Financial Markets—is trying to engineer what they call a “soft landing.” 

It’s been likened to the process by which you cook a frog in a pot where you raise the temperature one degree a day. The frog doesn’t hop out because the heat goes up gradually, but before long it’s too late. The frog has been cooked.

Even if the plunge protection team succeeds, and the frog cooks slowly, there will be a massive de facto default on dollar-denominated debt and a long-term degradation of the U.S. standard of living. The inside word is that we are likely to see major monetary shocks and a possible stock market crash as early as December 2007.

The worst off will be people locked into retirement funds which have a heavy load of mortgage-related securities. Entire investment portfolios are likely to disappear overnight.


See this most interesting article at: http://www.globalresearch.ca/index.p...xt=va&aid=6239

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## Barry Santini

There has been NO, *true* leadership in the US for over 30 years...we've been coasting...

GWB really is the closest thing to "What me worry?"

Now, as the ball of twine of our society unravels..

Buckle up.....

Barry

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## Chris Ryser

Actually a few minutes ago that Canadian Dollar gained 3 cents against the US Dollars and went from $ 1.05 to $ 1.08 since early this morning.

Over the last 12 month the US Dollar has dropped 45% against the Canadian currency.

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## ilanh

Before accepting such inflammatory statements as facts, let us look at some real facts first:

-The U.S continues to be the dominant economy in the world and has been shown in many studies to have the most productive workers in the world.
-Burgeoning economies in India, China and the developing thirld world are very dependent on the U.S markets and are very motivated to work in tandem with us.  This continues to be a win-win situation for us.
-Yes there has been a housing bubble; but at the same time millions of Americans have gotten their own homes, neighborhoods have been revitalized and the economy was helped by the boom.  Yes there will be some pain down the road, there will be foreclosures and prices will drop.  This may cause a recession but is not as unprecedented or drastic as some may believe.  Collateral debt obligations will plague the financial markets for a time but they too will eventually be flushed out and the major losers will be the banks, hedge funds and other financial institutions that absorbed them.  
-The U.S remains the world's most creative and inventive power and noone else to date has come close to replacing us in the technology, health, film, entertainment and music industries.  Ever noticed how China doesn't have a single brand name product despite their massive production capabilities?  
-No country in the world even approaches the  business- friendly infrastructure of the U.S.  
-The U.S has the lowest unemployment rate of any developed country.  Compare our 4% rate with France's 10% rate.
-The financial markets of the U.S remain the envy of the world.  Players from around the world come to play on wall street; not Shanghai, Paris, Berlin or Rome.  Also, despite several prominent scandals our Fortune 500 companies remain far more transparent and regulated than their counterparts elsewhere.
-Despite continuing problems in Iraq the U.S remains, by far,  the dominant military power in the world.  It's army is approximately 50 times larger than France, Germany and England put together.  This still commands some clout in today's world.

As Mark Twain liked to say: " The reports of my death have been greatly exaggerated."

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## Barry Santini

...we'll see......

Barry

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## braheem24

Barry if you were in Fort Lauderdale this weekend you may have noticed the land auction on the 1st floor in the convention center. I was the high bidder on 6 properties with 3 properties declined by seller so I ended up with 3 Florida properties at a bargain.

Hopefully we see a turnaround soon, but judging by the sellers(developers) and buyer's(realtors) enthusiasm they dont seem very optimistic about the housing economy's recovery.

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## Barry Santini

meeting you and the properties...Damn!

Barry

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## cash1

now how am i gonna get to sleep tonight!

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## chip anderson

Chris:

Do you really believe that if the U.S. economy crashes, Canada and the rest of the world will be very far behind?
Another note, when the U.S. economy really hits the dregs there is always another World War that occurs to put things right again.

Chip

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## Johns

> Hopefully we see a turnaround soon, but judging by the sellers(developers) and buyer's(realtors) enthusiasm they dont seem very optimistic about the housing economy's recovery.


I too have been dabling in the land market. In the past year, I bought over 300 acres of land.  Ironically, I only have 74 acres left, as I was able to turn around, within a matter of months, and resell much of it, and at a very healthy gain.  There are many people out there that are optimistic
about the economy, or they wouldn't be so eager to build new houses, condos, and retail devolpments.  It might not be happening in your neighborhood, but it's happening somewhere.

It all depends on where you're at, and what business you're in.  I hear the optical business is in a major slump, but you wouldn't know it from some of the people I met out in Vegas, and you wouldn't it if you asked my employees.

People that have been running up their credit cards, going on vacation with their home equity loans, and buying new SUVs each year may feel the pinch, or even a sucker punch - and deservedly so. They've been living their version of the American dream with somebody else's money. Those who live within their means and put away money for a rainy day will survive, and may even come out way ahead.

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## rbaker

Do any of you recall The Whiners on SNL? Now I know what happened to them. They seem to be alive and well here on OptiBoard. It seems that lifes losers are always the ones who predict doom and gloom. For them it is a self fulfilling prophecy. Then, there are those who see economic setbacks as opportunities. These are life's winners.

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## Johns

> It seems that lifes losers are always the ones who predict doom and gloom. For them it is a self fulfilling prophecy.


And on Optiboard, they take a lot of glee in doing so.

Great post rbaker!:cheers:

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## DragonLensmanWV

> Chris:
> 
> Do you really believe that if the U.S. economy crashes, Canada and the rest of the world will be very far behind?
> Another note, when the U.S. economy really hits the dregs there is always another World War that occurs to put things right again.
> 
> Chip



Chip, I'll be a lot of money you don't watch South Park, but they have a song you might like - "Blame Canada!":D

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## Chris Ryser

> *Do you really believe that if the U.S. economy crashes, Canada and the rest of the world will be very far behind?*
> *Another note, when the U.S. economy really hits the dregs there is always another World War that occurs to put things right again.*
> Chip


Chip, Actually Canada and the rest of the world will be right behind, it looks that everything seems to be tied together.

I am not predicting gloom, I am just interested in world happenings and how these happenings are tied together.

Looking at some of the other post's I see braheem who lives in Florida did the right thing, has the money and bought some property at rock bottom which is probably way below evaluation..
However he will also have to pay the taxes and the insurance which just about have doubled in S.Florida over the last 2 years.
There are always that believe that another world war will lift the economy, it may, but only on a temporary basis.




> *Do any of you recall The Whiners on SNL? Now I know what happened to them. They seem to be alive and well here on OptiBoard. It seems that lifes losers are always the ones who predict doom and gloom. For them it is a self fulfilling prophecy. Then, there are those who see economic setbacks as opportunities. These are life's winners.*


baker....The red highlighted text tells me that *you did not even bother to read the linked article which proposes solutions to the problem*, but proceed with comments about lifes loosers oon Optiboard who predict gloom and doom.

This seems to be typical for people that make comments without getting fully informed.

It is now 4.45 am on November 7th and at 4.30 it announced in the news that the Canadian Dollar is now trading at $ 1.10  against the US $, which is a full 2 cents more since yesterday afternoon. This result represents a drop of over 40% in 4 month. 

I bet, that this will not alarm you, you probably just wont go to Canada and drink their beer because everything will more expensive by 40%  when you go with your US Dollars.




> *It all depends on where you're at, and what business you're in. I hear the optical business is in a major slump, but you wouldn't know it from some of the people I met out in Vegas, and you wouldn't it if you asked my employees.*


The people you meet at shows are always saying that times were never that good. In a slump there are always some that are doing better than others, because they have adapted to the situation with proper foresight.

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## rbaker

Remember thee the tales of *Chicken Little* and the *Little Boy Who Cried Wolf*. Much truth can be found in these old nursery rhymes.

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## Johns

> The people you meet at shows are always saying that times were never that good. In a slump there are always some that are doing better than others, because they have adapted to the situation with proper foresight.


I wasn't talking about vendors, I was talking about the people sitting next to me in the suites that were waiting to buy.  They were putting their money where their mouth was. 

Vendors will usually say everything's good...

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## Chris Ryser

> *I wasn't talking about vendors, I was talking about the people sitting next to me in the suites that were waiting to buy. They were putting their money where their mouth was.* 
> 
> *Vendors will usually say everything's good...*


Am I right assuming that you did the buying in a hotel suite instead of the show. There are always a lot of companies setting up their booth in hotel suites to get around the exhibition cost. T direct and for less.hey are usually the ones that sell 

If that is the case I would assume that you are right because they adopted the same business system as you do.

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## Chris Ryser

*Dollar slides to historic lows*
Wed Nov 7, 2007 7:27am EST

LONDON (Reuters) - The dollar fell on Wednesday to historic lows of $1.47 per euro and $2.10 to the pound on expectations of further U.S. interest rate cuts to limit damage from an ailing housing market.
The dollar slid further after comments from senior Chinese officials stirred concerns about its central bank shifting reserves away from the U.S. currency.

See whole story at:  http://www.reuters.com/article/hotSt...17880720071107

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## For-Life

> Remember thee the tales of *Chicken Little* and the *Little Boy Who Cried Wolf*. Much truth can be found in these old nursery rhymes.


Yes and no

I mean a lower US dollar can be good for American Exporters.  Will lower the costs of goods in the US compared to other nations and could be good for industry.

However, several years ago the Canadian dollar was at 60 cents.  Earlier this year it was at 90 cents.  Not it is at 1.10.  That is a tremendous drop for the US currency, and is more of a shock than a benefit.  

Chris is right, price changes will happen to reflect those costs.  In the Eyecare only Forum, it has been established that Canadian companies are paying significantly more for lens prices than the Americans are.  Now that the position has been switched, the American prices could go up as much as 40 percent.

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## Chris Ryser

> *Now that the position has been switched, the American prices could go up as much as 40 percent.*


China was going to increase prices by 20% on January first. with the happenings over the last few days they might even make the move earlier.

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## Johns

> Am I right assuming that you did the buying in a hotel suite instead of the show. There are always a lot of companies setting up their booth in hotel suites to get around the exhibition cost. .


It was in the hotel, but it appeared to be VICA sactioned.  I was buying from KATA, and the sales there wre brisk.  In fact, they almost wouldn't see me, because I didn't have an appt.

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## ellivron55

I have just converted 5000 english pounds and got over 10000 us dollars.
Christmas shopping Big Apple here I come.
Happy Days

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## Chris Ryser

*China may dump greenback from its foreign currency reserves* 


ZHOU XIN AND EADIE CHEN 
Reuters
November 7, 2007 at 7:37 AM EST


BEIJING  China delivered a one-two punch to the dollar as a top lawmaker suggested a bigger role for the euro in its $1.43-trillion (U.S.) hoard of foreign reserves and a central banker said the dollar is losing its global currency status.
The euro hit a record high above $1.47 following remarks on Wednesday by Cheng Siwei, vice-chairman of the standing committee of the National People's Congress, China's parliament, pointing to diversification of the country's reserves.

Read the whole article at:  http://www.reportonbusiness.com/serv.../Business/home

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## medkoinc

with all this money talk.... do any of you guys trade on the forex market???  

if you think dollar is going down .... get on it and invest in the pound or the canadian dollar.... 

Just because the dollar is going down... doesnt mean we cant make money betting against it.

The Current economy status is just killing off the weak.... the strong will survive and the economy will grow again....

Plus...we will have a new president soon... he/she cant possible do any worst than bush did.... 

Mina

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## rbaker

Over the past years we have placed an increasing portion of our investments in foreign markets. That returns on that sector of our portfolio has by far exceeded any losses in the domestic and European markets.

Our investment philosophy is very conservative as we do not seek to achieve high gains overnight. We invest for the long term protection of our assets. When we were young we were in the business of asset accumulation. Now that we are retired our main concern is asset protection. The trick is to know when to change from the first to the latter.

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## jediron1

> *Buffett says recession may be worse than feared*
> Mon Apr 28, 2008 11:09am EDT
> 
> By Jonathan Stempel
> 
> NEW YORK (Reuters) - Warren Buffett, the world's richest person, said on Monday the U.S. economy is in a recession that will be more severe than most people expect.
> 
> Buffett made his comments on CNBC television after his Berkshire Hathaway Inc (BRKa.N: Quote, Profile, Research) (BRKb.N: Quote, Profile, Research) agreed to invest $6.5 billion in the takeover of chewing gum maker Wm Wrigley Jr Co (WWY.N: Quote, Profile, Research) by Mars Inc in a $23 billion transaction.
> 
> ...




This has all the same smell as the Carter years of the late 70's high inflation
and recession. Only I see this may be longer as Buffett say's. Boy if I could go back 4 years I would definitely vote against Bush. Live and learn.

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## Chris Ryser

*Wall Street may lose 36,000 jobs*
Thu Apr 24, 2008 1:00pm EDT

By Joan Gralla
NEW YORK (Reuters) - Wall Street, the lifeblood of New York City's economy, could lose over 36,000 jobs because the financial credit crisis has rocked markets and stunned the U.S. economy, estimated James Brown, a labor market analyst with New York state's labor department.
"History suggests it's going to be something of that magnitude," Brown told Reuters, noting Wall Street employment peaked at 200,300 in December 2000, nine months before the September 11, 2001 air attacks.
Losing one in five jobs on Wall Street could have dire consequences for the city's economy. 

Brown's estimate was almost double the 20,000 job loss over the next two years that the city's Independent Budget Office forecast in March.

At the end of last month, there were 182,300 people working at banks and brokerages, down more than 5,000 jobs since September. The smaller scope of the layoffs seen so far, however, likely reflects the lag between the end of severance payments and when job hunters ......................

See whole article:  http://www.reuters.com/article/topNe...44256220080424

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## Chris Ryser

*Fed tone may send food and gasoline prices higher*
Wed Apr 30, 2008 5:02pm EDT

By Matthew Robinson and Barani Krishnan - Analysis

NEW YORK (Reuters) - Consumers battered by soaring energy and food prices may see little relief after the U.S. Federal Reserve cut interest rates on Wednesday and left the door open to further cuts.

The Fed on Wednesday lowered a key U.S. interest rate by a modest quarter percentage point and hinted the move could be the last in an 8-month monetary easing cycle. 

But the central bank also suggested more rate cuts could be in store, possibly extending a commodities rally from last summer that sent prices to records as investors shifted money into the asset class to hedge against inflation.
The increases in food and fuel costs have triggered protests around the globe.

"There had been so much hope that they would say something that would give us some sort of indication that they were done with this insanity," said Peter Beutel, president of Cameron Hanover. "Every time they cut rates and leave the door open for another cut they basically are just giving away the store when it comes to commodity prices.

"A lot of these higher prices from the supermarket to the pump are the Fed's handwork," he added. ...................................

See whole article: http://www.reuters.com/article/idUSN2934407920080430

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## jediron1

> *Wall Street may lose 36,000 jobs*
> Thu Apr 24, 2008 1:00pm EDT
> 
> By Joan Gralla
> NEW YORK (Reuters) - Wall Street, the lifeblood of New York City's economy, could lose over 36,000 jobs because the financial credit crisis has rocked markets and stunned the U.S. economy, estimated James Brown, a labor market analyst with New York state's labor department.
> "History suggests it's going to be something of that magnitude," Brown told Reuters, noting Wall Street employment peaked at 200,300 in December 2000, nine months before the September 11, 2001 air attacks.
> Losing one in five jobs on Wall Street could have dire consequences for the city's economy. 
> 
> Brown's estimate was almost double the 20,000 job loss over the next two years that the city's Independent Budget Office forecast in March.
> ...




Wall street may lose 36,000 jobs but Mobil made in 1st quarter 10 bil. profit.
Let me say that again 10 Bil in first quarter. If they keep going in the year 2008 they will have made a record 40 bil. for the year, now that is down right greed. Were turning into a third world country and CEO's like the one at Xerox get a raise of almost 30%. Any of you seen a raise of 30% over the last year? My costs have almost doubled over the past year and the only raise I got was a measly 1.5%, could not even buy a small cup of Mickey D's coffee with that. Thank You George Bush you have now made us the arm pit of the world.

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## Chris Ryser

> *My costs have almost doubled over the past year and the only raise I got was a measly 1.5%, could not even buy a small cup of Mickey D's coffee with that. Thank You George Bush you have now made us the arm pit of the world.*


I just sent a shipment yesterday to London by airfreight. The freight charges were $ 240.00 and the fuel surcharge was $ 205.00, nearly the same as the regular charge.

Wondering that this thread has over 8180 views, and is climbing every day. Obviously Optiboard visitors must be interested in the subject, and I believe that we are all affected and must be feeling the pinch somewhere.

There are 2 threads presently dealing with on line opticals which very probably are doing more and more business as money gets tighter.

So I am wondering that so few grab the occasion to comment, try to find  solutions how to sit out the present and coming hard times and still keep busy and or even make money during the downturn.

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## For-Life

> I just sent a shipment yesterday to London by airfreight. The freight charges were $ 240.00 and the fuel surcharge was $ 205.00, nearly the same as the regular charge.
> 
> Wondering that this thread has over 8180 views, and is climbing every day. Obviously Optiboard visitors must be interested in the subject, and I believe that we are all affected and must be feeling the pinch somewhere.
> 
> There are 2 threads presently dealing with on line opticals which very probably are doing more and more business as money gets tighter.
> 
> So I am wondering that so few grab the occasion to comment, try to find  solutions how to sit out the present and coming hard times and still keep busy and or even make money during the downturn.


Chris, that is because you send huge boxes that are filled with 99% peanuts and one little bottle.  You can cut your costs into a small fraction by using the right sized containers.

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## Chris Ryser

> *............that is because you send huge boxes that are filled with 99% peanuts and one little bottle.*


Smart company is sending chemicals that way to opticians............should bottle leak liquid will be absorbed by the foam peanuts.

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## Chris Ryser

*Fed backs credit card reforms*
Fri May 2, 2008 4:58pm EDT

By John Poirier
WASHINGTON (Reuters) - The Federal Reserve on Friday joined other U.S. banking regulators in backing new limits on certain billing practices by credit card companies.

The Fed approved a proposal that would generally prohibit credit card companies from increasing the annual percentage rate on a customer's outstanding balance. It would also ban companies from reaching back to prior billing cycles when calculating the amount of interest charges in the current cycle, a practice known as double-cycle billing.

The U.S. Office of Thrift Supervision and National Credit Union Administration already approved the same proposal. All three regulators said they hope to finalize the rule by the end of 2008.

Among the biggest issuers of Visa Inc and MasterCard Inc credit cards are Bank of America Corp, JPMorgan Chase & Co, Citigroup Inc, Capital One Financial Corp and Discover Financial Services.

"The proposed rules are intended to establish a new baseline for fairness in how credit card plans operate," Fed Chairman Ben Bernanke said at a meeting to approve the proposal. "Consumers relying on credit cards should be better able to predict how their decisions and actions will affect their costs."

See whole article:  http://www.reuters.com/article/ousiv...00892120080502

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## Jacqui

> So I am wondering that so few grab the occasion to comment, try to find  solutions how to sit out the present and coming hard times and still keep busy and or even make money during the downturn.


I'm thinking of starting a 2 pairs for $69.95 store to compete with the online people. I could give better service and a better product. Just think, i could give same day service, free fitting and FREE PD's. Which online place can do that??

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## For-Life

Jacqui, please be careful.  You do not want to harm your image.  You also have to think about a few things:

- What will your current client base think?
- What type of people are the online opticals really attracting?
- If you drop your prices, how many people will you actually keep?  
- If you drop your prices, how much revenue will you lose from your main clients through it?
- Does the amount of customers that you retain = the amount of revenue loss?
- Will the people that you retain buy again in two years?
- Will they buy from you again in two years, or will they look elsewhere for a cheaper price?

I thought of offering a wide assortment of disco frames a few years ago.  I then looked at the psychology of the consumer and realized it would be a horrible decision.  I figured that if I introduced this, I would be cannablizing from my regular priced items.  I would then feel that I should be putting more people in the disco'd items, because it would be hard to tell the difference.  I would then lose money from that.  I then found that we had high acceptances of our regular prices.  I also found that those who did not buy from us, because we were too much, are price shoppers.  That means that if I got them, I probably would not keep them because they would go to the next cheap place the next time (sales, promotions, ect.).  I also found that these price shoppers take a lot of work and cause the most problems, so losing them really was not a bad thing.  Even if I did keep them, I would not be making the volume to even make anything off of them.  Also, if they are cheap, they probably hold onto their glasses for 5 or 6 years, so if they do decided to come back it would not be worth while.

It was a bad idea and I am so glad I did not go with it.

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## Jacqui

> Jacqui, please be careful.  You do not want to harm your image.  You also have to think about a few things:
> 
> - What will your current client base think?
> - What type of people are the online opticals really attracting?
> - If you drop your prices, how many people will you actually keep?  
> - If you drop your prices, how much revenue will you lose from your main clients through it?
> - Does the amount of customers that you retain = the amount of revenue loss?
> - Will the people that you retain buy again in two years?
> - Will they buy from you again in two years, or will they look elsewhere for a cheaper price?
> ...


It's too late, Dr. Barnes Eyemart Express beat me to it.  :cry:  :cry:   Two pairs for $67.92 and $31.00 exams  :cry:  :cry:

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## For-Life

Oh, that is the other problem too.  These guys will always undercut you by a nickel.

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## Chris Ryser

*Bernanke: High foreclosure rates hurt broad economy*
Mon May 5, 2008 8:32pm EDT

NEW YORK (Reuters) - Federal Reserve Chairman Ben Bernanke on Monday said conditions in mortgage markets remain strained, posing a threat to the economy, and urged steps be taken to prevent home foreclosure where possible.

"High rates of delinquency and foreclosure can have substantial spillover effects on the housing market, the financial markets, and the broader economy," Bernanke said in remarks prepared for delivery to the Columbia University School of Business in New York.

Bernanke said the sharp U.S. housing downturn is producing a steep rise in mortgage delinquencies. Not all foreclosures result in the loss of the home, he said, but the high number of borrowers in distress and sharp declines in home values in regions of the country mean the share of people who lose their homes will be higher in the current situation than in the past.

A widespread decline in home prices is a relatively novel phenomenon, and lenders and loan servicers will have to develop new and flexible strategies to deal with this issue, the Fed chairman said.

Bernanke called on Congress to move quickly on legislation expanding the Federal Housing Administration and strengthening oversight of government-sponsored mortgage finance enterprises Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research).

"Finding ways to avoid preventable foreclosures is a legitimate and important concern of public policy," he said.

Bernanke's comments come as a sharp spike in problem U.S. home loans and a deep correction in U.S. housing markets have led to financial market turmoil ..........................................................


See whole article: http://www.reuters.com/article/ousiv...41134020080506

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## Chris Ryser

*"Super-spike" could lift oil to $200: Goldman*
Tue May 6, 2008 12:07pm EDT

LONDON (Reuters) - Oil could shoot up to $200 within the next two years as part of a "super-spike" driven by poor growth in oil supplies, investment bank Goldman Sachs (GS.N: Quote, Profile, Research) said in a research note. 

"We believe the current energy crisis may be coming to a head, as a lack of adequate supply growth is becoming apparent," Goldman said in the note made available to Reuters on Tuesday.

Oil hit a new record near $121 a barrel on Tuesday, continuing an advance which has seen it double over the past 12 months.

"The possibility of $150-$200 per barrel seems increasingly likely over the next 6-24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty," Goldman said.

Goldman, which was one of the first to point to a triple digit oil price more than two years ago, said it believed the market was approaching the crunch in the "super-spike".

The "super-spike" theory argues that a lack of adequate supply growth along with price-insulated demand growth in non-OECD countries will lead to a dramatic and continuous rise in oil prices that will ultimately lead to a sharp correction in oil demand.

Goldman analysts said the underlying drivers of the rise in oil prices remained firmly in place, noting poor growth in non-OPEC supplies, low OPEC spare capacity, restriction on foreign investment in key oil producing nations and healthy demand growth in non-OECD economies.
"In our view, a gradual rally in prices is likely to be longer lasting than a sharp, sudden spike," the note ................................................

See whole article http://www.reuters.com/article/ousiv...080506?sp=true

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## Chris Ryser

*Pending homes sales fall, productivity up*

Wed May 7, 2008 11:36am EDT

By Joanne Morrison
WASHINGTON (Reuters) - Contracts to buy previously owned U.S. homes hit an all-time low in March and businesses braced for tough times by squeezing more out of their workers in the first quarter, data released on Wednesday showed.

The National Association of Realtors Pending Home Sales Index, based on contracts signed in March, fell 1 percent to 83.0, the lowest since this index began in 2001, and was 20.1 percent lower than a year ago.
Economists were expecting the decline in these contracts, which are a good barometer of future home sales, as homeowners have been increasing skittish about buying homes in a price-declining market and as mortgage financing is more difficult to obtain.

"This is not a shock. The pace of sales seems to be stabilizing but that's the best you could say about it. But I don't think we've hit a bottom yet," said David Wyss chief economist at Standard & Poor's in New York.
With continued erosion in the housing and mortgage markets, businesses did their part to brace for tough economic times...............................

See whole article:  http://www.reuters.com/article/domes...17285920080507

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## jediron1

> *Fed backs credit card reforms*
> Fri May 2, 2008 4:58pm EDT
> 
> By John Poirier
> WASHINGTON (Reuters) - The Federal Reserve on Friday joined other U.S. banking regulators in backing new limits on certain billing practices by credit card companies.
> 
> The Fed approved a proposal that would generally prohibit credit card companies from increasing the annual percentage rate on a customer's outstanding balance. It would also ban companies from reaching back to prior billing cycles when calculating the amount of interest charges in the current cycle, a practice known as double-cycle billing.
> 
> The U.S. Office of Thrift Supervision and National Credit Union Administration already approved the same proposal. All three regulators said they hope to finalize the rule by the end of 2008.
> ...




The banks will find a way around this. I once got in the mail a stuffer telling me I could get 0% for a few months. After reading the small print and all the charges they could charge me it worked out to a whopping 169% if they tapped me for all the charges they could. I also saw on the tele that a woman was suckered into one of these for 0%. She paid her bill faithfully and one day received a notice saying your rate was now 19.9%. She asked how " I never missed a payment" but they said "you missed your water payment". The reporter went on to say they found out this was a common practice so they could boost the rates quicker.  They watch all your bills you pay. Talk about BIG BROTHER where are the George Orwell's today?

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## Chris Ryser

*Bankruptcies now come pre-packaged*
Fri May 9, 2008 8:18pm EDT

By Emily Chasan

NEW YORK (Reuters) - The days when troubled companies could spend years fixing their problems in bankruptcy court are fast evaporating.
As companies face the tightest credit market in decades, ready-made, pre-packaged and pre-arranged bankruptcies have soared in popularity, spurred along by tougher bankruptcy rules and worried lenders.

"The bias is going to be towards getting in and out of bankruptcy quickly," said Jerry Mozian, a director of restructuring at consultancy Tatum LLC.
"If it's a small company you really don't want to go in without going in on a pre-packaged basis."

Moving and relocation services company SIRVA Inc SIRV.PK, for example, used a pre-packaged bankruptcy and received court approval for its reorganization plan this week -- just three months after initially going into Chapter 11.

While pre-packaged bankruptcies, in which creditors vote on a bankruptcy plan before it is filed with the court, have been around since the 1980s, the current credit market conditions have made them a much more common form of filing.

While there were only four pre-packaged bankruptcies initiated in all of 2007, this year there were four pre-packaged bankruptcies filed in February alone, according to research firm Bankruptcydata.com.
Several more pre-packaged bankruptcies have been filed since then, as the tightening of the credit markets has changed the game for a U.S. company seeking bankruptcy protection.

Just a year ago, a bevy of banks, hedge funds and private equity groups were willing to fund a distressed firm or refinance its debt, but today there are few to pick from.

See whole article: http://www.reuters.com/article/ousiv...080510?sp=true

----------


## Chris Ryser

*Inflate in haste, repent at leisure: James Saft*

Fri May 9, 2008 10:44am EDT

(James Saft is a Reuters columnist. The opinions expressed are his own.)
By James Saft

LONDON (Reuters) - Inflating our way out of trouble is tempting but it's another buy now, pay later strategy, both for the economy and investors.
Inflationary pressure is building globally, and consumers' expectations of future price rises are growing in a way reminiscent of the 1970s, pushed by surging commodity and energy prices and at least partly underwritten by U.S. interest rates designed to rescue a country experiencing a popping debt bubble.

In the year through March, overall U.S. consumer inflation rose by 4.0 percent, well above the Federal Reserve's comfort zone, though the core measure excluding food and energy on which the Fed traditionally concentrates rose only 2.4 percent. More to the point, inflation expectations are hardening. Consumers surveyed by the University of Michigan now expect prices to rise 4.3 percent in the next year.

From one perspective a bout of inflation is just what the doctor ordered: it will make paying back or writing off all those unwise loans far easier.
"America is a country that owes money. It is natural when you are a debtor that you lean in the direction of inflation, because it makes paying it back so much easier," said Philippa Malmgren....................................

See whole article: http://www.reuters.com/article/reute...84758320080509

----------


## jediron1

> *Inflate in haste, repent at leisure: James Saft*
> 
> Fri May 9, 2008 10:44am EDT
> 
> (James Saft is a Reuters columnist. The opinions expressed are his own.)
> By James Saft
> 
> LONDON (Reuters) - Inflating our way out of trouble is tempting but it's another buy now, pay later strategy, both for the economy and investors.
> Inflationary pressure is building globally, and consumers' expectations of future price rises are growing in a way reminiscent of the 1970s, pushed by surging commodity and energy prices and at least partly underwritten by U.S. interest rates designed to rescue a country experiencing a popping debt bubble.
> ...




Well what can you say he's right but how can you change it? Since the advent of the credit card it's been as the old cartoon the "Flintstones" as Wilma and Betty ran wild to the stores yelling "charge it" It's been drilled into our heads buy now pay later. We will give you interest free for a year if you buy your furniture now. Come on they built in these factors and now their blaming us for following what they told us to do. They build this debt
by their constant blaring BUY NOW PAY LATTER!:hammer:

----------


## Chris Ryser

*April retail sales barely budged: SpendingPulse*
Mon May 12, 2008 12:45am EDT

NEW YORK (Reuters) - Retail sales barely rose in April, as a relentless surge in gasoline prices made consumers cut back other types of spending, according to a report released on Monday.

Consumer spending excluding autos grew only 0.1 percent last month on a seasonally adjusted basis, less than the 0.6 percent increase in March, said SpendingPulse, the retail data service of MasterCard Advisors, which is a unit of MasterCard Worldwide.

"In general, consumers are spending less. Without gasoline, they are spending a lot less," said Kamalesh Rao, director of economic research at MasterCard Advisors.

Retail sales excluding cars and gasoline fell 0.7 percent in April versus March.

U.S. retail gasoline prices reached another record, hitting $3.61 a gallon in the week ended May 2, according to the government. Crude prices broke above $126 a barrel on Friday.

Expensive gasoline forced consumers, who have already been squeezed by the housing slump, to reduce other purchases, Rao said. He added that the few bright spots in this deteriorating retail environment were clothing and electronics.

"There was a pickup in apparel sales because we had such a cold March," he said...............................................

See whole articles:  http://www.reuters.com/article/ousiv...51007820080512

----------


## jediron1

> *April retail sales barely budged: SpendingPulse*
> Mon May 12, 2008 12:45am EDT
> 
> NEW YORK (Reuters) - Retail sales barely rose in April, as a relentless surge in gasoline prices made consumers cut back other types of spending, according to a report released on Monday.
> 
> Consumer spending excluding autos grew only 0.1 percent last month on a seasonally adjusted basis, less than the 0.6 percent increase in March, said SpendingPulse, the retail data service of MasterCard Advisors, which is a unit of MasterCard Worldwide.
> 
> "In general, consumers are spending less. Without gasoline, they are spending a lot less," said Kamalesh Rao, director of economic research at MasterCard Advisors.
> 
> ...




I just read on the internet that Bakersfield Ca. has the highest gas prices. Reg. at 3.93 per gal., med grade at 4.19 and Prem. at 4.25. diesel at 4.61. 
5.00 is right around the corner. Truckers are now paying upwards of a Thousand to fill their rigs some have said if this keeps up the money they make will all be spent on fuel. But the oil companies don't want to go after the shale oil and the government won't give permission to drill in Alaska in the protected lands. I guess I will dusk off my bike or go get a horse. Only problem with a horse is have to build a barn, store hay and what to do with all the horse waste? Well I could bag it and sell it. :bbg:

----------


## Jacqui

> Well I could bag it and sell it. :bbg:


Best idea you've had in a long time. :D

----------


## jediron1

> Best idea you've had in a long time. :D




Thanks GrandMa!
 In my younger days we used to have stables across the street from our house and too make a few extra bucks they would hire me and a friend to shovel out the stalls. One thing always pat the horse on the back side before going around them they do get a bit jumpy. I almost got kicked one day learned my lesson fast.   :Cool:

----------


## Chris Ryser

*Alaska first state to hit $4 a gallon gasoline: AAA*

Wed May 14, 2008 9:35pm EDT

By Bernard Woodall

LOS ANGELES (Reuters) - Alaska hit a milestone on Wednesday that could be a sign of things to come around the United States this summer -- it became the first state where the average price for regular gasoline reached $4 per gallon.

"It wasn't totally unexpected," said Geoff Sundstrom, spokesman for the travel and auto group AAA which issues a daily gasoline price report.
"Oil prices recently brushed against $127 per barrel so certainly, $4 gasoline could be in the cards for other states as well this summer," said Sundstrom.

At $4 per gallon, filling up a 15-gallon tank will cost $60.
Alaskans using self-service regular gasoline paid $4.006 per gallon, said the AAA Wednesday report.

The U.S. average for regular gasoline hit a record $3.758 per gallon, the same report showed.

A year ago, the U.S. average price was $3.3354 a gallon and in Alaska, the average price was $2.946 a gallon.

Gasoline price analysts will have a better handle on how many states are likely to reach $4 a gallon this summer once the Memorial Day weekend passes, said Sundstrom. That holiday weekend is May 23-26.......................................................*...*

*See whole article: http://www.reuters.com/article/newsO...54492020080515*

----------


## jediron1

> *Alaska first state to hit $4 a gallon gasoline: AAA*
> 
> Wed May 14, 2008 9:35pm EDT
> 
> By Bernard Woodall
> 
> LOS ANGELES (Reuters) - Alaska hit a milestone on Wednesday that could be a sign of things to come around the United States this summer -- it became the first state where the average price for regular gasoline reached $4 per gallon.
> 
> "It wasn't totally unexpected," said Geoff Sundstrom, spokesman for the travel and auto group AAA which issues a daily gasoline price report.
> ...



That may have been Alaska but here in NY I just read their are dealers selling for over $4.00 in fact it said $4.05 at some stations around the state. :drop:

----------


## Jacqui

$3.72 here in Frostbite Falls.

----------


## jediron1

> $3.72 here in Frostbite Falls.



Average in NYCity is $3.995 can't get much closer to $4.00 then that!

----------


## OpticalSLA

I'm not one to attack the source, but what are the ideological leanings of that particular website?  Actually, I do agree we are in quite dire straits...

----------


## jediron1

> I'm not one to attack the source, but what are the ideological leanings of that particular website?  Actually, I do agree we are in quite dire straits...




 If your referring to Chris's post above it says on their site: 

Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.
     NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

I did not notice any ideological leanings.

----------


## tmorse

> That may have been Alaska but here in NY I just read their are dealers selling for over $4.00 in fact it said $4.05 at some stations around the state. :drop:


Maybe the US oil companies have discovered that Canadians have been paying over $5.00gal without any real protest even though we are a net exporter of oil.  :Confused:

----------


## Chris Ryser

> *Maybe the US oil companies have discovered that Canadians have been paying over $5.00gal without any real protest even though we are a net exporter of oil.*


Just bought some gas at an Ultramar station which gives receipts detailing the taxes.

One US Gallon is (3.75 L)  $ 5.096

Taxes total 45%   = $ 2.293

Net price = $ 2.803

 :cry:

----------


## Jacqui

I see the Loonie has risen to above parity with the Dollar. (as of about 20 minutes ago)

----------


## Jacqui

Again I see the Loonie is above parity with the Dollar and the Toronto exchange closed at an all time high (15,000+)....hmmmm

----------


## Chris Ryser

> *Again I see the Loonie is above parity with the Dollar and the Toronto exchange closed at an all time high (15,000+)....hmmmm*


 
Canada did not participate in the real estate bubble and has no hangover over it. Thiings are still fairly normal but expected  to make down turn.

The Loonie is not up............the greenback is worth a lot less because you are printing too much money to pay for all the debts.

----------


## Chris Ryser

*American Airlines to slash capacity up to 12 percent*
Wed May 21, 2008 9:53am EDT

FORT WORTH, Texas (Reuters) - American Airlines said on Wednesday it plans to cut domestic capacity by 11 percent to 12 percent this year as fuel prices reach record highs and the weak U.S. economy casts a shadow over the summer travel season.
The cut would be the largest for American Airlines, owned by AMR Corp, since the drastic scaling back of air travel after the attacks of September 11, 2001.
(Reporting by Kyle Peterson; writing by Bill Rigby, editing by Gerald E. McCormick)

http://www.reuters.com/article/newsO...AS489020080521

----------


## Chris Ryser

*Fed lowers growth forecast, raises inflation*
Wed May 21, 2008 6:07pm EDT

By Mark Felsenthal and Glenn Somerville

WASHINGTON (Reuters) - The Federal Reserve on Wednesday slashed its U.S. economic growth forecast for 2008 and signaled that mounting concerns over inflation would make further interest rate cuts unlikely.
"Several members noted that it was unlikely to be appropriate to ease policy in response to information suggesting that the economy was slowing further or even contracting slightly in the near term," the Fed said in minutes from its April 29-30 policy meeting.

Fed officials said that cutting benchmark interbank lending rates by a quarter percentage point to 2 percent at their last meeting was "a close call," reinforcing the impression that policy-makers may be putting further interest rate moves on hold.

"If you had any doubt that the Fed is signaling a pause, that doubt is gone," said Christopher Low, chief economist at FTN Financial in New York.
In an accompanying forecast, the Fed cut its projection for 2008 growth to a scant 0.3 percent to 1.2 percent, down from the 1.3 percent to 2 percent it forecast three months ago.

At the same time, the U.S. central bank said it expects inflation to remain "elevated" and unemployment to increase "significantly."

Wall Street stocks tumbled after the Fed forecast, with the Dow Jones industrials closing off nearly 1.8 percent......................................

See whole article:  http://www.reuters.com/article/ousiv...080521?sp=true

----------


## Chris Ryser

*Economy still facing recession, rebound seen tepid*
Thu May 22, 2008 8:42am EDT

By Burton Frierson

NEW YORK (Reuters) - The economy is still facing a possible recession this year, with any recovery stunted by inflation that prevents the Federal Reserve from cutting interest rates again, according to a Reuters poll.
The Fed has already slashed rates by 3.25 percentage points since September to fight the effects of a housing slump, a drag on spending from record oil prices and four consecutive months of job losses.

The latest poll of over 100 economists, taken May 15-21, was moderately more upbeat than one taken a month ago, in part because first quarter economic growth, at an annualized 0.6 percent, was not as bad as many had feared.

They now see growth at 1.2 percent this year on a fourth-quarter over fourth-quarter basis, slightly above last month's forecast of 1.0 percent. The median forecast is also at the upper end of the Federal Reserve's own central range published on Wednesday. 

But they expect the economy will contract in the current quarter by an annualized 0.3 percent, though they were split on whether or not it will slip into recession, putting a median 50 percent probability on such an outcome.

That compares with the April survey, where 42 of 58 economists who answered the question....................................

See whole article: http://www.reuters.com/article/ousiv...080522?sp=true

----------


## GOS_Queen

> Canada did not participate in the real estate bubble and has no hangover over it. Thiings are still fairly normal but expected to make down turn.
> 
> The Loonie is not up............*the greenback is worth a lot less because you are printing too much money to pay for all the debts.*


Agreed!  :cheers:

----------


## Chris Ryser

*Think oil prices hurt now? Just wait..........................*

Thu May 22, 2008 4:32pm EDT

By Nick Carey - Analysis

DALLAS, Texas (Reuters) - Sky-high oil prices are causing pain at the pump, but bills for air conditioning this summer and heating next winter -- combined with rising food costs -- promise to squeeze U.S. consumers even more.

With gas at $4.00 a gallon, households already have less to spend on a new grill at Home Depot; a vacation at Walt Disney's Disney World; a new TV from Best Buy Co; or a new "hog" from Harley-Davidson Co.

And there are no signs things will get better soon for the consumer, long the driving force of U.S. economic growth.

"For the areas of the economy that rely on heating oil, high fuel prices are going to be another blow to the consumer this winter," said Jack Kyser, chief economist at the LA County Economic Development Corp.
"The hotter states will feel the pinch during the summer months but in the mid-America states where you get hot summers and cold winters, it's going to be very uncomfortable," he said.

"This is going to eat into the disposable income of American consumers -- supposing they have any left."

Oil prices, now $130 a barrel, have risen six-fold since 2002. On Wednesday, heating oil reached a record high above $3.90 a gallon and the price is expected to stay high.

Heating oil, which cost $3.29 a gallon in January, will likely cost $3.83 in December, according to the government's Energy Information Administration.  *Continued...*

*See whole article:  http://www.reuters.com/article/GCA-O...080522?sp=true*

----------


## Chris Ryser

*Home sales slip, stock of unsold homes rises*
Fri May 23, 2008 1:16pm EDT

By Joanne Morrison

WASHINGTON (Reuters) - Sales of previously owned U.S. homes slipped last month and the backlog of unsold properties hit a record high, according to data on Friday that suggested the market's downturn still has a long way to run.

Home resales fell 1 percent in April to a 4.89 million-unit annual rate, the National Association of Realtors said.

The sales pace was a bit better than expected on Wall Street, but the stock of unsold homes surged 10.5 percent to 4.55 million units, leading economists to warn of further market woes ahead.

At the current sales pace, the supply of homes reached 11.2 months' worth, the highest since the trade group began tracking single-family and condo properties together in 1999. For single units, the supply was 10.7 months' worth, the most in 23 years.

"The increase in unsold inventory suggests that the housing downturn will continue on through this year and well into next," said Moody's Economy.com Chief Economist Mark Zandi......................................

See whole article: http://www.reuters.com/article/newsO...080523?sp=true

----------


## Jacqui

> Canada did not participate in the real estate bubble and has no hangover over it. Thiings are still fairly normal but expected  to make down turn.
> 
> The Loonie is not up............the greenback is worth a lot less because you are printing too much money to pay for all the debts.


And now I see the Canadian budget has a surplus, *WOW !!*

I wonder if they would loan me a bit of it, I have a small project that includes the purchase of Essilor and Lux. ;)

----------


## Chris Ryser

*U.S. not yet half way through home mortgage trouble: Seidman*
Fri May 23, 2008 3:58pm EDT

(William Seidman is the former chairman of the Resolution Trust Corp., the agency Congress set up in the 1980s to clean up the savings-and-loan lending mess. He's also a former chairman of the FDIC. He spoke with Reuters this week on the housing rescue plan taking shape in Congress and on the state of banking in the United States.)

How important is this Senate housing rescue plan?

The Senate plan will certainly be some help. It will take a part of the problem in the financial system and perhaps cure 25 percent of it. It isn't an answer to all the problems we have.

Were you expecting to see a lot more, at least coming from Washington?
I think it's as much as they can do with the subprime mortgage issue. The real job will be to get the financial system back on its feet and that's going to be largely a private sector exercise, I think, with a substantial number of bank failures.

Where are we on that curve now?

Generally banks start to fail about a year after the events which cause the trouble. We're probably about seven or eight months down that year. .........................

See whole article:  http://www.reuters.com/article/reute...080523?sp=true

----------


## For-Life

> And now I see the Canadian budget has a surplus, *WOW !!*
> 
> I wonder if they would loan me a bit of it, I have a small project that includes the purchase of Essilor and Lux. ;)


Deficit is not a word that any political party in Canada wants to mention anymore.  We have had about 10 years of surpluses.  

Of course, the Feds acheived a lot of that by downloading some of its powers onto the Provinces.  The Provinces then acheived it by downloading powers onto municipalities.

----------


## Chris Ryser

*The Great American Sell-Off*

*This Great American Sell Off ticker is an up-to-date projection of the amount of money that foreign companies spend to acquire U.S. companies. Acquisition of companies by foreign entities diverts U.S. technology, jobs and ownership abroad.*



*The ticker is a projection based on the average amount of money spent per second on acquisitions in the 2007 fiscal year, which was     $6,749.43 per second.*



*Use the acquisition index below to see the most current data available on foreign acquisitions.*


Total acquisitions amount as reported:   $1,974,779,120,570

Total number of acquisitions:1   5,397

Average amount of US companies sold to foreign acquirors per day as reported:   $182,646,977

First acquisition date:   07/03/1978

Last acquisition date:   02/08/2008



See the whole article: http://www.economyincrisis.org/acquisitions/index#

----------


## Chris Ryser

*Foreign Ownership of US Domestic Industries*



This data comes from IRS (Internal Revenue Service) - Current as of 2002 (latest data available). 
Foreign ownership refers to ownership of assets of a particular industry by foreign controlled domestic U.S. Corporations (FDC) 50% or more owned by a foreign entity. 

*FOREIGN OWNERSHIP OF SELECTED U.S. INDUSTRIES*

Industry Percentage Foreign Owned:

Sound recording industries 97%
Commodity contracts dealing and brokerage 79%
Motion picture and sound recording industries 75%
Metal ore mining 65%
Motion picture and video industries 64% 
Wineries and distilleries 64%
Database, directory, and other publishers 63%
Book publishers 63%
Cement, concrete, lime, and gypsum product 62%
Engine, turbine and power transmission equipment 57% 
Rubber product 53%
Nonmetallic mineral product manufacturing 53%
Plastics and rubber products manufacturing 52%
Plastics product 51%
Other insurance related activities 51% 
Boiler, tank, and shipping container 50%
Glass and glass product 48%
Coal mining 48%
Sugar and confectionery product 48%
Nonmetallic mineral mining and quarrying 47% 
Advertising and related services 41%
Pharmaceutical and medicine 40%
Clay, refractory, and other nonmetallic mineral products 40%
Securities brokerage 38%
Other general purpose machinery 37% 
Audio and video equipment mfg and reproducing magnetic and optical media 36%
Support activities for mining 36%
Soap, cleaning compound, and toilet preparation 32%
Chemical manufacturing30%Industrial machinery 30% 
Securities, commodity contracts, and other financial investments and related activities 30%
Other food29%Motor vehicles and parts29%Machinery manufacturing 28%
Other electrical equipment and component 28% 
Securities and commodity exchanges and other financial investment activities 27%
Architectural, engineering, and related services 26%
Credit card issuing and other consumer credit 26%
Petroleum refineries (including integrated) 25%
Navigational, measuring, electromedical, and control instruments2 5% 
Petroleum and coal products manufacturing 25%
Transportation equipment manufacturing 25%
Commercial and service industry machinery 25%
Basic chemical24%Investment banking and securities dealing 4%


See more: http://www.economyincrisis.org/content/ownership

----------


## Chris Ryser

*It’s Not an Oil Crisis, It’s a Dollar Crisis* 


Published 05/24/08 by Economy In Crisis 

*Source Euro Pacific:*
*In their search for explanations as to why oil has surged past $130 per barrel, Washington, Wall Street, and the financial media are as clueless as cavemen after a freak summer snow storm. Despite the head scratching, the blame game is nevertheless in full force. Speculators and big oil companies are being trotted out as scapegoats, and increased margin requirements and taxes on windfall profits and futures trading have been mentioned as appropriate sanctions. It should be clear that this is pure farce, and that no one understands what is actually happening.*

*The reality is that after years of reckless consumption and dollar debasement, Americans are now being priced out of markets over which they formerly held unchallenged title. As more affluent foreigners consume more of the resources and products they previously supplied to us, Americans are being forced to cut back. The rising dollar-based price of gasoline is simply an illustration of this global trend.*

*Poorly concealed behind contrived government statistics, the signs of America’s falling standard of living are everywhere; all one has to do is look. We are unloading SUVs for less desirable compacts, and are paying more to fly on crowded planes (where we pay to check luggage and dine only on what we bring onboard). We drink our lattes at McDonalds or not at all, and we increasingly forego dining out, trips to the mall, and vacations, just so we can scrape together enough to fill our gas tanks and kitchen pantries, pay taxes and insurance, or make credit card, mortgage or car payments.*

*See more: http://www.economyincrisis.org/articles/show/1294*

----------


## jediron1

> *It’s Not an Oil Crisis, It’s a Dollar Crisis* 
> 
> 
> Published 05/24/08 by Economy In Crisis 
> 
> *Source Euro Pacific:*
> *In their search for explanations as to why oil has surged past $130 per barrel, Washington, Wall Street, and the financial media are as clueless as cavemen after a freak summer snow storm. Despite the head scratching, the blame game is nevertheless in full force. Speculators and big oil companies are being trotted out as scapegoats, and increased margin requirements and taxes on windfall profits and futures trading have been mentioned as appropriate sanctions. It should be clear that this is pure farce, and that no one understands what is actually happening.*
> 
> *The reality is that after years of reckless consumption and dollar debasement, Americans are now being priced out of markets over which they formerly held unchallenged title. As more affluent foreigners consume more of the resources and products they previously supplied to us, Americans are being forced to cut back. The rising dollar-based price of gasoline is simply an illustration of this global trend.*
> ...



Just past a sign ( NY state ) that said: diesel $5.02 per gal. reg. gas $4.05. Truckers are crying losing all their profits to gas and diesel fuel. Also saw the evening news where it broad cast a segment where people stayed home instead of going out for the weekend. One poor house wife said: " We had to eat burgers instead of our normal ribs, this gas thing is just killing us" Unbelievable we only had burgers instead of ribs. :hammer:

----------


## Chris Ryser

*Few options as energy costs soar for small businesses*
11:54 ET, Tue 27 May 2008 

By Deborah L. Cohen

CHICAGO (Reuters.com) -- Scott Graham won't do it - not yet.
Despite the rising cost of gasoline, Graham, president and co-owner of a Las Vegas-based medical supply business, refuses to raise prices or to exact a fuel delivery surcharge from customers.

"I've attempted to absorb it by cutting my own business operating costs," says Graham, whose MBI X-Ray & Medical Supply has 14 employees that deliver and service equipment and products for physicians in private practice throughout southern Nevada. "We try to make sure we cluster service whenever possible in the same area."

But Graham says he can't hold out much longer. Many vendors have raised minimum orders for the diagnostic devices, pharmaceuticals and other supplies that MBI distributes, forcing the company's costs up as they take up additional warehouse space. 

Medical wares are often are made from petroleum products, and their costs, too, have been rising. Meanwhile, MBI's employees, saddled with higher transportation expenses, want more money. To top it off, Graham expects some competitors are managing to keep their own prices down by procuring inventory over the Internet and failing to report state sales tax.
"I cannot keep absorbing these price increases," he says.

With gas pumps taking in more than $4 a gallon in some parts of the U.S., small businesses are faced with increasingly difficult choices: wringing more efficiencies from their operations, passing the costs on to customers in the form of price increases, cutting staff, or, if competition is too great, sucking it up and trying to hang on............................................

See whole article:   http://features.us.reuters.com/entre...-169A0D29.html

----------


## jediron1

> *Few options as energy costs soar for small businesses*
> 11:54 ET, Tue 27 May 2008 
> 
> By Deborah L. Cohen
> 
> CHICAGO (Reuters.com) -- Scott Graham won't do it - not yet.
> Despite the rising cost of gasoline, Graham, president and co-owner of a Las Vegas-based medical supply business, refuses to raise prices or to exact a fuel delivery surcharge from customers.
> 
> "I've attempted to absorb it by cutting my own business operating costs," says Graham, whose MBI X-Ray & Medical Supply has 14 employees that deliver and service equipment and products for physicians in private practice throughout southern Nevada. "We try to make sure we cluster service whenever possible in the same area."
> ...





Soaring energy you got that right! My gas and electric two years ago was 219.00 per month. ( I was on a budget system with gas and electric company ) Two years ago they raised me too 279.00 per month. About nine months ago they raise it too 319.00 per month. This month I get a bill saying your new premium will be 379.00 per month. In less then two years my gas and electric went from 219.00 per month too 379.00 per month. Now someone is getting rich and it isn't me.  :hammer:

----------


## Chris Ryser

*Ford to cut up to 12 percent of salaried jobs: report*
Wed May 28, 2008 8:55am EDT

DETROIT (Reuters) - Ford Motor Co plans to cut its U.S. salaried work force by up to 12 percent after its turnaround plan stalled because of the downturn in the U.S. economy, the Detroit News reported on Wednesday.
Ford warned last week it would not achieve its long-standing
goal of returning to profitability in 2009 because of the U.S. economic downturn and a permanent shift in demand toward cars and crossovers and away from large trucks and SUVs.

The automaker also told employees in a memo last week that it expected to make cuts in hourly and salaried employees .............................

See whole story at:      http://www.reuters.com/article/ousiv...33022820080528

----------


## Chris Ryser

*U.S. drivers cut back on gasoline amid high prices*

Wed May 28, 2008 4:11pm EDT

By Rebekah Kebede

NEW YORK (Reuters) - Americans, notorious for their love of the open road, are cutting back on gasoline consumption as prices at the pump continue to break records.

During the week leading up to the Memorial Day holiday, the traditional start of vacation season, Americans pumped 5.5 percent less gasoline than a year ago as average prices hit a peak $3.84 a gallon, MasterCard Advisors said in a report.

"It's in uncharted territory," said Michael McNamara, vice president of MasterCard Advisors. "As prices have gone up, consumer behavior has changed and it looks like it's continuing to change," McNamara said.
Average retail gasoline prices have jumped above $4 per gallon in 10 states and are running about 25 percent higher than last year, according to travel and auto group AAA.

So far this year, Americans have pumped about 1.7 percent less gasoline than in the same period a year ago, MasterCard said in its report.
The findings follow last week's U.S. Department of Energy data which showed highway miles driven in March fell 4.3 percent from a year earlier, the first March decline since the last major oil shock in 1979..................................

See whole article: http://www.reuters.com/article/domes...080528?sp=true

----------


## Chris Ryser

*Luxury firms hope to sail through global slowdown*
Fri May 30, 2008 4:28am EDT

By Sophie Hardach
TOKYO (Reuters) - Luxury goods makers are hoping to weather a consumption slowdown in the United States and Japan, their two biggest markets, with the help of shoppers in emerging economies and super-rich clients who do not feel the economic pinch.

Industry experts have questioned how long fashion companies, yacht and sports car makers and other luxury goods makers can resist the wider consumption slump. The very wealthy, after all, comprise a small group of people, and China, India and Russia are not yet spending enough to replace U.S. shoppers.

But chief executives at a luxury goods conference in Tokyo showed optimism, saying that sales were holding up.

"The luxury business has grown faster than the general economy and I think that trend is here to stay," said Toni Belloni, managing director at LVMH, the world's largest luxury group.

So far, the evidence has been mixed. LVMH reported solid first-quarter revenues, but others have seen slower sales. Bulgari, the jeweler, saw sales rise 3 percent in the third quarter, while net profit was down.
Ermenegildo Zegna, chief executive of the eponymous Italian suit maker, said his company was expanding into sportswear and accessories but also made-to-measure services for wealthy clients to woo new customers.
"Despite the crisis, we've been able to sustain single-digit sales growth. We can still grow despite the slowdown of two of the most important luxury goods markets," he told reporters at the conference.
"The business model has to be changed. We are adding leather accessories, glasses, perfumes."

Zegna is also the latest European fashion group to invest in a huge new flagship store in Tokyo. Armani, Bulgari and Gucci have already built glitzy retail towers in Ginza and Omotesando, Tokyo's main luxury playgrounds. With sparkling facades, designer restaurants and spas, the shops attract luxury fans from all over Asia -- most crucially, rich Chinese tourists who would rather shop in trendy Tokyo than in Beijing or Shanghai...................................................

See whole article: http://www.reuters.com/article/ousiv...080530?sp=true

----------


## jediron1

> *U.S. drivers cut back on gasoline amid high prices*
> 
> Wed May 28, 2008 4:11pm EDT
> 
> By Rebekah Kebede
> 
> NEW YORK (Reuters) - Americans, notorious for their love of the open road, are cutting back on gasoline consumption as prices at the pump continue to break records.
> 
> During the week leading up to the Memorial Day holiday, the traditional start of vacation season, Americans pumped 5.5 percent less gasoline than a year ago as average prices hit a peak $3.84 a gallon, MasterCard Advisors said in a report.
> ...




Albany NY reports reg. gas at $4.08 and Diesel at $5.19. I still remember the days of driving my Corvair to college putting in $.75 for 3 gallons and going almost all week.

----------


## Chris Ryser

*Jobs growth has "ground to a halt"*

Wed Apr 30, 2008 12:34pm EDT

NEW YORK (Reuters) - Jobs growth has "ground to a halt" and employment will remain weak for several months said the chairman of Macroeconomic Advisers on Wednesday, after the release of its joint private sector jobs report with ADP.

While the downturn in manufacturing and construction employment showed little sign of abating, growth in service sector employment was offsetting that, though it was hardly robust, Joel Prakken told Reuters.

A private report, jointly developed by ADP Employer Services and Macroeconomic Advisers LLC, earlier on Wednesday showed U.S. private-sector employers unexpectedly added 10,000 jobs in April.

The result was much better than economists' median expectation for a drop of 60,000 jobs in April, according to a Reuters poll, but hardly a sign of a strong job market.

"We will probably see several more months of numbers like this before you can see ... more impressive gains," Prakken said.

"I think it is pretty clear that employment has ground to a halt and that the contractions in both manufacturing and construction employment are still ongoing and little sign really of any abatement in that contraction."

The April ADP report showed employment in the service-providing sector of the economy grew by 64,000. Manufacturing employment fell by 26,000 in April and marked the 20th consecutive monthly decline.................................

See whole article:
http://www.reuters.com/article/ousiv...EN533920080430

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## For-Life

heck, it was not long ago when I was upset that gas went up to half of what I am paying now.

----------


## Chris Ryser

*Facing $4 gasoline, more Americans take mass transit*
Mon Jun 2, 2008 12:19pm EDT

NEW YORK (Reuters) - More Americans are leaving their cars at home and jumping on buses, trains, and trolleys as retail gasoline prices approach $4 per gallon, according to a report released Monday by the American Public Transportation Association.

American mass transit use increased 3.3 percent during the first quarter of 2008 while Americans drove 2.3 percent less during the same period, the report said.

The trend builds on last year's record increases when U.S. mass transit use reached a 50-year high as consumers tried to temper the impact of soaring gasoline prices.

"More and more people have decided that taking public transportation is the quickest way to beat the high gas prices," APTA president William W. Millar said in a press release.

"There's no doubt that the high gas prices are motivating people to change their travel behavior," he added.

Average retail gasoline prices have topped $4 per gallon in 13 states and are running about 25 percent higher than last year, according to travel auto group AAA.

Travel on light rails, which includes streetcars and trolleys, showed the highest increase with a 10.3 percent bump in ridership, according to APTA.
Commuter rails came in second with a 5.7 percent increase in usage during the first quarter in large metropolitan areas. Seattle's commuter rail system had the highest jump with nearly 28 percent more riders in the first quarter.

Buses had the least increase in ridership at 2 percent, although cities with populations under 100,000 saw a large increase.................................

See whole article:
http://www.reuters.com/article/newsO...080602?sp=true

----------


## jediron1

> heck, it was not long ago when I was upset that gas went up to half of what I am paying now.



I just went to the grocery store and almost everything I bought was up 20% and top of that my gas and electric bill just up another 20%. UNBELIEVABLE

----------


## Chris Ryser

*UAL to announce more fleet, job cuts: report*
Wed Jun 4, 2008 12:49am EDT

(Reuters) - UAL Corp (UAUA.O: Quote, Profile, Research), parent of United Airlines, plans to reduce its mainline fleet by another 70 aircraft by the end of 2009 and announce further job cuts, the Wall Street Journal said on Wednesday.

The airline is expected to announce the planned cuts to its fleet of 460 aircraft later on Wednesday, the paper reported, citing people familiar with the matter.

The airline will drop 64 Boeing 737s by the end of next year, and also remove six jumbo 747s, the paper said.

UAL could not be reached immediately for comment.
UAL will also announce additional cuts of salaried and management workers, with cuts of unionized positions to follow later, the paper said.
UAL said in April it would cut 500 salaried and management workers and eliminate 600 union jobs by the end of 2008. It had also said it would cut 30 aircraft.

The newspaper said while the move would help the Chicago-based airline to deal with surging fuel costs, it would result in furloughs of unionized workers and a major reduction in routes that may be less profitable............................

See whole article:
http://www.reuters.com/article/ousiv...42147920080604

----------


## Chris Ryser

*Credit recession may last over 2 years: strategists*
Wed Jun 4, 2008 10:19am EDT

NEW YORK (Reuters) - A "credit recession" sparked by a downturn in the U.S. housing market and excesses in structured finance may last more than two years, and the financial sector may undergo "massive consolidation," according to two leading Wall Street strategists.

The downturn may last for "two, two and a half years" which may help lead to a healthier market, Jack Malvey, Lehman Brothers' chief global fixed income strategist, said during a conference in New York.

"Structured finance is not new. It is the case in credit that (the market) hungered to get in this space 20 years ago," Malvey said. "This is the biggest blowup that we've had."

(Reporting by Walden Siew; Editing by James Dalgleish)


http://www.reuters.com/article/gc06/...44560820080604

----------


## Chris Ryser

*May see bigger U.S. bank failures in future: FDIC*
Thu Jun 5, 2008 10:31am EDT

WASHINGTON (Reuters) - Future U.S. bank failures linked to the downturn in the real estate market may include "institutions of greater size" than in the recent past, Federal Deposit Insurance Corp Chairman Sheila Bair said on Thursday.

In testimony prepared for a Senate Banking Committee hearing on the state of the banking industry, Bair said an increasing number of problem banks face high exposure to commercial real estate and construction lending.

"There is also the possibility that future failures could include institutions of greater size than we have seen in the recent past," Bair said. "Uncertainties in today's economic environment continue to pose significant challenges for the banking industry, households, and bank regulators."................................................  ..

See whole article:
http://www.reuters.com/article/ousiv...00409720080605

----------


## Chris Ryser

*Jobless rate leaps to 3-1/2 year high in May*
Fri Jun 6, 2008 12:20pm EDT

By Glenn Somerville

WASHINGTON (Reuters) - The U.S. unemployment rate surged to 5.5 percent in May, its highest in more than 3-1/2 years, as the barely growing economy lost jobs for the fifth straight month.

It was the biggest jump in the monthly jobless rate in 22 years and raised concerns the economy was at increased risk of stalling into recession.
"The unemployment rate is the shocker," said Robert MacIntosh, chief economist at Eaton Vance Management in Boston.

"The actual payrolls number itself was consistent with what we have been seeing in terms of a slowdown but not quite a recession. But the employment rate gives you a much weaker economic outlook than the payrolls number," said MacIntosh.

The Labor Department on Friday said 49,000 jobs were shed by employers last month on top of 28,000 in April -- for a total of 324,000 lost since the beginning of the year. May's unemployment rate was up from 5 percent in April and was the highest since October 2004.

The soft jobs data helped drive stock prices steeply lower, but it sent U.S. Treasury debt prices soaring as investors bet it pushed back any chance that the Federal Reserve might raise interest rates before November's presidential election.

WHITE HOUSE UNEASE

It added to discomfort at the White House, where spokesman Scott Stanzel said the unemployment rate was "too high for our liking," though he noted it stemmed partly from more job-seekers and "not from a broad increase in layoffs"..............................................


See whole article:
http://www.reuters.com/article/ousiv...080606?sp=true

----------


## jediron1

> *Jobless rate leaps to 3-1/2 year high in May*
> Fri Jun 6, 2008 12:20pm EDT
> 
> By Glenn Somerville
> 
> WASHINGTON (Reuters) - The U.S. unemployment rate surged to 5.5 percent in May, its highest in more than 3-1/2 years, as the barely growing economy lost jobs for the fifth straight month.
> 
> It was the biggest jump in the monthly jobless rate in 22 years and raised concerns the economy was at increased risk of stalling into recession.
> "The unemployment rate is the shocker," said Robert MacIntosh, chief economist at Eaton Vance Management in Boston.
> ...



In the paper today it said GM will close Canadian truck plant because of falling sales. The plant has 2500 workers.

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## Chris Ryser

*Jobs recovery at least 6 months away*

Fri Jun 6, 2008 5:00pm EDT

By Nick Zieminski - Analysis

NEW YORK (Reuters) - A surprisingly large jump in the U.S. unemployment rate during May sparked a sell-off in shares of staffing and employment services stocks on Friday, signaling that the length and depth of the current labor market downturn may well be worse than anticipated.
The Standard & Poor's HR Employment Services index was down 3.4 percent in morning trading.

Another several months of job losses are likely, analysts and staffing executives said, as evidence mounts that employers are more reluctant to hire.

But many also cautioned that some bright spots remain, and job losses remain relatively modest when compared with the millions of jobs added during the economic upturn.

The U.S. economy shed jobs for the fifth consecutive month in May, down 49,000 outside the farm sector, and job losses in April and March were wider than initially reported. The unemployment rate jumped to 5.5 percent from 5 percent, its biggest monthly rise in 22 years.

One explanation for the jump in people looking for work, which drove up the unemployment rate, is that more people are returning to the work force as their budgets get crimped by high food and gasoline prices.
"We do see more and more candidates because of gas prices and their inability to easily relocate; they're looking for work, but frankly they need something close to home," said Tig Gilliam, head of staffing company Adecco SA's U.S. operations.

"Costs are going up, so a bunch of people are going back and saying, 'OK, I've got to get serious,'" Gilliam saidJon Zion, who heads eastern U.S. operations at specialty staffing firm Robert Half International Inc, agreed.
"As a practitioner in the staffing business, my sense of the economy of what's going on -- energy prices, the housing industry -- has probably forced a population of people to come back into the market."

As more workers look for jobs close to home, so more employers are thinking locally to cope with $4 per gallon gasoline.

Adecco clients are increasingly looking for candidates locally, Gilliam said, rather than doing nationwide searches. Some are offering gas cards to employees or organizing ride sharing and bus programs.

NO RECOVERY YET

A drop in professional payrolls in the government report was a troubling sign, said Scot Melland, CEO of Dice Holdings Inc, which runs jobs web sites focused on the technology and finance fields.

"That could be a leading indicator of a weakening in the labor market overall," Melland said. "We're probably looking at a couple of quarters before we see a change in the labor outlook."

The biggest change in recent months is that employers are taking longer to make decisions, said William Grubbs, executive vice president and chief operating officer of Spherion Corp. A permanent placement that may have taken 35 days six months ago now takes about 60 days.

"We're not on the road to recovery ......................................

See whole article:  http://www.reuters.com/article/ousiv...080606?sp=true

----------


## Chris Ryser

*U.S. has few options as oil nations tighten grip*
Fri Jun 6, 2008 3:32pm EDT

By Chris Baltimore - analysis

WASHINGTON (Reuters) - Resource nationalism in oil producing countries is cordoning off valuable supplies and the United States has precious few options to battle the trend amid a looming supply crunch.

As U.S. oil prices CLN8 marched above $135 a barrel last month -- and settled up 8.4 percent at a record-high $138.54 on the New York Mercantile Exchange on Friday -- international firms have found themselves faced with tougher terms and shut out of the globe's most promising oil basins, a trend known as "resource nationalism."

The United States -- the world's biggest oil consumer -- stands mostly powerless as national oil companies like Venezuela's PDVSA and Russia's Gazprom block access to key oil reserves and demand a larger share of the profits in exchange for allowing international oil companies to drill.
"There are few good foreign policy options because oil really is our economic jugular," said Anne Korin, co-director of the Institute for the Analysis of Global Security, a nonprofit energy think tank.

Conventional wisdom in past years has been that when oil prices rise high enough, oil companies will have the profit motive to spend the billions of dollars needed to bring new supply sources online.

UNCONVENTIONAL WISDOM

But resource nationalism has turned such wisdom on its head, investment bank Goldman Sachs said in a recent report.

Resource nationalism "imposes significant policy constraints on the free flow of capital, labor and technology that are substantially limiting supply growth," Goldman Sachs said in its report, which also called for benchmark U.S. oil prices to average $141 a barrel in the second half of 2008............................................

See whole article:
http://www.reuters.com/article/reute...080606?sp=true

----------


## jediron1

> *U.S. has few options as oil nations tighten grip*
> Fri Jun 6, 2008 3:32pm EDT
> 
> By Chris Baltimore - analysis
> 
> WASHINGTON (Reuters) - Resource nationalism in oil producing countries is cordoning off valuable supplies and the United States has precious few options to battle the trend amid a looming supply crunch.
> 
> As U.S. oil prices CLN8 marched above $135 a barrel last month -- and settled up 8.4 percent at a record-high $138.54 on the New York Mercantile Exchange on Friday -- international firms have found themselves faced with tougher terms and shut out of the globe's most promising oil basins, a trend known as "resource nationalism."
> 
> ...



American Free Press ran this article 2 years ago that in the American west we have over 2 trillion gallons of oil, but at the time the oil companies said oil would have to go to around 60 or 70 per barrel to make it economical to go after. Well I believe oil is now at 133 per barrel, double what they said they needed and are they drilling yet? 
http://www.americanfreepress.net/html/u_s__has_massive_oil.html

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## Chris Ryser

*Amid economic gloom, where can investors hide?*
Fri Jun 6, 2008 5:06pm EDT

By Jennifer Ablan

NEW YORK (Reuters) - Fears of a U.S. recession amid a weakening labor market, further credit tightening by sick financial institutions, and consumers constrained by soaring gasoline prices and deteriorating home values leaves investors with few places to hide.

The Dow Jones Industrial Average .DJI plunged almost 400 points on Friday as crude oil prices surged an astounding $10.75 to $138.54 a barrel on a new forecast that oil could hit $150 by July 4, as America's unemployment rate in May showed the sharpest monthly increase in 22 years.

Against that very ugly backdrop for the consumer, Wall Street banks face gloomy prospects.

Next week Reuters hosts 16 leading analysts, economists and strategists at its annual Reuters Investment Outlook Summit in New York who will discuss how much longer the credit crisis is likely to go.
"We went through systemic financial risk concerns and I would argue we are headed toward more idiosyncratic risk concerns of where it is more company specific," Tobias Levkovich, Citigroup's chief U.S. equity strategist, said in an interview with Reuters.

The sudden collapse of Bear Stearns in March continues to reverberate through the financial markets, as many wonder if Lehman Brothers (LEH.N: Quote, Profile, Research) could go the way of its former rival.
"It seems that a lot of people want to break Lehman, but in my opinion that will be hard to do," Greg Peters, global head of fixed-income research and economics at Morgan Stanley (MS.N: Quote, Profile, Research) in New York, said after Lehman shares snapped three days of painful declines on Wednesday.

Indeed, losses at Lehman as well as rating downgrades of the world's two largest bond insurers, MBIA Corp (MBI.N: Quote, Profile, Research) and Ambac Financial Group Inc (ABK.N: Quote, Profile, Research) have reminded investors that credit problems are not in the past. 

See whole article:
http://www.reuters.com/article/Inves...33857820080606

----------


## jediron1

Maybe this is the answer:http://www.engdahl.oilgeopolitics.ne...peculation.HTM

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## Chris Ryser

*Why Its Worse Than You Think*

By Daniel Gross | NEWSWEEK
Jun 16, 2008 Issue 

*For months, economic Pollyannas have looked beyond the dismal headlines and promised a quick recovery in the second half. They're dead wrong.*

The forgettable first half of 2008 is stumbling to a close. On Friday, the Labor Department reported that American employers axed 49,000 jobs in May, the fifth straight month of job lossesan event that signals a recession sure as the glittery ball dropping on Times Square augurs a New Year. The report, which inspired a 394-point decline in the Dow Jones Industrial Average Friday, was the latest in a run of bad news. Auto sales, the largest retailing sector in the U.S., were off 10.7 percent in May from the year before. And housing? Ugh. Nationwide, according to the Case-Shiller Index, home prices in the first quarter fell 14 percent.

Yet hope springs eternal that the second half will be better than the first. Economists polled by the Federal Reserve Bank of Philadelphia in May believe the economy will grow at an annual rate of 1.7 percent and 1.8 percent in the third and fourth quarters, respectively. Lawrence Yun, chief economist at the National Association of Realtors, tells NEWSWEEK that "home sales and prices in most of the country will improve during the second half of 2008." (Yun is the Little Orphan Annie of forecasters. He's always sure the sun will come out tomorrow.) Last month, Treasury Secretary Henry Paulson said, "We expect to see a faster pace of economic growth before the end of the year."

The cause for optimism: the U.S. has called in the economic cavalry, which has responded in textbook fashion. The Federal Reserve has aggressively cut interest rates, bringing the Federal Funds rate down from 5.25 percent last September to 2 percent. Earlier this spring, Congress and President Bush, in a rare moment of bipartisan accord, passed a stimulus package, which will shove nearly $100 billion into the pockets of American consumers by mid-July.


But this downturn is likely to last longer than the eight-month-long recession of 2001. While the U.S. financial system processes popped stock bubbles quickly, it has always taken longer to hack through the overhang of bad debt. The head winds that drove the economy into this dead calm a housing and credit crisis, and rising energy and food priceshave strengthened rather than let up in recent months. To aggravate matters, the twin crises that dominate the financial newsa credit crunch and the global commodity boomare blunting the stimulus efforts. As a result, the consumer-driven economy may not bounce back as rapidly as it did in the fraught months after 9/11.

As it seeks to regain its footing in the second half, the U.S. economy faces two significant obstacles, neither of which was evident in 2001. The first is entirely homegrown: the self-inflicted wounds of the promiscuous extension and abuse of credit in the housing and financial sectors. The second is a global phenomenon that has comparatively little to do with American behavior: rampant inflation in commodities such as oil, food and steel. These trends have conspired to inflict genuine economic pain and deflate consumer confidence. The Conference Board's Consumer Confidence Index in May slumped to a 16-year low.

While the treatment of the current malaise has been essentially identical to the reaction to the 2001 slumpaggressive Federal Reserve rate cuts and tax rebatesthe _symptoms_ are quite different. In 2001, an implosion in the technology sector and a slump in business investment pushed the economy over the edge. Even though some 3 million jobs were shed between 2001 and 2003, consumers soldiered on through the downturn. "We had a massive reduction in both long- and short-term interest rates, which set off the housing and consumption boom," says Ian Morris, chief U.S. economist at HSBC. (Remember zero-percent car loans?) This time, it's the opposite. While businessesespecially those that exportare holding up, the economy is being dragged down by the cement shoes of a freaked-out consumer and a punk housing market.

The difficulties today startas they began last yearwith housing and housing-related credit. Last Thursday, the Mortgage Bankers Association quarterly report showed that the percentage of mortgage borrowers behind on their payments6.35 percentwas the highest since the MBA began tracking the number in 1979. It's not just subprime. In the first quarter of 2008, 36 percent of all foreclosures initiated were on prime adjustable-rate mortgages in California. Mark Zandi, chief economist of Moody's Economy.com, says the decline in home prices has slashed $2.5 trillion from household wealth, or about $25,000 per homeowner. The fall has also removed an important source of support for consumer spending, as Americans who grew accustomed to borrowing against rising home equity to finance car purchases or vacations now find themselves bereft. Banks are extricating themselves from the home-equity-line-of-credit business in the same way college students get themselves out of relationships gone bad: abruptly. Judi Froning, a second-grade teacher in San Diego, was surprised last week when she received a letter from Chase informing her that it was terminating her untapped HELOC. "In the light of declining home values, they said they are stopping, effective May 31, any draw on my line of credit," she says.

Despite repeated claims that the damage has been contained, the banks that recklessly financed the housing boomand then traded mortgage debt even more recklesslyare still cleaning up the mess. But it turns out (surprise!) the same sort of clouded judgment led banks to excesses in commercial lending, and in loans to private-equity firms. The battered financial system, which has raised tens of billions of dollars on onerous terms from new investors to shore up balance sheets, is still likely to suffer more pain from the popped credit bubble, said Bruce Wasserstein, the CEO of the investment bank Lazard, speaking at a New York breakfast. "The harm will radiate for another year." The latest victim: Wachovia CEO G. Thompson Kennedy, cashiered after the North Carolina-based bank suffered a string of losses. Next up: write-offs for bad credit-card and commercial real-estate debt. After a serene period between 2004 and '07 in which the Federal Deposit Insurance Corp. went without a single bank failure, four have gone under so far this year. FDIC chairperson Sheila Bair warned of the "possibility that future failures could include institutions of greater size than we have seen in the recent past." In preparation, the agency has brought staffers out of retirement.................................

See whole article:
http://www.newsweek.com/id/140553

----------


## Chris Ryser

*Banking crisis spreads from Wall St to Main St: James Saft*
Wed Jun 11, 2008 2:53am EDT

James Saft is a Reuters columnist. The opinions expressed are his own-
LONDON (Reuters) 

-The health of America's banks continues to worsen, with lending to real estate developers an emerging threat and more failures in the offing.
While it is too early to say that the fire fighting on Wall Street is over, there is growing evidence that the extended fall in real estate is putting stress on Main Street as well.

Commercial banks in the U.S. face a complex and difficult situation: margins are compressed and there is increasing stress on a range of assets, from mortgages to consumer loans to debt backing commercial and residential real estate development.

For bank investors this means that we are only at the beginning of lower dividends, more dilutive capital raisings and share price falls, as well as the odd failure.

These failures aren't likely to be widespread enough to be a systemic threat, but the capital raisings, distressed mergers and write downs that are part of the solution will further crimp lending.
This credit crunch will run and run.

It was striking just how negative top banking regulators were last week in an appearance before the Senate Banking Committee.

"We expect bank holding companies to continue to report weak earnings and further asset valuation writedowns ........................

Se whole article:
http://www.reuters.com/article/reute...080611?sp=true

----------


## jediron1

#1 Highest Price $5.30
GROVELAND, CA

#2 Highest Price $5.16
SPRING VALLEY, NY

----------


## jediron1

:cheers:

----------


## Chris Ryser

> *#1 Highest Price $5.30*
> *GROVELAND, CA*
> 
> *#2 Highest Price $5.16*
> *SPRING VALLEY, NY*


 
Here in Montreal Canada a US Gallon now cost's $ 5.625

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## Chris Ryser

*Desperate times require sensible measures*
15:09 ET, Wed 11 Jun 2008 

By Linda Stern 

WASHINGTON (Reuters) - The economy is in a bad place and people are casting about, sometimes desperately, for ways to ease the crunch. I know this because of the contents of my e-mail inbox, which grows more outlandish all the time. 

Some of the ideas I've seen this week include: How to invest in Chinese real estate; using options to increase returns in your retirement account; how to sell your lawsuit before you collect; and how to use a debit card to hit up your 401(k) account for cash. 

Much of this reflects not the desperation of working people with spending and savings needs, but the desperation of folks who must sell them financial products. 

Stocks are disappointing, conventional mortgages are tight, student loans are unprofitable. Why not get more arcane? 
Here are some of the pitches currently being aimed at financial consumers, and why you should pass on most of them. 
The 401(k) convenience card: Borrowing from tomorrow to get through today is generally not good financial strategy. Some exceptions, such as carefully undertaken debt for appreciating assets like an education or a house, make sense.
It can even make sense to borrow against your own 401(k) plan to cover those items: The interest you pay goes back into your own account and the home equity or degree you pick up will help support your retirement too. 

But getting a plastic debit card that pulls money out of your 401(k) plan whenever you swipe it is a dangerous proposition. So much so that the Financial Industry Regulatory Authority (FINRA) recently warned consumers against it. "Remember that with every swipe comes the potential to wipe out a portion of your hard-earned retirement savings," the self-regulatory group said. Using your retirement assets to pay for car repairs, vacations, the kids' soccer shoes and other consumables can cause a host of problems, including lost investment opportunities, added fees, a smaller-than-necessary nest egg when you need it most, and extra tax burdens, for example, if you do not pay it back on time. Skip the card, and if you need to make an emergency loan against your retirement plan, think it through very carefully. 
The invest-in-China plan: Not a day goes by that I don't get some kind of "amazing buying opportunity in China" e-mail. And maybe it is, but China has its own financial problems -- growing inflation, an aging population, the same dependence on energy the United States is dealing with, a weak currency, not to mention shortcomings in its manufacturing and inspection processes and labor markets that could cost investors a lot of money.
As for the real estate, it's hard enough to pick a solid .............................

See whole article:
http://features.us.reuters.com/perso...-F9ECDEDD.html

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## Chris Ryser

*Inflation up sharply on gasoline*
Fri Jun 13, 2008 2:14pm EDT

By Mark Felsenthal

WASHINGTON (Reuters) - Soaring gasoline prices helped drive up consumer prices in May at the fastest rate in six months, the government said on Friday, but core prices remained tame, easing inflation fears in financial markets.

A separate report showed U.S. consumer sentiment tumbling to a 28-year low in June, with some lessening of expectations on inflation one year out and a steady reading on long-term inflation expectations, which held at a 13-year high.

The Labor Department said the Consumer Price Index rose a steep 0.6 percent in May, a touch more than Wall Street had expected, after a modest 0.2 percent gain in April.

However, so-called core prices, which exclude volatile food and energy cost, edged up just 0.2 percent.

Surging gasoline prices and soft labor market conditions have depressed consumer spirits. The Reuters/University of Michigan sentiment index for this month dropped to 56.7 from 59.8 in May. Wall Street economists had expected a decline to only 59.5.

"Today's inflation numbers do not put any additional pressure on the Fed to hike interest rates," said Mark Vitner, senior economist at Wachovia Corp. in Charlotte, North Carolina. "The Fed is not nearly as behind the curve as some people currently believe."

U.S. bond prices rose and the dollar slipped as traders scaled back expectations of Federal Reserve interest rate hikes. The stock market welcomed the news on core inflation and the blue chip Dow Jones industrial average was up about 130 points in the first half hour of trade.
The reassuring data followed a series of inflation warnings from central bankers around the globe, and capped off a ...................................

See whole marticle: 
http://www.reuters.com/article/newsO...080613?sp=true

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## Chris Ryser

*Retailers try to thrive in tumultuous climate*

Fri Jun 13, 2008 1:16pm EDT

By Nicole Maestri

NEW YORK (Reuters) - Retailing is normally not for the faint of heart, but the current state of the industry is enough to make even the most time-tested veteran swoon.

In the United States, consumer spending has slowed as the average price of a gallon of gas has topped $4, the housing market sags, access to credit has tightened and food prices have jumped.

J.C. Penney Co Inc (JCP.N: Quote, Profile, Research, Stock Buzz) Chief Executive Myron Ullman has called this the most unpredictable environment in his 39-year retail career, while Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research, Stock Buzz) CEO Lee Scott said last week that if the company had not been able to win shoppers by flexing its discounting muscles, he would probably be out of a job.

"I thank God we are positioned like we are this year," Lee Scott told analysts.

At the Reuters Consumer and Retail Summit in New York and London June 16-18, executives from Borders Group Inc (BGP.N: Quote, Profile, Research, Stock Buzz), Perry Ellis International Inc (PERY.O: Quote, Profile, Research, Stock Buzz), Jones Apparel Group Inc (JNY.N: Quote, Profile, Research, Stock Buzz), Toys "R" Us, Best Buy Co Inc (BBY.N: Quote, Profile, Research, Stock Buzz) and other companies will discuss how they are navigating these uncertain times.

They must juggle inflationary pressures, reluctant shoppers and intense competition while facing the looming challenge of enticing people to spend during the crucial holiday season without sacrificing too much profit.

SQUEEZED BY JOB MARKET, ENERGY PRICES

For the four months through May, the average monthly rise for U.S. retail chain sales at stores open at least a year is 2 percent. That trails the 2.1 percent advance notched at this point last year and the 3.6 percent rise in 2006, according to the International Council of Shopping Centers.
Excluding Wal-Mart's results, which have been outpacing competitors, sales are up just 0.9 percent -- far below the gains of 2.6 percent last year and 4.8 percent the year before.

"Households are becoming squeezed as the harsh job market holds down wage growth while the costs of energy and food rise rapidly," Mark Zandi, chief economist for Moody's Economy.com, wrote in a note.

The difficult conditions are shaking up the retail sector. Linens 'n Things, Sharper Image and Goody's Family Clothing have filed for bankruptcy, while Starbucks Corp (SBUX.O: Quote, Profile, Research, Stock Buzz), AnnTaylor Stores Corp (ANN.N: Quote, Profile, Research, Stock Buzz), Home Depot Inc (HD.N: Quote, Profile, Research, Stock Buzz) and others have closed stores or slowed expansion plans.
Borders Group, the No. 2 U.S. bookseller after Barnes & Noble Inc (BKS.N: Quote, Profile, Research, Stock Buzz), has put itself up for sale. Meanwhile, it has been closing underperforming stores and taking steps to turn around its business, which has suffered from the pullback in consumer spending.

Jones Apparel has formed a joint venture to develop, market and license the fashion brand Rachel Roy, a move that broadens its exposure to higher-end shoppers, who are often less worried by a weak economy.
"We see tremendous opportunity in Rachel Roy as a designer and brand," Chief Executive Wesley Card said on Thursday.

GLIMMER OF HOPE?

Stocks got a boost on Thursday after the U.S. Commerce Department said May retail sales rose 1 percent, much higher than expected, as many consumers had more cash in their wallets from government tax rebate checks...................................

See whole article:
http://www.reuters.com/article/reute...080613?sp=true

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## tmorse

Chris Ryser was often mocked by some OptiBoarders when he gave us various heads-up warnings over the years regarding finance and the state of the optical marketplace. And I would have loved to hear his sentiments on the current dysfunctional US senate, or the Trump-years experience.

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