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Charts That Count March 26 2012 - Shouting FIRE in a crowded economy

Charts That Count March 26 2012 - Shouting FIRE in a crowded economy

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Published by Capita1

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Published by: Capita1 on Mar 26, 2012
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03/26/2012

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March 26, 2012
Charts That Count
 
Never Shout FIRE in a Crowded EconomyDespite all the supposedly good news emanating from the US in the form of"improving employment conditions" allow me to be the one who continues to shoutFIRE or more accurately "Finance, Insurance & Real Estate". What do I mean bythis?
 
Are pension funds solvent?
 
Are the finance and insurance sectors recapitalized?
 
Have real estate losses been recognized and fully liquidated?
 
Are governments repaying or even capable of repaying their debts?
 
Have trillions in unfunded social liabilities disappeared?In short, have any of the problems created by the FIRE economy been fixed? No.In fact, rather than address the mal-investments that are at the heart of theongoing financial crisis, our central banks and governments have only temporarilydelayed their liquidation via the expedients of massive fiscal deficits and moneyprinting (see table below) - though just how far into the future remains to be seen.Money Well Spent?Just how much longer can the Federal Reserve keep expanding its balance sheet(aka printing money) at this pace?And it is not just the Federal Reserve - all major centrals banks have been rapidlyexpanding their balance sheets - in both relative...
 
 and absolute terms...Bubble Heading for a Pin?Apologies for the continued skepticism of the sustainability of Canadian residentialreal estate prices, but doesn't this market seem passingly similar to the US in2007 right down to low affordability, a government sponsored entity (CHMC)overtly subsidizing risk for commercial lenders and a central bank keeping interestrates artificially low?
 
 Agcapita Farmland Fund IIIAgcapita Fund III is currently open and RRSP eligible.
 
Residents in BC, Alberta, Saskatchewan or Manitoba -CLICK HEREto becontacted with more info.
 
Resident in Ontario and an Accredited Investor - CLICK HERE to be contactedwith more info. The Ontario Securities Commission has a detailed definitionof Accredited Investor that can be found HERE.Some Quotable QuotesThe always entertaining if not particularly prescient Ben Bernanke, Chairman ofthe Federal Reserve:
 
"We've never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don't think it's gonna drive the economy too far from its full employment path, though." 
- July 1, 2005
 
"Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise." 
- February 15,2006
 
 
"At this juncture . . . the impact on the broader economy and financial 

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