Not as good a showman as Monckton, but Richard Heinberg has got that FACTS about correct!

UPDATE 10.45am: The Australian sharemarket was still down nearly 4 per cent mid-morning after big falls on world markets overnight prompted by fears of another global recession.

By 10.45am, the benchmark S&P/ASX200 index was still down a massive 160.6 points, or 3.8 per cent, at 4119.5 while the broader All Ordinaries index had lost 175.5 points, or 4 per cent, to 4177.4.

The S&P/ASX200 index had been off as much as 4.42 per cent in earlier trade.

No stocks were spared the wrath of panicked investors, with selling across all sectors.

CMC Markets analyst Ben Le Brun said the market was being savaged on fears the US economy was sliding towards recession, while Europe's debt problems were intensifying.

“Everything that's leveraged to the global growth scenario is getting absolutely pummelled,” Mr Le Brun said.

Link -
http://au.news.yahoo.com/thewest/a/-/mp/9978712/market-loses-54b-on-recession-fe...
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This means that since its recent market Peak in April, Australia Shares in the All Ords have lost about $250 Billion, which is roughly equivalent to 20% of the Total Australian annual GDP!  

perceptions_now wrote on Aug 5^th, 2011 at 8:47am:

U.S. Payrolls Rose in July; Jobless Rate at 9.1%

Employers added more jobs than forecast in July, the jobless rate fell and wages climbed, easing concern the U.S. economy is grinding to a halt. Stock futures rallied and Treasuries fell.

Payrolls rose by 117,000 workers after a 46,000 increase in June that was more than originally estimated, Labor Department data showed today in Washington. The median estimate in a Bloomberg News survey called for a July gain of 85,000. The jobless rate dropped to 9.1 percent as more Americans left the labor force, while average hourly earnings climbed 0.4 percent.

Economists’ Forecasts
The unemployment rate was forecast to hold at 9.2 percent, according to the survey median. Estimates ranged from 9.1 percent to 9.4 percent.

The jobless rate declined as 193,000 people left the labor force and the number of unemployed dropped by 156,000. The share of the eligible population holding a job declined to 58.1 percent, the lowest since July 1983.

Link -
http://www.bloomberg.com/news/2011-08-05/u-s-payrolls-rose-more-than-estimated-1...
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On the back of these reports, the US DOW is now up 70 at 11,454, after having been up 166 at 11,550 earlier.

I never cease to be amazed, at how guilible some people are!

The reports that this Employment/Unenemployment is somehow GOOD, is just rubbish.

As I said earlier, the US needs Employment growth at around 150,000 each month, just to tred water, just to stand still, so anything less is still going backward, which they are on these reports!

It seems the penny is now dropping, as I wrote these few lines the DOW dropped and it is now DOWN by 50 points!

The supposed reason for the massive 400 point turnaround in the DOW last night was their GOOD Employment/Enemployment result, where the US put on 117,000 jobs and reduced Unemployment from 9.2 to 9.1.

The Truth is, there are 2 significant Demographic factors which should also be taken into consideration when viewing US Empolyment, Unemployment & Economic impact.

Population Growth
The US Population is growing at around 1% annually, which should increase the Employment (or at least employable) pool by 3 million annually or 250,000 per month, which would/should equate to an additional 150,000 real & additional jobs each month, if we use a standard 60% participation rate?

Retirements (Baby Boomers)
Since January 1st this year, the Baby Boomer generation have officially reached retirement age. No doubt there are Boomers who have already been doing so unofficially, but starting on January 1st there are 80 million Boomers who offically started the transition to leaving the workforce.
That means over the next 18 years, there will be around 4.44 million annually or 370,000 per Month, which would/should equate to about 222,000 retirements each month, if we use a standard 60% participation rate?

In a fully functional Economy, those retiring would/should be replaced by others in the workforce and a further 150,000 SHOULD be added to the workforce, via Population Growth, just to tread water. All of which means, the total Employed Pool should expand at a rate of about 150,000 each month or 3.6 million over a 2 year period.

However, as you point out, the total Employed pool has actually Declined by over 700,000 in the last 2 years.

This means that the US Economy has failed by some 4.3 million jobs, over the last 2 years, just to keep up treading water, let alone to actually expand the Economy!

These Demographics will not go away, both Population Growth & Boomer Retirements are likely to remain constant, particularly with Boomer retirements, as the next 10 years will see a larger portion of boomer retirements than the next 10 years, as the largest portion of Boomer births came in the period 1946-1956 and that rate then started to decline.

Now, I've provided all of those facts, to tell you this, THAT IS WHY DEMAND IS FALLING, as huge numbers of Boomers move into a lower Consumption Retirement lifestyle, plus a greater portion of the Total Population also moves into a lower Consumption lifestyle, as they lose jobs altogether or can not gain full time work!

These factors, plus Peak Energy (Oil first), plus the existing massive Debt situation, plus issues relating to Climate Change are flowing to the rest of the US Economy and onto the wider Global Economy, which means, THERE IS NO RECOVERY AND THERE CAN NOT BE ANY RECOVERY!

By way of re-inforcing where the USA is now at, the ratings company Standard & Poors have today downgraded the US rating from AAA, which it has held for some 100 years, to AA+.

http://www.dailyfinance.com/2011/08/05/americas-credit-downgraded-what-you-need-...

In doing so S&P said, "The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability."

S&P also provided the 2 following graphs, which strongly relate to what's been happening -




The US government have already said that S&P have got their figures wrong, which is like "the pot calling the kettle black".

Given past experiences with share market crashes, I suspect that there is still some way to go, before reaching a temporary market bottom!

THE escalating debt crises in Europe and fears that the US is rapidly sliding back into recession have rocked Australian financial markets, wiping $100 billion off the value of company shares this week and sending the Australian dollar into a tailspin.

The benchmark S&P/ASX200 index closed down 171.1 points to 4105.4, while the broader All Ordinaries index was off 183.2 points, or 4.21 per cent, to 4169.7.

The losses mean the Australian market has fallen in 14 of the past 20 trading sessions.

The Australian dollar was dumped as the currency plunged nearly 2 per cent from $US1.0689 to trade at $US1.0465, the lowest level in four months, amid fears the global economy was slowing, which would also undermine China's economy.

For home owners, the financial markets were betting that the next interest rate move would be down, but it is small comfort at a time when the economy is facing a severe jolt and employment indications are weakening.

ANZ's co-head of Australian economics Ivan Colhoun said the European debt crisis was a major threat to the world economy.

"We are highly alert to the risks of a second GFC," he said.

It is almost four years since the stockmarket peaked -- 1373 days have passed since the peak, an extended rout that eclipses the time it took stockmarkets to recover from the 1987 crash when markets recovered and leaped previous highs within 504 days.

The Reserve Bank surprised the market yesterday as it slashed its growth forecasts for the Australian economy this year from 4.25 per cent to 3.25 per cent.

The RBA also warned that inflation would remain at or above its 2-3 per cent management bracket for two years.

"When there is pneumonia offshore, it is going to have a direct impact on us because of our level of debt and the fact that nearly three-quarters of the debt is held by people living offshore.

"The best way to be positioned at the moment for a nation and for an individual is to have cash in the bank.

Citigroup equity strategist Tony Brennan said investors were most concerned about the state of the world economy.

"People are starting to worry about a global recession," he said. "We had that in 2008 and 2009, but I don't think people are too concerned about things getting to that extent at the moment," he said.

"The markets have come off about 10 to 15 per cent; in the GFC, markets were down 50 per cent."

Link -
http://www.theaustralian.com.au/news/nation/markets-brace-for-more-economic-pain...
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The Truth is, I suspect that world markets will revisit their GFC Mk1 lows at some point, prior to the end of 2012 and eventually revisit their 1995 positions, to come back to the point where this share market bubble started!

When Standard & Poor's reduced the nation's credit rating from AAA to AA-plus, the United States suffered the first downgrade to its credit rating ever. S&P took this action despite the plan Congress passed this past week to raise the debt limit.

The downgrade, S&P said, "reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics."

It's those medium- and long-term debt problems that also worry economics professor Laurence J. Kotlikoff, who served as a senior economist on President Reagan's Council of Economic Advisers. He says the national debt, which the U.S. Treasury has accounted at about $14 trillion, is just the tip of the iceberg.

"We have all these unofficial debts that are massive compared to the official debt," Kotlikoff tells David Greene, guest host of weekends on All Things Considered. "We're focused just on the official debt, so we're trying to balance the wrong books."

Kotlikoff explains that America's "unofficial" payment obligations — like Social Security, Medicare and Medicaid benefits — jack up the debt figure substantially.



We don't hear more about this enormous number, Kotlikoff says, because politicians have chosen their language carefully to keep most of the problem off the books.

"Why are these guys thinking about balancing the budget?" he says. "They should try and think about our long-term fiscal problems."

According to Kotlikoff, one of the biggest fiscal problems Congress should focus on is America's obligation to make Social Security payments to future generations of the elderly.

"We've got 78 million baby boomers who are poised to collect, in about 15 to 20 years, about $40,000 per person. Multiply 78 million by $40,000 — you're talking about more than $3 trillion a year just to give to a portion of the population," he says. "That's an enormous bill that's overhanging our heads, and Congress isn't focused on it."

"We've consistently done too little too late, looked too short-term, said the future would take care of itself, we'll deal with that tomorrow," he says. "Well, guess what? You can't keep putting off these problems."

To eliminate the fiscal gap, Kotlikoff says, the U.S. would have to have tax increases and spending reductions far beyond what's being negotiated right now in Washington.



NPR Interview with Laurence J. Kotlikoff, who served as a senior economist on President Ronald Reagan's Council of Economic Advisers and is a professor of economics at Boston University.
http://www.npr.org/player/v2/mediaPlayer.html?action=1&t=1&islist=false&id=13902...

Link -
http://www.npr.org/2011/08/06/139027615/a-national-debt-of-14-trillion-try-211-t...
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That said, I'm sure if we just wack up the interest rates & go for a
nice big round of AUS-terity cuts, then OZ should be fine???

http://www.finviz.com/fut_chart.ashxt=CL&cot=067651;t=YM&p=d1

Nice Crude Oil (WTI) chart, it shows the substantial Price fall since May!

Has anyone yet seen that reflected in a similar Price fall in Petrol???