U.S. Investment Outflow Hits Record as China Cuts Holdings

The beginning of the end of the dollar. The Fed will be the buyer of last resort and further debase the dollar.-Lou


U.S. Investment Outflow Hits Record as China Cuts Holdings


The U.S. posted a record cross-border investment outflow in June as China andJapan reduced their holdings of Treasuries and private investors abroad sold bonds and notes.

The total net outflow of long-term U.S. securities and short-term funds such as bank transfers was $153.5 billion, after an inflow of $33.1 billion the previous month, the Treasury Department said in a report today. The June figure, and $40.8 billion in net selling of Treasury bonds and notes by private investors in June, were the largest on record, the Treasury said.

“Right at the beginning of June, you had a very strong sell-off of Treasuries and that’s what frightened a lot of private investors,” Gennadiy Goldberg, U.S. strategist at TD Securities USA LLC in New York, said by phone. “As yields stayed lower in subsequent months, some of the investors probably resumed their buying.”

China’s holdings of U.S. Treasuries declined by $2.5 billion to $1.27 trillion, while Japanese holdings dropped $600 million to $1.22 trillion, according to a Treasury report today.

China and Japan’s combined share of total foreign holdings of Treasuries has declined since 2004. It dropped to 41.4 percent in June from 50.9 percent in August 2004, according to data compiled by Bloomberg.

Belgian Holdings

Meanwhile, holdings in Belgium climbed $1.7 billion last month to $364.1 billion, the report showed. As home to Euroclear Bank SA, a provider of securities settlements for foreign lenders, Belgium probably serves as a custodial holder for many countries, including China, said Jeffrey Young, an interest-rate strategist at Nomura Holdings Inc. in New York.

Private investors and government holders combined were net sellers of $20.8 billion in Treasury notes and bonds in June, the biggest monthly net sales in a year, according to the report.

Treasuries declined in June amid improving economic data, and as reports released that month, from unit labor costs to consumer prices, indicated inflation pressures beginning to build within the economy. Labor Department data released June 17 showed the consumer price index for May unexpectedly rose to 2.1 percent, the highest since October 2012.


Kareem Abdul Jabbar: The Coming Race War Won’t Be About Race

Ferguson is a symptom of the underlying anxiety about economic security of both the black and white underclass in America. The militarization of local police should make everyone worried. Here is reasonable and well written Op-Ed by legendary Hall of Famer, Kareem Abdul Jabbar.-Lou


The Coming Race War Won’t Be About Race

by Kareem Abdul Jabbar

You probably have heard of the Kent State shootings: on May 4, 1970, the Ohio National Guard opened fire on student protesters at Kent State University. During those 13 seconds of gunfire, four students were killed and nine were wounded, one of whom was permanently paralyzed. The shock and outcry resulted in a nationwide strike of 4 million students that closed more than 450 campuses. Five days after the shooting, 100,000 protestors gathered in Washington, D.C. And the nation’s youth was energetically mobilized to end the Vietnam War, racism, sexism, and mindless faith in the political establishment.

You probably haven’t heard of the Jackson State shootings.

On May 14th, 10 days after Kent State ignited the nation, at the predominantly black Jackson State University in Mississippi, police killed two black students (one a high school senior, the other the father of an 18-month-old baby) with shotguns and wounded twelve others.

There was no national outcry. The nation was not mobilized to do anything. That heartless leviathan we call History swallowed that event whole, erasing it from the national memory.

And, unless we want the Ferguson atrocity to also be swallowed and become nothing more than an intestinal irritant to history, we have to address the situation not just as another act of systemic racism, but as what else it is: class warfare.

By focusing on just the racial aspect, the discussion becomes about whether Michael Brown’s death—or that of the other three unarmed black men who were killed by police in the U.S. within that month—is about discrimination or about police justification. Then we’ll argue about whether there isn’t just as much black-against-white racism in the U.S. as there is white-against-black. (Yes, there is. But, in general, white-against-black economically impacts the future of the black community. Black-against-white has almost no measurable social impact.)

Then we’ll start debating whether or not the police in America are themselves an endangered minority who are also discriminated against based on their color—blue. (Yes, they are. There are many factors to consider before condemning police, including political pressures, inadequate training, and arcane policies.) Then we’ll question whether blacks are more often shot because they more often commit crimes. (In fact, studies show that blacks are targeted more often in some cities, like New York City. It’s difficult to get a bigger national picture because studies are woefully inadequate. The Department of Justice study shows that in the U.S. between 2003 and 2009, among arrest-related deaths there’s very little difference among blacks, whites, or Latinos. However, the study doesn’t tell us how many were unarmed.


West’s historic drought stokes fears of water crisis (and food crisis)

Here is the major reason we have massive food inflation, and it’s only going to get worse.-Lou

West’s historic drought stokes fears of water crisis

Washington Post-WILLOWS, Calif. — When the winter rains failed to arrive in this Sacramento Valley town for the third straight year, farmers tightened their belts and looked to the reservoirs in the nearby hills to keep them in water through the growing season.

When those faltered, some switched on their well pumps, drawing up thousands of gallons from underground aquifers to prevent their walnut trees and alfalfa crops from drying up. Until the wells, too, began to fail.

Now, across California’s vital agricultural belt, nervousness over the state’s epic drought has given way to alarm. Streams and lakes have long since shriveled up in many parts of the state, and now the aquifers — always a backup source during the region’s periodic droughts — are being pumped away at rates that scientists say are both historic and unsustainable.

One state-owned well near Sacramento registered an astonishing 100-foot drop in three months as the water table, strained by new demand from farmers, homeowners and municipalities, sank to a record low. Other wells have simply dried up, in such numbers that local drilling companies are reporting backlogs of six to eight months to dig a new one.

In still other areas, aquifers are emptying so quickly that the land itself is subsiding, like cereal in a bowl after the milk has drained out.

California’s record drought brought very little snowpack this past winter, placing extra demands on the state’s aquifers.

“How many straws can you stick into one glass?” asked John Viegas, a county supervisor who, after months of fielding complaints from constituents about water shortages, recently was forced to lower his own well by 40 feet. “People need to realize you can’t water everything.”

The shrinking of the aquifers has added a new dimension to the concerns over the historic drought that continues to shatter records across the Western United States. The parched zone now spans a dozen states and nearly 600 counties, from southern Texas to the northern Rockies, and includes fields and grazing land that produce a third of the country’s beef cattle and half of its fruit, vegetables and winter wheat. Prices for most of these products have soared this year.

Hardest hit is California. As of last month, nearly 60 percent of the state is officially in an “exceptional” drought — the highest level, above “severe” — and meteorologists are seeing no immediate change in a relentlessly dry forecast. Indeed, scientists are warning that the state’s cyclical droughts could become longer and more frequent as the climate warms.

If that happens, the elaborate infrastructure built to deliver water to the state’s 38 million residents and 27 million cultivated acres may not survive the challenge, new research suggests. Already the drought has led to the “greatest water loss ever seen in California agriculture,” said a study last month by researchers at the University of California at Davis.


Listen To This Week’s Radio Show (8/15/14)

This week’s radio show is now available.-Lou Listen Here 120809_radio_mic_istock_photo_328

Both You and Your Honey Should Manage The Money

On today’s radio show I discuss the importance of spousal teamwork when it comes to the family finances. “Both You and Your Honey Should Manage The Money”.-Lou

Today’s Column For Physician’s Money Digest

Both You and Your Honey Should Manage the Money

Louis G. Scatigna | Wednesday, August 13, 2014

PMD2_retirementhappyWhen only one member of a household runs the financial show, the other may feel left out and that he or she has no say in the use of his or her own money. The managing partner may not know what the other really wants nor get the benefit of the partner’s knowledge and feelings — which could be considerable. When only one partner has total control, teamwork and unity suffer and divisiveness and resentment can be bred. Negative feelings can undermine the couple’s relationship. Those feelings can fester, trickle down and infect the rest of the family and their close friends.

When the partner who handles all the family finances also works, it can be a heavy load. As a result, that partner may not devote all the time, focus and energy necessary to do the best job. However, if partners manage the finances together, they can share the load, pick each other up and do a better job.

Furthermore, if the sole financial steward suddenly dies, as they frequently do, the survivor may be totally unprepared to step in. I’ve dealt with survivors who had no knowledge or experience with finances. Some had never written a check. A number were forced to rely on advisors, family, friends, or associates of the deceased who they didn’t like or who didn’t have their best interests at heart. Still others fell victim to devious financial salespeople and advisors — sharks and vultures who prey on hapless survivors.

Let’s face it: one of the spouses will eventually die. So planning and working as team is a must. In all probability, both spouses will not die together, and male partners will usually go first. Survivors who have not been involved in their families’ finances can make major financial mistakes, incur unnecessary expenses, or be ripped off.

In relationships, we all take on roles and certain ways of thinking become ingrained. Traditionally, men were the head of their households. As such, they were in charge of their families’ money and made the financial decisions. Since men were the primary earners, they usually paid the bills and handled the savings, investments and future planning. They gave their wives and kids allowances and provided household funds.

My Appearance On CNBC Monday

Two News Stories That Keep Me Pessimistic About America’s Future

The Financial Physician Is In……..”Physician’s Money Digest”

I am now a regular columnist for the impressive website Physicians Money Digest. PMD is a financial resource to mainly doctors and people in the medical field. There are currently over 80,000 members of the site. The editor found me by doing a google search on physicians that know about finance. What came up first? “The Financial Physician”, of course. You can read my first column here.-Lou

Obama’s Approval Rating Has Hit All-Time Low, And Confidence In The Future Of America Has Collapsed

Sad, very sad.-Lou


Obama’s Approval Rating Has Hit All-Time Low, And Confidence In The Future Of America Has Collapsed

Business Insider

A new poll from WSJ/NBC finds a high level of dissatisfaction with the president, the U.S. political system, and the economy, and a stunning number of respondents see a grim future for their children.

Just 40% of respondents approve of the job President Obama is doing, a level which matches an all-time low. On the matter of foreign policy — which is in the news a lot lately due to Russia, Ukraine, Iraq, and Gaza — the President’s approval is at a mere 36%, also at an all-time low.

And though the stock market remains close to record highs, while unemployment has dropped considerably, there’s still widespread pain being felt economically. 64% of respondents still say they’re feeling the effects of the economic collapse, and nearly half believe the economy is still in recession.

But perhaps the worst stat shows the extent to which Americans have lost faith in the future of the country.

76% — an all-time high — are skeptical that their children will have a better life.

This chart shows how this number has deteriorated rapidly this decade, with an especially sharp jump in the last two years.

The gloomiest chart you’ll see today: There’s no confidence in our kids’ future. WSJ/NBC poll: