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NEW YORK (Reuters) - The number of U.S. consumers who filed for bankruptcy protection in 2010 was the highest infive years, and the figure could rise as Americans struggle with excessdebt in an uncertain economy, a report issued Monday said.Roughly1.53 million consumer bankruptcy petitions were filed in 2010, up 9percent from 1.41 million in 2009, according to the American BankruptcyInstitute, citing data from the National Bankruptcy Research Center.
Filings in December totaled 118,146, up 4 percent from a year earlier and 3 percent from November's total.
The full-year total is the highest since the 2.04 million recorded in 2005,when there was a rush to seek bankruptcy protection ahead of a stricterfederal law taking effect in October of that year.
Samuel Gerdano, executive director of the ABI, said filings are rising even asconsumers try to cut spending and debt after the 2008 financial crisisand accompanying recession, and with the unemployment rate at 9.8percent.
He said there is usually a 12- to 18-month lag between declines in consumer spending and bankruptcy levels.
According to the Federal Reserve, U.S. consumer credit outstanding has fallen in19 of the last 21 months for which data are available, declining to$2.41 trillion in October 2010 from $2.57 trillion in January 2009.
"Consumers have been on sort of a strike when it comes to taking on more debt, asthey become more aware of the dangers of high debt burdens in a weakeconomy," Gerdano said.
Robert Lawless, a bankruptcy professor at the University of Illinois College of Law in Champaign, said the paceof filings may peak in early 2011 but that full-year filings could dropby a single-digit percentage.
"Consumer debt is declining, which means the incentive for taking the legal step of filing for bankruptcyis going down," he said. "I suspect borrowing demand has also gone down,but the bigger reason is that lenders are less willing to lend."
There were 2.94 million U.S. consumer bankruptcy filings in 2009 and 2010,the most over a two calendar year period since the 3.6 million recordedin 2004 and 2005.
"The (2005) law was supposed to reduce filings, but we are very close to levels we were at then," Gerdano said. "Thelaws of economic gravity are more powerful than the laws passed byCongress."
(Editing by Steve Orlofsky)
Sent from Thomson Reuters Marketboard
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Andy Xie, former Chief Asia-Pacific Economist at Morgan Stanley who's nowindependent, was on Bloomberg TV talking about inflation inChina,tightening measures, potential property market effects, hardlanding versus soft landing, U.S. monetary policy, U.S. National Debtand the coming Treasury crash. After watching the video read his recent write up at caing.com titled "Good Tidings in 2011":
Video:http://www.bloomberg.com/video/65587400/
1. Equity Markets–Faber believes a correction is imminent for the stock market as bullish sentiment (AAII sentiment)nears record levels and mutual fund cash positions remain verylow. Furthermore, the latest upward move in stocks has occurred ondeclining volume, which is usually bearish from a technical point ofview. The correction should occur in January. That being said, youshould be buying into the correction as it represents a good buyingopportunity. Faber prefers energy companies and speculative stocks suchas home builders and even AIG. He goes on to say that the third year ofa Presidential cycle is very good for speculative stocks versustraditional blue chip value plays.
2. Gold and Silver–Reiterates his favorable opinion on gold and silver. Doubts they are currently in a bubble as someanalysts postulate. Faber notes that investor exposure is very low whenyou look you compare it to the world’s financial wealth, meaning thatgold and silver are still under-owned and have room to run.
3. Emerging Markets–While he is very bullish long-term on emerging markets, investors should avoid (or atleast lighten up on) emerging market stocks right now. They should onlybe bought on corrections which would represent favorable entry levels.Overall, Faber thinks the SP 500 will outperform emerging markets in2011. The only emerging market that looks attractive right now isVietnam (VNM).
4. Commodities–On a correction, Faber likes energy companies since the long-term trend in oil is up, as supply fails tokeep up with surging demand from emerging markets. Notes that emergingmarkets have surpassed the developed world in oil consumption and thatthis trend should keep demand strong for the foreseeable future. Faberlikes the majors like Exxon, Hess, and even Chesapeake as natural gas istoo cheap on an inflation adjusted basis. Continuing the energy theme,coal and uranium stocks should be gradually accumulated on weakness asthe world looks for alternative sources of reliable energy. Peabody onthe coal side and Cameco for uranium should outperform over the nextfew years.
5. Bond Market–Reiterates his bearish long-term view on US Treasuries, but notes that they are currently oversold andcould be a good trade at this point (TLT). But this would only be ashort-term bounce as rates have likely bottomed and higher inflationwill erode future returns.
6. Japan Equities–While everyone is still bearish on Japan, Faber likes Japanese equities and thinks they have thepotential for more upside. In particular, he likes Japanesefinancials such as Nomura and Mizuho Financial.
Overall, Faber is pretty bullish on equities despite his prediction of a short-term pullback in January.
Happy New Year!
if double top holds then oil, copper, silver, gold all go down ......... and who follows? our beloved FTSE 100
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
#1 Rated
It was the night before Christmas Eve, and CNBC trucked out TrimTabs’ Charles Biderman to a de minimisaudience, knowing full well that a man with his understanding of moneyflows would very likely repeat his statement from last year, that thereis no real, valid explanation for the inexorable move in stocks higher,as equity money flows in 2010 were decidedly negative, and anyexplanation of the upward melt up would need to account for Fedintervention (and no-volume HFT offer-lifting feedback loops but that isa story for another day). A year after the first scandalous reportwas published, TrimTabs is sticking with its story: “If themoney to boost stock prices by almost $9 trillion from the March 2009lows did not come from the traditional players, it had to have comefrom somewhere else. We believe that place is the Fed. Byfunneling trillions of dollars in cash to the primary dealers inexchange for debt, the Fed has given Wall Street lots of firepower toramp up the prices of risk assets, including equities.” And, wisely,Biderman, just like Zero Hedge, asks what happens when the buying oneday, some day, ends: “…stock prices will be higher by the timeQE2 ends, but economic growth will not be sustainable without massivegovernment support. Then even more QE will be needed, and stockprices could keep rising for a while. In our opinion, however, no amount of QE will be able to keep the current stock market bubble from bursting eventually.” Ergo our call earlierthat Bernanke has at best +/- 150 days to assuage the market’s fearthat QE2 is ending (not to mention that we have a huge economicrecovery, right Jan Hatzius? We don’t need no stinking QE…). Thereforethe best Bernanke can hope for is to buy some additional time. At theend of the day, the biggest problem is that the massive slack in theeconomy means that LSAP will have to continue for a long, long time,before the virtuous circle of self-sustaining growth can even hope totake over. By then bond yields may very well be high enough that RonPaul will demand someone finally bring Paul Volcker out of the fridge.
Tyler Durden @zerohedge Jan2,2010
From TrimTabs:
What Source of Money Is Pushing U.S. Stock Prices Higher? Market Cap Rises $2 Trillion in 2010 as Buying by Companies andForeigners Offsets Selling by Pension Funds and Retail Investors.However All of Gain and Then Some, $2.4 Trillion, Since QE2 Announcedat End of August.
At the end of 2009, we published a report entitled, “Are Federal Reserve and U.S. Government Rigging Stock Market?” We questioned whether the Fed or the Treasury were pushing up stockprices because we could not identify the source of the money thatpushed the market cap up by nearly $7 trillion from mid-March 2009through December 2009.
At the time we released our report, many people thought it was crazy to suggest that the Fed or the government would manipulate the stockmarket. Yet Ben Bernanke, Alan Greenspan, and Brian Sack have all butadmitted publicly this year that the Fed attempts to prop up stockprices.
The market cap of all U.S. stocks increased $2 trillion in 2010. All of the gain and then some, $2.4 trillion, occurred since the end ofAugust after QE2 was announced. Once again, most of the money to pushthe market cap higher does not seem to have come from the traditionalplayers that provided money in the past:
Companies and foreign investors were net buyers:
· Companies. Corporate America was the biggest net buyers of shares, although all the float shrink occurred betweenJanuary and August. The float of shares decreased $150 billion in2010, mostly because new stock buybacks nearly tripled from thedepressed levels of 2009. However, between September and year-end thefloat did not shrink but instead grew by $14 billion.
· Foreign investors. Foreigners provided some buying power in the U.S. stock market, purchasing a net $89 billion in U.S.equities from January through October.
But the buying of companies and foreigners was offset by selling elsewhere:
· Pension funds. Pension funds were apparently huge net sellers of U.S. equities. Based on Informa Investment Solution’sPlan Sponsor Network data, we estimate that managers of separateaccounts pulled $169 billion from U.S. equities from January throughSeptember. Pension funds account for about 60% of the assets inseparate accounts.
· Retail investor funds. Retail investors were net sellers of U.S. stocks. U.S. equity funds and ETFs redeemed $38 billionin 2010 even as a whopping $273 billion poured into bond funds andETFs.
· Retail investor direct purchases. We doubt retail investors were big direct buyers of U.S. stocks when they were netsellers of U.S. equity funds and retail investor sentiment wasrelatively cautious until late this year.
· Hedge funds. We have no way to track in real time what hedge funds do, but we doubt they were big net buyers of U.S.equities. While hedge funds posted an inflow of $60 billion fromJanuary through November, the most popular strategies were Event Driven($14 billion), Fixed Income ($9 billion), and Emerging Markets ($7billion). Equity Long Bias, Equity Long Only, and Equity Long-Shortreceived a total of only $12 billion.
U.S. Stock Market in Trouble Once Fed Interventions Stop. No Amount of Bond Buying Will Keep Stock Market Bubble from BurstingEventually.
If the money to boost stock prices by almost $9 trillion from the March 2009 lows did not come from the traditional players, it had tohave come from somewhere else. We believe that place is the Fed. Byfunneling trillions of dollars in cash to the primary dealers inexchange for debt, the Fed has given Wall Street lots of firepower toramp up the prices of risk assets, including equities.
But what will happen when the Fed stops buying assets? If QE2 works and the wealth effect of higher asset prices creates a sustainableeconomic recovery, we think the Fed will stop its QE activities. TheFed is legally mandated to manage the economy, not the stock market,and we think the Fed will sacrifice the stock market to its legalmandate. If that happens, stock prices are likely to plunge to wellbelow fair value.
A more likely outcome is that stock prices will be higher by the time QE2 ends, but economic growth will not be sustainable withoutmassive government support. Then even more QE will be needed, andstock prices could keep rising for a while. In our opinion, however,no amount of QE will be able to keep the current stock market bubblefrom bursting eventually.
Mutual Fund and Exchange-Traded Fund Flows Not Dramatically Different in 2010 Than in 2009. Bond Funds Post Big Inflows, GlobalEquity Funds Post Moderate Inflows, and U.S. Equity Funds SufferRedemptions.
Mutual fund and exchange-traded fund flows in 2010 were not greatly different than they were in 2009. Bond funds—references to “funds” inthis section include both mutual funds and ETFs—continued to rake inhuge amounts of money, although inflows subsided to $273 billion in2010 from a record $416 billion in 2009.
Equity fund flows were mixed. Global equity funds posted a respectable inflow of $87 billion in 2010, up modestly from $62 billionin 2009. Nevertheless, global equity fund inflows were nowhere nearthe peak of $182 billion in 2007. U.S. equity funds posted their thirdconsecutive outflow, losing $38 billion in 2010, little changed fromthe outflows of $42 billion in 2008 and $47 billion in 2009.
Flows shifted dramatically in late 2010 as the municipal bond market tanked and bond yields backed up. Bond funds lost $1.0 billion inNovember and $16 billion in December, the first monthly outflows sincelate 2008. If this selling persists, the exodus from bond funds couldput more upward pressure on bond yields.
We will probably have very little action at all today with most of the major centres closed and with Europe also closed
http://www.forexlive.com/156457/all/china-japan-australia-closed-today
