Filed under: Big Banks, bob chapman, DEBT, depression, devaluation, Dictatorship, Dollar, dollar bubble, dollar drop, dollar dump, Economic Collapse, economic crisis, economic depression, economic disaster, economic forecast, Economy, Empire, Federal Reserve, global economy, global government, Great Depression, Greenback, hyperinflation, Inflation, market manipulation, prediction, Richard Russell, Stock Market, Uncategorized, US Economy
Dow Theorist Richard Russell: Sell Everything, You Won’t Recognize America By The End Of The Year
Business Insider
May 18, 2010
WHOA!
Richard Russell, the famous writer of the Dow Theory Letters, has a chilling line in today’s note:
- Do your friends a favor. Tell them to “batten down the hatches” because there’s a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don’t need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won’t recognize the country. They’ll retort, “How the dickens does Russell know — who told him?” Tell them the stock market told him.
That’s pretty intense!
Update: By popular demand, here’s more on what he sees in the market. The gist is that the markets recent gyrations are telling him that the economy is in trouble:
- And I ask myself, “Am I seeing things? The April 26 high for the Dow was 11205.03. The Dow is selling as write at 10557 down 648 points from its April high. If business is even better than expected, then why is the Dow down over 600 points? And why, if there were 674 new highs on the NYSE on April 26, were there only 20 new highs on Friday, May 14? And if my PTI was 6133 on April 26, why is it down 17 points since its April high?
The fact is that I’ve been seeing deterioration in the stock market ever since early-April, and this in the face of improving business news. The D-J Industrial Average is composed of 30 internationally known top-quality blue-chip stocks. These are 30 of “America’s biggest companies.” If Barron’s is so bullish on the future of America’s biggest companies, then why isn’t the Dow advancing to new highs?
Clearly something is wrong. But what could it be? Much as I love Barron’s, I trust the stock market more. If I read the stock market correctly, it’s telling me that there is a surprise ahead. And that surprise will be a reversal to the downside for the economy, plus a collection of other troubles ahead.
About Dow Theory — First, we saw the recent April highs in the Averages. Then we saw a plunge in both Averages to their May 7 lows — Industrials to 10380.43, Transports to 4298.12, next a short rally. If ahead, the two Averages turn down and violate their May 7 lows, that would be the clincher. Such action would signal the certain resumption of the primary bear market.
Just as for years I asked, cajoled, insisted, threatened, demanded, that my subscribers buy gold, I am now insisting, demanding, begging my subscribers to get OUT of stocks (including C and BYD, but not including golds) and get into cash or gold (bullion if possible). If the two Averages violate their May 7 lows, I see a major crash as the outcome. Pul – leeze, get out of stocks now, and I don’t give a damn whether you have paper losses or paper profits!
Bob Chapman: US Dollar Will Collapse at end of 2010
Filed under: 9/11 Truth, Barack Obama, big pharma, Bill Clinton, Bio Weapons, biological warfare, catastrophic event, Credit Crisis, dick armey, Dictatorship, Dollar, Dow, Economy, engineered crisis, Fascism, fearmongering, h1n1, h1n1 clinic, h1n1 vaccine, Harry Reid, health and environment, health care, health care reform, Hegelian Dialectic, Hitler, Hoax, HR 3200, Human Experiments, hype, influenza, innoculation, inside job, insurance companies, Media Fear, medicaid, medical care, medical Experiments, medical industrial complex, medicare, Nancy Pelosi, Nazi, Neolibs, obama, obama care, obama deception, obamacare, Pandemic Influenza, pandemic virus, paul broun, Problem Reaction Solution, Propaganda, Rahm Emanuel, socialism, State Sponsored Terrorism, stimulus, stimulus bill, Stimulus Package, swine flu, swine flu pandemic, swine flu vaccine, tax rebates, truth movement, US Economy, Vaccine, virus pandemic, White House
Obama Needs A Crisis Revive Health Care Reform
Bloomberg News
September 6, 2009
President Barack Obama returns to Washington next week in search of one thing that can revive his health-care overhaul: a sense of crisis.
Facing polls showing a drop in his approval, diminished support from independents, factions within his Democratic Party and a united Republican opposition, Obama must recapture the sense of urgency that led to passage of the economic rescue package in February, analysts said.
“At the moment, except for the people without insurance, we’re not in a health-care crisis,” said Stephen Wayne, a professor of government at Georgetown University in Washington. “You do need a crisis to generate movement in Congress and to help build a consensus.”
Obama speaks to labor leaders on Sept. 7 and to a joint session of Congress on Sept. 9 as he attempts to rebuild support for his top domestic priority, one that affects 17 percent of the economy. Lawmakers, trying to extend coverage to millions of uninsured Americans and rein in costs, are considering mandates on employers to provide coverage, new rules for insurers, and creating a government program to compete with private insurers such as Indianapolis-based WellPoint Inc.
Obama Chief of Staff Rahm Emanuel said the administration made unprecedented health-care progress in eight months.
‘Not There Yet’
“We gave Congress a charge, we gave them broad outlines, which is the reason we are farther along than any of the five presidents that have tried,” Emanuel said in an interview yesterday. “We’re not there yet, and this speech is intended to finish the job.”
Presidential speeches historically do little to move public opinion significantly, said George Edwards, author of “The Strategic President: Persuasion and Opportunity in Presidential Leadership.”
“This is almost like a Hail Mary, because they know that they’re substantially behind and the trajectory is negative for them,” Edwards said.
Unlike the financial crisis he inherited, the health-care debate is of Obama’s making and places a different burden on him, Edwards said.
“The best thing in presidential leadership is to recognize and exploit opportunities,” said Edwards. “The White House overestimated the nature of the opportunity.”
Stimulus Debate
Obama’s economic stimulus was debated as the Dow Jones Industrial Average dropped 18 percent from Nov. 4, 2008, to Feb. 13, when Congress approved the legislation. Unemployment had risen to more than 7 percent.
On the stimulus, Obama was able to say “that unless we do X right now, and X is pretty painful and pretty expensive, there is a serious danger in the next few weeks that the entire financial system will come crashing down,” said Bill Galston, a former official in President Bill Clinton’s administration, now a Brookings Institution scholar in Washington.
Emanuel remarked at the time that a crisis was a terrible thing to waste, and Obama pushed for health-care overhaul and energy legislation along with financial and auto bailouts.
Government Will Hype Fall Swine Flu Outbreak To Save Obamacare
Infowars
August 17, 2009
Former Congressman and House Majority Leader Dick Armey warns that the government is planning to exploit a hyped swine flu outbreak this fall in order to reinvigorate support behind its failing Obamacare agenda.
Armey is confident that the grass roots backlash against Obamacare will cause the plan to fail, but warns that the government has one last trick up its sleeve which it is preparing to pull in the next few months.
The former House leader told the Financial Times that wavering lawmakers in both parties might be won over by an engineered crisis that the Obama administration is planning to exploit.
“In September or October there will be a hyped up outbreak of the swine flu which they’ll say is as bad as the bubonic plague to scare the bed-wetters to vote for healthcare reform,” said Mr Armey. “That is the only way they can push something on to the American people that the American people don’t want.”
As we reported last week, Georgia Congressman Paul Broun gave a similar warning when he told attendees of a town hall event Tuesday that the Obama administration was planning to use a pandemic or a natural disaster to implement martial law in the United States.
Speaking at the North Georgia Technical College auditorium, Broun said that the “socialistic elite,” as well as Obama, Nancy Pelosi and Senate Majority Leader Harry Reid, were planning to exploit a crisis to create a favorable climate for their stalling political agenda.
“They’re trying to develop an environment where they can take over,” he said. “We’ve seen that historically.”
Health authorities as well as Homeland Security chief Janet Napolitano have been hyping the inevitability of swine flu’s deadlier return this fall ever since it first appeared in April.
Despite the fact that the virus has proven far less potent than the common flu, governments across the world have been preparing to roll out mass vaccination campaigns which are set to begin next month, despite the fact that the shots will contain mercury and squalene and have also been linked with the killer nerve disease Guillain-Barre Syndrome.
Filed under: bernanke, Credit Crisis, DEBT, Dollar, Dow, Economic Collapse, economic depression, Economy, Federal Reserve, global economy, gold, Great Depression, Greenback, hyperinflation, Inflation, SEC, short selling, Stock Market, US Economy, Wall Street | Tags: david tice, Prudent Bear Mutual Funds, virgin islands
Billion-Dollar Fund Manager; Gold To Hit $2,000, Dow To Sink To 5,000
Paul Joseph Watson
Prison Planet
October 1, 2008
Billion dollar fund manager David Tice says that the Federal Reserve’s ceaseless printing of dollars could cause gold to surge past $2,000 an ounce, while the Dow could fall below 5,000.
Tice, who manages the $1.1 billion Prudent Bear Mutual Funds from the Virgin Islands, told Bloomberg TV anchor Carol Massar yesterday that the time scale of his forecast will be determined by how quickly foreigners lose confidence in the dollar.
“Bernanke has essentially been known as, you know, possessing the printing press, etc. and, you know, it depends a lot on foreigners as far as how quickly they lose confidence in the dollar and what happens throughout the world as well,” Tice said.
“Our currency’s going to be diminished even though gold has been very, very volatile – down $250 just over a few months,” he added. “I think it’s going to head to $2,000 eventually and it will protect you. And I do think less equity investments make sense,” said Tice, advising that owning precious metals was a way of reducing equity exposure.
Warning that the pain was far from over, Tice said, “We think that we’re going to have to pay for the excesses of really the last five to 10 years of this excessive credit growth with a dramatic slowdown in the economy, dramatically lower markets. We’re still above 10,000. We think we’re going to, you know, fall below 5- or- 6,000 on the Dow and we think we’re going to have to readjust the U.S. economy towards less consumption – where we pay for goods with goods.”
Despite a recent SEC ban on the short selling of nearly 800 financial stocks, Tice advised that traders should still short the market, arguing that it’s a legitimate trading practice.
Filed under: 2-party system, 2008 Election, bailout, Barack Obama, bernanke, Big Banks, brad sherman, Britain, C-Span, California, Chicago, China, chris dodd, citigroup, CNBC, Congress, Credit Crisis, DEBT, Dictatorship, Dollar, Dow, Economic Collapse, economic depression, Economy, Empire, Europe, european union, Fascism, FDIC, Federal Reserve, food crisis, food market, food prices, food shortage, foreclosure, foreign banks, foreign investors, France, general motors, George Bush, Germany, global economy, Globalism, GM, Goldman Sachs, google, Great Depression, Greenback, Harry Reid, henry paulson, House, housing market, hyperinflation, Inflation, interest rate cuts, Japan, jim rogers, joe biden, John McCain, Larry Kudlow, left right paradigm, liquidation, london, marc faber, middle class, mortgage, national socialism, nationalization, neocons, Neolibs, obama, Paulson, Propaganda, Psyops, putin, rate cut, real estate, Russia, Senate, socialism, Stock Market, subprime, subprime lending, Taxpayers, US Economy, US Treasury, Wachovia, Wall Street, wells fargo | Tags: earmarks, financial markets bill, financial terrorism, great britain, hr 3997, mental health bill, pork, pork barrel, pork barrel earmarks, Pork Barrel Spending, shanghai
Bailout Bill Will Help Chinese Banks, Foreign Banks
Congress Approves Bailout Bill
AP
October 3, 2008
With the economy on the brink and elections looming, Congress approved an unprecedented $700 billion government bailout of the battered financial industry on Friday and sent it to President Bush for his certain signature.
The final vote, 263-171 in the House, a comfortable margin that was 58 more votes than it garnered on Monday. The vote capped two weeks of tumult in Congress and on Wall Street, punctuated by daily warnings that the country confronted the gravest economic crisis since the Great Depression if lawmakers failed to act.
Dow plummets when bailout passes
List of Representatives who Switched from “Nay” to “Yea”
http://www.campaignforliberty.com/blog.php?view=1087#.
Food Riots Have Already Begun as Global Grain Prices Skyrocket, Supplies Dwindle
http://www.naturalnews.com/024372.html
California may need emergency $7 billion bailout
http://www.reuters.com/article/newsOne/idUSTRE49229820081003
Hoax Bank Closure Story Peddles Bailout Propaganda
http://www.prisonplanet.co..e-story-peddles-bailout-propaganda.html
Fed Officials Considering Further Rate Cuts: Report
http://www.cnbc.com/id/26986621
Former Head of Fed’s Open Market Operations Says Bailout Might Make Things Worse
http://georgewashington2.blogspot.com/2..ad-of-feds-open-market.html
Bailout Would Only Prolong Crisis: Jim Rogers
http://www.youtube.com/watch?v=49SYpcaWHTE
Wells Fargo Buys Wachovia Nixing Citi Deal
http://biz.yahoo.com/..ls_fargo_wachovia.html?.v=8
Report blames U.S. trade gap for 5.6 million lost jobs
http://www.reuters.com/article/ousiv/idUSTRE4913E220081002
Putin blames US for world economy crisis
http://www.presstv.ir/detail.aspx?id=71042§ionid=351020602
Bailout bill is 451 pages long
http://news.yahoo.com/s/a..cnWOA64ch9GkocOsJ0lJv24cA
Who’s profiting from the crisis? Goldman Sachs, of course
http://www.marketwatch.c..CDCB7}&print=true&dist=printMidSection
Paulson Bank Rescue Proposal Is ’Crazy,’ O’Neill Says
http://www.bloomberg.com/apps/ne..mClVjevU&refer=home
France Wants $500B Rescue For Europe
http://business.timesonline.co.uk/tol/business/markets/article4864032.ece
Faber: U.S. Bailout Won’t Stop Slowdown
http://www.bi-me.com/main.php?id=25070&t=1&c=35&cg=4&mset=1011
IMF Adds Pressure On Congress To Pass Bailout
http://www.guardian.co.uk/business/2008/oct/01/banking.useconomy
Google stock plunges more than 93% in “erroneous trading”
http://www.tgdaily.com/html_tmp/content-view-39543-118.html
Ford & GM Auto Sales Drop
http://news.yahoo.com/s/ap/20081001/ap_o..OmxGcLJO8EjS5v24cA
Chicago woman buys a house for $1.75
http://www.presstv.ir/detail.aspx?id=71130§ionid=3510213
Ex-bankers on pushing customers to rack up debt
http://www.cnn.com/2008/LIVING/pers..dex.html?iref=mpstoryview
US economic dominance over – Russia
IMF Warned Of Full-Blown Crisis
September’s ISM Manufacturing Index “Screams Recession,” Economists Say
SEC Extends Ban On Short Selling
Brazilian president: Brazilian economy solid, U.S. should do their homework
Western World Will Become Less Wealthy
’Car sleepers’ the new US homeless
Filed under: bailout, Big Banks, China, consolidation, Credit Crisis, DEBT, Dollar, Dow, Economic Collapse, economic depression, Economy, fannie mae, Federal Reserve, freddie mac, gas prices, George Bush, global economy, Great Depression, Greenback, housing market, hyperinflation, Inflation, interest rate cuts, liquidation, Media, middle class, mortgage, mortgage companies, mortgage lenders, neocons, Oil, Petrol, rate cut, real estate, Stock Market, subprime, subprime lending, Taxpayers, US Economy, Wall Street, WMD | Tags: run on banks
China Blames Wall Street Meltdown On Fed Overissuance Of Currency
Paul Joseph Watson & Yihan Dai
Prison Planet
September 19, 2008
China’s state media today reports on the real reason behind the Wall Street meltdown and a subject that the mainstream US media dare not mention – the Federal Reserve’s overissuance of currency – which the Chinese say is part of a wider agenda to justify increased control over the global economy.
The Bush administration today announced a plan to use hundreds of billions of dollars of taxpayer money to buy up up bad mortgages and other debts. The process of injecting more fiat money into an already over-inflated system had the desired effect – the Dow Jones shot up 450 points – but the dollar, following a brief jump, began to plummet.
According to numerous Chinese state media news sources today, the Federal Reserve’s continued zeal for propping up the market by injecting illusory liquidity is part of an agenda to gain trust and grease the skids for increased government intervention in financial markets.
China Finance , China News and Chaobao Financial News, all state owned media outlets, slammed the Fed for taking action that will only make long term economic conditions worse and devalue the dollar by “creating money that does not exist which leads to the inflation of liquidity,” a policy contrary to China’s position as a holder of vast reserves of US dollars.
The analyst quoted by Chaobao Financial News highlighted “that when there is market failure, the paramount purpose of government intervention should be saving the market for the benefit of the people: Relief, Recovery and then Reform,” and that “Protecting the rights of people who are suffering in the housing market and as a result of high oil prices should be treated as a priority.”
The analyst added that by concentrating on saving just a few large financial companies, the Fed is creating wider financial chaos while arousing anger and suspicion by “only protecting and encouraging large companies’ wrong doing.”
CEIBS Professor of Economics and Finance Xu Xiaonian told a conference yesterday that “The fundamental source of Wall Street’s meltdown is caused by Federal Reserve overissuing currency.” He cautioned that the US government has already exceeded its scope in terms of intervention compared with their usual policy.
Similar sentiments were echoed by economist Zuo Xiaolie, who said that the amount of money injected into the market will have little real impact, but that such measures are a “Narrow minded way that the Federal Reserve uses to diversify the pressure of currency adjustment to other countries, which leads to the devaluation of the dollar, causing imbalance in the global economy.”
“The amount of money that has been put into the market can not fundamentally save the market,” said Xiaolie, adding that the move was merely part of an agenda to “regain the trust and justify future further intervention in the economy.”
On Wednesday, China’s official People’s Daily newspaper, the voice of the ruling Communist party, said that the US had unleashed economic “weapons of mass destruction” and set off a “financial tsunami” by allowing Wall Street lenders to trade in subprime debts and unstable financial derivatives, according to a Press TV report.
China has previously threatened to liquidate its vast holding of US treasuries, amounting to $1.33 trillion, if Washington imposes trade sanctions to force a yuan revaluation. The Communist power has also repeatedly expressed its anger at the Fed’s indifference to the weakening dollar. If China were to dump the dollar it would likely set in motion a chain of events that would lead to a collapse of the greenback.
We know we are in trouble when the Chinese Communist Party sound like bastions of sound money policy and fiscal conservatism in comparison to the Bush administration and the Federal Reserve, who in creating more money out of thin air continue to bail out their friends on Wall Street while the economic future of hundreds of millions of American citizens is sold down the river.
Filed under: Alan Greenspan, bailout, Bank of England, bernanke, Big Banks, BOE, Britain, central bank, CFR, China, CNBC, Communism, Credit Crisis, DEBT, Dow, Economic Collapse, economic depression, Economy, energy, Europe, european union, fannie mae, Fascism, Federal Reserve, freddie mac, George Bush, george soros, global economy, gold, Goldman Sachs, Great Depression, Greenback, henry paulson, housing market, hyperinflation, Inflation, interest rate cut, interest rate cuts, jim rogers, martgage companies, Media, Merrill Lynch, mortgage, mortgage companies, mortgage lenders, Oil, Paulson, rate cut, real estate, Russia, Stock Market, subprime, subprime lending, Taxpayers, United Kingdom, US Economy, US Treasury, Wamu, washington mutual, WW2 | Tags: run on banks
Fannie and Freddie Seized…Cost to Taxpayer: Over $1 Trillion
Contrarain Profits
September 8, 2008
Uncle Sam has finally taken over Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE). Yesterday, the Bush administration placed the mortgage giants under a conservatorship, putting billions of dollars of taxpeyers’ money at risk in the process.
The Treasury says it will stump up $200 billion to back the companies in exchange for a 79.9% stake in each. The government is now the biggest player in the US mortgage market.
Don Rich warns that the government’s bailout spells trouble for anyone holding US dollars. A major issue is that the Congressional Budget Office’s estimation of the costs of the bailout is far too conservative…
This from last Thursday’s Daily Reckoning:
A recent study from the Congressional Budget Office (CBO) has zero credibility. It pegged likely taxpayer losses in the Fannie Mae and Freddie Mac bailouts at $25 billion. For those with a sense of history, it is worth remembering that the S&L bailout had a $160 billion price tag. The numbers diverge so far from reality as to be laugh-out-loud funny. Funny, that is, except that the CBO estimate demonstrates a willful disconnect with the actual consequences of federal government actions.
As demonstrated below, the real cost of the bailouts will easily exceed $1.3 trillion. In fact, the real cost is likely to range between $1.3 trillion to $1.6 trillion, and is not unlikely to reach $2.5 trillion.
Between 2001 and 2007, Fannie and Freddie purchased or guaranteed $700 billion of Alt-A and subprime loans. Given the default rates on these loans – and the fact that the price of the housing that is the ultimate security of the loans will, for reasons demonstrated below, fall by at least thirty percent – this alone implies a loss for Fannie and Freddie on the order of $210 billion.
Fannie and Freddie acknowledge already-impaired loans on the balance sheet of $19 billion, which they have used creative accounting to avoid deleting from the shareholder equity account. This means that Fannie and Freddie have a maximum of $64 billion in capital remaining.
Given the inevitable losses on the Alt-A/subprime portion of their portfolio, it must be the case that if the federal government, as it is doing, guarantees Fannie and Freddie’s solvency, the difference between the loss and the capital to be made up by the government (i.e., the taxpayers) must equal, not $25 billion but $147 billion.
That alone would mean that the CBO is blowing smoke with their estimated cost figures, and if you think back to the S&L cost of $160 billion, this is not a surprising result. The real picture is so much worse that it is pretty obvious the CBO is flat out inventing figures just to get the politicians through November.
It doesn’t take a genius to work out how the government is going to get its hands on such money: the Federal printing press…
I don’t know what those people in Washington are taking to sleep at night after all their electorally driven accounting and finance exercises, but I can tell you what they will be doing to keep the government open for business: printing a whole lot of money.
Chairman Bernanke has the discount window open to any collateralization not worth the paper it is written on, so in effect he has the helicopters ready to drop hundred-dollar bills over Wall Street – as he once famously described the ultimate policy instrument of a fiat-money system.
Of course, if he does that, we will have to change his nickname from Helicopter Ben to Hyperinflation Ben, which answers the question of who picks up the tab of bailing out Fannie and Freddie: anyone owning dollars.
Produce a lot of something, and it becomes worth less. And given the losses at Fannie and Freddie, the taxpayer guarantee, and the ongoing initiation of Boomer retirement, only the inflation tax will work to pay for keeping Fannie and Freddie afloat.
Like it or not, we are about to enter interesting times, and it is too bad our supposed professional civil servants at the Congressional Budget Office have failed to tell the emperor the truth: that he is buck-naked bankrupt and getting ready to take a lot of people with him.
P.S Don Rich is an instructor of economics, finance, and political science at Montgomery County Community College in Blue Bell, PA. He also teaches economics, government, and history at Delaware County Community College in Exton, PA. You can leave comments for Don on the mises.org blog.
Greenspan: U.S Economy in ’once-in-a-century’ financial crisis
September 15, 2008
The nationalization of Fannie Mae and Freddie Mac shows that the U.S. is “more communist than China right now” but its brand of socialism is meant only for the rich, investor Jim Rogers, CEO of Rogers Holdings, told CNBC Europe on Monday.
“America is more communist than China is right now. You can see that this is welfare of the rich, it is socialism for the rich… it’s just bailing out financial institutions,” Rogers said.
Stock markets jumped after the U.S. government’s decision to launch what could be its biggest federal bailout ever, in a bid to support the housing market and ward off more global financial market turbulence.
But Rogers said in the long term the move spelled trouble.
“This is madness, this is insanity, they have more than doubled the American national debt in one weekend for a bunch of crooks and incompetents. I’m not quite sure why I or anybody else should be paying for this,” Rogers told “Squawk Box Europe.”
Soros Compares Mishandling Of Current Crisis To Great Depression
Paul Joseph Watson
Prison Planet
September 17, 2008
Billionaire investor George Soros has slammed US Treasury Secretary Hank Paulson for behaving in the same manner as bankers in the 1930’s and mishandling a financial crisis that threatens a repeat of the Great Depression.
Soros told BBC Newsnight that the world was merely at the beginning of a financial storm and warned, “We mustn’t allow the financial system to collapse as it did in the 1930s.”
Referring to Hank Paulson, the US Treasury Secretary, Soros stated, “The way Paulson is handling the situation is reminiscent of the way the bankers handled it in the 1930s.”
He added: “The financial system has gone overboard and the financial engineering has grown to big, it takes up too big a share in the world’s resources.”
“Now it is shrinking. When it becomes regulated it will be less profitable than the last 25 years.”
Soros, a former member of the Board of Directors of the Council on Foreign Relations, is ranked by Forbes as the 99th richest person in the world with a net worth of around $9 billion.
Ironically, Soros made his name by reaping the dividends of another financial meltdown when he “broke the Bank of England” by short-selling the pound sterling before the currency dropped out of the European Exchange Rate Mechanism in 1992, landing Soros a profit of around $1.1 billion.
In 2006, the highest court in France upheld a conviction that Soros had practiced insider trading when he bought shares in French bank Société Générale after discovering that the bank was on the verge of a takeover.
Soros has repeatedly predicted fiscal armageddon, writing three books about a “superbubble” that is on the verge of collapse.
In response to those accusing him of crying wolf in an effort to panic financial markets and benefit from the fallout, Soros stated, “I have a record of crying wolf…. I did it first in The Alchemy of Finance (in 1987), then in The Crisis of Global Capitalism (in 1998) and now in this book (2008’s The New Paradigm for Financial Markets). So it’s three books predicting disaster. (After) the boy cried wolf three times . . . the wolf really came.”
Respondents to a Daily Mail article about Soros’ comments accused the financier of engaging in wanton hypocrisy.
“I don’t know why on Earth they interview Soros since he has been proven again and again to deliberately spread financial rumour for his own exploitation and gain,” wrote one, “Soros became a multi multi billionaire precisely through manipulating markets like this – if this man says that we are heading for a 1930’s style crash you can guarantee he already has plans to profit from it.”
http://www.reuters.com/article/ousiv/idUSPEK4365020080917?sp=true
US authorities have now spent $900 billion to prop up the financial system
http://www.swissinfo.ch/eng/..d=9736054&cKey=1221686585000&ty=ti
Central banks pump £100bn into money markets
http://www.telegraph.co.uk/money/m..2008/09/17/cncentral117.xml
Treasury announces debt auctions for Fed
http://ap.google.com/article/ALeqM5jnS9Vm..m4iAD938I1A80
Fed Pumps $70B Into Financial System
http://news.yahoo.com/s/ap/20080916/ap_on_bi_ge/fed_credit_..E44U6Xfx.Fe7GUOQ.D1v24cA
Run On The Bank? Americans Could Lose Their Deposits
http://www.prisonplanet.com/run-on-the-bank-americans-could-lose-their-deposits.html
Merrill Lynch seals future with Bank of America deal
http://business.timesonline.co.uk/tol/bu.._finance/article4755438.ece
Rogers: Dollar To Lose World Reserve Status
http://www.prisonplanet.com/rogers-dollar-to-lose-world-reserve-status.html
Paulson: Congress Has No Authority Here
http://bigpicture.typepad.com/comments/2008/09/paulson-congres.html
Goldman profit plunges 70 pct amid market slump
http://news.yahoo.com/s/nm/20080916/bs_nm/goldmansachs_dc
August home starts seen at lowest level in 17 years
http://www.reuters.com/article/newsOne/idUSN1638353220080917
Russia halts trading after 17.5% share price fall
http://money.cnn.com/news/newsfeeds/articles..ORTUNE5.htm
Dow closed down 450
http://news.yahoo.com/s/ap/20..er=1;_ylt=Al5VvbZImvYKFj5hEtFaLktv24cA
Is Britain Heading For Worst Recession Since 1929?
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/09/15/bcnrecession115.xml
Washington Mutual Tumbles 30%
http://news.yaho..CZ6k2k2Rd38VKPgv6b.HQA
Now fear stalks British banks
Inflation rises to 4.7% and FTSE plunges ANOTHER 90 points as global markets tumble in wake of Meltdown Monday
Bush Claims Economy Can Weather Storm
Bailouts Will Push U.S. Into Depression
Filed under: Alabama, bankruptcy, Big Banks, brazil, California, central bank, Congress, Credit Crisis, DEBT, Dollar, Dow, Economic Collapse, economic depression, Economy, FDIC, georgia, global economy, Great Depression, Greenback, hyperinflation, Illegal Immigration, Immigration, indymac, Inflation, Merrill Lynch, Stock Market, US Economy, Wachovia, World Bank | Tags: Federal Deposit Insurance Corp., Integrity Bank of Alpharetta, run on banks
10th Bank Collapse This Year
Bloomberg
August 29, 2008
Integrity Bank of Alpharetta, Georgia, was closed by U.S. regulators today, the 10th bank to collapse this year amid a surge in soured real-estate loans stemming from the worst housing slump since the Great Depression.
Integrity Bank, with $1.1 billion in assets and $974 million in deposits, was shuttered by the Georgia Department of Banking and Finance and the Federal Deposit Insurance Corp. Regions Financial Corp., Alabama’s biggest bank, will assume all deposits from Integrity, which was run by Integrity Bancshares Inc. The failed bank’s five offices will open on Sept. 2 as branches of Regions, the FDIC said.
“Depositors will continue to be insured with Regions Bank so there is no need for customers to change their banking relationship to retain their deposit insurance,’’ the FDIC said.
Banks are being closed at the fastest pace in 14 years as financial companies report more than $505 billion in writedowns and credit losses since 2007. California lender IndyMac Bancorp Inc., which had $32 billion in assets, was closed July 11 in the third-largest bank seizure, contributing to a 14 percent drop in the U.S. deposit insurance fund that had $45.2 billion at the end of the in the second quarter.
FDIC may borrow money from Treasury to see it through an expected wave of bank failures: report
August 27, 2008
Federal Deposit Insurance Corp (FDIC) might have to borrow money from the Treasury Department to see it through an expected wave of bank failures, the Wall Street Journal reported.
The borrowing could be needed to cover short-term cash-flow pressures caused by reimbursing depositors immediately after the failure of a bank, the paper said.
The borrowed money would be repaid once the assets of that failed bank are sold.
“I would not rule out the possibility that at some point we may need to tap into (short-term) lines of credit with the Treasury for working capital, not to cover our losses,” Chairman Sheila Bair said in an interview with the paper.
Bair said such a scenario was unlikely in the “near term.” With a rise in the number of troubled banks, the FDIC’s Deposit Insurance Fund used to repay insured deposits at failed banks has been drained.
In a bid to replenish the $45.2 billion fund, Bair had said on Tuesday that the FDIC will consider a plan in October to raise the premium rates banks pay into the fund, a move that will further squeeze the industry.
The agency also plans to charge banks that engage in risky lending practices significantly higher premiums than other U.S. banks, Bair said.
The last time the FDIC had borrowed funds from the Treasury was at nearly the tail end of the savings-and-loan crisis in the early 1990s after thousands of banks were shuttered.
The fact that the agency is considering the option again, after the collapse of just nine banks this year, illustrates the concern among Washington regulators about the weakness of the U.S. banking system in the wake of the credit crisis, the Journal said.
Bankruptcy Filings Surge 29%
http://www.economicpolicyjournal.com/2008/08/bankruptcy-filings-surge-29.html
FDIC: Bank Profits Fell By 86% In 2nd Quarter
http://seattletimes.nwsource.com/html/busi..webbanks26.html
World Bank: More People In Poverty
http://www.reuters.com/article/worl..=RSS&feedName=worldNews
Dow Falls Another 240 Points
http://news.yahoo.com/s/ap/2..=1;_ylt=ArOpbuqd64sBzkF3Xyx3zOxv24cA
Merrill, Wachovia in Danger of Failing: Strategist
http://www.cnbc.com/id/26262..Cquote%7Ctext%7C&par=yahoo
Large U.S. bank collapse seen ahead
http://www.reuters.com/article/newsOne/idUSSP21695020080819
Deepening economic crisis ‘may trigger family breakdown’
http://www.dailymail.c..onomic-crisis-trigger-family-breakdown.html
Auto industry seeks $50B in loans from Congress
http://money.cnn.com/2008/08/23/news/economy/auto_bailout.ap/index.htm
Living the American dream in Brazil
http://english.aljazeera.net/focus/2008/08/200881884358873790.html
Illegal Immigrants Returning to Mexico in Record Numbers
http://www.foxnews.com/story/0,2933,409221,00.html
FDIC: Highest Level Of Troubled Banks Since 2003
http://news.yahoo.com/s/ap/20..s;_ylt=AiX6b2alma.c4GBC5tc9LJqs0NUE
FDIC Increasing Staff for Expected Increase in Bank Failures
Japan’s Mitsubishi takes over US bank
Filed under: Bank of America, Bear Stearns, bernanke, Big Banks, Britain, central bank, copper, Credit Crisis, DEBT, Dollar, Dow, Economic Collapse, economic depression, Economy, energy, Euro, Europe, european union, fannie mae, Federal Reserve, food market, food prices, freddie mac, gas prices, George Bush, global economy, gold, Great Depression, Greenback, housing market, Illegal Immigration, imf, Immigration, Inflation, Israel, Mexico, mortgage companies, nymex, Oil, Petrol, real estate, silver, stimulus, Stimulus Package, Stock Market, tax, tax rebates, UAE, United Kingdom, US Economy, US Treasury, World Bank | Tags: soybeans, wheat, with corn
Oil Hit Record $147, Gold $969, Euro $1.59
On Friday Oil hit record of $147.27, Gold $969, Euro $1.5972 against the greenback, Today July 14, 2008 11:31 AM EDT Crude price sinks to $145, Gold $969, Euro 1.5859.
AP
July 12, 2008
Gold prices rose Friday, making their largest advance since first hitting $1,000 earlier this year, after another record crude rally and a tumbling stock market led jittery investors to the safety of hard assets.
Other commodities traded mostly higher, with corn, soybeans, wheat and other agriculture futures rising.
Gold’s rally suggests investors are increasingly concerned about rising inflation as Americans struggle with $4 gasoline and the U.S. dollar continues to lose ground against its main rivals.
After a week of volatile trading in the commodities complex, a myriad of dour economic developments pushed gold prices skyward: Oil soared above $147 for the first time, stocks dove on concerns that mortgage companies Freddie Mac and Fannie Mae might collapse and the dollar tumbled further against the euro.
“All of these things are a pretty good recipe for safe-haven buying into bullion,” said James Steel, analyst with HSBC in New York. “You’re really spoiled for choice on a day like this.”
Gold for August delivery added $18.60 to settle at $960.60 an ounce on the New York Mercantile Exchange, after earlier rising as high as $969.10. That was gold’s highest trading level since first cracking the $1,000 threshold on March 13 after the collapse of Bear Stearns & Co.
Nervousness about the U.S. economy, record energy prices and the falling dollar have helped propel gold 34 percent higher in the past year, but it’s not clear if the current climate is gloomy enough to push gold back into record territory.
“The $1,000 mark accompanied a bank failure the last time so it’s questionable whether the situation now is as severe, but that doesn’t mean it won’t go back to that level,” Steel said.
Other precious metals also traded higher. September silver prices added 50 cents to settle at $18.82 an ounce on the Nymex, while September copper gained 2.15 cents to settle at $3.74 a pound.
Euro falls one cent vs dollar from day’s highs
Reuters
July 14, 2008
The euro fell over one cent from the day’s highs against the dollar on Monday, after the U.S. Treasury and Federal Reserve launched emergency steps to restore investor confidence in U.S. mortgage lenders Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac.
The euro fell to as low as $1.5866 on trading platform EBS, down from an intraday high of $1.5972.
Jim Rogers: Dollar Doomed, Fed Will Fail
Recent News:
http://www.nydailynews.com/ny_local/2008/07/12/2..siness-2.html
Bush acknowledges ’tough times’
http://rawstory.com/news/afp/Bush_..mes__07112008.html
Dow Drops Below 11,000
http://news.yahoo.com/s/ap/2008..TBWOFUn8JIG0V8Jn7V5dv24cA
Stimulus Checks for the Dead
http://taxprof.typepad.com/taxprof_blog/2008/07/stimulating-the.html
Budget Deficit Twice as Big as Last Year’s
http://www.washingtonpost.com/wp..7.html?hpid=sec-nation
World Bank’s Zoellick: Food Prices High Until 2012
http://www.washingtonpost.com/..AR2008071101987_pf.html
Mexican Illegal Aliens Leaving U.S.
http://www.dallasnews.com/sharedc..nmetimmigrants.24395628.html
Experts Worry Euro Might Replace US Dollar as Primary Reserve Currency
http://rawstory.com/news/2008/The_buck_doesnt_stop_here_it_0706.html
IMF says world economy between recession and inflation
http://uk.news.yahoo.com/rtrs/20..economy-imf-bd5ae06.html
Oil’s Rise Stirs Talk Of $200 A Barrel This Year
http://online.wsj.com/article/SB12..od=hpp_us_whats_news
Bank of Israel to buy more US dollars
http://www.jpost.com/servlet/Satel..me=JPost%2FJPArticle%2FShowFull
Bank of America CEO: Recession “feel” may last year
http://www.reuters.com/article/ousiv/idUSWNAB018220080709
Similarities between 1929 and 2008 terrifying
Emirates calls on GCC countries to depeg currencies from US dollar to curb inflation
Pension plans suffer huge losses
Filed under: Britain, central bank, Credit Crisis, DEBT, Dollar, Dow, Economic Collapse, economic depression, Economy, energy, Europe, european union, gas prices, general motors, Great Depression, Greenback, gulf, Inflation, job market, london, New York, nymex, NYSE, Oil, Petrol, Stock Market, United Kingdom, US Economy
Oil Above $146 in London
Fin Facts
July 4, 2008
In thin trading in New York Thursday, with markets closed early at 1:00 pm Eastern for today’s July 4th holiday weekend, the big focus was on the June employment report on a day when crude oil breached the $145 a barrel level in both New York and London.
US nonfarm payrolls fell for a sixth consecutive month, dropping by 62,000 jobs in June. The month’s unemployment rate held at 5.5%, after rising sharply in May. A service-sector report also supported the gloomy outlook.
US lost 62,000 jobs in June – Six straight months of job losses total 438,000
Dr. Peter Morici: Crisis grips US Job Market: Economy sheds 62,000 jobs in June
The Institute of Supply Management said its index of service sector activity fell to a reading of 48.2 in June, below analysts’ expectation for a reading of 51.0. Any reading below 50 indicates contraction.
The Dow Jones Industrial Average closed 73.03 points, or 0.7%, at 11288.54, down 14.9% in 2008. Component General Motors rose 1.4%.
GM fell to a 54-year low on Wednesday and the stock closed Thursday at $10.17, down from $18 just a month ago.
Crude oil rose to a record on concern conflict with Iran over its nuclear program would cut Persian Gulf supplies.
Brent North Sea oil for August delivery surged to a life-time peak of $146.34 per barrel in morning trade. In New York, oil touched a new record of $145.85. On the New York Mercantile Exchange, oil closed at $145.29. Brent closed at $146.08.
Alexei Miller, chief executive of Russia’s gas giant OAO Gazprom, added fuel to the fire by saying that Europeans would soon have to pay much more for imports of natural gas. Miller, who last month forecast that oil would rise to $250 a barrel in the near future, said Russian gas would be sold in Europe for $500 per thousand cubic meters by the end of the year – about a fifth more than the current price.
World Must Brace For $150 Oil
AP
July 4, 2008
Oil’s meteoric rise since the start of the year to nearly $150 has distressed consumers and policy makers the world over, but the stark reality is prices are likely to rise higher still.
For two decades, prices were relatively stable, but then they rose seven-fold from a trough below $20 in 2001. Since breaching the $100 mark on the first trading day of this year they have risen around 45 percent.
Given such momentum, politicians’ efforts to bring the price down could well be a waste of energy.
Filed under: bernanke, Big Banks, BIS, Britain, central bank, Credit Crisis, DEBT, Dollar, Dow, ECB, Economic Collapse, economic depression, Economy, Euro, Europe, european central bank, european union, Federal Reserve, food prices, Fox News, gas prices, GDP, general motors, global economy, gold, Great Depression, Greenback, imf, Inflation, interest rate cuts, Iran, job market, neil cavuto, Oil, Paulson, peter schiff, Petrol, rate cut, Ron Paul, Saudi Arabia, Stock Market, United Kingdom, US Economy, US Treasury, utah, World Bank | Tags: indymac, inland empire, starbucks
Fed Auctions $75 Billion to Big Banks
AP
July 1, 2008
The Federal Reserve has auctioned another $75 billion in loans to squeezed banks to help them overcome credit problems and announced it will provide a fresh batch of the loans this month.
The central bank on Tuesday released the results of its most recent auction — the 15th since the program began in December. It’s part of an ongoing effort to ease financial turmoil and credit stresses.
In the latest auction, commercial banks paid an interest rate of 2.340 percent for the 28-day loans. There were 77 bidders. The Fed received bids for $90.88 billion worth of the loans. The auction was conducted on Monday with the results made public on Tuesday.
The Fed also said it will conduct two auctions in July. Banks will have an opportunity to bid on a slice of $75 billion in short-term loans in each auction.
In mid-December the Fed announced it was creating an auction program that would give banks a new way to get short-term loans from the central bank and to help them over the credit hump. A global credit crunch has made banks reluctant to lend to each other, which has crimped lending to individuals and businesses.
Europe May Push The Fed To Raise Rates
CNN
July 1, 2008
The fireworks may come a day early for the financial markets if the European Central Bank, as expected, raises interest rates on Thursday.
If the ECB, Europe’s counterpart to the Federal Reserve, hikes rates, that could put even further pressure on the anemic dollar and send commodity prices even higher.
The ECB will announce its decision on interest rates early the morning of July 3 and will hold a press conference shortly thereafter to discuss the decision.
Global economy faces deep slowdown and deflation threat, BIS warns
Telegraph
July 1, 2008
The global economy may be heading for a far deeper crisis than is expected and a bout of deflation in the world’s biggest economies is now a possibility, according to one of the world’s most highly regarded economic institutions.
The Bank for International Settlements has warned that many in the City and elsewhere may have underestimated the scale of the coming economic downturn in one of its most sombre portraits yet of the international financial system.
The Swiss institution – known as the central bankers’ bank – issued the alert in its annual report, released today.
Peter Schiff Demonized On Fox Business
Recent News:
http://news.xinhuanet.com/english/2008-07/03/content_8478565.htm
Ron Paul Calls For Hearings On Falling Dollar
http://www.fortbendno..t=push&instance=home_news_bullets&open=&
Thieves Stealing Manhole Covers
http://www.usatoday.com/printedition/news/20080630/a_manhole30.art.htm
Bank Giving Debit Cards To 11 Year Olds
http://www.telegraph.co.uk/mone..?xml=/money/2008/06/30/cnvisa130.xml
U.S. Stocks Tumble
http://www.bloomberg.com/a..d=aF4fDOUXmP2k&refer=worldwide
LA Times To Cut 250 Jobs
http://biz.yahoo.com/ap/080702/la_times_cuts.html?.v=1&printer=1
Forecast for U.S. workers: Gloom
http://www.iht.com/articles/2008/07/02/business/02jobs.php
U.S. Treasury’s Paulson: Downturn has ’further to go’
http://www.marketwatch.com/news/story/us-trea..7D&dist=msr_6
Starbucks to cut as many as 12,000 positions
http://news.yahoo.com/s/nm/20080701/bs_nm/starbucks_dc_1
Analyst sees ‘ghost town’ in Inland Empire
http://latimesblogs.latimes.com/laland/2008/07/analyst-sees-gh.html
Oil Prices Rise To Record Highs Above $144
http://www.breitbart.com/article.php?id=D91LTE8O0&show_article=1
Utah company puts operations on hold due to food and fuel prices
http://www.ksl.com/?nid=148&sid=3637972
CBS Story On $7 Gas
http://rawstory.com/rawreplay/?p=1365
Dow Has Worst 1st Half Since 1970
http://www.reuters.com/article/newsOne/idUSL1764662020080630?sp=true
Saudi king urges consumers to get used to high oil prices
http://www.breitbart.co..24505.gb3mxog6&show_article=1
Merrill says General Motors bankruptcy possible
Ron Paul On Financial Crisis: Something Big is Going On
Paulson: Banking Regulations Need Overhaul
IndyMac denies that it’s close to collapse
Dow Jones breaks Great Depression record for poor performance
Oil Rises to Record on Concern Iran Supplies May Be Disrupted
Euro Inflation Highest In 16 Years
IMF To Investigate The Federal Reserve
Filed under: belgium, bernanke, Big Banks, biofuels, Britain, brussels, central bank, Central Banks, citigroup, Credit Crisis, DEBT, Dollar, Dow, Economic Collapse, economic depression, Economy, energy, Euro, Europe, european union, Federal Reserve, gas prices, general motors, global economy, gold, Great Depression, Greenback, housing market, Inflation, marc faber, Merrill Lynch, middle class, netherlands, Oil, Petrol, Protest, real estate, Stock Market, United Kingdom, US Economy | Tags: Jean-Paul Votron, Maurice Lippens
3rd largest bank predicts U.S. financial market meltdown within weeks
DFT
June 28, 2008
Fortis expects within the next few days to weeks to complete the collapse of the U.S. financial markets. That explains the bank insurers interventions of the series Thursday at dealing with € 8 billion. “We are ready at the last minute. It goes in the United States much worse than thought, “said Fortis chairman Maurice Lippens, who maintains that CEO Votron to live. Fortis expects bankruptcies of 6000 U.S. banks that now lack coverage. “But Citigroup, General Motors, there begins a complete meltdown in the U.S..”
Fortis took yesterday € 1.5 billion with a share issue. At the end of last year was the Belgian-Dutch group € 13 billion of new shares for the takeover of ABN Amro, for which it paid € 24 billion. Lippens bases its concern on interviews with bankers. “Two months ago we knew not so bad that it is in America. And it will be much worse. We have a thick mattress needed for the next eighteen months to come when we can bring to ABN Amro. “
Two weeks ago reported the U.S. investment bank and adviser to Fortis Merrill Lynch certainly € 6.2 billion in additional capital was needed. The VEB yesterday demanded clarification of Fortis: CEO Jean-Paul Votron stopped in late april Fortis maintains that after the purchase of ABN Amro does not need on the capital market. In one year € 30 billion in market capitalization destroyed. After Votron last confession kelderde the share price by 19.4%, although yesterday climbed by 4.4% to € 10.65.
The massive unrest around the bank insurers, especially with our neighbours in Belgium as a bomb broken. While the fuss arose in the Netherlands to the limited financial world, it is with our neighbours the call of the day. Not only is the bank dominates the streetscape, but by the mokerslag for the Belgian volksaandeel are also hundreds of thousands of small investors hit hard.
All Belgian newspapers opened yesterday with real rampenkoppen, where the free fall of the bank insurers was wide coverage. ’Fortis crashes, “” Rampdag for Fortis’ and’ Fortis loses 5.3 billion, “opened three leading newspapers.
The panic around the group across the border so great that the national regulator CFBA has had reassuring words to speak to the desperate savers. “The emergency of Fortis is no reason to bank run and money to get off,” said a CFBAwoordvoerder. “The bank complies with all legal requirements, but has itself just very sharp targets.”
Maurice Lippens claims that all major shareholders yesterday “unanimously support” have pledged.
Like arrows in the Netherlands focus mainly on CEO Jean-Paul Votron, who are heavily vertild appears to have complied with the takeover of ABN Amro. But while the Netherlands in Brussels calling his bonus of € 2.5 million to be paid back in Belgium is demanding his departure.
Who makes such big mistakes, must bear the consequences and therefore resign, “said Huybregtse chairman of the Flemish federation of Investment and Investors. The fall of the share is for him a confirmation that the takeover of ABN Amro far too expensive and was poorly timed.
“The former shareholders of ABN Amro are now taking a bath in champagne”, stressed Huybrechts. “Who makes major mistakes, must go. Fortis is a really volksaandeel and with confidence that you can not cope reckless. ”
The Belgian newspaper the Standard is tough on the CEO: “The kredietcrisis has affected all banks, but it is no excuse. Fortis is much sharper fall, “says the commentator. “Fortis has always denied that there was still a capital increase. They were therefore either lies or ignorance. Both are equally bad, so must Votron the honour to itself. He is the only one who has earned something to the whole operation. ”
According to Belgian media wanted Fortis announce Thursday that the bonus Votron would be removed, but this is at the last moment not yet happened. Also, all press speculation about his succession, with the name of Filip Dierckx.
Votron itself will of being firm. “The shareholders are behind me and also in the top of the group, I only support for this I have put in operation,” said the under fire lying Fortis chief executive.
The refund of the now controversial bonus points he resolutely. “What I do with my money, my case. The bonus had nothing to do with ABN Amro, but was about the year 2007, “said Votron. The CEO is a willing part of his salary in Fortis documents.
Votron may also still rely entirely on chairman Lippens, who denies that the bank itself on the takeover of ABN Amro has completed. “Votron remains simply the CEO. At present intervention, which is difficult, that’s really show leadership. “
Barclays warns of disaster as Fed loses all credibility
Telegraph
June 28, 2008
US central bank accused of unleashing an inflation shock that will rock financial markets, reports Ambrose Evans-Pritchard
Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall “below zero”.
“We’re in a nasty environment,” said Tim Bond, the bank’s chief equity strategist. “There is an inflation shock underway. This is going to be very negative for financial assets. We are going into tortoise mood and are retreating into our shell. Investors will do well if they can preserve their wealth.”
Barclays Capital said in its closely-watched Global Outlook that US headline inflation would hit 5.5pc by August and the Fed will have to raise interest rates six times by the end of next year to prevent a wage-spiral. If it hesitates, the bond markets will take matters into their own hands. “This is the first test for central banks in 30 years and they have fluffed it. They have zero credibility, and the Fed is negative if that’s possible. It has lost all credibility,” said Mr Bond.
Faber: Federal Reserve Could Fail, Buy Gold.
http://www.reuters.com/article/ousiv/idU..Number=2&virtualBrandChannel=0
Intervention Will Not Stop Dollar’s Slide
http://www.321gold.com/editorials/schiff/schiff062708.html
http://www.latimes.com/business/la-fi-oil2..un28,0,5485259.story
Mugabe Henchmen Back By Barclays
http://www.timesonline.co.uk/tol/news/world/africa/article4232283.ece
http://www.latimes.com/business/inves..ain22-2008jun22,0,6088160.story
Dow Crashes while Gold rises
http://www.gold-eagle.com/editorials_08/wallenwein062808.html
Families’ cash fears worst for 26 years
http://business.timesonline.co.uk/tol/business/economics/article4238319.ece
Family Storms Pittsburgh Bank, Protests Mortgage Crisis
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Biofuel Plants Go Bankrupt on Feedstock Costs
http://moneynews.newsmax.com/headline..y/2008/06/27/107992.html
Tax means fewer travellers at main Dutch airport: report
http://www.breitbart.com/article.php?i..54.yhsfzix8&show_article=1
Filed under: 2008 Election, Afghanistan, AIPAC, central bank, CIA, Credit Crisis, DEBT, Dissent, Dollar, Dow, Economic Collapse, economic depression, Economy, elbaradei, energy, Federal Reserve, gas prices, gold, GOP, Great Depression, Greenback, h.con.res.362, House, Inflation, interest rate cuts, Iran war resolution, Iraq, nation building, nevada, NIE, occupation, Oil, Petrol, Propaganda, Protest, rally, rate cut, Ron Paul, Saber Rattling, Sanctions, Senate, Stock Market, UN, US Economy, Washington D.C., WMD | Tags: revolution march, ron paul march, Ron Paul Rally
Ron Paul: Iran war will triple energy prices
Press TV
June 28, 2008
Republican congressman Ron Paul warns against military engagement in Iran, saying ‘bombing Iran’ will cause energy prices to skyrocket.
In a speech on the House floor, Congressman Paul suggested that the US is inching toward an ‘endless struggle’ similar to the Iraq war.
“In the last several weeks, if not for months we have heard a lot of talk about the potential of Israel and/or the United States bombing Iran. Energy prices are being bid up because of this fear. It has been predicted that if bombs start dropping, that we will see energy prices double or triple,” said the Republican.
“To me it is almost like deja vu all over again. We listened to the rhetoric for years and years before we went into Iraq. We did not go in the correct manner, we did not declare war, we are there and it is an endless struggle,” he told a nearly empty House chamber.
“I cannot believe it, that we may well be on the verge of initiating the bombing of Iran,” said the war veteran.
The 72-year-old former presidential candidate then blasted what he called the ‘virtual Iran war resolution’, which is soon to be considered by the House of Representatives.
“This resolution, House Resolution 362 is a virtual war resolution. It is the declaration of tremendous sanctions, and boycotts and embargoes on the Iranians. It is very, very severe,” Paul said.
Supported by the American Israel Public Affairs Committee (AIPAC), House Resolution 362 (and the Senate version Resolution 580), known as the ‘Iran War Resolution’ can be considered a means of imposing harsher sanctions as well as a naval blockade restricting exports to the oil-rich country.
This bill, which was introduced at an AIPAC annual policy conference, has gained 208 co-sponsors in the House and 29 in the Senate. It will likely be put to a vote after July 4.
“The fear is, they say, maybe some day, [Iran is] going to get a nuclear weapon, even though our own CIA’s National Intelligence Estimate has said that the Iranians have not been working on a nuclear weapon since 2003,” continued the 10-term congressman.
The US and Israel accuse Tehran of making efforts to produce nuclear weapons; Iran insists its nuclear program is directed at peaceful purposes.
The most recent UN nuclear watchdog report on Tehran’s nuclear program, however, has conceded that there is no link between the use of nuclear material and ‘the alleged studies’ of weaponization attributed to Iran by Western countries.
“This is unbelievable! This is closing down Iran. Where do we have this authority? Where do we get the moral authority? Where do we get the international legality for this? Where do we get the Constitutional authority for this?” asked Paul.
Ron Paul on How The Fed Creates Inflation
Ron Paul March in Washington D.C. on July 12
http://ronpaulforum.info/index.php?topic=362.0
Filed under: Big Banks, central bank, citigroup, Credit Crisis, DEBT, Dollar, Dow, dow jones, Economic Collapse, economic depression, Economy, Euro, Federal Reserve, gas prices, gold, Great Depression, Greenback, Inflation, interest rate cuts, middle class, New York, Oil, OPEC, Petrol, rate cut, silver, Stock Market, US Economy
Oil Near $143
AP
June 27, 2008
Oil futures climbed to a new record near $143 a barrel Friday as the dollar weakened against the euro, confirming expectations that the falling greenback, a major factor in crude’s stratospheric rise, will extend its decline and add to oil’s appeal.
Retail gas prices inched lower overnight, but are likely to resume their own trek into record territory now that oil futures have broken out of the trading range where they had been for nearly 3 weeks.
Light, sweet crude for August delivery rose as high as $142.99 a barrel on the New York Mercantile Exchange before pulling back sharply in a spate of late-day profit-taking to settle up 57 cents at a record $140.21. On Thursday, the contract shot past $140 and rose more than $5 to a new settlement record.
The latest record came as the dollar fell against the euro in afternoon trading, having traded roughly unchanged for much of the day.
“The dollar was slightly stronger, and when it gave up its gains, that gave oil the green light,” said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com.
The market now believes the Federal Reserve is unlikely to raise interest rates in the near future; since higher rates tend to strengthen the dollar, traders are anticipating that it will continue to fall and, consequently, that investors will keep turning to commodities including oil as a hedge against inflation.
“Oil’s back in favor, especially with people bailing out of the stock market,” said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill.
The stock market’s recent swoon is also sending investors in search of higher-yielding investments. On Thursday, the Dow Jones industrial average fell nearly 360 points, and in afternoon trading Friday was down more than 100 points.
OPEC chief sees oil at $150-170 in coming months
Reuters
June 27, 2008
Crude oil prices could rise to as high as $170 per barrel in the coming months but are unlikely to hit $200 and should ease towards the end of the year, OPEC President Chakib Khelil said in an interview on Thursday.
“I forecast prices probably between $150-170 during this summer. That will perhaps ease towards the end of the year,” he told France 24 television, according to a text of the interview released by the station.
Gold Futures Rise as Oil Surges, Dollar Falls
IBT Times
June 27, 2008
Gold futures rose above $930 an ounce on Friday to the highest price in a month as crude oil hit a record high and the U.S. dollar continued to weaken, boosting the investment appeal of the precious metal as a hedge against inflation.
Gold for August delivery rallied $16.20 to end at $931.30 an ounce on the Comex division on the New York Mercantile Exchange. The yellow metal hit an intra-day high of $933 an ounce, the highest for a most-active contract since May 27.
The precious metal posted a weekly gain of $27.60, or 3.1 percent from last Friday’s closing level of $903.70.
Gold is likely to regain $1,000 an ounce by the end of 2008 and work higher through 2009-2010, said John Hill, an analyst at Citigroup, in a research note.
Also on the Nymex, Silver futures for September delivery rose 49 cents, or 2.8 percent, to $17.71 an ounce. The metal climbed 1.8 percent this week and is up 19 percent this year.
http://www.guardian.co.uk/world/2008/jun/25/usa.subprimecrisis
Stocks Mostly Lower Again
http://biz.yahoo.com/ap/080627/wall_street.html?printer=1
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http://www.spiegel.de/international/world/0,1518,562291,00.html
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Dow Tumbles 360 Points
http://news.yahoo.com/s/ap/200..p7tkyjYvSV08ZQAF3YkzSNv24cA
Filed under: central bank, Credit Crisis, DEBT, Dow, Economic Collapse, economic depression, Economy, gas prices, Goldman Sachs, Great Depression, Greenback, IEA, Inflation, morgan stanley, Oil, Petrol, Russia, Stock Market, US Economy | Tags: commerzbank, gazprom
Oil seen hitting $150 this summer: Goldman analyst
Reuters
June 9, 2008
Oil prices are likely to hit $150 a barrel this summer season, the global head of commodities research at Goldman Sachs said on Monday, as tighter supplies outweigh weakening demand.
“I would suggest that the likelihood of that happening sooner has increased tremendously … sometime in summer,” Jeffrey Currie told an oil and gas conference in the Malaysian capital, referring to oil at $150 a barrel.
Goldman Sachs, the most active investment bank in energy markets and one of the first to point to triple-digit oil more than two years ago — a once unthinkable level — said last month oil could shoot up to $200 within the next two years as part of a “super spike.”
Morgan Stanley Analyst Sees Oil Driven To $150 By July 4
Dow Jones
June 6, 2008
Strong demand from Asia will cause a short-term spike in oil prices to $150 a barrel by July 4, a Morgan Stanley analyst said Friday.
Oil prices took a big step in that direction Friday, with benchmark futures rising 5% and topping $134 a barrel in morning trading. A spike to $150 would significantly raise the risk of severe damage to oil-sensitive sectors.
Aviation executives have said even $125 oil wrecks the industry’s business model, and chemical companies like Dow Chemical (DOW) have sharply raised prices to accommodate the soaring cost of petroleum feedstocks. Retailers and others who rely on consumers with budgets pinched by high gasoline prices are also under stress.
Gazprom predicts oil will reach $250 in 2009
Financial Times
June 10, 2008
Gazprom, Russia’s gas monopoly, on Tuesday predicted oil prices would reach $250 a barrel in 2009.
The striking prediction came as the International Energy Agency, the developed world’s energy watchdog, warned that record high prices were needed to choke off demand in order to balance the oil market.
It is the IEA’s most candid admission to date that oil supply is struggling to catch up with Asian demand, and follows the sharp rise in prices last week, which saw crude jump more than $16.24 in less than 36 hours to a record $139.12.
Gazprom’s prediction came at a strategy presentation in Deauville, where Alexei Miller, chief executive, said: “Today we are witnessing a very great change for hydrocarbons. The level is very high and we think it [the price of oil] will reach $250 a barrel.” A company spokesman specified that Gazprom believed that level would be hit in 2009.
That is substantially higher than forecasts by analysts, who see oil prices in 2009 ranging between $100 and $200.
http://www.canada.com/calgaryheral..8a202a-d569-48eb-8612-14533cb80543
Commerzbank: Oil Could Hit $150 – $170
http://www.iht.com/bin/printfriendly.php?id=13645369
Filed under: Bank of England, Bear Stearns, Big Banks, BOE, California, central bank, Credit Crisis, DEBT, Dow, Economic Collapse, economic depression, Economy, Euro, food prices, gas prices, George Bush, global economy, gold, Great Depression, Greenback, henry paulson, Inflation, interest rate cut, interest rate cuts, Iraq, nymex, Oil, Paulson, Petrol, rate cut, silver, Stock Market, US Economy, Wall Street, wheat
Update: Gold Regains $954, Oil $108, Euro $1.58
AP
March 27, 2008
Gold prices edged slightly lower Thursday after the dollar gained against the euro, leading investors to sell the precious metal traditionally viewed as a haven against inflation.Other commodities traded mixed, with crude oil briefly rising above $108 a barrel and wheat and soybean futures retreating.
The dollar strengthened against the euro after the U.S. Commerce Department reported that the economy grew slightly in the fourth quarter. The euro bought $1.5766 in Thursday trading, down from $1.5815 in New York late Wednesday.
A stronger greenback often encourages investors to sell hard assets like gold and silver, which are seen as hedge investments during times of economic uncertainty and rising inflation. A stronger dollar also makes dollar-denominated commodities seem more expensive to overseas buyers.
Gold for April delivery inched 40 cents lower to settle $944.20 an ounce on the New York Mercantile Exchange, after earlier trading as low as $940.
“Gold seems to be following the euro,” said Scott Meyers, analyst with Pioneer Futures in New York. “I think it’s a brief pause in the upward trend but we have to keep an eye on the dollar.”
Other precious metals traded higher. Silver for May delivery rose 16.7 cents to settle at $18.55 an ounce on the Nymex, while May copper added 14.80 cents to settle at $3.873 a pound.
Gold had moved higher in the previous two sessions, breaking out of last week’s commodities slump that saw big drops in everything from corn to copper. Gold has gained 12 percent this year, driven up by U.S. interest rate cuts, record-high crude prices and nervousness about the economy. The metal reached a record 1,033.90 this month, and analysts say it could go even higher.
“We’re going to see sustained acceleration in the (gold) market,” Meyers said. “There’s enough nervousness about the dollar and I don’t know if there’s enough bullets in (Federal Reserve Chairman Ben) Bernanke’s gun to keep lowering rates.”
In energy markets, oil futures briefly rose above $108 a barrel after the bombing of a major oil pipeline in Iraq. Dow Jones Newswires reported that the attack cut off exports from the southern city of Basra, although oil officials said exports weren’t affected.
Light, sweet crude for May delivery added $1.68 to settle at $107.58 a barrel on the Nymex after earlier rising as high as $108.22.
Other energy futures traded mixed. April gasoline futures fell 2.66 cents to settle at $2.7163 a gallon, while April heating oil futures rose by 10.45 cents to settle at $3.1483 a gallon.
In agriculture markets, wheat prices fell after the dollar rebounded.
Wheat for May delivery dropped 19 cents to settle at $10.14 a bushel on the Chicago Board of Trade, after earlier falling as low as $10 a bushel.
Other agriculture futures traded mixed. Corn for May delivery added 3.25 cents to settle at $5.55 a bushel on the CBOT, while May soybean futures declined 24.75 cents to settle at $13.2725.
BlackRock says gold record high may be challenged
Reuters
March 26, 2008
http://youtube.com/watch?v=OvCVEsahhZo
Investment manager BlackRock expects tight gold supply and a gradual rising trend in the price which could lift the metal to new highs above the record $1,030 per ounce hit last week.
“We expect a gradually rising trend in the gold price and if that happens we will get to a new high. We are expecting that positive trend to continue, with volatility over the short term,” said fund manager Evy Hambro, who runs BlackRock’s $17 billion (8.5 billion pound) World Mining Fund and co-manages the $8.9-billion World Gold Fund.
Gold traded at $931.60 an ounce on Tuesday, well off a high of $1,030.80 hit on March 17.
“We think the replacement cost of gold today is much higher than where the market is right now,” Hambro said, adding that even if the price reached the desired level it would have to be sustained for gold companies to invest.
“Just because it reaches that number doesn’t mean it’s going to change anything. We’re not going to see all gold mining CEOs building new projects. The price needs to average that over a decent period of time for them to start investing shareholder capital into new production assets,” he said.
The Gold fund’s top three holdings as at the end of last month were Australia’s Newcrest Mining (NCM.AX: Quote, Profile, Research), Canada’s Barrick Gold (ABX.TO: Quote, Profile, Research) and Kinross Gold (K.TO: Quote, Profile, Research), which together accounted for over 22 percent of the fund.
“In the gold space we are very much in a situation where production will continue to likely decline. There are not enough new gold discoveries to replace the gold being mined,” Hambro said.
Recent News:
http://business.timesonline.co..economics/article3624591.ece
Wall Street To Shed 20,000 Jobs
http://www.telegraph.co.uk/money/..money/2008/03/26/bcnjobs126.xml
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Next Stop $2000 Gold
http://seekingalpha.com/article/69710-next-stop-2-000-gold
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Filed under: bear sterns, bernanke, Big Banks, Britain, central bank, China, Credit Crisis, DEBT, dollar peg, Dow, Economic Collapse, economic depression, Economy, Europe, Federal Reserve, food prices, gas prices, gas tax, global economy, gold, Great Depression, Greenback, housing market, imf, Inflation, interest rate cut, interest rate cuts, job market, Lehman Brothers, Oil, OPEC, Paulson, Petrol, rate cut, Stock Market, subprime, subprime lending, tax, tax rebates, United Kingdom, US Economy, Venezuela, yuan | Tags: John Lipsky, Nigel Gault
America is ALREADY in recession, say top economic global experts – and that spells trouble for the UK
Daily Mail
March 21, 2008
Experts have accused the International Monetary Fund of “driving the car using the rear view mirror” after the global body warned the U.S. was on the verge of a recession.
The world’s biggest economy is already in a recession, they claim, as a draft version of the IMF’s World Economic Outlook declared the U.S. economy is “very weak”. Nigel Gault, chief US economist at Global Insight, a worldwide economic forecasting and consultancy firm, said he believed the US was in recession already – and that spelt problems for other countries, including the UK.
He said: “The US has, for years, been the primary motor for growth in the global economy. However, now consumer spending in the US has seen a downturn, the tables are turned, and the US is looking to the rest of the world for support, through strong export growth, and cutting imports.
“This is happening, US exports are doing extremely well, but it’s not enough to keep the economy out of recession.
“We do not expect to see the problems in the housing market in the US bottoming out before 2009, and while spending will be helped by tax rebates to be given this summer, that may give only temporary relief, and in the first quarter next year growth may dip back close to zero.
“The longer either the recession or period of weak growth goes on, the longer the US market is going to be weak, and very difficult for anybody trying to sell goods to it.”
Jeremy Batstone, head of research at stockbrokers Charles Stanley, said the IMF “has a history of driving the car using the rear view mirror”.
He added: “For the whole of 2007, it was not looking through the windscreen, it was merely reporting what the prevailing economic data releases were telling it.
“This report suggests nothing has changed, the IMF using backward-looking data is taking the view that the US economy might be in recession.
“Recent economic releases make it entirely clear that the US economy is already in recession, it’s confirmed by diverse economic statistics, including retail sales, sharply falling house prices, rising unemployment, deteriorating industrial production and manufacturing output.
“The 64,000-dollar question, indeed the 64-trillion dollar question, is not what happened in the first quarter, but what might happen in the second quarter, and beyond that.
“The hope among economists is that radical action by the US Federal Reserve might be enough to nip this crisis in the bud, and maybe there can be gradual recovery in the second quarter of the year, but at the moment we just don’t know.
“I do find myself becoming a little more hopeful, as the hour is darkest before the dawn. Just maybe radical action will prove that in the second quarter – or the third quarter if we are unlucky – that the storm abates.”
The draft version of the International Monetary Fund’s World Economic Outlook concluded the US economy “remains very weak, certainly close to a possible recession”.
The report is due to be published ahead of a meeting next month, and was leaked to Italian news agency Ansa.
The verdict comes after the cash crisis and cut-price rescue of troubled US investment bank Bear Stearns sent markets plummeting at the beginning of the week.
The Federal Reserve, the US central bank, dropped its main interest rate by three quarter-points on Wednesday – the latest in a series of cuts which have seen the rate trimmed by 2 per cent in the first three months of this year – and 3 per cent since the credit crunch first erupted in global markets last August.
The moves come as the Fed attempts to rescue the world’s biggest economy from the brink of recession and ease the pressure on the banking system.
IMF: Think The Unthinkable
CNBC
March 19, 2008
The International Monetary Fund (IMF) today warned authorities worldwide to “think the unthinkable” in planning to cope with a mounting crisis in the global financial system.
John Lipsky, IMF first deputy managing director, called for “decisive policy action” amid a credit crunch that stems from the US real estate meltdown and is spreading throughout the financial markets.
The coordinated actions by the US Federal Reserve and other global central banks on Tuesday to further pump billions of dollars of liquidity into financial markets were “helpful” but stronger measures may be necessary.
Policy actions worldwide to date “may not prove to be adequate” to deal with the “low-probability but high-impact events” that may materialize and undermine global financial stability, Lipsky said in an address at the Peterson Institute for International Economics, a Washington think tank.
“Policy makers as a matter of course need to ’think the unthinkable,’ and to consider how they would plan to react if contingencies arise. The need to prepare more systematically for potential risks has been demonstrated amply during the past few months,” he said.
“By now, there is little doubt that risks of further escalation of this crisis are rising and decisive policy action will be required to put the global financial system and economy on a firmer footing.” He said the first priority was to reverse the spreading strains in global financial markets and to restore the normal functioning of the financial system in advanced economies.
If contingent risks materialize, the central banks together with financial supervisors and regulators will be the first line of defence. The second line of defence lies with fiscal authorities. Finally, public intervention will be considered as a third line of defence, Lipsky said. The IMF “stands ready to use its record liquidity if needed to help cushion the global economy,” Lipsky said, adding, “we must keep all options on the table.”
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Here Comes Worldwide Currency Debasement
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Filed under: 2008 Election, bernanke, Big Banks, C-Span, CNN, Credit Crisis, DEBT, Dow, Economic Collapse, economic depression, Economy, Federal Reserve, Fox News, global economy, gold, GOP, Great Depression, Greenback, health care, housing market, Inflation, Iraq, John McCain, liquidation, neil cavuto, rally, Ron Paul, S&P, Stock Market, subprime, subprime lending, Torture, US Economy, Wall Street, Washington D.C., ww4
Ron Paul: Fed Injection A Disaster
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Ron Paul: A Recession is Tough Medicine
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Ron Paul Warns Of Economic Worldwide Collapse
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Ron Paul Speaks at Freedom Rally in D.C. April 15, 2008
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Ron Paul v. Bushian Torture
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Video: Ron Paul On CNN – (3/10/2008)
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Ron Paul: Fixing What’s Wrong With Iraq
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Man gets 10 months for firing shotgun at Ron Paul sign
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Ask Congress to pass Ron Paul’s health care bill
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Ron Paul Endorsements Keep Pouring In
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Ron Paul leaves open door to third-party bid, unlikely to support McCain
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Filed under: Big Banks, central bank, Credit Crisis, DEBT, Dow, ECB, Economic Collapse, economic depression, Economy, european central bank, fannie mae, Federal Reserve, freddie mac, Great Depression, Greenback, Inflation, interest rate cut, interest rate cuts, liquidation, rate cut, Stock Market, US Economy, US Treasury, Wall Street | Tags: swiss national bank, Term Securities Lending Facility, TSLF
Fed pumps up liquidity in funding markets to ease credit crunch
AP
March 11, 2008
Fed Announces Further Steps to Ease Credit Crunch WASHINGTON (AP) — The Federal Reserve on Tuesday ramped up efforts to provide more relief to squeezed financial institutions, a coordinated action with other central banks aimed at easing a global credit crises that threatens to push the U.S. economy into its first recession since 2001.
The Fed said it will make up to $200 billion in Treasury securities available to big Wall Street investment houses and banks. The new action is designed to ensure that there is an ample supply of Treasury securities. With strains in financial markets, demand has grown for Treasury securities, considered the safest investment in the world because they are backed by the U.S. government.
On Wall Street, the Fed’s action propelled stocks upward. The Dow Jones industrials jumped more than 250 points in morning trading.
The move comes as banks and other financial institutions face cash crunches.
“Pressures in some of these markets have recently increased again,” the Fed said in a statement. “We all continue to work together and will take appropriate steps to address those liquidity pressures.” The other banks involved are the Bank of Canada, the Bank of England, the European Central Bank and the Swiss National Bank.
The Fed announced the creation of a new tool, called the Term Securities Lending Facility (TSLF), geared to provide primary dealers — big Wall Street investment firms and banks that trade directly with the Fed — with 28-day loans of Treasury securities, rather than overnight loans. They would pledge other securities — including federal agency residential-mortgage-backed securities, such as those of mortgage giants Fannnie Mae and Freddie Mac — as collateral for the loans of Treasury securities.
“This will not turn the economy around or fix all the problems in the markets but it should reduce the liquidity issue, at least for now,” said Ian Shepherdson, chief economist at High Frequency Economics. The odds of a deep, three-quarters of a percentage point cut in the Fed’s key interest rate next Tuesday have dropped sharply as the Fed’s new relief seemed to calm market turmoil, he said.
http://www.nytimes.com/2008/03/11/b..ef=slogin&oref=slogin
Global central bank liquidity injection no long term cure for dollar
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Filed under: Alan Greenspan, bernanke, black monday, Britain, Canada, central bank, Credit Crisis, DEBT, Dow, ECB, Economic Collapse, economic depression, Economy, Europe, european central bank, european union, global economy, gold, Great Depression, Greenback, Inflation, interest rate cut, interest rate cuts, John McCain, liquidation, Paul Craig Roberts, platinum, rate cut, Stock Market, United Kingdom, US Economy
Forget 1987, This Could Be 1929 All Over Again
Analyst says economic winter could last 8 years, worst is yet to come
Paul Joseph Watson
Prison Planet
January 24, 2008
The huge debt bubble, which has artificially propped up the stock market since the turn of the millennium, could cause a new great depression according to one expert, who also predicts that investors will flock to buy gold as the dollar continues to plummet.
Financial analysts have been drawing comparisons between this week’s chaos and the October 19 1987 crash, known as Black Monday, when the Dow Jones Industrial Average dropped by over 22 per cent and markets sunk worldwide.
But Vancouver-based investment adviser Ian Gordon has gone a step further, seeing clear parallels between current events and those that foreshadowed the 1929 crash and ensuing depression.
“We’re really seeing a mirror image of what happened following the [19]29 peak in equity prices in the United States, and the subsequent crash in equities,” Gordon told the Georgia Straight. “We’re seeing really the mirror of…the huge debt bubble that was built into the economy in the ’20s in the United States. We’re now seeing the collapse of the debt bubble that was built into the world economies, but principally in the United States.”
Gordon levels the blame at Alan Greenspan for creating a huge bubble by injecting too much money into the system in an attempt to offset the “economic winter” that inevitably arrives as part of the boom and bust cycle of the fiat money system, arguing that the realistic peak in the stock market occurred in 2000.
Gordon predicts that the “economic winter” will last another 7 or 8 years and that the worst is yet to come, with the continued meltdown of the dollar causing people to flock to the safe haven of gold.
“As this whole collapse in paper assets begins to unfold, causing tremendous strain on the banking system, we will see a tremendous rush to gold, to own gold,” he said. “But I think the worst is definitely in front of us, and not behind us.”
Gordon slammed the huge 75 points rate cut as ineffective, arguing that neither banks or consumers want to engage because of the crippling problems of their existing debts.
The analyst’s conclusions are in line with those of Paul Craig Roberts, the father of Reaganomics, who on Tuesday warned that the mess could result in the dollar losing its status as the world reserve currency.
Roberts also cautioned that the rush to diversify into gold could make people’s assets a target for government confiscation, as happened in 1933, four years after the great depression.
SocGen raises questions over Fed rate cut
FT
January 24, 2008
The Federal Reserve had no inkling about Société Générale’s firesale of stock futures following the discovery of a rogue trader when the US central bank made its emergency interest rate cut.
The question being asked by some in the markets is: was the Fed duped into a clumsy and panicked move by the clean-up operation for Jérôme Kerviel’s mammoth losses for the French bank?
There are many prepared to believe that, without SocGen’s huge derivatives sales, the mood in the stock markets would not have been half as bleak.
“It is now clear that the Fed was panicked into a 75 basis point rate cut by the actions of a rogue trader and the bank’s unwinding of his positions,” said one London-based hedge fund manager. “The action also clearly suggests that their French and ECB counterparts did not tell them what had happened at SocGen.”
Read Full Article Here
Purchasing Power Of The DOW
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A full-blown, prolonged recession in America is now inescapable
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Crisis far from over, even with emergency cut
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Filed under: 9/11, Australia, Bank of America, Bear Stearns, bernanke, Big Banks, bilderberg, black monday, bonds, Britain, central bank, CFR, Credit Crisis, DEBT, Dow, Economic Collapse, economic depression, Economy, engineered recession, Europe, european union, Federal Reserve, foreign buyout, FTSE, gas prices, George Bush, global economy, gold, Great Depression, Greenback, hong kong, housing market, Inflation, interest rate cut, interest rate cuts, Merrill Lynch, Northern Rock, Oil, Oppenheimer, Petrol, rate cut, Russia, S&P, Stock Market, tax rebates, US Economy, Wall Street
Fed Cuts Interest Rates 75 Basis Points
AP
January 22, 2008
The Federal Reserve, confronted with a global stock sell-off fanned by increased fears of a recession, slashed a key interest rate by three-quarters of a percentage point on Tuesday and indicated further rate cuts were likely.
The surprise reduction in the federal funds rate from 4.25 down to 3.5 percent marked the biggest funds rate cut on records going back to 1990.
Federal Reserve Chairman Ben Bernanke and his colleagues took the action after an emergency video conference on Monday night, a day when global markets had been pounded by rising concerns that weakness in the world’s largest economy was spreading worldwide.
Despite the Fed’s bold move, Wall Street plunged at the opening. The Dow Jones industrial average was down 311.99 points in the first hour of trading.
In a brief statement explaining its move, the Fed said that “appreciable downside risks to growth remain” and officials pledged to “act in a timely manner” to deal with the risks facing the economy. The action was approved on an 8-1 vote.
Analysts said the fact that the Fed did not wait until its meeting next week to cut rates underscored the seriousness of the situation.
“The world’s stock markets are in meltdown so the Fed came in with an inter-meeting move to try to stop the panic,” Christopher Rupkey, senior economist at Bank of Tokyo-Mitsubishi.
The Bush administration, which had announced on Friday that President Bush supported a $150 billion economic stimulus package, said Tuesday that it was not ruling out doing more than the $150 billion proposal if necessary.
Many analysts said if the carnage continues in stock markets, the Fed will move to cut rates again at its Jan. 29-30 meeting.
“This move is not an instant fix,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics. “The economy is still staring recession in the face, but at least the Fed now gets it.”
‘Fed may keep cutting interest rates’
Western Mail
January 23, 2008
There could be more interest rate cuts to come as the US Federal Reserve tries to head off recession.
Howard Archer of Global Insight said the prospect of a US recession suggests the Fed may keep cutting rates.
Yesterday’s surprise decision to cut US rates by 0.75% helped rally London’s FTSE-100 index, after £76bn had been wiped off its value on Monday. The index of leading shares closed 161.9 up at 5740.1, a gain of 2.9% after Monday’s 5.5% fall.
The Fed’s cut to 3.50% was its first emergency move since 2001 and the largest single reduction since 1984.
Mr Archer of Global Insight said “The Fed did not directly reference Monday’s global stock-market meltdown in its announcement, merely noting that ‘broader financial market conditions have continued to deteriorate’. It focused upon the weakening outlook for growth.”
US rates ‘heading for 2.5% by the spring’
The Scotsman
January 23, 2008
American interest rates are set to tumble as low as 2.5 per cent by early spring as US policymakers battle to restore stability to a faltering economy.
Economists said they expected the Federal Reserve to have shaved another full point off borrowing costs by its scheduled April meeting.
The prediction came after yesterday’s surprise three-quarter-point cut to 3.5 per cent – a move that appeared to have only limited success in restoring investor confidence.
Bonds jumped sharply, with two-year notes falling to their lowest in nearly four years, as investors prepared for still more rate- cutting.
In London, the benchmark FTSE 100 index of Britain’s biggest companies closed 161.9 points or nearly 3 per cent higher at 5,740.1 following a rollercoaster session and the previous day’s 323-point battering.
Nigel Gault, chief US economist at forecasting body Global Insight, said the prospect of “at least a mild US recession” suggested the Fed was “far from done cutting rates”.
He added: “We now expect the Fed to cut another cumulative 100 basis points off interest rates. The next instalment will probably come at the formal meeting on 30 January – another 25 or 50 basis points. We would expect to hit 2.5 per cent by the April meeting.”
Yesterday’s decision to slash interest rates came a week before the US central bank’s regularly scheduled meeting, a sign that it acknowledges that the global financial situation is serious.
David Jones, chief economist at DMJ Advisors, said the Fed could move again between meetings, should conditions deteriorate further, and predicted the Fed would lower interest rates to 3 per cent by the end of March.
Earlier this month, leading investment bank Merrill Lynch said the US economy was already in recession.
Some analysts pointed to a panic move by the Fed, which is headed by chairman Ben Bernanke. Michael Metz, chief investment strategist at Oppenheimer in New York, said: “Unfortunately the Fed] have no power to reverse what in my opinion is the worst post-war recession.”
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The Coming Global Depression
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World stock markets fall
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Filed under: bernanke, Britain, Congress, Credit Crisis, DEBT, Dow, Economic Collapse, economic depression, Economy, Euro, Europe, european union, Federal Reserve, gas prices, George Bush, Globalism, gold, Great Depression, Greenback, housing market, Income Tax, Inflation, Japan, Oil, peak oil, Petrol, sterling, Stock Market, subprime, subprime lending, tax rebates, United Kingdom, US Economy, Wall Street, White House, World Bank
Tax Rebates Urged To Rescue Economy
Do they really think spending your rebate check on a flat-screen is going to help the economy?
AP
January 17, 2008
United for urgent action, the White House and Congress raced toward emergency steps Thursday to rescue the national economy from a possible recession, including tax rebates of at least $300 a person — and maybe as much as $800. Federal Reserve Chairman Ben Bernanke endorsed the idea of putting money into the hands of those who would spend it quickly and boost the flagging economy.
All the talk of rescue efforts failed to soothe Wall Street. The Dow Jones industrials plunged 306.95 points, underscoring deepening concern about the country’s economic health.
The sudden scramble to take action came as fears mounted that a severe housing slump and a painful credit crisis could cause people to clamp down on their spending and businesses to put a lid on hiring, throwing the country into its first recession since 2001.
President Bush told congressional leaders privately he favors income tax rebates for people and tax breaks for businesses, officials said. Bush spoke with congressional leaders as House aides worked behind the scenes on an emergency package that could also include more money for food stamp recipients and the unemployed.
Aides to lawmakers involved in the talks said the White House is pressing for tax rebates of $800 for individuals and $1,600 for married couples. Lawmakers were likely to settle on a $500 rebate for individuals, said an aide involved in the talks, with details for couples and people with children still being negotiated.
U.S. economy teeters on the brink
Globe & Mail
January 19 2008
In a bid to save the world’s largest economy from recession, U.S. President George W. Bush and central bank chief Ben Bernanke yesterday endorsed a $100-billion stimulus package as the spreading housing mess continued to hammer banks, consumers and investors.
The rare plug for fiscal action comes as a growing number of economists say the United States is either in recession or perilously close to it. “The United States has now effectively entered into a serious and painful recession,” said economist Nouriel Roubini of New York University.
Prof. Roubini said all of the keys to economic health are headed in the wrong direction, including the housing market, credit availability, the job market and business spending. Add to that a run-up in oil and gas prices, and the consumer is likely to take it on the chin in 2008, he said.
7-Year Plan Aligns Europe With U.S. Economy
World Net Daily
January 16, 2008
Six U.S. senators and 49 House members are advisers for a group working toward a Transatlantic Common Market between the U.S. and the European Union by 2015.
The Transatlantic Policy Network – a non-governmental organization headquartered in Washington and Brussels – is advised by the bi-partisan congressional TPN policy group, chaired by Sen. Robert Bennett, R-Utah.
The plan – currently being implemented by the Bush administration with the formation of the Transatlantic Economic Council in April 2007 – appears to be following a plan written in 1939 by a world-government advocate who sought to create a Transatlantic Union as an international governing body.
An economist from the World Bank has argued in print that the formation of the Transatlantic Common Market is designed to follow the blueprint of Jean Monnet, a key intellectual architect of the European Union, recognizing that economic integration must inevitably lead to political integration.
Recession looming in US housing-boom states
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Banks Losses Exceed Assets
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Filed under: Bank of America, bernanke, Big Banks, central bank, China, citigroup, countrywide, Credit Crisis, david walker, DEBT, Dow, Economic Collapse, economic depression, Economy, Federal Reserve, food prices, gaza, glenn beck, gold, Goldman Sachs, Great Depression, Greenback, henry paulson, housing market, Inflation, interest rate cut, interest rate cuts, Japan, job market, JP Morgan, Merrill Lynch, rate cut, Ron Paul, Stock Market, subprime, subprime lending, Tony Blair, UN, unemployment, US Economy, US Treasury
Fed Ready To Cut Rates Again
ABC
January 10, 2008
Federal Reserve Chairman Ben Bernanke pledged Thursday to slash interest rates yet again to prevent housing and credit problems from plunging the country into a recession.
The Fed chief made clear the central bank was prepared to act aggressively to rescue a weakening economy. “We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks,” he said.
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Filed under: central bank, Credit Crisis, DEBT, Dow, ECB, Economic Collapse, economic depression, Economy, european central bank, fannie mae, Great Depression, Greenback, housing market, Inflation, Stock Market, subprime, subprime lending, US Economy, Wall Street
Housing construction drops
AP
December 18, 2007
WASHINGTON – Housing construction fell in November with single-family activity dropping to the lowest level in more than 16 years. Analysts said the recession in housing showed no signs of a turnaround.
The Commerce Department reported Tuesday that construction of new homes and apartments dropped by 3.7 percent last month to a seasonally adjusted annual rate of 1.187 million units.
Construction of single-family homes fell by 5.5 percent to an annual rate of 829,000 units. It was the eighth consecutive drop in single-family starts, pushing activity in this area to the lowest level since April 1991. Apartment building rose last month by 4.4 percent to an annual rate of 332,000 units.
In an ominous sign for future activity, the government reported that applications for building permits fell for a sixth straight month, dropping by 1.5 percent to a seasonally adjusted annual rate of 1.15 million units, the slowest pace for building permits since June 1993.
On Wall Street, investors were buffeted by the continued bad news on housing and an encouraging move by the European Central Bank to inject the equivalent of $500 billion into the European banking system to combat the global credit crunch that has been triggered by the meltdown in subprime mortgages in the United States. After a rollercoaster day, the Dow Jones industrial average finished up 65.27 points at 13,323.47.
The overall construction decline left home building 24.2 percent below the level of activity a year ago. After five straight years of record sales and soaring prices, housing has been in a serious downturn for two years.
Analysts expect the weakness to intensify in coming months, possibly becoming enough of a drag to push the country into a full-blown recession.
“The housing recession continues to grind away,” said Brian Bethune, an economist at Global Insight. “The housing market is now navigating through perfect storm conditions.” He said a downward spiral in sales is being exacerbated by the severe credit crunch and rising mortgage foreclosures which are dumping more homes on an already glutted market.
U.S. Housing Crash Deepens in 2008 After Record Drop
Bloomberg
December 14, 2007
For U.S. homeowners, builders, bankers and realtors, the crash of 2007 will only get worse in 2008.
Everyone from mortgage-finance company Fannie Mae to Lehman Brothers Holdings Inc. expects declines next year. Existing home sales will drop 12 percent and existing home prices will fall 4.5 percent, Washington-based Fannie Mae says. Lehman analysts estimate almost 1 million mortgage loans will default in 2008, up from about 300,000 this year.
“We’re only halfway through the housing shock,” said Ethan Harris, chief U.S. economist at New York-based Lehman, the fourth- biggest U.S. securities firm by market value. “It’s just a matter of time before the weakness spreads to the rest of the economy.”
The housing market collapse has been anything but the “soft landing” that Federal Reserve Bank of San Francisco President Janet Yellen and David Lereah, former chief economist at the National Association of Realtors in Chicago, predicted for real estate at the start of 2007.
Median home prices declined in the U.S. this year, the first annual drop since the Great Depression, according to forecasts from the National Association of Realtors.
“I’m not going to sit here and tell you it’s going to turn real strong next year,” said Jim Gillespie, chief executive officer of Coldwell Banker Real Estate LLC, the largest U.S. residential brokerage, according to Franchise Times. “It’s not going to turn real strong next year.” Gillespie said he doesn’t make housing market forecasts.
Filed under: Bank of America, bernanke, central bank, credit card, Credit Crisis, DEBT, Dow, Economic Collapse, economic depression, Economy, Europe, Federal Reserve, food prices, foreclosure, gold, Great Depression, Greenback, housing market, Inflation, interest rate cuts, london, petroeuro, rate cut, rate freeze, Stock Market, subprime, subprime lending, UBS, United Kingdom, US Economy, Wall Street, washington mutual, wells fargo
Wall Street Tumbles After Rate Cut
AP
December 11, 2007
WASHINGTON (AP) – The Federal Reserve dropped its most important interest rate to a nearly two-year low on Tuesday and left the door open to additional cuts to prevent a housing and credit meltdown from pushing the economy into a recession.
Fed Chairman Ben Bernanke and all but one of his colleagues agreed to trim the federal funds rate by one-quarter percentage point to 4.25 percent.
The rate reduction, the third this year, was needed to energize national economic growth, Fed officials said. The deepening housing slump is affecting the behavior of consumers and businesses alike, the Fed said.
“Economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending. Moreover, strains in financial markets have increased in recent weeks,” the Fed said in a statement explaining its decision to cut rates again. The three rate cuts ordered thus far “should help promote moderate growth over time,” the Fed added.
On Wall Street, stocks tumbled, reflecting disappointment among some investors who were hoping for a larger rate cut. The Dow Jones industrial plunged more than 200 points.
The funds rate affects many other interest rates charged to individuals and businesses and is the Fed’s most potent tool for influencing economic activity.
In response, commercial banks, including Wachovia and Wells Fargo, lowered their prime lending rate by a corresponding amount, to 7.25 percent. The prime rate applies to certain credit cards, home equity lines of credit and other loans.
The fact that the Fed’s key rate was lowered again marked an about- face for the central bank. At its previous meeting in October, Fed officials hinted that their two rate cuts probably would be sufficient to help the economy survive the housing and credit stresses. Since then, however, financial conditions have deteriorated, prompting Bernanke to signal before Tuesday’s meeting that another rate cut may be needed after all as an insurance policy against undue economic weakness.
As another bolstering move, the Fed on Tuesday also lowered its lending rates to banks by one-quarter percentage point. That was the fourth cut to the discount rate since mid-August.
“Recent developments, including the deterioration in financial market conditions, have increased the uncertainty surrounding the outlook for economic growth and inflation,” the Fed said in its statement.
Banks, financial companies and other investors who made loans to people with spotty credit or put money into securities backed by those subprime mortgages have lost billions of dollars. Investors in the U.S. and abroad have grown more wary of buying new debt, thereby aggravating the credit crunch.
Harder-to-get credit has thwarted would-be home buyers, intensifying the housing collapse. Foreclosures have soared to record highs. The number of unsold homes have piled up. Problems are expected to persist well into next year.
The 9-1 decision for a quarter-point reduction to the funds rate was opposed by Eric Rosengren, president of the Federal Reserve Bank of Boston. He preferred a bolder, half-percentage point cut.
“Fed’s language clearly reflects a heightened degree of concern about the economic outlook,” said Carl Tannenbaum, chief economist at LaSalle Bank. “They left open the possibility of additional rate reductions,” he added. If the economy were to take a turn for the worse, another rate cut could come before the Fed’s next scheduled meeting on Jan. 29-30, Tannbenbaum said.
The situation poses the biggest challenge yet to Bernanke, who took over the Fed in February 2006. Some analysts have questioned whether he waited too long to cut the Fed’s key rate and whether he has acted aggressively enough to the nation’s economic woes.
In September, the central bank dropped the funds rate for the first time in four years. Then it was a half-point drop; on Oct. 31 came a quarter-point cut.
The rationale behind the lower rates is that they will induce consumers and businesses to boost spending, invigorating economic activity. With Tuesday’s reductions, both the funds rate and the prime rate are now at their lowest levels in nearly two years.
From July through September, the economy logged its best growth in four years. But it is expected to slow to a pace of just 1.5 percent or less over the final three months of the year as the housing collapse and credit crunch chill consumers, sapping overall economic growth. The odds of a recession have grown.
With growth cooling, the unemployment rate, now at a relatively low 4.7 percent, is expected to rise. Analysts expect the jobless rate to climb to 5 percent by early next year.
High oil prices could complicate the Fed’s job of trying to keep the economy expanding and inflation low.
Oil prices, which had neared $100 a barrel, have moderated. But they are still high. High energy prices are a double-edged sword. They can slow economic activity and spread inflation if they cause the prices of lots of other goods and services to rise.
“Elevated energy and commodity prices, among other factors, may put upward pressure on inflation,” the Fed said. “Inflation risks remain,” the Fed said, adding that it “will continue to monitor inflation developments carefully.” Some economists believed the Fed’s decision to go with a moderate quarter-point cut was a nod to those inflation concerns.
Dropping dollar cramps the style of Americans abroad
LA Times
December 9, 2007
LONDON – Karla Keating and her husband had retirement on their minds in May when they got what they considered an offer too good to refuse: a three-year stint in London.
Coming from North Carolina, they knew it was going to be a bit of a financial leap. But the major US bank where her husband is an executive lured him with a 33 percent increase in pay. Within weeks, they had crossed the ocean and found a nice flat near Marylebone for 1,820 pounds – about $3,750.
“The estate agent told me the price, and I said OK, I guess that’s kind of comparable to prices around Europe. And he said, ‘That’s the price per week,’ ” Keating recalls. Since then, it’s been all downhill.
The iPod Nanos for the children cost 99 pounds apiece (about $204), compared with $149 in the United States. Keating’s six-Diet Coke-a-day habit got shaved quickly to one, at $2 a can. They sit at the end of the day on their small balcony overlooking Great Portland Street, and her husband smiles (sort of) and says, “Here’s your $12 glass of wine.”
“When I got here I was like a deer in headlights. I was just, ‘Oh my God’ about everything,” Keating said. “We figured out that with the increasingly weakening dollar, in reality he is making less than he was making 20 years ago.”
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Filed under: Credit Crisis, Credit Suisse, Dow, Economic Collapse, economic depression, Economy, Euro, Europe, foreclosures, freddie mac, gas prices, Great Depression, Greenback, housing market, Inflation, Oil, Petrol, S&P, Stock Market, subprime, subprime lending, US Economy, Yen
Stocks Fall as Oil Flirts With $100 a Barrel
NY Times
November 21, 2007
A late sell-off in the final minutes of trading sent stocks down sharply today, with the Dow Jones industrial average closing at its lowest level since April. The Standard & Poor’s 500-stock index, a broad measure of the equity market, fell into negative territory for the year.
The plunge came as investors remain frightened and uncertain about a credit crisis that does not show any signs of easing. Freddie Mac, considered a backstop for the mortgage industry, said yesterday that it lost $2 billion last quarter because of increased foreclosures tied to subprime mortgage defaults. Oil prices flirted with the symbolic $100-a-barrel level in overnight trading. Markets in Asia and Europe dropped sharply as investors questioned whether the United States economy will slow more than expected. And investors fled to the safety of relatively stable government bonds.
The Dow Jones industrials, off less than 100 points soon before 3 p.m., finished down 211.10 points, to 12,799.04, a 1.6 percent decline. It was the lowest close since April 19. The index fell even below the low ebb of trading during the summer’s credit crisis, when it finished at 12,845.78 on Aug. 16.
The S.& P. 500 index fell 22.93 points, also 1.6 percent, to 1,416.77, putting it down 0.11 percent for the year.
“This is an ugly week,” said James Paulsen, chief investment strategist at Wells Capital Management. Indeed: the Dow lost 2.9 percent of its value in the last three days alone.
Some market watchers suggested that lower trading levels during a holiday week make the market more volatile, but at least one analyst disputed that notion. “I don’t know of anyone taking a day off today,” said Dennis Davitt, who oversees equity derivative trading for Credit Suisse. “Not in these conditions.”
Crude oil futures briefly rose above $99 in overnight trading and an Energy Department report showed that inventories fell slightly last week, leaving investors wondering how soon oil will be nudged above its inflation-adjusted record of $102. Crude settled in New York trading at $97.29, down 74 cents.
The recent run-up in oil prices, which threaten to curb consumer spending, dovetails with a shaky economic outlook released by the Federal Reserve yesterday, which predicted a slowdown in growth over the coming months.
The overnight rout in foreign markets reflected a broad reaction to the Fed’s grim projections and a growing sense that the besieged housing market, which once helped American consumers buy the world’s products and services, has not hit bottom.
Dollar hits new low versus euro
China View
November 22, 2007
NEW YORK, Nov. 21 (Xinhua) — The dollar dropped to new low against the euro for the second straight day Wednesday on worries about credit market losses and the health of the U.S. economy.
The U.S. currency also fell to a two-year low against the yen on Wednesday as investors sold higher-yielding assets financed by borrowing in Japan.
The dollar traded at 1.4858 dollars against the euro late Wednesday. It dropped to a record low of 1.4870 against the euro and 1.1016 versus the Swiss franc in earlier trading on speculation that the Federal Reserve will cut interest rates for a third time this year in December to prevent the economy from falling into a recession.
The dollar has declined 11.2 percent this year against the euro since the Federal Reserve began cutting rates in mid-September.
The dollar fell as low as 108.26 yen, the first time it has fell below 109 yen since June 2005, as global stocks weakened and oil prices surged toward 100 dollars a barrel. It stood at 108.63 yen in late trading.
Analysts said further sharp currency moves are likely in the near term, with U.S. markets closed on Thursday for the Thanksgiving holiday and trading likely to be thin on Friday.
Filed under: Alan Greenspan, Bank of England, Big Banks, Britain, China, citigroup, Credit Crisis, Dow, Economic Collapse, economic depression, Economy, Euro, global economy, Goldman Sachs, Great Depression, Greenback, housing market, Inflation, interest rate cuts, Joseph Stiglitz, Merrill Lynch, Northern Rock, Paulson, pound, rate cut, Stock Market, subprime, subprime lending, US Economy, US Treasury, wells fargo, Yen
Dollar Decline “Irreversible”
The Independent
November 17, 2007
The decline of the dollar, symbol of US global hegemony for the best part of a century, may have become so entrenched that some experts now fear it is irreversible.
After months of huge and sustained turmoil on the money markets, lack of confidence in the world’s totemic currency has become so widespread that an increasing number of international traders are transferring their wealth to stronger currencies such as the euro, which recently hit its highest level against the dollar.
“An American businessman over here who is given the choice would take anything but the dollar,” David Buik of Cantor Index said yesterday. “I would want to be paid in yen, and if not yen then the euro or sterling.”
Matthew Osborne, of Armstrong International, added: “The majority would say sterling. There are a few dealers in the City who may take the view that they’ll take dollars now, while they’re cheap, and hold on to them for 12 months.
“But the problem is so serious that there are people who in July or August might have been thinking, ‘I’m paid in dollars, how annoying’ for whom it’s now a question of, ‘Do you have a job; do you have a bonus?’ “
The collapse of the sub-prime mortgage market in the US, which is fuelling the dollar unrest, has already brought down one British bank, Northern Rock, and has forced others to declare vast losses. Yesterday, just as it appeared that the dollar might have finally reached its floor, there was another warning that the sub-prime crisis is going to get worse. The US Treasury Secretary Henry Paulson, warned an international business summit in South Africa: “The sub-prime market, parts of it will get worse before it gets better.” Huge numbers of US homeowners are still cushioned by introductory interest rates set when they took out loans in 2005 or 2006, he said. When these introductory offers run out, their interest payments will increase, setting off another wave of defaulting and repossessions. And the dollar is enduring its rockiest spell in recent memory.
Goldman Sees Subprime Cutting $2 Trillion in Lending
Bloomberg
November 16, 2007
Nov. 16 (Bloomberg) — The slump in global credit markets may force banks, brokerages and hedge funds to cut lending by $2 trillion and trigger a “substantial recession” in the U.S., according to Goldman Sachs Group Inc.
Losses related to record home foreclosures using a “back- of-the-envelope” calculation may be as high as $400 billion for financial companies, Jan Hatzius, chief U.S. economist at Goldman in New York wrote in a report dated yesterday. The effects may be amplified tenfold as companies that borrowed to finance their investments scale back lending, the report said.
“The likely mortgage credit losses pose a significantly bigger macroeconomic risk than generally recognized,” Hatzius wrote. “It is easy to see how such a shock could produce a substantial recession” or “a long period of very sluggish growth,” he wrote.
Goldman’s forecast reduction in lending is equivalent to 7 percent of total U.S. household, corporate and government debt, hurting an economy already beset by the slowing housing market. Wells Fargo & Co. Chief Executive Officer John Stumpf said yesterday that the property market is the worst since the Great Depression.
Citigroup Inc., the biggest U.S. bank, and Merrill Lynch & Co. have led companies writing down more than $50 billion on securities linked to subprime mortgages. The risk of further losses by banks has pushed their borrowing costs above the average for investment-grade companies, according to Merrill Lynch indexes. Citigroup paid bondholders the highest yield relative to benchmark interest rates in its history this week.
Will Dow-gold ratio hit one-to-one again?
http://www.thestar.com/Business/article/276972
Markets poised for severe fall: Bank of England
http://www.telegraph.co.uk/mon….cnking115.xml
Stiglitz: Greenspan To Blame For Crisis
http://www.bloomberg.com/apps/news?…6mHrJk&refer=us
Wells Fargo: Housing worst since Great Depression
http://www.guardian.co.uk/feedarticle?id=7080215
China State TV To Viewers: Dump The Dollar
http://mparent7777-2.blogspot.com/…p-dollar.html
Cost Of The Crunch $2 Trillion, Says Goldman
http://www.forbes.com/2007/11/16/gold….ed=rss_news
Goldman Sees Subprime Cutting $2 Trillion in Lending
http://www.bloomberg.com/apps/new…A&refer=home
Suddenly ‘world’s biggest financial institutions are paying more to borrow in the corporate bond market than the average company’
http://www.bloomberg.com/apps/…fqw&refer=home
Investors Should Spank Banks for Betraying Trust
http://www.bloomberg.com/apps/news….4&refer=home
Pound Poised for Biggest Weekly Drop Against Dollar Since 2005
http://www.bloomberg.com/apps/new…8&refer=uk
Warning over rate rise by ‘devious’ lenders
http://www.telegraph.co.uk/news/main.j…1/17/nrates117.xml
Fed Pumps $47bn Into System, Goldman Sachs Warns Recession
http://noworldsystem.com/2007/11/17/fed…s-recession/
Gold falls below $800 and Oil Slides $94 a Barrel
http://noworldsystem.com/2007/11/16/g…-a-barrel/
Jim Rogers Urges People To Sell Dollars
http://www.bloomberg.com/apps…d=aXH9wCx1oydw
Gold steadies as bargain hunters resurface
Gulf states’ dollar peg comes under threat
Pound hits fresh 4-yr low vs euro after weak data
Economists in poll expect credit turmoil to continue: WSJ
UK: Fastest rise in food prices for 14 years
Forex – Pound sinks as Oct retail sales show flagging sentiment
Bank’s grim warning over UK economy
Consumer inflation posts increase
Inflation, gold: Back to the 1970s?
Goldman Sachs bets credit crisis will worsen
British taxpayers face paying £730 EACH to cover Northern Rock in plans to ‘nationalise’ bank
Carnage on Wall Street as loans go bad
Treasury Market Inflation Anxiety Renewed
‘Sub-prime black hole is getting scarier’
California, Ohio, Florida Cities Lead U.S. Foreclosure Filings
US dollar will get stronger: Bush
Dollar to stay anchor of China’s reserves: Chinese official
When I start seeing Jay-Z flashing euros instead of the dollar, I know our economy is in trouble
Talk of Worst Recession Since the 1930s
Recession fears grow as inventories swell
Recession fears grow as inventories swellOECD Says the Full Effect of the Sub-Prime Mess is Still in Front of Us
MBIA, Ambac Downgrades May Cost Market $200 Billion
Paulson Becomes Boxed-in by `Strong’ Dollar Chant
88% Erosion and Purchasing Power
Bear Stearns Cuts Subprime Assets, Limits Writedown
Orlando Foreclosure Filings Up 184%
Judge rules against the banks!?
Crude Oil = $98; Gold = $845
Wall Street Sees Worst Weekly Point Loss Since 9/11
Gold bounces above $800 after 1 percent drop
It’s the FIRE Economy, stupid
Dollar Crisis: None dare call it ‘conspiracy’
Subprime Losses May Reach $300/400 Bil
Sterling falls as risk aversion leads to carry unwind
Time for the White House to Rescue the Dollar?
Bets against the dollar unlikely to slow this quarter
Even a weakened dollar still rules
World stocks hit 8-week low
With the dollar’s fall, intervention idea gains force
Currency Controls Return as Central Banks Fight Gains
The Risk of a Systemic Shock to the System is “Alarmingly High” – Morgan Stanley
Wall Street’s money machine breaks down
Oil Price Rise Causes Global Shift in Wealth
Global credit crisis intensifies
Ron Paul to Bernanke: How can we solve inflation with more inflation?
U.S. Economic Collapse News Archive
Filed under: bernanke, Credit Crisis, Dow, Economic Collapse, economic depression, Economy, energy, Federal Reserve, food prices, gas prices, gold, Great Depression, Greenback, Inflation, interest rate cuts, Nasdaq, Oil, Petrol, rate cut, Stock Market, US Economy, Wall Street
Talk of Worst Recession Since the 1930s
NY Sun
November 12, 2007
After what Los Angeles money manager Arnold Silver called “a brutal three days,” the question is: What now for the market?
A Wall Street superstar this year who runs Balestra Capital Partners, Jim Melcher, says he’s “worried about a recession. Not a normal one, but a very bad one. The worst since the 1930s. I expect we’ll see clear signs of it in six months with a dramatic slowdown in the gross domestic product.”
Balestra Capital, a $350 million New York hedge fund, was up 3% for the past three market sessions, when the Dow Jones Industrials, spearheaded by widespread declines in financial stocks and fears of more billion-dollar-plus asset write-downs, tumbled more than 677 points, or about 4.5%. The Nasdaq fared worse, skidding about 7%, triggered by across-the-board declines in those fast-stepping technology stocks.
Balestra has increased in value by 175% so far this year, Mr. Melcher tells me. A 9-year-old fund, it has posted compounded annual growth of about 30% since its inception.
Mr. Melcher, a market bear, had some pretty discouraging words. “What I think is not good for the country, but good for me.” he says. His basic advice to the country’s roughly 80 million stock players: Run for the hills — the worst is far from over. An investor’s stock portfolio now, he believes, should be only about half of what it might normally be.
With the housing market in a state of collapse — and he says he believes it is far from over — Mr. Melcher argues that average homeowners will not be able to withstand the kind of recession he sees, given the added burdens of rising energy and food costs, and continued deterioration in the credit markets.
Noting that consumption is already slowing, Mr. Melcher figures sharply rising unemployment is inevitable. Another of his worries is that central banks around the globe, America’s included, are debasing their currencies, which is setting the stage for a new round of higher inflation. Our bear figures the next six to 12 months will be awful for investors as the market goes down “pretty substantially.” His frightening outlook calls for an additional 20% to 30% decline from current levels. A drop of that magnitude would put the Dow down in a range of roughly 9,100 to 10,400.
Crude Oil = $98; Gold = $845
Seeking Alpha
November 7, 2007
The Fed recklessly abandons their price stability mandate, and this is what it has wrought: Dollar at record lows, oil and gold near all time highs.
It is the first rule of economics, yet so many idiots pundits cannot seem to to remember it: THERE IS NO FREE LUNCH.
In physics, the corollary is that “every action has an equal and opposite reaction.” Why this is too complex for their little frontal lobes is beyond me. It is simple. It is basic. It is easily understood by even supply siders.
Think about all of the brainiacs who have been begging for rate cuts — and from historically moderate rates — over the past 2 years. Be sure to thank them for the reckless disregard for your wallet.
Hey, how’s your core inflation doin’ these days?
Crude (December contract):
Gold (December contract):
Wall Street Sees Worst Weekly Point Loss Since 9/11
http://abcnews.go.com/Business…845823&page=1
Gold bounces above $800 after 1 percent drop
http://investing.reuters.co.uk/news/articleinvesting.as…IOUS.xml
It’s the FIRE Economy, stupid
http://mparent7777-2.blogs…nomy-stupid.html
Dollar Crisis: None dare call it ‘conspiracy’
http://infowars.com/articles/…._conspiracy.htm
Subprime Losses May Reach $300/400 Bil
http://www.bloomberg.com/ap…efer=worldwide
Sterling falls as risk aversion leads to carry unwind
http://investing.reuters.co.uk/news/articleinv….G-OPEN.XML
Time for the White House to Rescue the Dollar?
http://www.usnews.com/blogs/capital-comm…-dollar.html
Bets against the dollar unlikely to slow this quarter
http://investing.reuters.co.uk/news/a….REX-IMM.XML
Even a weakened dollar still rules
http://www.iht.com/articles/2007/11/11/bloomberg/bxatm.php
World stocks hit 8-week low
http://www.reuters.com/article/hotStocksNews/idUSSP15927320071112
With the dollar’s fall, intervention idea gains force
http://afp.google.com/article/ALeqM…2b0Z2XrjX5-45Glg
Currency Controls Return as Central Banks Fight Gains
http://www.bloomberg.com/apps/news?pid///78L0&refer=home
The Risk of a Systemic Shock to the System is “Alarmingly High” – Morgan Stanley
http://commonsenseforecaster.blogspot.c,,,em-is.html
Wall Street’s money machine breaks down
http://money.cnn.com/magazines/fortune…2007111210
Oil Price Rise Causes Global Shift in Wealth
http://www.washingtonpost.com/wp-dyn/co..110902573.html
Global credit crisis intensifies
www.guardian.co.uk/business/200…ed=networkfront
Ron Paul to Bernanke: How can we solve inflation with more inflation?
http://noworldsystem.com/2007/11/09/ron-paul-schools-ben-bernanke-again/
U.S. Economic Collapse News Archive
noworldsystem.com 