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SEC Orders AIG Info Sealed Until 2018

SEC Orders AIG Info Sealed Until November… 2018!

Business Insider
January 12, 2010

Good news. It looks as though we’ll be getting access to secret data on the bailout of AIG and its counterparties.

The bad news: We’re going to have to wait until November of 2018, according to Matthew Goldstein at Reuters.

    In May, the SEC approved a request by AIG to keep secret an exhibit to a year-old regulatory filing that includes some of the details on the most controversial aspect of the AIG bailout: the funneling of tens of billions of dollars to big banks like Societe Generale, Goldman Sachs (GS.N), Deutsche Bank (DBKGn.DE) and Merrill Lynch.

    The SEC’s Division of Corporation Finance, in granting AIG’s request for confidential treatment, said the “excluded information” will not be made public until Nov. 25, 2018, according to a copy of the agency’s May 22 order.

    The SEC said the insurer had demonstrated the information in the exhibit, called Schedule A, “qualifies as confidential commercial or financial information.” More

By then, Wall Street will have significantly recycled many people (and probably some more firms) and perhaps the American public just won’t care about how Tim Geithner helped bail out a gigantic black hole of a firm, upon which so many ostensibly rock solid firms had their foundation.

Bankergate: Emails Expose Criminal Financial Dictatorship At Work

Geithner’s Fed told AIG to hide “backdoor bailout”

New York Fed Faces House Subpoena Over AIG Bailout

 



Top contributors to Obama and McCain are big banks

Top contributors to Obama and McCain are big banks

 



WaMu: The Biggest Bank Collapse In U.S. History

WaMu: The Biggest Bank Collapse In U.S. History

TOP News
September 26, 2008

In what is being termed as the biggest bank collapse in US history, J.P.Morgan Chase & Co. will acquire massive branch network and troubled assets from Washington Mutual Inc. for $1.9 billion, as per a deal arranged by federal regulators. Under the deal – the latest stunning development in the ongoing credit crisis – J P Morgan Chase will acquire all the banking operations of Washington Mutual, including $307 billion in assets and $188 billion in deposits.

Washington Mutual had been one of the most hard-hit banks during the financial crisis after it bet big, like many of its competitors, on the strength of the housing market – only to see its fortunes sour as housing prices fell. Many analysts were speculating that the endgame for the embattled savings and loan was imminent, particularly after ratings agency downgrades this week, and a freefall in the company’s stock.

As a result of the Washington Mutual acquisition, the New York City-based J P Morgan Chase – after its mid-March acquisition of investment bank, Bear Stearns – will now boast some 5,400 branches in 23 states. “We think it is a great thing for our company,” said Jamie Dimon, J P Morgan Chase Chairman and CEO, in a conference call with investors late Thursday night.

Federal regulators who helped in finalizing the deal said the transition for Washington Mutual customers would be “seamless.” In a statement, FDIC Chairman, Sheila Bair, said: “There will be no interruption in services and bank customers should expect business as usual come Friday morning.”

The acquisition might prompt criticism from J P Morgan Chase rivals about preferential treatment by the government. For instance, no government assistance was extended to Bank of America Corp. in its recently announced purchase of Merrill Lynch. However, in the case of Washington Mutual acquisition, there were presumably other bidders who, in comparison to J P Morgan Chase, offered better deal for the deposits and branches.

The fall of Washington Mutual is the latest turn in a dizzying fortnight that has seen the bankruptcy of Lehman Brothers, the acquisition of Merrill Lynch by Bank of America (BAC, Fortune 500) and the near collapse of insurance giant AIG (AIG, Fortune 500). In fact, Washington Mutual has set a ‘record’ of sorts – it is the 13th bank to fail so far this year, and earns the title of the country’s ‘largest bank failure’ by assets on record, surpassing Continental Illinois’ $40 billion in assets when it failed in May of 1984.

Washington Mutual Is The 13th Bank To Fall This Year
http://www.fdic.gov/bank/individual/failed/banklist.html

 



Paulson’s former firm to be among largest beneficiaries of bailout

Paulson’s former firm to be among largest beneficiaries of bailout

John Bryne
Raw Story
September 23, 2008

It certainly pays to be Treasury Secretary if your former firm is a brokerage house, a new study says.

Goldman Sachs Group — formerly run by Treasury Secretary Henry Paulson, and Morgan Stanley, stand to be among the biggest beneficiaries of a $700 billion US bailout.

“Its benefits, in its current form, will be largely limited to investment banks and other banks that have aggressively written down the value of their holdings and have already recognized the attendant capital impairment,” Jeffrey Rosenberg, Bank of America’s head of credit strategy research, wrote in a report obtained by Bloomberg News yesterday.

Paulson was the head of Goldman Sach’s investment banking division from 1990 to 1994. He later became chairman and chief executive officer of Goldman, and left his post to join the Bush Administration.

According to the study, the bailout benefits Paulson’s former firm more because banks haven’t had to write down as many troubled mortage assets under accounting rules. This means that participating in the program would cause them to actually lose capital, as opposed to investment banks, which stand to gain.

Paulson $700 billion program is designed to remove “bad assets” from the US financial markets to prevent credit for businesses from drying up, which would send the economy into a further tailspin. Many businesses rely on credit to fund their daily operations.

Lawmakers are debating the plan today.

“While Goldman and Morgan Stanley, both based in New York, were yesterday granted permission to transform themselves into bank holding companies, the companies so far have operated mostly under investment-bank accounting rules, logging almost $21 billion of asset writedowns and credit losses,” Bloomberg News notes.

Goldman made sizable profits in 2007 from the subprime mortgage sector. It, along with Morgan Stanley, has fared better than investment houses Merrill Lynch, Lehman Brothers and Bear Stearns, because it has held a more conservative capital base.

Paulson has admirers: during his Goldman tenure the firm donated 680,000 acres of land in Chile, and he has personally given away $100 million of his fortune to charitable groups.

According to estimates conducted by Open Secrets, Paulson is the richest cabinet member of the Bush Administration.

Conflict Of Interest? Report Says Goldman Sachs ‘Among Biggest Beneficiaries’ Of Paulson’s Bailout
http://thinkprogress.org/2008/09/22/paulson-goldman-bailout/

 



Lehman Brothers Bank Files For Bankruptcy

Lehman Brothers Bank Files For Bankruptcy

AP
September 15, 2008

Lehman Brothers, a 158-year-old investment bank choked by the credit crisis and falling real estate values, filed for Chapter 11 protection in the biggest bankruptcy filing ever on Monday and said it was trying to sell off key business units.

The filing was made in the U.S. Bankruptcy Court in the Southern District of New York by Lehman Brothers Holdings Inc., the bank’s holding company. The case had been assigned to Judge James M. Peck.

Lehman fell under the weight of $60 billion in soured real estate holdings, and the credit market’s dislocation ultimately forced it to seek court protection. The credit crisis has caused global banks to write down more than $300 billion in asset value since last year, and caused the shotgun sales of Merrill Lynch & Co. and Bear Stearns Cos.

Lehman’s bankruptcy filing marks the end of a Wall Street firm that started the U.S. cotton trade before the Civil War and financed the railroads that built a nation.

Read Full Article Here

FDIC Monitoring Lehman Impact
http://www.reuters.com/article/bondsNews/idUSWAT01005420080915

 



Taxpayers to Pay Trillions for Fannie and Freddie Bailout

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

http://www.youtube.com/watch?v=-t6dLePtyXQ

 

U.S. Is “More Communist than China”: Jim Rogers

CNBC
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.”

Read Full Article Here

 

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.”

Recent News:

China paper urges new currency order after “financial tsunami”
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

U.S. Economic Collapse News Archive

 



10th Bank Collapse This Year

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

Reuters
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.

Recent News:

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

 



9th U.S. Bank Failure This Year

9th U.S. Bank Failure This Year

Bloomberg
August 23, 2008

Columbian Bank and Trust Co. of Topeka, Kansas, was closed by U.S. regulators, the nation’s ninth bank to collapse this year amid bad real-estate loans and writedowns stemming from a drop in home prices.

The bank, with $752 million in assets and $622 million in total deposits, was shuttered by the Kansas state bank commissioner’s office and the Federal Deposit Insurance Corp., the FDIC said yesterday in a statement.

Citizens Bank and Trust will assume the failed bank’s insured deposits. Columbian Bank’s nine branches will open Aug. 25 as Citizens Bank and Trust offices, the FDIC said. Customers can access their accounts over the weekend by writing checks or using ATM or debit cards.

“There is no need for customers to change their banking relationship to retain their deposit insurance coverage,’’ the FDIC said.

The pace of bank closings is accelerating as financial firms have reported more than $500 billion in writedowns and credit losses since 2007. The FDIC’s “problem’’ bank list grew by 18 percent in the first quarter from the fourth, to 90 banks with combined assets of $26.3 billion.

Prior to yesterday, the FDIC had closed 36 banks since October 2000, according to a list at fdic.gov. The U.S. shut 12 banks in 2002, the highest in the period, and 2005 and 2006 had no closures.

U.S. bank regulators closed Florida’s First Priority Bank on Aug. 1; Reno-based First National Bank of Nevada, Newport Beach, California-based First Heritage Bank, and Pasadena-based IndyMac Bancorp Inc. in July; Staples, Minnesota-based First Integrity Bank and ANB Financial in Bentonville, Arkansas, in May; Hume Bank in Hume, Missouri, in March; and Douglass National Bank in Kansas City, Missouri, in January.

Merrill, Wachovia in Danger of Failing: Strategist
http://www.cnbc.com/id/26262925..%7Cquote%7Ctext%7C&par=yahoo

Large U.S. bank collapse seen ahead
http://www.reuters.com/article/newsOne/idUSSP21695020080819

 



Bush: “Wall Street got drunk”

Bush: “Wall Street got drunk”

http://www.youtube.com/watch?v=hrzFyeHSRJI

Recent News:

U.S. deficit to hit record US$490-billion next year
http://www.financialpost.com/story.html?id=685851

Russia Cuts Exposure To Mortgage Companies
http://www.reuters.com/article/fundsFundsNews/idUSL863553320080728

Aussi Bank Writedown Shock Street?
http://www.freemarketnews.com/WorldNews.asp?nid=58634

Merrill Lynch forced to take emergency action ahead of writedown
http://business.timesonline.co.uk/tol/b..banking_and_finance/article4420207.ece

Haiti: Mud cakes become staple diet as cost of food soars
http://www.guardian.co.uk/world/..internationalaidanddevelopment

China Owns America
http://www.washingtontimes.com/ne..chinas-economic-bargaining-chip/

Economy hitting the elderly especially hard
http://www.msnbc.msn.com/id/25804814/page/2/

Congress Taps Paulson’s Helmet
http://www.321gold.com/editorials/schiff/schiff072808.html

No Angry Lines At New Failed Banks
http://news.yahoo.com/s/ap/200…AhOmkT7fUvH9bYpM6zC6uZlv24cA

Abu Dhabi To Buy Stake In GE
http://business.timesonline.co.u..try_sectors/industrials/article4380773.ece

Russia Owns 10% Of U.S. Steel Industry
http://www.reuters.com/article/reutersEdge/idUSL0746834220080407?sp=true

Cramer: Stocks are Doomed, Sell Now
http://moneynews.com/streettalk/cramer_sell_stocks_now/2008/07/09/111259.html

Controller tells Schwarzenegger he won’t cut workers’ wages
California Governor Schwarzenegger to cut state worker pay to $6.55/hr
Ford Posts Loss of $8.7 Billion on Asset Woes
Food Price Rise Has Coca Farmers Planting Rice
Pelosi Eyes $50 Billion In New Economic Stimulus
Dow Drops 200 Points On Housing Data

U.S. Economic Collapse News Archive

 



Fortis Bank predicts U.S. market meltdown within weeks

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.

Read Full Article Here

 

Faber: Federal Reserve Could Fail, Buy Gold.

Citigroup sinks to 10-year low, Goldman urges short sale
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

What’s behind the dollar’s decline in value?
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
http://www.wpxi.com/news/16727813/detail.html

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

U.S. Economic Collapse News Archive

 



Red flags in Bear Stearns’ collapse

Bear Stearns Collapses, Sold to JP Morgan at $2/Share

Depression2.tv
March 17, 2008

Last Friday we got a taste of what the future is likely to be like as we make our way further into the belly of the second great depression. The Fed rushed to bail out a venerable Wall Street institution, which was rumored to be insolvent. Sunday evening, that rumor was confirmed to be true, as Bear Stearns agreed to sell itself to JP Morgan for a paltry $2 per share. Two dollars! This for a firm that was trading at $170 just over a year ago, and was as high as $54 just Friday! If Bear Stearns is only worth $2 per share, how can we possibly say with any confidence what other “investment banks” are worth?

While this bankruptcy comes as a shock to nearly everyone, it should be a surprise to no one. The global financial system has been teetering on a precipice for years if not decades, pumped up by unsustainable amounts of debt at every level of the economy, and is primed for a crash. That the crash has been postponed countless times by even easier money lent to yet poorer credit risks has served only to instill a false sense of confidence in markets and to magnify the impending calamity that seems finally to be at hand. Warnings that have been sounded on websites such as this one appear finally to be coming true, as confirmed by none-other than the venerable Wall Street Journal in a front page article titled, “Debt Reckoning: US Receives a Margin Call.”

The US is at the receiving end of a massive margin call: Across the economy, wary lenders are demanding that borrowers put up more collateral or sell assets to reduce debts.

The unfolding financial crisis – one that began with bad bets on securities backed by subprime mortgages, then sparked a tightening of credit between big banks – appears to be broadening further. For years, the US economy has been borrowing from cash rich lenders from Asia to the Middle East. American firms and household have enjoyed readily available credit at easy terms, even for risky bets. No longer.

Did you ever think news like that would ever make it off the internet and into the pages of the Wall Street J? Even I was beginning to have my doubts. But the news is seeping even further into the mainstream. This week’s Time Magazine has an article titled “10 Ideas that are Changing the World.” Idea 8 is “The New Austerity:”

Americans simply don’t have enough money to pay back the mortgage and credit-card debt they’ve run up. That reality is forcing banks to retrench as loans gone bad shrink their capital bases and falling house prices shrink the collateral that homeowners can borrow against. And it will presumably force chastened consumers to change their ways as well.

Americans simply don’t have enough money… What does it mean? It means defaults, economic loss and a spiral of fear and more loss. It means more Bear Stearns. Time’s article quotes David Rosenberg, an economist at Merrill Lynch: “I’m not saying we’re going back to our parents’ level of frugality, but what we have witnessed in the past 20 to 30 years – and especially the parabolic credit growth of the last five years – is going to be bursting in the next decade.” If not back to our parents’ level of frugality, then what? To our grandparents’ level? How can anything less be avoided, in an era when most people are already working full speed, maxed-out and yet still need credit to survive? And now they’re cutting off the credit!? The result for households will be the same as for Bear – massive liquidation. And the Fed is in no position to do anything about it. The Fed is currently operating in triage mode – desperately trying to aid the banks and save the global financial system as we know it. But what ammunition does the Fed have to save the average American working stiff, who is up to his eyeballs in debt?

Read Full Article Here

 

Wall Street fears for next Great Depression

London Independent

March 16, 2008

Wall Street is bracing itself for another week of roller-coaster trading after more than $300bn (£150bn) was wiped off the US equity markets on Friday following the emergency funding package put together by the Federal Reserve and JPMorgan Chase to rescue Bear Stearns.

One UK economist warned that the world is now close to a 1930s-like Great Depression, while New York traders said they had never experienced such fear. The Fed’s emergency funding procedure was first used in the Depression and has rarely been used since.

A Goldman Sachs trader in New York said: “Everyone is in a total state of shock, aghast at what is happening. No one wants to talk, let alone deal; we’re just standing by waiting. Everyone is nervous about what is going to emerge when trading starts tomorrow.”

In the UK, Michael Taylor, a senior market strategist at Lombard, the economics consultancy, said on Friday night: “We have all been talking about a 1970s-style crisis but as each day goes by this looks more like the 1930s. No one has any clue as to where this is going to end; it’s a self-feeding disaster.” Mr Taylor, who had been relatively optimistic, has turned bearish: “It really does look as though the UK is now heading for a recession. The credit-crunch means that even if the Bank of England cuts rates again, the banks are in such a bad way they are unlikely to pass cuts on.”

Mr Taylor added that he expects a sharp downturn in the real UK economy as the public and companies stop borrowing. “We have never seen anything like this before. This is new territory for us. Liquidity is being pumped into the system but the banks are not taking any notice. This is all about confidence. The more the central banks do, the more the banks seem to ignore what’s going on.”

Read Full Article Here

 

Bear Stearns Rescue Is `Finger in Dike,’ Scholars Say

Bloomberg
March 17, 2008

With Bear Stearns Cos.’ temporary rescue in place, the $200 billion subprime crisis joins the history of government bailouts to preserve jobs, homes and savings when economic disaster looms.

Ever since Treasury Secretary William Gibbs McAdoo shut the New York Stock Exchange for four months in 1914, to prevent foreign investors from cashing out and throwing the U.S. into financial chaos at the outset of World War I, American policy makers routinely have suspended their support for free markets when confronted by economic peril.

“I think the systemic risks dominate right now, which means you’ve got to put your finger in the dike,’’ says William Silber, a finance professor at New York University’s Stern School of Business. He is the author of “When Washington Shut Down Wall Street: The Great Financial Crisis of 1914 and the Origins of America’s Monetary Supremacy’’ (Princeton University Press, 232 pages, $27.95).

Bailouts can buy time while policy makers try to defuse panic. Last week, the Federal Reserve Bank of New York provided financial support for Bear Stearns, the fifth-largest U.S. securities firm. It faced eroding investor confidence in the fallout from losses related to securities based on mortgages to the least creditworthy borrowers.

Bear Stearns executives were striving today to strike an agreement to sell the firm to JPMorgan Chase & Co. before financial markets open tomorrow, people with knowledge of the talks said.

Read Full Article Here

Stunned Bear Stearns investors eye legal claims
http://news.yahoo.com/s/nm/20080317/us_nm/bearstearns_lawsuits_dc

Banks Face New World Order Consolidation
http://www.reuters.com/artic..743541720080317?sp=true

Stocks Widely Mixed on Bear Stearns News
http://biz.yahoo.com/ap/080317/wall_street.html

 



Greenspan Says U.S. Economy Is on Edge of a Recession

Greenspan Says U.S. Economy Is on Edge of a Recession

Bloomberg

February 15, 2008


Former Federal Reserve Chairman Alan Greenspan said the U.S. economy is on the verge of its first recession in six years as falling home values hurt consumer spending.

“We are clearly on the edge,” Greenspan told a group of energy-industry executives yesterday at the Cambridge Energy Research Associates’ 27th annual CERAWeek conference in Houston. He reiterated comments from last month that the odds of an economic contraction are “50 percent or better.”

Greenspan’s view has evolved from a year ago, when he saw a one-in-three chance of a recession, citing slowing profit growth and becoming one of the first economists to warn of the risk. Now, Wall Street firms including Merrill Lynch & Co. and Goldman Sachs Group Inc. are forecasting a contraction in the aftermath of the worst housing downturn in a quarter century.

Fed Chairman Ben S. Bernanke, Greenspan’s successor, acknowledged “downside” risks to the expansion yesterday, while telling lawmakers he expects growth to pick up later this year. He reiterated the central bank is prepared to take “timely” action to aid the economy as needed.

Treasuries rose, pushing the 10-year yield 1 basis point lower to 3.81 percent at 3:37 p.m. in Tokyo.

“While we are at stall speed in the U.S. at the moment, we haven’t yet seen the discontinuity that characterizes recession,” Greenspan said during a question-and-answer session yesterday. “American business was in such extra-good shape before this problem hit. Otherwise we would be talking about how long and how deep. We are not there yet.”

Read Full Article Here

 

Bloomberg: US Economy Resembles A “Third World Country”

WCBS-TV
February 15, 2008

Mayor Michael Bloomberg has unleashed another flurry of jabs on Washington, ridiculing the federal government’s rebate checks as being “like giving a drink to an alcoholic” on Thursday, and said the presidential candidates are looking for easy solutions to complex economic problems.

The billionaire and potential independent presidential candidate also said the nation “has a balance sheet that’s starting to look more and more like a third-world country.”

President Bush signed legislation Wednesday that will result in cash rebates ranging from $300 to $1,200 for more than 130 million people.

The federal checks are the centerpiece of the government’s emergency effort to stimulate the economy, under the theory that most people will spend the money right away.

But Bloomberg does not believe it will do much good. And his harsh words at a news conference Thursday reflect the view among some of his associates that the country’s economic woes present a unique opportunity for him to launch a third-party bid for the White House.

Read Full Article Here

 



Fed Cuts Interest Rates 75 Basis Points

Fed Cuts Interest Rates 75 Basis Points

AP
January 22, 2008

Fbiiraqisbein_mn

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.”

Read Full Article Here

 

‘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.”

Read Full Article Here

 


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.”

Read Full Article Here

Recent News:

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Let Market Crash Now Or Face Financial Train Wreck
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Market’s Wild Ride Ends With Dow at 15-Month Low
http://www.nytimes.com/2008/01/22/business/23cnd-stox.html?hp

Fed Rate Cut Seen As Once In A Generation
http://www.iht.com/bin/printfriendly.php?id=9418610

Federal Reserve slashes US rates on day when ‘chaos reigned supreme’
http://www.guardian.co.uk/business/2008/jan/22/useconomy.marketturmoil1

World’s Largest Bond Insurers Collapsing!
http://www.moneyandmarkets.com/Issues.aspx?NewsletterEntryId=1381

Tuesday Could Bring 1,000 Point Drop in Dow
http://www.247wallst.com/2008/01/a-1000-point-dr.html

All signs point to U.S. consumers hunkering down in recession bunkers
http://www.theglobeandmail.com/serv.ZA18/TPStory/Business

Foreigners Buy Stake In USA At Record Pace
http://www.nytimes.com/2008/01..partner=MYWAY&pagewanted=print

Bank of America net sinks 95 percent
http://www.reuters.com/articl..r=1&virtualBrandChannel=0&sp=true

Oil falls below $89 as stock markets plunge
http://biz.yahoo.com/rb/080121/markets_oil.html?.v=1

Horror day for Australian stock market
http://www.news.com.au/story/0,23599,23089611-2,00.html

Russian shares tumble as panic grips world markets
http://www.russiatoday.ru/business/news/19933

Current financial crisis was topic of Bilderberg 2006
http://rinf.com/alt-news/new-world-..s-topic-of-bilderberg-2006/2277/

The Coming Global Depression
Bear Stearns: The Fed Will Cut Rates AGAIN Next Week
World stock markets fall
Hopes of global rate cut sparks FTSE revival after early morning slump
Black Monday: recession fears spark global share crash
Biggest fall in shares since September 11
When governments print money, buy gold
Gold rallies back to the 890 usd mark after emergency Fed rate cut
Stocks Plunge Despite Fed Rate Cut
Surprise rate cut sparks dollar sell-off
Global markets dropped 5% overnight
Market drops on recession fear
Wall Street set to open lower
Wall St execs collect $US33b bonuses
Asian Markets Continue Slide
Futures plunge on U.S. recession fears
US recession fears wipe £77bn from London shares
Recession fears weigh on markets
Emergency: Global Financial Markets Collapsing
HK shares dive, China plays in worst day in 10 yrs
Will the Economic Crash Wake People Up?
U.S. slide an expanding threat
Britain Unveils Northern Rock Buy Out Plan
CFR: The ‘Historical Anomaly’ of the Dollar
Banks to suffer into ’09 as credit crunch drags: S&P
Tax Rebates Urged To Rescue Economy
U.S. economy teeters on the brink
7-Year Plan Aligns Europe With U.S. Economy

U.S. Economic Collapse News Archive

 



Traders betting oil will hit $200 a barrel in 2008

Traders betting oil will hit $200 a barrel in 2008

Rocky Mountain News
January 12, 2008

Fbiiraqisbein_mn

The fastest-growing bet in the oil market these days is that the price of crude will double to $200 a barrel by the end of the year.

Options to buy oil for $200 on the New York Mercantile Exchange rose tenfold in the past two months to 5,533 contracts, a record increase for any similar period. The contracts, the cheapest way to speculate in energy markets, have appreciated 36 percent since early December as crude futures reached a record $100.09 on Jan. 3.

While analysts at Merrill Lynch & Co. and UBS AG say the slowing U.S. economy will lead to the biggest drop in prices since 2001, the options show that some traders expect oil to rise for a seventh straight year.

Demand will increase 2.5 percent in 2008, according to the International Energy Agency.

U.S. inventories fell to a three-year low Dec. 28.

Production from Mexico is declining, and Saudi Arabia is behind schedule in opening its newest field.

“One hundred dollars a barrel is actually 14.9 cents a cup, so we’re still talking about oil being remarkably cheap,” said Matthew R. Simmons, chairman of Simmons & Co. International, a Houston-based investment bank that focuses on energy.

Inventories “are tight as a drum, and I don’t see how we get out of this box,” he said in a Bloomberg News television interview last week. “Demand clearly isn’t starting to slow down.”

World consumption will rise to 87.8 million barrels a day this year, 2.1 million more than in 2007, or an increase equal to what Nigeria supplies, according to the Paris-based IEA, an adviser to oil-consuming nations. Demand from China alone will increase 5.7 percent to 8 million barrels a day as imports expand to support an economy that’s likely to grow 11 percent, the IEA said.

Oil suppliers are straining to increase production. Saudi Arabia, the world’s largest exporter, said last week that the 500,000-barrel-a-day Khursaniyah oilfield missed a December start date. Brazil’s Tupi field, the second-largest find of the past two decades, lies more than five miles below the ocean surface and will take at least five years to develop.

Petroleos Mexicanos, Mexico’s state oil monopoly, suffered a three-year, 40 percent decline at its Cantarell field, the world’s third-largest. Fighting in Nigeria has reduced production 11 percent since December 2005 to 2.18 million barrels a day, according to Bloomberg.

Read Full Article Here

 



Fed Ready To Cut Rates Again

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.

Glenn Beck Interviews U.S. Comptroller General

http://www.youtube.com/watch?v=I-16u9x3tfE

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http://mparent7777-2.blogspot.com..urselves-taxpayers-of-america.html

Tony Blair To Join JP Morgan
http://news.yahoo.com/s/nm/2..nm/jpmorgan_blair_dc

Jobless Claims Fell By 15, 000 Last Week
http://www.reuters.com/article/businessN…dName=businessNews

Paulson Sees `No Evidence’ Housing Decline Is Ending
http://www.bloomberg.com/apps/news?p..JukkXAFuWo&refer=home

Japanese Stocks Tumble on Goldman U.S., Domestic Recession Call
http://www.bloomberg.com/apps/news?pid=..LlqAo&refer=japan

Write-down at Merrill Lynch may hit $15 billion
http://www.iht.com/articles/2008/01/11/business/11wall.php

Helicopter Ben About to Shift the Confetti Shredder Into Afterburner
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Food Crisis In Gaza
http://afp.google.com/article/ALeqM5h4RRlEa_z4MbOnNbq_n6O_H8g_Sg

Dow Drops Nearly 250 Points
http://biz.yahoo.com/ap/080111/wall_street.html?.v=40

Gold Hits Record After Bernanke Speech
http://www.breitbart.com/article.php?id=D8U36JQO2&show_article=1

Goldman Sachs sees recession in 2008
http://biz.yahoo.com/rb/080109/usa_economy_goldman.html

Merrill Lynch: Recession “Has Arrived”
http://news.bbc.co.uk/2/hi/business/7176255.stm

Chinese & Kuwaitis Bail Out Citigroup
Ron Paul: Get Back to Gold
‘Shocking’ sales results from M&S deepen fears of recession in UK
National Bureau of Economic Research: “Odds Of Recession More Than 50%”
Jim Rogers Says U.S. to Have Worst Recession `in a While’
Gold futures back off in early U.S., near $900/oz
Gold Forecast for 2008

 



Goldman Sachs sees recession in 2008


Goldman Sachs sees recession in 2008

Reuters
January 9, 2008

Goldman Sachs on Wednesday said it expects the U.S. economy to drop into recession this year, prompting the Federal Reserve to slash benchmark lending rates to 2.5 percent by the third quarter.

In a note to clients, Goldman said real gross domestic product would contract by 1 percent on an annualized basis in both the second and third quarters. For all of 2008, the investment bank said GDP would rise by 0.8 percent.

The unemployment rate will rise to 6.5 percent in 2009 from the current 5 percent, it said.

The weakening economy will force the Fed to lower policy rates by an additional 1.75 percentage points from the current 4.25 percent. Starting in September, the Fed cut rates at the last three meetings of the Federal Open Market Committee, reducing the target rate on loans between banks by 1 percentage point from 5.25 percent.

Read Full Article Here

 

Merrill Lynch: Recession “Has Arrived”

BBC
January 8, 2008

The feared recession in the US economy has already arrived, according to a report from Merrill Lynch.

It said that Friday’s employment report, which sent shares tumbling worldwide, confirmed that the US is in the first month of a recession.

Its view is controversial, with banks such as Lehman Brothers disagreeing.

An official ruling on whether the US is in recession is made by the National Bureau of Economic Research, but this decision may not come for two years.

The NBER defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months”.

It bases its assessment on final figures on employment, personal income, industrial production and sales activity in the manufacturing and retail sectors.

Merrill Lynch said that the figures showing the jobless rate hitting 5% in December were the final piece in that puzzle.

“According to our analysis, this isn’t even a forecast any more but is a present day reality,” the report said.

It added that the current consensus view on Wall Street that there is a good chance of avoiding a recession is “in denial”.

It also objected to the use of euphemistic terms for the state of the economy.

“To say that the backdrop is ‘recession like’ is akin to an obstetrician telling a woman that she is ‘sort of pregnant’,” the report said.

 

National Bureau of Economic Research: “Odds Of Recession More Than 50%”

Bloomberg
January 7, 2008

Harvard University economist Martin Feldstein, head of the group that dates U.S. economic cycles, said the odds of a recession have risen to more than 50 percent after a report showing unemployment jumped in December.

“We are now talking about more likely than not,” Feldstein, president of the National Bureau of Economic Research, said in an interview in New Orleans two days ago. “I have been saying about 50 percent. This now pushes it up a bit above that.”

The jobless rate rose to 5 percent in December, the highest in two years, from 4.7 percent in November, a government report showed last week. Payrolls rose by 18,000, the least since August 2003.

The U.S. economic expansion is cooling after a third- quarter surge as the housing slump enters its third year and consumer spending slows. Former Federal Reserve Chairman Alan Greenspan and ex-Treasury Secretary Lawrence Summers are among those raising the prospect of a recession.

The increase in unemployment will hurt consumer confidence, Feldstein said in the interview. He was in New Orleans to speak at an economics panel discussion on productivity that was part of the annual meeting of the Allied Social Science Associations.

“Consumers, with essentially no growth in jobs in December, are going to be more nervous about the future,” said Feldstein, 68. “They are going to be a little more reluctant to spend, and that is going to put a further drag on growth in 2008.”

Read Full Article Here

Jim Rogers Says U.S. to Have Worst Recession `in a While’
http://www.bloomberg.com/apps/..sid=ayq29JCsf65c&refer=home

 



Gold Reaches Record High Near $900/oz

Gold futures back off in early U.S., near $900/oz

Reuters
January 9, 2008


U.S. gold futures slipped from a record high just shy of $900 an ounce early Wednesday as investors kept buying and strong demand at the debut of China’s first gold futures contract underscored global bullishness.

Gold’s rally comes in the context of explosive fund interest in the commodity sector since the beginning of 2008. Platinum also hit a new high overnight before backing off.

Despite the mild correction as New York traders sat down, upward momentum appeared strong with sentiment underpinned by record oil prices, a weak dollar and the flight from U.S. equity markets into hard assets.

Building on Tuesday’s more than $18 gain, gold for February delivery at the COMEX division of the New York Mercantile Exchange GCG8 rose to $894.40 in electronic trade overnight, more than $10 higher than the previous day’s record and up $28.70 on the week.

 

Gold Forecast For 2008

Funny Money Report
January 8, 2008

Back in April 2007 we projected a high for the year of $869.64 for gold. Although gold did not hit that level in 2007, the November 8th close was $841.10 and $833.30 at year end. Today’s close on January 2nd, of $856.50 brings us very near our forecasted price.

With gold in all time high territory, oil hitting $100.00 a barrel, enthusiasm does not seem to be overwhelming in the precious metal arena. Gold is still selling for little more than 8 times the price of oil. Based on our analysis we believe gold will hit a high of $1014.00 sometime in 2008.

The Federal Reserve is doing its best to prevent a collapse of the banking system, but in the process will continue to burn the dollar. As the dollar declines gold ascends. Fiat currencies trade against each other, while gold moves higher against them all. The true flight to quality means owning things that are real and liquid. This means gold, silver, and large commodity based equities.

For 2008 we expect precious metal equities to perform better than in 2007. Some of the poor performance was due to the increasing costs of mineral extraction which include higher fuel and material expenses. Higher prices for gold should start to outpace increased costs, leading to improved equity returns.

We expect gold, food, and most basic commodities to move higher throughout 2008. We continue to recommend bullion in your physical possession and cash on hand for emergencies. Pay particular attention to your FDIC coverage, and consider safe alternatives like savings bonds instead of bank CD’s.

For 2008 we think that the economy will continue to deteriorate, with real estate leading the way down. We are in the 2nd inning of a long ugly ballgame where those holding dollars, real estate, and high levels of debt will be praying for the game to end. Those players who are out of debt and holding a commodity based portfolio will be winners in 2008 and years to come.

Related News:

Gold May Hit $1000 If It Begins Trading At Its Normal Ratio To The Oil Price
http://www.financialpost.com/story.html?id=222354

China’s Stock Market Heading For Crash?
http://news.independent.co.uk/business/news/article3321423.ece

Bush Meets With Plunge Protection Team
http://www.roguegovernment.com/news.php?id=5936

Gold is the new global currency
http://www.ft.com/cms/s/0/301c1..l?nclick_check=1

Collapse of the U.S. Dollar: Gold futures surge to new all-time record high
http://www.marketwatch.com/news/story/gold-futu..e&dist=printTop

Pending Sales of Existing U.S. Homes Fell in November
http://www.bloomberg.com/apps/new..pXVernpcSqw

Bad news piles up for British economy
http://www.businessweek.com/ap/financialnews/D8U16LJO0.htm

No Jobs for the New Economy
http://www.counterpunch.org/roberts01082008.html

Citigroup to Take $16 Billion Writedown, Merrill Says
http://bloomberg.com/apps/news?pid=2..sv8&refer=worldwide

Fed Boosts Next Two Special Auctions to $30 Billion
http://www.bloomberg.com/apps/ne..JoePynybzGg&refer=home

Unemployment Surge Clear Sign U.S. Is Headed For Recession: Economists
http://www.nytimes.com/2008/01/05/..05econ.html?hp

Stephen Roach: America’s inflated asset prices have to fall
Peter Schiff on Cashin’ In – (1/5/2008)
Forget Oil New Crisis Is Food
Recession fears stoke political debate
Jobless Rate Hits Two-Year High; The Last Shoe to Drop in the Unavoidable Recession Ahead
Baltimore Sun asks what will we do if Fannie Mae and Freddie Mac go bust?
Sinking dollar alters the game in 2008
UK: Millions Face Financial Crisis
War on Terror Costs $6,000 Per Second
Gold Peaks Above $861, Oil $100 a Barrel
Oil at $100 not our fault: OPEC
No End In Sight For Dollar Decline
U.S. Federal Reserve Meeting Minutes for December 11, Says Economic Outlook Is “Unusually Uncertain”
Citigroup May Write Down $12 Billion, Bernstein Says
U.S. Manufacturing Fails To Grow
Era Of Cheap Food Is Over
Chinese currency hits new high against U.S. dollar
From the sub-prime to the ridiculous: how $100bn vanished
Wall Street Start To Year Worst In 25 Years
New Year 2008 may destroy USA’s struggling economy
City of debt shows US housing woe
Mortgage Defaults Rise 35%
Top economist says America could plunge into recession
Venezuela Introduces New Currency

U.S. Economic Collapse News Archive

 



Overstock.com CEO warns of depression

Overstock.com CEO warns of depression

http://www.youtube.com/watch?v=m-TLfmLTiqA

 



Why America’s Currency Is the World’s Problem

THE DOLLAR NOSEDIVE: Why America’s Currency Is the World’s Problem

Spiegel Online
December 3, 2007

The ailing US economy seems to be driving the exchange rate of the dollar inexorably downward, with serious consequences for the global economy. Politicians and central bankers are looking on helplessly as the economic outlook worsens by the day and European companies rack up huge losses.

It costs about four cents to produce a one-dollar bill — a pittance, compared to the greenback’s influence on the world’s economy.

The exchange rate of the dollar can boost the fortunes of companies and entire economies — or plunge them into crisis. Its rate against the euro fluctuates by a few hundredths of a cent each day. But in the past five years that fluctuation has more often than not taken the US currency on a downward trajectory, causing consternation — and now despair — among people around the world.

Last Thursday, Thomas Enders, the CEO of Airbus, gave a speech to employees in building 261 at the consortium’s production complex in Hamburg. He was there to tell them that a pain threshold had reached. The graph he had projected on the wall revealed the horrifying progression of the dollar over time. The US currency has lost 13 percent of its value against the euro since the beginning of the year. Conversely, the euro has risen in value, and for a short time last Friday it even approached the symbolic $1.50 threshold.

According to Enders, the rate at which the US currency is falling makes “reasonable processes of adjustment” a virtual impossibility. Every cent the dollar drops against the euro costs Airbus €100 million. This has even the normally optimistic Enders alarmed. “It’s life-threatening,” he told his audience.

Read Full Article Here

 

Merrill Lynch Predicts Recession

Silicon Alley Insider
December 5, 2007

Two major Wall Street firms have finally thrown in the towel and are now calling for a recession. For a variety of reasons, Wall Street is usually late to call downturns, so this probably means that 1) we’re already beginning to come out of the recession, or 2) this recession is going to be a doozy (the more likely explanation, in our opinion).

The pessimism of Jan Hatzius at Goldman prompted Ben Stein to call him a lightweight, conflicted shill who was just “selling fear” to help Goldman’s proprietary trading desk. We therefore look forward to Stein’s explanation for the pessimism of Merrill Lynch economist David Rosenberg:
“The US consumer is on the precipice of experiencing its first recessionary phase since 1991 – the last time we had the combination of high, punishing energy prices; weakening employment conditions; real estate deflation and tightening credit conditions…

We reiterate that real estate deflations are unique and have never ended well for the consumer, the credit market or the economy. We can identify only five periods post WWII when the real value of housing assets turned negative on a year-on-year basis. All of these time periods inevitably included a consumer downturn. Maybe it will be different this time, but we fail to see why.”

Related News:

Liquidity in European Government Bonds Evaporating
http://www.nakedca….ropean-government-bonds.html

Who got rich off the mortgage mess? : Deep recession ahead
http://articles.moneycentral.msn.com/I…?page=all

The dollar’s perfect storm worsens
http://articles.moneycentral.msn.com….px?page=all

Foreclosure rescue: No help for you
http://money.cnn.com/2007…on=2007120318

Goldman Pushed, Shorted Mtge Junk Simultaneously
http://mparent7777-2.blogspot.co…mtge-junk.html

Bush says economic fundamentals are good
http://www.reuters.com/article/domesticNews/idUSWBT00802120071204

Credit and economic woes sink Wall Street
http://www.reuters.com/article/hot…54763720071204

Pound Falls to 6-Week Low Against Dollar as House Prices Slide
http://www.bloomberg.com/apps/ne…CLye4&refer=uk

Paulson Crafts Subprime Deal to Prevent Second Bush Recession
http://www.bloomberg.com/a…4wSM&refer=home

AMF Urges Dollar Depegging
http://www.arabnews.com/?pag…d=1&m=12&y=2007

World Food Prices To Rise
http://finance.myway.com/jsp/nw/nwdt_rt.jsp?…date=20071204

Banks Ask UK Clients Not to Borrow
http://www.nakedcapitalism.c…s-not-to-borrow.html

UK: House prices ‘will plummet by 10pc over the next year’, says banking chief economist
http://www.dailymail.co.uk/pages/live/articl…=1770&ct=5

The Fed has sold us out one and all for the benefit of a small cabal of credit addicted privileged insiders
http://www.stockmarketimplode.com/2007/12/short-it-blind.html

Market bears’ gloomy growl being echoed by big players
Krugman: Financial Crisis
Subprime Mess To Get Worse
Epidemiology of the Credit Crunch
Soft landing of U.S. economy could support dollar, according to Thomson Research
Dollar climbs as higher stocks boost risk appetite
Housing mess forces Bush admin change
Real Estate Foreclosures Topping Great Depression
Bernanke Clears Way For Fed Rate Cut
Paulson’s Plan to Punish the Public
SIV watch: Citi’s Sedna edges closer to liquidation
Price tag in mortgage crisis is looking like real money
Foreclosure fallout: Renters forced out of lost homes
Shadow Mortgage Bailout Already in Progress
U.S. Government, Banks Near a Plan to Freeze Subprime Rates
UK: Trouble ahead for the economy
IMF Warns Of UK Recession
Video: “Food Banks Nationwide Face Shortages”
In the long run, value of paper currencies is zero
More bad news for the dollar as the UAE gets ready to dump it
China’s attempt to convert its U.S. Treasury holdings into euros
Growth in Consumer Spending Slows While Construction Activity Drops Sharply
Goldman Sachs Says To Short Gold In 08
Treasury Close to Subprime Aid Plan
Morgan Stanley may face $5.7 billion Q4 writeoff
New Home Prices: Worst Drop In 37 Years
More than 50,000 Lost Their Homes in October

U.S. Economic Collapse News Archive

 



Market bears’ gloomy growl being echoed by big players

Market bears’ gloomy growl being echoed by big players

Chicago Tribune
December 2, 2007

Henry Van der Eb has run a mutual fund designed to weather financial disaster since the 1970s, continually preparing for the worst even as stock prices mostly soared.

Now he senses the times turning in his favor, and while he isn’t wishing hardship on anybody, some of Wall Street’s biggest and most respected players are echoing his gloomy cry.

Merrill Lynch last week issued a series of research reports warning of “pre-recession” conditions, even as stock prices first plunged, then soared. Goldman Sachs predicted housing woes would be “considerably worse than we originally anticipated.” And giant European bank Societe Generale warned risks are “growing rather than receding.”

For the first time in years, Van der Eb and his fellow “bears,” as the market’s perpetual doomsayers are known, were enjoying high-powered company.

By the end of the week, however, the bleak forecasts had been offset by the promise of U.S. central bankers riding to the rescue with a series of interest-rate cuts aimed at bringing about a soft landing for the sagging economy. In a speech Thursday evening, Federal Reserve Chairman Ben Bernanke promised to be “exceptionally alert and flexible.” Relieved investors bid the market higher in the expectation of further rate cuts beginning when Fed policymakers meet Dec. 11.

Van der Eb, manager of the Gamco Mathers Fund in north suburban Bannockburn, was unmoved. Fed action is no cure for the “reckless lending” that’s weighing on the markets today, he declared. “At some point, the rhetoric can’t keep overriding the fundamentals. You can’t create perpetual prosperity on debt.”

Waiting for stocks to plunge is a lonely business, and while last week’s volatile ups and downs clearly reflect unsettled times, they also illustrate the near-impossible task of predicting the market’s direction. For every Cassandra convinced the retreat of credit markets will take down the broader economy, an optimist points to the boom in U.S. exports brought about by the falling dollar, or to a Fed chairman eagerly resisting any sudden downturns.

As Morgan Stanley analyst Gerard Minack noted, “Most investors still expect the U.S. to land softly. Notwithstanding the jitters of the past few weeks, equity markets do not appear to me to be pricing in anything worse.”

While many analysts are forecasting just such a soft landing, the typical bear is betting against it, more visibly than at any time in years.

Anyone curious about the worst-case-scenario for the economy can find it at their local bookstore, where sky-is-falling analyses have been writ large in 2007 titles such as “Financial Armageddon” and “Crash Proof.”

Stock-market pessimists such as David Tice, manager of the Prudent Bear mutual fund, have become familiar voices to anyone paying attention to the financial media. “We’re as confident as we’ve ever been that the wheels have come off,” said Tice, expressing a sentiment reflecting his views for some time now. “We’re sad for the country.”

‘Revolution’ on horizon?
Ravi Batra, among the most bearish of bears, expects nothing less than a popular uprising against “moneyed interests preventing reform” and, eventually, “a revolution.”

The polite, soft-spoken economics professor from Southern Methodist University is no stranger to such alarmist ideas, and Batra says he’s “logging a lot of interviews” these days. He also has a new book, “The New Golden Age,” its optimistic title referring to the period that supposedly will follow the bedlam he foresees over the next five years.

Batra achieved fleeting glory when his book, “The Great Depression of 1990,” became a best seller in the aftermath of the 1987 stock market crash. And while the Dow Jones industrial average has gained more than 10,000 points in the years since, Batra has seen calamity lurking around the corner pretty much all along.

The only reason his predictions weren’t spot on, he said, is because he underestimated America’s capacity for debt. But he has no doubt the end is near: “American consumers can’t borrow any more,” he said. “That game is over.”

Perhaps chastened by the economic staying power that has defied their expectations in the past, neither Van der Eb, Tice nor even the far-out Batra predicts an imminent crash. Tice comes closest: “It may rally short-term. But we’ve started the bear market, and it’s going to go a lot lower.”

Predictably, Tice emphasizes the falling housing market and mortgage crisis. He expects Fannie Mae and Freddie Mac, the government-backed mortgage companies, to fall into disarray. And he sees an enormous hangover from the boom in structured finance. “We’re in the first inning of this thing,” he warned.

Van der Eb considers it premature to declare a full-blown bust in the making. “It’s probably too soon to say it’s going to be the big one,” he said. But trouble looms in bad-credit problems that “really dwarf” the dot-com bubble of 2000, he noted. “We’re headed toward the open water here, and we’ll just have to see how bad the waves get.”

Of course, those negative vibes belie the fact stock prices recovered sharply last week. On Monday, all looked bleak as the Dow Jones industrial average fell 237 points, bringing its decline from mid-October past the 10 percent threshold that signifies a correction. Though benchmarks differ, a “bear market” typically becomes official after a 20 percent decline, and the drop can be far sharper: During the dot-com collapse earlier this decade, large-capitalization stocks lost roughly half their value from the peak in 2000 before bouncing back.

If another drubbing is due, it was difficult to tell from the way the market shook off its Monday blues to post its biggest weekly gain in two months.

Not only did Bernanke signal a willingness to cut interest rates, but the Treasury moved closer to a plan to help Americans avert mortgage foreclosures.

JPMorgan Chase & Co. and Wells Fargo & Co. led financial shares to their best weekly gain in four years. Home builders rallied the most in seven years on Treasury Secretary Henry Paulson’s plan to buoy their market. For the week, the Dow rose 3 percent, the Nasdaq 2.5 percent and the Standard & Poor’s 500 2.8 percent.

Even bad news, such as a government report Friday showing that incomes and spending rose less in October than economists had forecast, merely boosted the confidence of investors that Fed policymakers would be cutting rates sharply for months to come.

The long-distance stock-market bear takes such rosy appraisals in stride.

Tice, for one, scoffs at “everybody who says it is time to buy every time the Fed cuts rates.” The bear market won’t unfold by moving straight down, he predicted. “You’ll have one-day rallies that give hope this is the time to buy.”

But don’t fall into the trap, Tice asserted: “People just ought to get out.”

 



Dollar Decline “Irreversible”

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.

Read Full Article Here

 

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.

Read Full Article Here

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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
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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

 



Relative of Merrill Lynch Founder Predicts Stock Market Crash


Relative of Merrill Lynch Founder Predicts Stock Market Crash


Kerri Panchuk
DSNews
October 30, 2007

In a market where fears over the subprime shakedown are spreading pessimism nationwide, Charles Merrill, the cousin of the man who founded Merrill Lynch & Co., is predicting a stock market crash that will put the 1929 crash to shame.

Merrill, in an exclusive interview with a financial author, said, “There is going to be a major stock market crash, so protect your assets. Buy physical gold and hide it.”

Merrill also discussed all the changes at Merrill Lynch that indicate a potential market crises—even alluding to the company’s chief executive officer, who stepped down this week.

“Merrill Lynch is crashing, due to the ineptness of the CEO,” Merrill said. “No matter who is running Merrill Lynch & Co., it’s going to need a regimen of restraint and recuperation after getting badly bruised by the global credit market shakedown. I predict a house of dominos, and the whole stock market is going to crash.”

Lynch’s less-than-encouraging remarks were part of an interview with writer Michael Grace, who is writing a book called, “The Final Great Depression.”

During the interview, Merrill concluded, “There is so much wealth in Palm Springs … from inherited to funny money, and I’m advising my friends to buy gold. Grace’s book on the ‘final depression’ sounds like a novel or fantasy but unfortunately it is a picture of our horrible future here in America. My cousin Charlie must be turning over in his grave.”

 

Oil Crisis in Summer ’09: War in Iran. Gasoline rationing. A military draft. A Chinese takeover of Taiwan. Double-digit inflation and unemployment

Herald Tribune
November 2, 2007

WASHINGTON: War in Iran. Gasoline rationing. A military draft. A Chinese takeover of Taiwan. Double-digit inflation and unemployment. The draining of the strategic petroleum reserve.

This is where current energy policy is going in the United States, according to a nightmare scenario played out as a policy-making exercise on Thursday by a group of former top government officials.

Two bipartisan business-supported groups sponsored an elaborately staged role-playing game called Oil ShockWave that tried to dramatize the effect of American dependence on oil imported from unstable and unfriendly parts of the world.

The organizers have an agenda: They hope to prompt Congress to act on energy legislation and to push the issue into the presidential campaign.

Read Full Article Here

 

CDS traders warn of ‘blood on streets’

BBC
October 27, 2007

The mood in credit derivatives markets turned ugly on Thursday, with the cost of insuring corporate debt hitting multi-week highs on both sides of the Atlantic.

Speculation was rife that leading major investment banks were facing additional losses linked to complex mortgage-backed securities, while worries mounted over the health of major financial guarantors.

“It’s scary out there — there’s blood on the streets,” a trader at a US brokerage said. “It’s a real mess.”

In the US, the perceived risk of owning corporate debt jumped to a seven-week high, with the cost to insure a $10m portfolio of investment-grade debt reaching $67,000, data from Phoenix Partners Group showed.

Confidence in Citigroup and Merrill Lynch, as measured by their credit default swaps, slumped to lows not seen since the height of the credit squeeze in August.

Five-year credit default swaps tied to Citigroup widened to 60 basis points, meaning it cost $60,000 annually to insure Citigroup’s debt against default for five years. A couple of weeks ago, that figure stood at $27,000.

Contracts on Merrill Lynch, which last week posted the largest quarterly loss in its 93-year history, rose $18,000 to $103,000. CDS on UBS rose 10bp to 51bp, Deutsche Bank said. The contracts stood at about 6bp in May. Contracts on Credit Suisse rose 4bp to 52bp from 10bp in June.

Bond insurers, or monolines, were also hit hard.

“[These triple-A rated companies are] exposed to the crumbling housing market,” said Gavan Nolan, an analyst at derivatives data provider Markit. “Investors in monolines will be waiting for the coming months of housing data with trepidation,” Mr Nolan said.

CDS on MBIA Insurance rocketed to a four-year high, of 345bp, CMA Datavision said.

Last week the insurer posted $36.6m net loss and halted its share buy-back programme.

Contracts on the bond insurance unit of Ambac Financial climbed to a five-year high of 310bp.

Gimme Credit, an independent research term, downgraded both MBIA and Ambac this week.

In Europe, the iTraxx Crossover index of 50 mostly high-yield companies widened by 18 bp to 338bp, the biggest rise since August, according to Deutsche Bank data.

The iTraxx Europe index, which tracks 125 investment-grade companies, rose 3.75bp to 41bp. It was the biggest one-day jump since early September.

Related News:

Central banks flooded the world with cheap money for years, helping the rich get richer. Now inflation is on the horizon, threatening to make the poor even poorer.
http://www.spiegel.de/international/world/0,1518,514621,00.html

The Fed digs us a deeper hole
http://articles.moneycentral….ronicles/TheFedDigsUsADeeperHole.aspx

Forex – Dollar sinks to new record low against euro as market shrugs off US data
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Latest Exec Departure: Citigroup CEO Charles Prince To Resign Following Subprime Crisis
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Global stocks hit by fresh subprime woes
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Foreclosures almost doubled from ’06: report
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Everybody Hates The Dollar
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U.S. Economic Collapse News Archive

 



Gloom & Doom Economist Says Worst Is Yet to Come

Gloom & Doom Economist Says Worst Is Yet to Come

CNBC
October 22, 2007

Marc Faber, editor and publisher of The Gloom, Boom & Doom Report, thinks the worst is yet to come for the global economy.

Appearing on CNBC’s “Squawk Box,” the economist and managing director of Marc Faber Ltd., explained his bearish outlook — and offered advice for how to play a glum market.

Faber perceives a “battlefield” between the Federal Reserve and other central banks, which had infused billions of dollars into the worldwide system to boost liquidity, and the counter-pressure of illiquidity brought about by market forces such as declining home prices.

Watch It:

http://www.youtube.com/watch?v=isD2aj3wh20

http://www.youtube.com/watch?v=YmORG10k71c

http://www.youtube.com/watch?v=VXsZu9oXCcg

But the economist fears that the Fed’s “throwing money at the system” will not help improve the fundamentals of the real economy. Instead, he believes, excessive monetary growth has merely driven excessive consumption in the U.S., with consumers living beyond their means and speculators “piling one bubble, housing, on top of the Nasdaq [tech] bubble” that popped in 2001-2001.

“The easy money, the easy credit — you can’t solve your problems with what caused them in the first place,” Faber declares.

He posits that a fully-realized recession at the turn of the millenium might have been for the best, restabilizing the world credit markets. “The longer you postpone the hour of truth, the worse it will be,” he augurs. “We will reach ‘zero hour,’ when more debt doesn’t help.”

How should one prepare for the full-fledged global bust Faber predicts?

Precious metals. He points to the traditional safe harbor, gold — but cautions that the precious metal is “a bit over-bought.” Construction-oriented commodities in general will continue to be driven by Chinese demand, he says, making mining companies a good bet. And he the one absolute essential: Food. “We all have to eat.”

Markets. As to national markets, Faber says that Japan and Thailand are “very reasonable.”

Currencies. He foresees the U.S. dollar remaining low against other currencies — but notes that “Euroland” is very expensive compared to the greenback.

Real estate. Faber’s outlook for real estate goes against the grain: Manhattan is the great exception to U.S. trends, continuing to rise in price even when strong U.S. regions show signs of decline. But Faber says that in the bigger perspective, New York property is as vulnerable to a credit bust as any major metropolitan areas, such as “Hong Kong, Zurich and Frankfurt.”

His real-estate advice: “Buy a farm and learn to drive a tractor.”

Related News:

Jim Rogers Shifts Assets Out of Dollar to Buy Yuan
http://www.bloomberg.com/apps/news?pid=….&refer=home

U.S. “undoubtedly in recession”: Jim Rogers
http://www.reuters.com/article/businessNe….=23&sp=true

Iran Breaks With USD
http://www.presstv.ir/detail.aspx?id=28261&secti..351020102

Merrill Lynch Reports Loss on $7.9 Billion Writedown
http://www.bloomberg.com/ap…7aCkqY&refer=finance

Thousands of more jobs gone
http://www.costar.com/News/…474A4A4784CF

Bank of America To Cut 3K Jobs
http://biz.yahoo.com/ap/071024/bank_of_america_job_cuts.html

What the Citibank, et al $80B Bail-Out Fund is Trying to Avoid
http://commonsenseforecast…80b-bail-out-fund.html

Steep decline in oil production brings risk of war and unrest
http://www.guardian.co.uk/oil/story/0,,2196435,00.html

Dollar Slides To Record Low Against Euro
http://www.ft.com/cms/s/0/56….0779fd2ac.html?nclick_check=1

America vetoes G7’s dollar alert
IMF chief warns dollar may suffer ‘abrupt fall’
The Dollar: How Low Can It Go?
IMF Warns Of Inflation Risks
Weapons of mass financial destruction: The credit shock
Gold: Relentless march towards $800/oz-mark seen
US loan default problems widen
Global stocks see sharp declines
China Bank To Buy $1B Stake In Bear Stearns
The Basis for Markets Optimism
Bad Loans
Living paycheck to paycheck gets harder
Who Expects 4-Digit Gold and Why!
Oil jumps over $90 a barrel, dollar sinks to new low against the euro
Dollar dives as US slump spreads
Stocks Sink on Black Monday Anniversary
‘Black Monday’ redux? Global rally makes some sweat
Gold to go higher, says Newmont boss
UK house market is ‘heading for crash’
Dow Loses 367 Points
Markets see U.S. policy of “ignore the dollar”
IMF Badmouths The Dollar In Open Attack On American Middle Class
Dollar stays near record euro low
Video: The inevitable collapse of the dollar
Dollar Falls To New Low Against Euro
A Weak Dollar Is Bad For America
Dangers Of The Diving Dollar
Global inflation: Policymakers fear return of a banished beast
Inflation 7982% In Zimbabwe
Oil Surge To $89 May Provoke OPEC Meeting
Oil Reverses Course, Hits New Record
Gold price hits highest level since 1980
Friction over weak dollar expected at G-7 meeting
Japan and China lead flight from the dollar
2011 – The U.S. Dollar: R.I.P.
Paulson warns of damage to come
Greenspan would not be surprised to see a double-digit fall in US house prices nationally from their peak
Wall’s Street’s Rescue Plan: Be Very Afraid
GMAC Expected to Cut 25 Percent of Mortgage Workforce
Southern CA Home Sales Plunge 30%
German bank hit by subprime crisis slashes results, directors leave
The IMF States The US Dollar Still Has Some Downside
Sub-Prime Blow Up In Canada?
It’s Time For The Banks To Face The Hangman
US home foreclosures double
U.S. home starts fall to 14-year low
Experts Fear Repeat Of 1929 Economic Crash
Oil surges near $88 a barrel
Oil Futures Hit New Record Above $86
After a 200-Year Resource Bear Market, Gold Price Could Pass US$2,271
Wall Street Falls Amid Unease Over Bad Debt; Oil Settles Above $86
Gold & Oil Surges Dollar Falls
Treasury Sales May Rise 50% as Deficit Suddenly Grows
Plan to Save Banks Depends On Cooperation of Investors
Big Banks Trying to Avoid Global Economic Crash
Treasury claims power to seize gold and silver — and everything else
Income inequality worst since 1920s, according to IRS data
Man who correctly predicted Black Tuesday makes another prediction in NY Times: ‘Country is facing… a depression’
Oil Futures Hit New Record Above $85
Oil hits record $84
Bill Moyers: Are we heading for another 1929?
London, Not U.S., Controls U.S. Mortgage Crisis
Gold price rockets to 27-year high, platinum nears record
U.S. Foreclosure Filings Nearly Double in September Over Same Month a Year Ago
Strong silence from U.S. on dollar’s weakness
Central Banks Sell 475 Tons Of Gold
Credit card debt is ready to blow
Americans charge it as Bank of Subprime closes
‘The Roof Is Caving In On the Housing Market’; ‘Think Housing’s Bad? You Ain’t Seen Nothing Yet’

U.S. Economic Collapse News Archive

 



Congressman: Dollar Could Collapse To Absolute Zero


Congressman: Dollar Could Collapse To Absolute Zero

Presidential candidate Ron Paul warns of coming global economic depression

Paul Joseph Watson
Prison Planet
October 8, 2007


Presidential candidate Ron Paul has made a dire prediction that the dollar could collapse to absolute zero – precipitating hyper inflation, soaring oil prices and a global economic depression if current policies are continued.

“Once they realize the American people have awakened to the con game that’s been going on – I think those people running the banking and monetary system aren’t going to be too happy,” Paul told the Alex Jones Show on Friday.
The Texas Congressman forecasts that if current policies are prolonged, the dollar could crash all the way to nothing and be forced to start over.

“If Bush is foolish enough to start bombing Iran, that might precipitate such a crisis as oil going to $200 dollars a barrel and really dampening the enthusiasm of the whole dollar,” said Paul.

“If they continue what they’re doing, it’s gonna go to zero, we’re gonna have runaway inflation, all paper currencies eventually self-destruct and are ruined, and we’re in uncharted waters right now – this is the first time in the history of man you’ve had no solid currencies around the world and this has been going on for 35 years.”

Paul agreed that elitists would seize upon a global depression by posing as the saviors and offering more control, police state and big government as the solution.

“This was the whole thing that started in the last depression,” said Paul, “Scare people to death instead of blaming the Federal Reserve for the depression and the financial bubble of the 20’s, they said ‘well capitalism failed, it was that stupid gold standard’, therefore we have to have welfare and of course everything they did prolonged the depression.”

Paul said his warnings about the impending collapse of the U.S. economy, which stretch back years, were helping his campaign gain credibility due to the unfolding crises in the market and the credit crunch.

“When the people understand how the Fed screws up the economy and causes all the bubbles and all the changes that have to come from that, I’m getting a lot more calls,” said Paul.

The Congressman also discussed the continued success of his campaign and the establishment’s attempts to stifle its importance.

The presidential candidate said the reason that the Democrats and Republicans are trying to speed up the primaries is because they don’t like competition from third party and grass roots candidates and are trying to prevent them from gaining traction.

“The move right now is to try to close the primaries – do you think they’re sincere when they say they want to have a big tent and invite new people in? They can invite a lot of new people in but they don’t want constitutionalists evidently because they want to make it tough to vote in a Republican primary,” said the Congressman.

“It confirms the fact that the control of this whole system has been one party so to speak, it’s one group of people that control both parties and right now I think the people are getting disgusted with it and they’re starting to wake up,” he added.

The Congressman stated that the popularity of his campaign outstripped even his expectations and slammed the establishment networks for attempting to skew Paul as a fringe candidate.

“It doesn’t discourage our supporters, it enrages them,” said Paul, “They always claimed that there were just a few of us out there that cared and that they were bloggers manipulating the Internet – well you can’t manipulate to the point where you get 35,000 new donors who average about $40 dollars a piece and raise $5 million dollars and outpace many of the other candidates.”
Paul said the other candidates had initially tried to ignore his platform, before ridiculing it, to the point where they are now being forced to adopt constitutionalist rhetoric in order to compete with his burgeoning popularity.

Related News:

Gulf funds drift away from dollar
http://archive.gulfnews.com/articles/07/10/07/10158647.html

Merrill Lynch Posts Huge Loss
http://news.yahoo.com/s/ap/20071005/ap_on_bi_ge/merrill_lynch_guidance_15

The (un)charitable core of Northern Rock
http://ftalphaville.ft.c….the-uncharitable-core-of-northern-rock/

Australian Dollar at 23-Year High Against U.S. Dollar
http://www.economicsbriefing.com/200…at-23-year-high.html

The Slow Motion Recession
http://www.gcnlive.com/AGLDoffer.htm

Dollar falls, unable to shake gloom despite jobs report
http://www.reuters.com/article/hotStocksN….pageNumber=2

Washington Mutual 3Q Earnings to Tumble
http://ap.google.com/article/A…of-wD8S3BM0G1

For home builders, the worst is to come
http://articles.moneycentral.ms…orstIsToCome.aspx?page=2

Homebuilders Liquidate Assets in Desperation Sales
http://www.bloomberg.com/apps/ne….refer=realestate

Merill Lynch loses $5 Billion on subprime loss
Washington Mutual Sees About 75% Drop In Q3 Profit
Ohio Bank Fails
Canadian Dollar Reaches 31-Year High Against U.S. Dollar
Dollar’s double blow from Vietnam and Qatar
US economy, housing crisis to worsen
Weaker US Dollar is Good for the United States and its Trading Situation – Economic Myth Busters
Greenspan’s Dark Legacy Unmasked
JPMorgan, Bank of America May Write Down Buyout Loans
New data show housing market ‘in freefall’
Is the credit crisis over? Not so fast
Weak Dollar Prompts Record Foreign Buyouts of U.S. Companies
Europe Urges Tough Line on Dollar
Indian economy ‘to overtake UK’
Business calls for euro action
Why the US Dollar Will Continue Its Downward Trend
Weak dollar prompts record foreign buyouts of U.S. companies
Dollar Peggers to Stretch the ‘Impossible Trinity’
China $200B Superfund To Drain Dollars
Pending Home Sales Index Hits Record Low
Iran Slashes Oil Sales In Dollars
Greenspan Says Solution to Inequality is to Lower U.S. Wages
The Con That Turned the World Against America
U.S. Pending Home Sales Fall to Lowest Level in More Than Six Years
The Alarming Parallels Between 1929 and 2007
Big chill looms for the economy as new mortgages fall sharply
Greenspan Warns Good Times Are Over
Dollar Crunch Puts Gold Centre Stage
Euro Bursts To Fresh Dollar High
Dow surges to record high
The Worst Recession in 25 years?
Largest U.S. Bank: Profit Down 60%
U.S. $10 trillion in the red
Fears over cracks in Britain’s gold stock
Gold hits 28-year peak, platinum near all-time high
Gold rises as dollar sinks like a rock
How Economy Could Survive $100 Oil
Bush Disappointed Spending Bills Not Passed
Private Student Loan Bubble Could Burst
Greenspan on market upheaval
ING Direct steps in as US bank collapses
35K state workers get layoff notices
As Prices Soar, U.S. Food Aid Buys Less
Freddie Mac chief warns of recession
Oil Prices Rise As Dollar Falls
FDIC Shuts Down NetBank Due to Defaults
Gold Hits 28 Year High
EU’s Almunia Worried By Dollar’s Fall
New-Home Sales Tumble to 7-Year Low
U.S. Government About to be Broke

 



For home builders, the worst is to come

For home builders, the worst is to come

MSN Money
October 2, 2007

The era of NINJA (“no income, no job or assets” ) subprime loans sold by fast-talking storefront mortgage brokers is dead, after all. By some estimates, up to three quarters of sales made in Southern California, Nevada and Florida in the go-go era of 2004-2006 involved some sort of fraud, particularly in the form of exaggerated income.

Foreclosure rates are soaring, and as those owners are kicked out of their homes for not paying, the structures are sitting empty, with no one waiting in line to buy at any price. Meanwhile, more than $1 trillion in adjustable-rate loans will kick mortgage payments much higher by June 2008 for tens of thousands of homeowners, which will push foreclosure rates even higher as people simply walk away from houses they can’t afford. I saw this happen in the last down-cycle in Los Angeles in the late 1980s; it gets ugly and stays that way for years, not months.

According to a report by investment bank Punk Ziegel, there are 17.4 million vacant houses in the country, and only 4.3 million of those are second homes. That means there are more ownerless houses in the United States today as a percentage of total inventory than at any time since records have been kept.

Not only are there not enough qualified households available to take them over, but demographics are heading the opposite direction. A Punk Ziegel analysis shows that the number of people aged 25 to 34 — the age of most home buyers — peaked in 1989 and will not get back to that level until 2013.

Waiting for a bankruptcy

As a result of too few buyers facing too many homes, the rate of price depreciation has been accelerating, with a 3.9% year-over-year decline in July nationwide after a 3.4% decline in June and a 2.8% decline in May. There is little doubt that builders will be forced to write down more of their inventory as losses over the next quarter, further eroding book values.

Although there are pockets of strength, such as my hometown of Seattle, home values in areas like Detroit, Los Angeles, Phoenix, Tampa, Miami and Washington, D.C., are plunging, with year-over-year declines as great as 9.7%, according to data released by research group Case-Shiller.

Related News:

Homebuilders Liquidate Assets in Desperation Sales
http://www.bloomberg.com/apps/ne….refer=realestate

Merill Lynch loses $5 Billion on subprime loss
http://www.bloomberg.com/apps/news?pid…me

Washington Mutual Sees About 75% Drop In Q3 Profit
http://www.rttnews.com/sp/Quickfactsnew.asp?date=10/05/2007&item=50

Ohio Bank Fails
http://www.thestreet.com/s/ohio-bank-fails/ne….&cm_ite=NA

Canadian Dollar Reaches 31-Year High Against U.S. Dollar
http://www.economicsbriefing.com/2….-year-high.html

Dollar’s double blow from Vietnam and Qatar
http://www.telegraph.co.uk/money/main…/10/03/bcnviet103.xml

US economy, housing crisis to worsen
http://www.moneycontrol.com/india/video/stockmarket/19/56/newsvideo/306461

A Weaker US Dollar is Good for the United States and its Trading Situation – Economic Myth Busters
http://www.marketoracle.co.uk/Article2295.html

Greenspan’s Dark Legacy Unmasked
http://www.globalresearch.ca/index.php?c..va&aid=6946

JPMorgan, Bank of America May Write Down Buyout Loans
http://www.bloomberg.com/apps/new…EXwEC9A&refer=finance

New data show housing market ‘in freefall’
http://www.theglobeandmail.com/servl….tory/Business

Is the credit crisis over? Not so fast
http://www.reuters.com/article/reutersEd….2?pageNumber=3

Weak Dollar Prompts Record Foreign Buyouts of U.S. Companies
http://www.iht.com/bin/print.php?id=7720834

Europe Urges Tough Line on Dollar
http://www.ft.com/cms/s/0/f3ef4c12-712d-11dc-98fc-0000779fd2ac.html

Indian economy ‘to overtake UK’
Business calls for euro action
Why the US Dollar Will Continue Its Downward Trend
Weak dollar prompts record foreign buyouts of U.S. companies
Dollar Peggers to Stretch the ‘Impossible Trinity’
China $200B Superfund To Drain Dollars
Pending Home Sales Index Hits Record Low
Iran Slashes Oil Sales In Dollars
Greenspan Says Solution to Inequality is to Lower U.S. Wages
The Con That Turned the World Against America
U.S. Pending Home Sales Fall to Lowest Level in More Than Six Years
The Alarming Parallels Between 1929 and 2007
Big chill looms for the economy as new mortgages fall sharply
Greenspan Warns Good Times Are Over
Dollar Crunch Puts Gold Centre Stage
Euro Bursts To Fresh Dollar High
Dow surges to record high
The Worst Recession in 25 years?
Largest U.S. Bank: Profit Down 60%
U.S. $10 trillion in the red
Fears over cracks in Britain’s gold stock
Gold hits 28-year peak, platinum near all-time high
Gold rises as dollar sinks like a rock
How Economy Could Survive $100 Oil
Bush Disappointed Spending Bills Not Passed
Private Student Loan Bubble Could Burst
Greenspan on market upheaval
ING Direct steps in as US bank collapses
35K state workers get layoff notices
As Prices Soar, U.S. Food Aid Buys Less
Freddie Mac chief warns of recession
Oil Prices Rise As Dollar Falls
FDIC Shuts Down NetBank Due to Defaults
Gold Hits 28 Year High
EU’s Almunia Worried By Dollar’s Fall
New-Home Sales Tumble to 7-Year Low
U.S. Government About to be Broke

 



Unusual Amount of Put Options Just Before 9/11 Attack

9/11: Unusual volumes on Put Options just before the attack. Swiss study

9/11 Blogger
September 30, 2007

September 11, 2001: Unusual volumes on Put Options just before the attack. Swiss study

Says the 11 September 2007 issue of Les Echos, the leading French financial newspaper ]

The paper continues:

Six years after the attacks, a study has been released by two professors of the university of Zurich on the atypical volumes of put options placed before the attacks on World Trade Centre.

The authors, one specialist in derivatives, the other a specialist in econometrics, studied the options to sell (put options), used to speculate on the fall in the price of 20 large American groups.

(Read the full the French article below – Lesage translation)

“Atypical volumes, very rare on certain titles, lead to suspicions of insider trading. ” Six years after the attacks of World Trade Center, it is the disconcerting conclusion of a recent study by Marc Chesney and Loriano Mancini, professors at the University of Zurich.

The authors, one a specialist in derivatives, the other a specialist in econometrics, worked on the options to sell, used to speculate on the fall, of 20 great American groups, in particular in aeronautics and finance.

Their analysis relates to the transactions carried out between the 6 and September 10, 2001 compared to the average volumes recorded over long period (ten years for the majority of the companies).

The two specialists, in addition, calculated the probability of several options of the same sector having significant volumes in a few days.

“We tried to see whether the movements recorded on certain titles little before the attacks were common. We show that, for certain companies like American Airlines, United Airlines, Merrill Lynch, Bank of America, Citigroup, Marsh & McLehnan, movements are scarce from a statistical point of view, a fortiori in comparison to the volumes observed for other values like Coke or Hewlett-Packard, explains Marc Chesney, a former professor with (the prestigious business school) HEC, author of “Money Laundering and Financing of Terrorism” (published by Ellipses Editions).

“For example, 1.535 contracts of options to sell in the term October 2001, with 30 dollars, were exchanged on American Airlines on September 10, against a daily average of approximately 24 contracts over the three previous weeks “the fact that the market is bear at the time” does not explain enough these surprising volumes “

“Enormous” profits:

The authors also studied the profitability of the options to sell, and of purchase, for an investor having bought a product between the 6th and the 10th “For certain titles, the profits were enormous. For example, investors having acquired options to sell of Citigroup with a maturity at October 2001 could potentially have gained more than 15 million dollars “,He said.

The conjunction of the data between volumes and profitability, the two authors conclude “the probability that there were offences of initiates (insider trading) is strong for American Airlines, United Airlines, Merrill Lynch, Bank of America, Citigroup and JP Morgan.

It is not a legal proof but it is the findings of statistical methods confirming signs of irregularities “.

The study is certainly not the first on possible insider trading in connection to the attacks but it is disconcerting in comparison with the conclusions of the regulatory authorities. As of September 2001, the Securities Exchange Commission and its European counterparts were interested in the atypical stock exchange movements before the attacks.

In an official statement of July 2004, the American regulator stated that it examined more than 9,5 million transactions in the weeks preceding September 11, then delivered its conclusions to the National Commission on the terrorist attacks (The 9/11 Comission).

According to this commission, unusual transactions certainly took place but each had a non-criminal explanation. The authorities evoke, for example, analyst’s investor advice to explain certain rises of volumes.

Same tone from the ex-COB now the AMF (French SEC), which states in its annual report of 2002: “the elements obtained forbid to show any evidence that financial groups related to the instigators of the attacks could have used the Stock Exchange to realise operations”

MARINA ALCARAZ
http://www.lesechos.fr/info/marches/4620847.htm