CNBC: Bailout will cause Depression. Central Banks Supressing Price of Gold
DriftingByTheStorm
Posts: 8,684
Look, this lunatic fearmonger made it on to televison!
Man this guy sounds a LOT like a certain fearmonger "conspiracy theorist" on this message board.
WATCH THE VIDEO TOO.
He mentions hyperinflation around 4-5 minutes. And around 7 minutes is the comment about gold price supression.
Bailouts Will Push US into Depression: Manager
The end result of the global economic slowdown may be the U.S. announcing national bankruptcy as the government cannot afford the bailouts that it promised and the market will not bail out the government, Martin Hennecke, senior manager of private clients at Tyche, told CNBC on Thursday.
"We expect a depression in the United States. We expect a depression, very possibly, also in Europe," Hennecke said on "Worldwide Exchange."
The estimated $300 billion cost of the Fannie/Freddie bailout will probably be considered as a loss that the government will have to take, therefore passing it on to taxpayers, he explained.
"We already have $3 trillion of debt [SIC. He said TEN trillion. Typo] , as far as the U.S. government is concerned. These debt figures across the U.S. economy are rising very sharply."
When the government can no longer pass the United States' "immense debt" on to taxpayers, it will turn to the holders of U.S. dollars, leading to the eventual downfall of the currency, Hennecke said.
"Definitely, it (the dollar) is not a safe place to be invested in, as real inflation is closer to 10 or 11 percent than the actual inflation numbers given by the U.S. government," Hennecke said on "Worldwide Exchange".
Investors should avoid exposure to debt and stay away from leveraging on any investment or asset, including property, Hennecke advised, adding that "banks have been too highly leveraged in the past, private households, everybody."
Hennecke's stock allocations are mainly Asian-based, especially in the Chinese market as the country's government has a large amount of cash and the macroeconomics are fundamentally strong.
He also suggested investing in gold, despite the recent fall in price.
© 2008 CNBC.com
Man this guy sounds a LOT like a certain fearmonger "conspiracy theorist" on this message board.
WATCH THE VIDEO TOO.
He mentions hyperinflation around 4-5 minutes. And around 7 minutes is the comment about gold price supression.
Bailouts Will Push US into Depression: Manager
The end result of the global economic slowdown may be the U.S. announcing national bankruptcy as the government cannot afford the bailouts that it promised and the market will not bail out the government, Martin Hennecke, senior manager of private clients at Tyche, told CNBC on Thursday.
"We expect a depression in the United States. We expect a depression, very possibly, also in Europe," Hennecke said on "Worldwide Exchange."
The estimated $300 billion cost of the Fannie/Freddie bailout will probably be considered as a loss that the government will have to take, therefore passing it on to taxpayers, he explained.
"We already have $3 trillion of debt [SIC. He said TEN trillion. Typo] , as far as the U.S. government is concerned. These debt figures across the U.S. economy are rising very sharply."
When the government can no longer pass the United States' "immense debt" on to taxpayers, it will turn to the holders of U.S. dollars, leading to the eventual downfall of the currency, Hennecke said.
"Definitely, it (the dollar) is not a safe place to be invested in, as real inflation is closer to 10 or 11 percent than the actual inflation numbers given by the U.S. government," Hennecke said on "Worldwide Exchange".
Investors should avoid exposure to debt and stay away from leveraging on any investment or asset, including property, Hennecke advised, adding that "banks have been too highly leveraged in the past, private households, everybody."
Hennecke's stock allocations are mainly Asian-based, especially in the Chinese market as the country's government has a large amount of cash and the macroeconomics are fundamentally strong.
He also suggested investing in gold, despite the recent fall in price.
© 2008 CNBC.com
If I was to smile and I held out my hand
If I opened it now would you not understand?
If I opened it now would you not understand?
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The fragility of the U.S. banking system puts the country in a more dire position than many people realize according to CNBC “Mad Money” host Jim Cramer.
Cramer, in his September 11 “Stop Trading” segment on CNBC’s “Street Signs” told host Erin Burnett the situation puts the United States in danger of “Great Depression, No. 2.”
Burnett questioned Cramer’s assertion that banks should be bailed out by the federal government, in turn passing the cost off to the taxpayer. “It’s obvious the bank system is falling apart,” Cramer said. “Let’s save it before it goes to zero.”
Here is the blow by blow:
BURNETT: But, what I’m writing down is some numbers here – more broadly for the state of, of, of bailouts. You had the Bear [Stearns] bailout and they guaranteed the first $30 billion. We don’t know what the costs will be. Fannie and Freddie – numbers are all over the map, no one knows – $50 billion to $500 billion.
CRAMER: We don’t want a Great Depression, what’s the matter with that? We don’t want a Great Depression.
BURNETT: But OK, then you look at a Washington Mutual, you have a few hundred billion dollars in assets here. You got all these deposits. You’ve got to go borrow the money …
CRAMER: That was run by morons.
BURNETT: But my point is – you’ve got to go borrow the money to fulfill your FDIC insurance to $100,000.
CRAMER: Well, no, you just transfer – you close it one day, like my bank was…. I was banking at Crossland. The next day it opens as another bank, what do I care? My $100,000 was insured.
BURNETT: But, you care because taxpayers are the ones who’s going to be the paying you back for the ones who borrowed it.
Cramer argued it was necessary because otherwise, the U.S. would go into a depression:
CRAMER: We don’t want a Great Depression. I mean, we just don’t want one.
BURNETT: But, are we really at risk of a Great Depression? Most people would argue that we’re not in a full-blown recession.
CRAMER: Totally, totally. John Stumpf [president] from Wells Fargo said it was the worst since the Great Depression.
BURNETT: In housing, but that’s not everywhere.
CRAMER: If I wanted clean hands, if I wanted to be Andrew Mellon, I would call for – I would just say, “Listen, let’s just let the Great Depression, Number Two, happen. But, that’s where we are. That’s, we’ve been like that for a while. So, let’s try to avoid it if we can.
Burnett argued the economy was still growing. After one quarter of negative gross domestic product (GDP) at the end of 2007, the economy has rebounded with two positive quarters. But Cramer said there was a difference between the economy and the banking system.
“Well, one is the difference between the economy and the banking system,” Cramer said. “The economy really picked up in 1936 to ’38 because of armament orders, and World War II turned around the U.S. economy entirely, but there was still, the banking system was still very frail throughout the ’30s.”
Cramer told Burnett he was disappointed in Federal Reserve Chairman Ben Bernanke, who has studied the Great Depression. Cramer added there is a need for another interest rate cut at the upcoming Federal Reserve Board meeting on September 16.
“But you know, look – I hear you on the jobs, I hear you on the economy,” Cramer said. “I don’t really care. I’m talking about a dysfunctional banking system. We don’t want Citi (NYSE:C) to go out of business. We don’t want AIG (NYSE:AIG) to go out of business.”
House Speaker Nancy Pelosi, D-Calif., September 11 mentioned the possibility of another rescue package – this one for beleaguered investment bank Lehman Brothers (NYSE:LEH), based on its impact on the credit markets.
Great Depression references have been used liberally by the media in 2008. Networks have made endless connections to the Great Depression – more than 70 times in the first six months of the year and that’s just on the three broadcast networks.
Cramer is such a contradiction.
He calls for an investigation and much stronger regulation of the Fed.
He agrees with Ron Paul on a lot of what he had to say on his show,
but he is such a fucking inflationist and thus inherently a backer of the very elite which he espouses to no longer sypathize with. His analysis is often right on, and he makes a lot of good insight, but his positions on Fed policy turn me off in a BIG way.
:(
If I opened it now would you not understand?
Watching the future of America as debts pile up,Unloading US dollars could be detrimental to the economy, efforts to manipulate gold continue, 100 billion in losses already written off, South America heats up the Cold War, Saudi walks out of OPEC
"By the pricking of my thumbs, something wicked this way comes." This line from Shakespeare's play, "Macbeth," comes to mind when we consider the future of America as we watch our government continue to take on debt after debt after inane debt, heaping more and more responsibility for the financial obtuseness of its privileged elite on its hapless peon taxpayers, profligately spending, borrowing, bailing out and inflating us into some sort of nightmarish, moral hazard oblivion. Welcome to our new Banana Republic, a country that is now characterized by nonstop hyperinflation, bailouts and moral hazard - and which will soon decline into another Great Depression. The nationalization of Fannie and Freddie has set us on a path from which there can be no return, carving out for us a much wider and deeper swath of financial death and destruction of a magnitude never dreamed of by even the most pessimistic among us. Our economy is now in a temporary state of suspended animation by use of an economic act of smoke and mirrors, with the Sword of Damocles waiting overhead, waiting to chop us into tiny pieces. The implications are dire. And worse yet, this has all been planned for a while now, having been decided by the Illuminati soon after they watched their precious system burn to the ground right before their eyes a year ago in August. Hence, you heard Goldman Sachs pronounce late last year: "Short Gold for 2008." They knew this was coming last year, because these evil reprobates planned it to happen that way. They knew the jig was up when their subprime plot was exposed by analyst Meredith Whitney of Oppenheimer & Co. They knew the implosion of Fannie and Freddie would happen eventually when the fraudulent mortgages started to go bad, but it happened far sooner than they had wanted or expected, and caught them with their pants down. So, what was supposed to be a future plan to merge our mortgage lending system into their growing corporatist, fascist, financial structure, was moved from the back burner to the front burner, and now you all see the results in spades.
What we may be witnessing here is a combination of internecine warfare between American and European branches of the Illuminati, mixed in with financial warfare between countries that are not yet totally owned and controlled by the Illuminati, like China and Russia, and those countries which are under the Illuminist yoke, like the US, Canada, Europe and Japan. Note that the Middle East countries like to play both ends to the middle, by pitting the Europeans against the Americans, or Illuminist dominated nations against non-Illuminist nations, which often adds clouds of confusion to events going down on the international front.
The European Illuminists are livid with their American counterparts, who have systematically weakened the dollar to shore up the trade deficit by making European exports more expensive after dumping hundreds of billions worth of fraudulent real estate derivatives into the European sector, derivatives which continue to implode at an ever-accelerating rate and which may act as a catalyst to lead Europe into depression as well. Their gripe on the derivatives is legitimate, but they know the dollar should have weakened long ago against the euro, so they are blowing smoke about dollar weakness and the American Illuminists know it. Nevertheless, the European Illuminists are demanding, by way of apology for the derivatives debacle, that the dollar be strengthened to save their staggering economies from imploding, and that the GSE debt which they own a lot of, especially via their OPEC clients, be nationalized to ensure payment when Fannie and Freddie implode. They know that the final vaporization of Fannie and Freddie is now only a question of "when," not "if."
The Japanese are caught in the middle between the Americans and the Europeans who want revenge, and their economy is being destroyed because of it. While the Japanese are benefiting from the GSE bailout because they own lots of GSE bonds, the weakening of the euro and the dollar against the yen is destroying their export economy and the yen carry trade and leading them into depression as well.
And then there are the non-Illuminist nations who have lots of dollar-denominated treasuries and agencies as well, bought with trade surpluses made possible by artificially lowering the value of their currencies against the dollar through illegal currency manipulations. This has made them very powerful economically, and has greatly helped to power up their economies, especially Russia and China. The Illuminati are now picking fights with them in poorly executed attempts to embroil them in pointless, expensive and what they hope will be unwinnable wars. The purpose of these bogus, false-flag conflicts is to reduce the dollar reserves and drain the power of non-Illuminist nations, thus leveling the playing field. That playing field is now out of kilter on account of the doltish, bonehead, Illuminist schemes to implement free trade, globalization, off-shoring, outsourcing, and both legal and illegal immigration. Such schemes have been used in a pathetic attempt to improve the prospects for world government, but have instead greatly hindered the efforts to establish world government by weakening the Illuminist centers of power vis-à-vis the non-Illuminist centers of power.
These non-Illuminist nations have undoubtedly threatened to burn the US to the ground, not via a nuclear war, but via hyperinflation to be unloaded on the US by the sale and repatriation of its treasuries and its agencies, and by the refusal to finance its ever-burgeoning deficits by shunning future purchases of these instruments. They have threatened to turn off the credit spigot and bring the US economy to a screeching halt, thus leading it on a short path to deep depression, if the US continues to weaken the dollar, and fails to make good on its agency paper which would otherwise be vaporized by the subprime fraud. They are also sending a message about the bogus, false-flag wars and conflicts that the Illuminists are trying to pick with them, and Russia has threatened to start a new Cold War, if necessary. It is hard to sympathize with the Russians and Chinese after what they did in the aftermath of WWII, but nevertheless these endless wars for profit and geopolitical power have got to stop before we end up burning the earth to a cinder in a senseless world war of self-extermination. The Illuminati will likely get their world government all right, once the earth has been reduced to a toxic, uninhabitable, burning lump of fused atomic elements. Congratulations, morons, if and when that happens.
So the Illuminati have been forced by these circumstances to re-strengthen the dollar, and to bail out the GSE bondholders. They made the other nations wait until the time was right, meaning that they wanted to implement this appeasement at a time of their choosing, the objective being to make America look strong economically right before elections to keep their incumbent henchmen in power. They also managed to wedge in an oil/food/commodity profit extravaganza for the tanking fraudsters along the way, with a nice little temporary trade deficit reduction thrown in for good measure via the weakened dollar. Hence, just before elections, the dollar has been pushed up, and the GSE's have been nationalized.
This is what they get for making us into a debtor nation in a foolish attempt to sacrifice their base of power on the alter of world government. They thought they could do this while maintaining the balance of power. We have news for them. They have failed utterly. The destruction to their power base is not the controlled demolition they had hoped for to push us into a corporatist fascist system All they have managed to do is destroy their base of power, and now they are running around like chickens with their heads cut off, fomenting wars, conflicts and other schemes, while appeasing the many nations they have angered and bloodied along the way, in a pathetic attempt to restore the balance of power.
Gold and silver had to be crushed, otherwise their moves would have been exposed as financially unwise and toxic, and the Fed would look like an institution of imbeciles. Oil and commodities had to be tamed in the process as would happen in any case by virtue of a strengthening dollar, and this has helped them to give the sheople the appearance of improvement on the inflation front to benefit incumbents, even though inflation is still raging. Naturally, the stock markets had to be supported as well in keeping with the ruse, and the PPT henchmen must be exhausted from the unbelievable manipulations we have witnessed over the past few months. The elitist have gone completely berserkers with the latest run of market fraud, and they are going to pay for this raging fraud later when the class action lawsuits are implemented and the discovery exposes their machinations. Look at the open interest on the USDX futures. The previous record during a dollar rally of 58,595 contracts was set on December 14. This Thursday, the USDX futures posted a gargantuan 94,021 contracts, shattering the previous all-time high by 35,426 contracts, an increase of more than 60%. That is how desperate they are. Oil has briefly dipped below 100, to 99.99, and the dollar spiked through 80 to a high of 80.395, and now suddenly, as we predicted might happen, everything has reversed and gold and silver are starting to rally again. Let's see if this is this new trend is going to continue, or if the Illuminati have some October surprises in store for us to benefit incumbents. Keep loading up, because the prices you are getting now on gold, silver and their related shares will never be seen again. If you do, you will be a very happy camper in 2009.
It is obvious that the FDIC lacks the capital to back up its claims of the rescue of the American banks. IndyMac was a $10 billion problem, but the other ten failures this year were much smaller. This, like in the instance of Fannie Mae and Freddie Mac, will cause our government soon to bail out the FDIC with funds that do not exist. They will have to create more debt in order to accommodate our banking system pushing government further into the hole. Incidentally, the Federal Reserve faces the same problem. No one has the money to meet the guarantees. That is what we just found out in the cases of Fannie and Freddie.
Our government will have to sell more bonds to accommodate these financial demands and they become the obligation of American taxpayers. That is immediate monetization of those funds, which will be highly inflationary.
Just to give you a prospective of banking health, they have already written off more than $100 billion. They made $5 billion in the second quarter down from $30 billion plus quarters in recent years. The FDIC reports that the total assets of 8,451 institutions it insured fell to $13.30 trillion from $13.37 trillion in the first quarter, the largest drop since 1987.
Most of the above losses were due to CDOs, SIVs and ABSs, plus the failure of loans and mortgage loans. They do not reflect the deterioration of the financial condition of the bank’s customer bases. There are many who are not current on their loans and banks are starting to write off other loan losses. As a result loan loss reserves are lower for the month and consecutive quarter leaving banks with 88.5 cents for every $1.00 in non-current loans.
Banks are lying about their financial positions. They are hiding losses on and off balance sheets. The bad FDIC list isn’t 117, it is more like 2,000 but they won’t tell you that. They lie about everything as well. That is frightening but worse more frightening is the fact that the FDIC has one-cent in reserves for every dollar it is responsible for. Worse yet, there are $4.1 trillion of uninsured deposits in banks. That is in addition to $8.6 trillion covered by only one-cent per dollar. If that doesn’t frighten you, you are just plain dumb.
Then you look at Lehman’s books and you find they are bankrupt and the South Korean government agrees with us. Incidentally no one in the US media carried the government of South Korea’s comments.
Half the investment banks, brokerage houses and insurance companies are insolvent. Just wait – you will find out.
All we see is patchwork, smoke and mirrors and political expediency. Lies, lies and more lies.
Iraq and Afghanistan continues and the possibility of a cold and hot war with Russia is a possibility.
After looking at the events of the past three months we believe the Cold War could be a put up job involving Russian collusion with the Illuminati. We just don’t know for sure yet.
The financial system is falling apart, which is part of the disintegration process. All these other events are distractions to obfuscate the fact that the game is over. It is only a question of when does the bottom fall out.
Follow our advice and get your excess capital out of banks, even brokerage houses are safer. Buy gold and silver coins and shares and Swiss franc government bonds. If you do not you may lose everything.
Warren Buffett’s Berkshire Hathaway has told its subsidiaries to stop insuring bank deposits above the amount guaranteed by the FDIC, which deals a major blow to the financial services industry as it tries to calm anxious customers. Now what does that tell you? It tells us it is panic time, as Warren and his gang of traders run for the hills.
Their subsidiary KBS is one of only a handful of firms, which offer bank deposit guaranty bonds. This shows you how worried Mr. Buffett is about future bank failures. This is insurance beyond FDIC insurance for accounts over $100,000. At Columbian Bank and Trust, which went under, 610 accounts worth $46 million was covered by KBS and it caused them to lose money. Buffett has no further confidence in the banking system, so he is pulling out. That should be a lesson to those of you who have more money in banks than you need for current operations.
Now that American taxpayers have taken over Fannie and Freddie, Bill Gross is a seller. He is telling people on CNBC that mortgage paper is an attractive investment, while he is a seller.
CONT. BELOW...
If I opened it now would you not understand?
Lehman Brothers’ losses were far more than expected and they may go under. They failed to purge their balance sheet as Merrill Lynch did. Richard Fuld released a convoluted, manipulated quarterly report filled with accounting chicanery that would make Mr. Ponzi proud. The true write-down should have been $7.8 billion. Business for the first nine months of the year fell 28%, reflecting a rapid deterioration of their ability to conduct trading and investment banking. Other houses are avoiding doing business with them. Their commercial and residential mortgage paper of $50 billion is probably worth $25 billion, or more. They want to sell 55% of their investment management business, which is deteriorating as markets implode and investors leave the market. If the Fed does not rescue Lehman they are toast.
S&P has re-rated Washington Mutual to negative from stable. Debt market players are now assessing liquidation of WaMu and they believe that on a liquidation basis, best case, that debt holders are covered at slightly more than 60% of the total amount of debt outstanding. This means bankruptcy. Move any accounts you have at WaMu out of there now.
The WSJ reports that 1,082 businesses and some individuals filed for Chapter 11 in August, up 38% from July. The average this year to date has been 745. Goldman Sachs in an effort to preserve capital and reduce exposure is telling hedge fund clients that the terms of current margin-lending agreements will have to be renegotiated when the current credit facilities expire.
Fitch says debt liabilities equal $1.6 trillion, or 11% of GDP, with guarantees of $3.48 trillion, or 48% of GDP after the government takeover of Fannie and Freddie.
The phony dollar rally will end and only one investment will remain gold and silver. The dollar is way over-bought (over manipulated), and gold and silver are way over-sold (manipulated.) the world is in deep trouble and there is only one place to be and that is in gold and silver related assets.
Ron Paul has rejected John McCain’s appeal for his endorsement. Paul said: “the idea was that he would do less harm than the other candidate.”
Bolivian President Evo Morales ordered the expulsion of the US Ambassador, Philip S. Goldberg, accusing him of fostering divisions in the Andean nation.
The drop in Phoenix home resale prices extended to 16 months in June and is approaching the record of 17 months of decline posted in the early 1990s.
Home prices fell 22.8% from June 2007. It was the fourth monthly double-digit drop.
House prices in Fort Myers, Florida have fallen from $250,000 to $143,000, which means, as I pointed out last month that they might be on the bottom price wise in that area.
An Iraq plan to award six no-bid contracts to Western oil companies has been withdrawn. The companies were Exxon Mobil, Chevron, Shell, Total, BP and several smaller companies. The deals under-mined the efforts of Kurds, Sunnis and Shiites to reach agreement on a hydrocarbon law and a revenue sharing agreement.
Bank of America agreed to buy back $4.5 billion in auction-rate securities from its customers nationwide in a settlement brokered by Massachusetts. They neither admitted or denied the fraud allegations. Its pay the investors and fines and again no one goes to jail.
Saudi Arabia has walked out of OPEC. It said it would not honor the cartel’s production cut. It was tired of the rants of Hugo Chavez of Venezuela and the oil minister of Iran.
Saudi said it would meet the market’s demand. If this situation continues OPEC is dead. You can see the hands of the Illuminists all over this.
Freddie Mac said Thursday the 30-year fixed-rate mortgage average fell from the previous week to 5.93% with an average 0.7 point for the week ending Sept. 11. In the previous period, the average was 6.35%, and the year-ago average was 6.31%. "Interest rates for 30-year fixed-rate mortgages are down almost 0.6 percentage points over the past 4 weeks, which will help to spur home purchases and loan refinancing in coming weeks," said Frank Nothaft, Freddie Mac chief economist. "Lower rates have occurred at an opportune time, as the July pending sales data from the National Association of Realtors were off 3.2% from June. The Mortgage Bankers Association reported that refinance applications are up 18% over the past 3 weeks through Sept. 5, indicating that refinance activity has already begun to pick up."
If I opened it now would you not understand?
Markets brace for Lehman collapse
Financial markets are bracing themselves for a possible collapse of Lehman Brothers and the potential wide-ranging implications for the global financial system, with the US Federal Reserve and a banking consortium announcing measures to offset a further credit crunch.
The consortium of 10 global commercial and investment banks said it would provide $70bn "to help enhance liquidity and mitigate the unprecedented volatility and other challenges affecting global equity and debt markets".
Bank of America, Barclays, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Merrill Lynch, Morgan Stanley, and UBS, said in a joint statement that they had agreed to create a "collateralised borrowing facility" of $70bn, with each bank contributing $7bn, to help ease access to credit.
"These actions reflect the extraordinary market environment," the banks said in a statement.
The announcement came moments after the US Federal Reserve announced new steps to ease access to emergency credit for struggling financial companies, by broadening the collateral to be used for central bank loans.
Lehman Brothers, the fourth-largest US investment bank, was on the brink of collapse on Sunday after talks with potential buyers hit a dead end.
Weekend talks with Britain's Barclays Bank and the United States' Bank of America faltered after the potential buyers said they were not convinced that Lehman, which last week announced a loss of $3.9bn in just three months, would be a good buy for shareholders.
Some analysts believe a Lehman collapse could trigger a shake up of the entire US financial system which has been stuck in the economic doldrums since the mortgage crisis hit more than a year ago.
"The US financial system is finding the tectonic plates underneath its foundation are shifting like they have never shifted before," Peter Kenny, managing director at Knight Equity Markets in New Jersey, said.
"It's a new financial world on the verge of a complete reorganisation."
The end of bidding for Lehman prompted a rare emergency trading session on Sunday which market sources said was initiated by the US Federal Reserve with the aim of reducing risk associated with a potential bankruptcy filing by Lehman, possibly on Monday.
The lack of a government guarantee to resolve the Lehman crisis is the main reason Barclays decided to exit the negotiations, according to a person familiar with the talks.
So far this year, the government has bailed out mortgage giants Freddie Mac and Fannie Mae, and saved Lehman rival Bear Stearns from going under by extending it cheap loans and allowing its forced sale to another rival, JPMorgan Chase.
Within hours of the collapsed Lehman talks, there were already reports of talks involving the takeover of Merrill Lynch & Co and the expected sale of assets by American International Group.
Over the weekend Alan Greenspan, the former US Federal Reserve chairman, projected the failure of "other major financial firms" but added that this did not need to be a problem.
"It depends on how it is handled and how the liquidations take place," he said on US broadcaster ABC.
"And indeed we shouldn't try to protect every single institution. The ordinary course of financial change has winners and losers."
If I opened it now would you not understand?
Just a hunch, but CNBC is showing the euro markets have S&P futures down 45 points already.
The SEC often "halts" all trading around 45 points short anyhow if shit is too hairy on the whole.
DOW was showing down 350 points in futures.
Monday morning is going to be brutally ugly, one way or another, no matter how many times they shut off the switch on traders.
Lehman, in all likelyhood, is the REAL beginning of a financial shit storm, boys and girls.
Brace yourselves, the real pain is about to start.
:( :( :(
If I opened it now would you not understand?
and I feel fine.
I'm praying they let gold go, and the markets hang on long enough for my juniors' assays to start rollin in from the lab...that's all I ask...
but I have a feeling driftin is going to get to do his sad, I-told-you-so dance sooner than anyone would hope....
whothefuck knows these days....
John Embry, Chief Investment Strategist for Sprott Asset Management and renowned industry expert, has researched the sector for 30 years. He expresses disbelief as he explains today's irrational pricing in this exclusive interview with The Gold Report. He attributes gold's alarming distress to "violent intervention by the paper players." But he's convinced they can only hold prices down for so long and forecasts four-digit gold by January 2009. Juniors present the best opportunity to leverage the coming gold price explosion and he shares his favorite names
(interview follows)
http://www.theaureport.com/pub/na/1624
The market regularly needs correcting, but do these corrections necessarly need bankruptcy? Because this correction has already put many people on the streets.
a. Silver is on the firesale of a lifetime right now.
Currently at $10.5 an ounce. Thats cheaper than it was this time last year. It makes NO sense (unless you truly think that the deleveraging unwind is THAT bad!)
Look what Drowned out posted:
Things are so fishy with metals!
Silver is down on a day like today !?!
And you are right, your bonds could be really fucked too, especially if the Fed starts dumping government paper itself in a final catastrophic attempt to hold on to its own balance sheet, as the market dumps its paper, and the Fed is forced to follow. It would also drive rates sky high, and housing through the floor. :(
Oh.
And oils is down to 95 a barrel making Lindsay William's $50\barrel number (allegedly told to him by a BP excec. back when oil was still $145) more accurate by the day.
Scary shit.
I hear your sentiment, but sadly bankruptcy is looking all but certain for big players like Lehman, who are so tainted by bad debt that even bargain basement pricing doesn't make it attractive to other large banks.
Lehman is currently THIRTY SIX CENTS A SHARE! It was $60 less than 12 months ago.
Oh how the world turns.
:( :( :(
If I opened it now would you not understand?
You know its bad, when THE FED IS NOW ACCPETING STOCKS IN EXCHANGE FOR CASH LOANS!
Whoa!
If I opened it now would you not understand?
Just to put this in context.
And the sad thing is, relatively speaking, today was a "good" day in an "all things considered" since of the term.
As AIG unravels (already started) this will get worse.
I'm not sure who else on here cares to make a prediction for tomorrow,
but i would reckon tomorrow is a down day of atleast half the measure of today. Maybe a DOW -200 or -150 close.
Although we have a Fed meeting so that could change the game up a bit.
Ugh. Just noticed, we also have CPI numbers come out tomorrow morning.
That could just add more fuel to the fire.
They could likely come out hotter than expected, like they seem to have done almost regularly as of late.
Anyhow.
Central banks aim to calm markets in financial storm
By John Parry, Marc Jones and Yoko Nishikawa
NEW YORK/FRANKFURT/TOKYO , Sept 15 (Reuters) - Central banks mobilized worldwide on Monday to calm high tensions and ease deep distrust in short-term lending markets after Lehman Brothers Holdings Inc filed for bankruptcy protection and news that Merrill Lynch, another Wall Street giant long seen as too big to fail, was being sold.
As U.S. interbank lending rates jumped to triple the official target rate the U.S. central bank sets, the Federal Reserve pumped a total $70 billion of temporary reserves into the banking sector in an effort to get short-term cash flowing again to some of the borrowers in dire need of funds.
At midday, New York Gov. David Paterson said he and other state officials had reached an agreement with American International Group Inc, once the world's largest insurer by market value, to give AIG access to $20 billion of its own capital, preventing a liquidity crisis.
The Federal Reserve Bank of New York was hosting meetings about AIG's situation on Monday with representatives of the U.S. Treasury, financial services companies and state officials, a New York Fed spokesman said.
"We hope that we don't see a crisis which pushes the global economy to the brink of ruin," said German Economy Minister Michael Glos.
Central bankers had their work cut out. Stock prices sank and demand soared for extra short-term lending that they offered in an attempt to keep going the system that oils the wheels of modern capitalism.
OVERNIGHT BORROWING COSTS SOAR
On the interbank market, overnight dollar borrowing costs surged almost 1 percentage point to their highest in nearly three months, showing that banks are hoarding cash rather than lending it on.
"It is clear there is hoarding of bank reserves going on in the financial system," said Tony Crescenzi, chief bond market strategist with Miller, Tabak & Co. in New York.
Smaller banks tend to have excess short-term funds and are apparently reluctant to lend those out today, he said.
Reflecting these strains in interbank markets, the spread of U.S. federal funds in the market over the official rate the Federal Reserve sets was on track to widen to the most in about 20 years on a closing basis, Crescenzi said.
In a sign, analysts said, that short-term markets were clamming up, U.S. federal funds briefly traded at 6 percent, tripling the 2 percent fed funds target rate, the official rate the Federal Reserve sets for banks to lend to each other. [this is unprecedented drama in the markets, and the "run away rate" (even this brief extreme) is a pretty ugly indication that credit and lending in this country is about to go schitzo-fucked.]
Monday's $50 billion overnight Fed repo was the largest single such operation since Sept. 17, 2001, in the aftermath of the attacks on New York and Washington. Monday's combined Fed money market operations total of $70 billion was the biggest daily addition since an $81.25 billion weekend repo on Sept. 14, 2001, the New York Fed said.
Global central banks' response started on Sunday when the U.S. Federal Reserve announced that central banks, regulators and supervisors were in close contact internationally and were monitoring events as they unfolded.
It announced emergency measures for lending operations that effectively relax the terms on which commercial banks can borrow from the U.S. central bank.
In Europe, the European Central Bank, as well as the German, French, British and Swiss authorities, all responded in turn.
The ECB held a money market operation where it allotted 30 billion euros in one-day liquidity to banks, only a third of the level demanded.
NOT ENOUGH?
Economists Jacques Cailloux and Gareth Claase at Royal Bank of Scotland said this high level of demand, similar to that seen when the credit crunch first forced the ECB into emergency mode in August 2007, showed how fragile the situation was.
"The ECB will likely take note that the financial system remains starved of cash and that it might thus be forced to step in again," they said.
The Bank of England put an extra 5 billion pounds into the financial system after receiving bids of nearly five times the amount of three-day funds available. The Swiss National Bank also provided extra liquidity to the money market.
The bank-to-bank premium paid for overnight dollar funds was fixed at 3.10625 percent, according to the British Bankers Association's latest daily fixing, up nearly a percentage point to hit its highest level since late June.
In Asia, officials at Japan's central bank confirmed that the authorities were monitoring the situation closely, and the message was the same in Europe.
Stocks fell in Asia, then in Europe and finally in the United States, as markets in each region opened. Safe-haven debt soared after emergency weekend talks failed to save 158-year-old Lehman from becoming the latest victim of the credit crisis.
The U.S. dollar also rose as aversion to risk sparked some safe-haven flows, while the yen rallied broadly.
Wall Street's woes prompted talk that the U.S. Federal Open Market Committee may cut its benchmark interest rate from 2.0 percent when it meets this week. Fed fund futures jumped on Monday to indicate a 66 percent probability of a cut to 1.75 percent on Tuesday.
Lehman filed for bankruptcy protection after the weekend talks produced no alternative, but the gloomy news on Wall Street's health went further than that.
Bank of America said it had agreed to buy Merrill Lynch in an all-stock deal worth $50 billion, looking for a bargain as the world's largest retail brokerage sought refuge from fears that it could be the next victim of the credit crunch.
Insurer AIG, working to shore up the capital of its holding company, has made an unprecedented approach to the Federal Reserve, seeking $40 billion in short-term financing, the New York Times reported.
Ten of the world's top banks agreed to set up a $70 billion emergency fund, with any one of them able to tap up to a third of that.
NEW STEPS
On Sunday, the Fed said that among emergency measures, it will start accepting equities as collateral for cash loans at one of its special credit facilities for the first time in its 90-year history.
"We have been and remain in close contact with other U.S. and international regulators, supervisory authorities, and central banks to monitor and share information on conditions in financial markets and firms around the world," Fed Chairman Ben Bernanke said in a statement.
The ECB said in a brief statement: "The ECB stands ready to contribute to orderly conditions in the euro money market," a line the Bank of Canada echoed on Monday.
The German central bank, finance ministry and regulatory authority issued a joint statement saying the country's banks had "manageable" exposure to Lehman.
The Swiss National Bank offered extra liquidity, too, and so did the Reserve Bank of Australia to limit the risk of paralysis in short-term funding markets, where the central banks have had to help keep things functioning since the credit crunch hit in earnest in August 2007.
Since then global banks have written off some $500 billion in credit market losses.
Lehman's filing for bankruptcy protection and Merrill Lynch's agreement to sell itself to Bank of America remove two more names from Wall Street's map, just months after Bear Stearns' near collapse. That means three of the top five have run into trouble in six months. (Writing by Brian Love and John Parry, with reporting from Asia, North America and Europe; Editing by Jan Paschal)
If I opened it now would you not understand?
i would say best guess is yes.
At this point, having miraculously (read: with much manipulation) escaped a tragic fate by bouncing back from the edge, the dollar will be the last victim of this crisis.
Here are two videos that i think are very well articulated, despite their amateur nature:
Mr. Fed
"Mrs. Fed"?
The take away for you, Jose, would simply be that while the Fed will try its darnedest to shore up the markets by providing liquidity, it will stop at nothing to save the dollar and treasuries (with more emphasis placed on treasuries, lol).
Your account is certainly safe in the sense that for it to not receive FDIC insurance, we would already have to be discussing some sort of cataclysmic failure of the US Government itself (if the Government isn't going to honor the FDIC, we would have to be having some sort of ULTRAMEGA catastrophe)... so your money IS insured, and even if your bank failed, the government, vis a vis the FDIC would give you your money.
However, there is still the remote possibility of some sort of total collapse of the dollar.
But if that was going to happen, you would likely be hearing people screaming bloody murder in the streets and jumping from buildings days and weeks in advance of such a catastrophe.
Again, those videos could help you better understand the more plausible dangers that we face -- namely, the price of treasuries dropping in a massive global dump, and the rates thus being forced through the roof. Such an event would trigger massive global losses (likely in large part through the severe depression of the real estate market, as if rates - like mortgage rates - go sky high, the real estate market will simply be fucked triple hard) via the deflationary mechanism.
I would stress that i am NOT an economist though, and i would like to hear the opinions of some of those on this board (and the one in this thread) who ARE in the field, and may have some more cogent arguments.
The one thing that we DO have going for us in general is that the real money masters (the largest banks, in collusion with the central banks, and the government planners) have done an INCREDIBLE job of keeping the price of commodities in relative check through the worst of this crisis ... i mean gold, silver and oil have all been coming DOWN (and down rather hard) through some of the most inflationary (in theory) events in modern history ... and this financial feat has done wonders to conceal the true nature of inflation.
If the powers that be can continue to manipulate the facade of inflation, suppressing commodities, propping up the dollar, and putting out somewhat fudged figures (like CPI, PPI, etc)... then they do stand the plausible chance of lying their way out of an unfathomable crisis in the treasuries -- the only market that REALLY matters to the sanity of the global system.
If they can keep treasuries calm, we could get through this with RELATIVE stability. If the cat gets out of the bag regarding the truth of inflation (like if gold goes to $2000 an ounce, and oil somehow spikes to $200) then everyone will be jumping out of treasuries wholesale, and we could unravel completely.
but, yeah. again, your dollars should be pretty safe right now.
uh. keeping in mind everything could change again next week. This shit is day by day, brotha.
If I opened it now would you not understand?
hey thanks for the video & info really appreciate it you have been stating this mess for a while so i give you credit you know your shit when it comes to this ....what a mess no less ....
no doubt
what goes up must come down fuckers
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
They are doing some sort of special on this thing.
They've got all their top staff on tap for it.
Looks pretty darn good.
Just FYI.
Today was highest volume trading day on NYSE in HISTORY, apparently.
Yikes.
If I opened it now would you not understand?
EMAIL:
The last time the Fed Funds target rate got this out of line with the effective rate was in 1987, and from a base of over 6% not 2%. On a percentage basis, at three times the target rate the spread is unprecedented. It happened today.
Fed funds jump to 6 pct in mkt, tripling Fed's target
NEW YORK NEW YORK, Sept 15 (Reuters) - Federal funds traded in the U.S. interbank lending market were indicated to have jumped to 6 percent on Monday, tripling the target rate of 2 percent which the Federal Reserve sets.
The move happened even after the Federal Reserve earlier added $20 billion of temporary reserves to the banking system via overnight repurchase agreements.
Early Monday, at around 7:10 a.m. EDT in New York, federal funds had traded at 2.0625 percent. When market inter-bank lending rates shoot up, that often reflects distrust among financial institutions of lending to some other counterparties. Global market participants' risk aversion has surged on Monday as the U.S. banking crisis has escalated, analysts say.
[end article]
[email response]
AntiSpin: The Fed tries to manage the economy and inflation by influencing short term interest rates. It does that by buying and selling government bonds in the bond market in what are called "open market operations." They set a target rate, such as 2%, then buy or sell bonds as needed until the effective rate in the bond market matches the target rate objective. Problem is, this process does not always work in times of crisis because the bond markets themselves may be dis-functional, as is the case today.
Really, really dis-functional.
In 1987 during the crash the Fed Funds target rate was 6% but the effective rate jumped more than two times to 16% as banks lost confidence in lending to each other. Today that spread looks benign.
On Friday Sept. 12, the effective funds rate was 2.1 percent, only 10 basis points over the target rate. Now the effective rate is three times the target rate. What it means is that the banks are so distrustful of each other's credit that they do not want to lend to each other. Who can blame them? Lehman Bros. went out of business today leaving its creditors holding the bag to the tune of $630 billion in defaulted debt.
``If the fed funds rate closes high today, I would be really worried as it would mean that there really is no money out there to be lent,'' said Stan Jonas, who trades interest- rate derivatives at Axiom Management Partners LLC in New York.
- Bloomberg
These episodes usually don't last long. It will be interesting to see what happens next.[/email]
If I opened it now would you not understand?
A country that had intelligent leaders would recognize its dire straits, stop its gratuitous wars, and slash its massive military budget, which exceeds that of the rest of the world combined. But a country whose foreign policy goal is world hegemony will continue on the path to destruction until the rest of the world ceases to finance its existence.
Most Americans, including the presidential candidates and the media, are unaware that the US government today, now at this minute, is unable to finance its day-to-day operations and must rely on foreigners to purchase its bonds. The government pays the interest to foreigners by selling more bonds, and when the bonds come due, the government redeems the bonds by selling new bonds. The day the foreigners do not buy is the day the American people and their government are brought to reality.
the feds check here daily and he's COIN-COINTEL pro'ing them without even knowing it....
and reveling in it's loyalty. It's made by forming coalitions
over specific principles, goals, and policies.
http://i36.tinypic.com/66j31x.jpg
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( o.O)
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DOW now within 800 points of falling below 10,000!
YIKES!
:eek:
If I opened it now would you not understand?
Perverse US Dollar Rally Prelude to Financial System Collapse
(Calling US Bonds Home)
http://www.marketoracle.co.uk/Article6226.html
(this one is a week old)
This article seems to tie into the ideas above regarding the USD and the nationalization of the financial sector:
Bank of America, Merrill Bailout Disguised as Buyout?
http://www.marketoracle.co.uk/Article6274.html
Dude....you and me both....
put it this way....I'm looking at articles on how to raise a protein source and keep it alive over the winter...
half joking...
and reveling in it's loyalty. It's made by forming coalitions
over specific principles, goals, and policies.
http://i36.tinypic.com/66j31x.jpg
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( o.O)
(")_(")
What's the result? Gold up by 10%? hmmmm.....