It is only natural for Greenspan to continue raising interests rates until he deflates the stock markets....I can visualize Greenspan never being hot in bed,and showing consternation whenever his wife showed any signs of "irrational exuberance" ;D...
The downturn in US markets are a direct result of Greenspan separation anxiety felt by immature and less developed investors...Have no fear,The FED will keep increasing rates to 5.5% and the onset of a renewed recession later this year... ;D
Bond prices going down;stock prices going up...This sick inverse relationship will correct itself by stock prices going down to restore the natural positive relationship...Ramsberg's charts are correct...Welcome to the 2006 stock market brought to you by the Fed/Bernarke,in the best of Greenspan tradition...Have no doubt where this emerging bear market came from...Are we fighting an elusive inflation,or are we desperately trying to support our dollar in world trade??? >:D
Fed chairman berserker is possessed by the spirit of the bear...After working himself into a frenzy,he verbally axed the market yesterday...Negative personal savings,declining home (piggybank) values,maxed out credit cards,,and weak wage increases all add to a renewed bear market...If not a recession,how much of an economic SLOOOOOOWDOWN do you expect??? ;)
Bounce off the 50 DMA,THEN after the next Fed meeting,test the 200 DMA??? Oh the horror,but I am at 79% cash!!!! >:D
An unpleasant surprise raise of 50 basis points by the Fed tomorrow will cool the housing market,consumer irrational exurberance, and the stock market indexes..."Smart" money expects only 25 basis points...They may have out-smarted themselves in the face of banking industry interests... :)
I will take my bets on a bloodbath next few days and weeks ahead. No long positions held since the big turn in the market. Rising intrest rates, real estate market tanking will lead to a recession. The economy was lead on by the real estate industry last few years. With construction, mortgage industry, home products, and consumer goods increasing due to people using there homes as an ATM machine. I can only imagine how bad it will get when the people start mass selling there homes and the foreclosures go up significantly. The demand is gone in the real estate market those who bought have already done so and even the ones that shouldnt have bought due to there financial condition, have bought using ARMs and 0 down on a house.
The investors, flippers, speculators, and baby boomers buying second homes are going to rush to sell when there appreciation goes to depreciation. It has been said that there hasnt been this much speculating in the real estate industry ever! What does this mean.... Many of the homes in this market are vacant. Well if the rental income from the home cant cover the mortgage and the home is depreciating then investors and speculators will jump to the door to sell and cash out.
In my opinion its looking very grim, we are all in this together good luck to all.
Also I would suggest watching this video on the real estate market and the economy by a professor at UCLA its very intresting and informative. It has given me a clearier picture of the troubles ahead.
http://video.google.com/videoplay?docid=-2640239019877885520&q=real+estate+bubble
If the Fed postpones another 1/4 point rate hike this month,will we see a "suckers rally" in stock prices lastimg a couple months???I hope so for the short term...I bought back in last month.... ??? ???
Old Greenspan is still able to move the markets...Despite being retired and stating the obvious,his statements that the Chinese markets would go down created an afternoon dip in the American markets...Judging from the timeliness of his past premature eloquence on the irrational exuberance of American markets,can we be certain that the Chinese markets will continue to skyrocket for at least two more years????
The Fed doesn't need to lower the interest rate to stimulate the economy and boost the markets....The printing presses are pumping out dollars at more than twice the normal rate Maybe that is why the money supply is no longer published... >:D
Cramer thinks Bernarke is asleep at the wheel...Bernarke is wide awake,desperately trying to save the dollar , which is at the edge of the 80 index value tipping point ...I expect that a rate hike is more likely than a rate cut...While the Fed publicly claims that inflation is the enemy,the imminent drop in the value of the dollar is their primary concern...Stock indexes are planned to dive ;a sacrificial lamb to the global economy....... >:D
Having been fed the lotus flower from the Fed and sung to sleep by President Bush's reassurance that the economy is fine,the markets are awakening with a hangover...Thank God for SDS,SKF,SRS and QID... >:D >:D >:D
The "Fed " "is forever blowing bubbles.."..... >:D
Bernarke saved the markets Friday by being soft on inflation...Since the "Federal" Reserve took over the dollar in 1914, the 1914 dollar is now worth 3 cents... >:D
Fortress Fed has the resources to address "liquidity issues" of most banks,hedge funds,and mortgage lenders during the next few months ...However,if the enormous house of cards of 500 trillion dollars of derivatives credibility is called into question , its collapse of confidence would be a Tsunami which would sweep away all remnants of the Federal Reserve Board... Of course this will never happen , like China will never dump its US Treasuries on the markets... >:D
We all know about "runs on the bank" ,which Bernarke can handle...What about "runs on the hedge fund"??? Fourth quarter will see pension funds and institutional investors line up to withdraw from hedge funds , as withdrawals are highly restricted...If Bernarke LOWERS THE PRIME TO 4.75%, the dollar is weakened,imports and mortgages will cost more, further causing bumps up in ARM mortgages and increasing foreclosures...The FED is caught between a rock and a hard place.... >:D
September promises to be a brighter day,with the Fed likely to grant the panic stricken financial markets a cosmetic 1/4 point reduction in the prime...The markets will over react and go up...However,come October the financial institutions and some hedge funds will disclose their losses for the third quarter...The reality will be worse than the panic...The markets will again over react in October and go way down...When the government says everything is fine,be afraid,be very afraid.... >:D
Citigroup economists predict the yen will strengthen to 105 yen to the us dollar by years end...The yen carry trade boosted worldwide markets with up to $1 trillion in liquidity...The 105 yen means the end of the carry trade,which forces worldwide sell offs of assets...Bernarke will be hard pressed to pick up the one trillion slack in liquidity... >:D
Central Banks worldwide printed $500 billion in currency to buy questionable mortgage backed securities...Now sub-prime fever has infected the "commercial ( corporate) paper market"...In the last 3 weeks,$250 billion was not rolled over,out of a total US commercial paper market of $2.2 trillion...Lenders are afraid to extend credit, and loans from the FED offer no solace...Bernanke will need to act quickly to have the FED PURCHASE more questionable assets...This is the only way he can unfreeze this part of the credit market...A trillion here and a trillion there of printing more fiat currency,and we may see the value of the US dollar equal to the Mexican Peso...I wonder what other sections of our $500 trillion house of cards (i.e. derivatives) will need Super Ben to rescue them??? My best guess s the Hedge Funds will need a "hand" from gentle Ben... >:D
Is the price of oil and gold going up,or is the value of the US dollar going down??? That is the question.... >:D
Jim Cramer,Bill Gross,and Steve Forbes may whimper and petulantly criticize the Fed and recommend a 1% drop in the lending rate,but they should be thankful to see a 1/4%...Sometimes the recommended cure causes more harm than the disease...Perhaps America should resign itself to economic hard times as a cyclical reality...
Excessive cuts in the Feds lending rate would result in a giant sucking sound of foreign capital out of US assets and Treasuries...The value of the US dollar would fall and in the end, interest rates on loans would paradoxically increase..."Hyper-stagflation" would be a new economic term as inflation soars over the sinking dollar....I believe the Fed decided the US markets will be the sacrificial lamb to the global economy and to maintain a modicum of credibility in the US dollar...Bernanke cannot save us from a tired,dying bull market or an overdue recession,without risking serious inflation...At best,he may prevent a collapse of our currency...The real estate bubble that his predecessor helped create,has burst and it is spiraling down...There is no saving it until it reaches a natural equilibrium...The credit markets will show their bleeding wounds , beginning next month with quarterly stock reports and exits from hedge funds...
The economy can recover AFTER 2008 if this impending recession is handled wisely by the Fed and our government...A short term recession is no ones fault, but as natural as the changes of seasons... >:D >:D >:D
Quickly rising price of gold and Euros suggest the Fed overdid the lending rate cut to 1/2%...Bernanke created inflation today... >:D
I was fundamentally wrong about Ben Bernanke...He has chosen the US dollar to be the sacrificial lamb to the markets...The USDX is dangerously close to the all time low closing of 78.33 achieved on 9/1/92...If it breaks down below that there is NO support below, and a correction to 55.00 is possible....That scenario guarantees the giant sucking sound of foreign capital out of American assets and US Treasuries resulting in double digit inflation...Other countries have not yet stepped in to relieve the pressure on the US dollar by decreasing their interest rates...
The Fed took this action to preserve the interests of its employers---the Banks and Hedge Fund crowd...The citizens are caught with the short end of the stick again...For Bernanke to risk a political backlash that could result in the death of the Federal Reserve System, I fear that the crisis in the debt markets is far more severe than we are told...The secrecy will begin to unravel next month... >:D
Are the American stock markets up,or is the US dollar down??? That is the Question...On 9/25/07,the USDX hit an intraday 52 week low of 78.213...( see last post)
Insolvency in housing,bonds,banks,and derivatives trumps a liquidity crisis...Insolvency can't be cured by the Fed inflating the dollar by lowering the lending rate in FED attempts to avert a recession which maybe unavoidable...The steepening yield curve of the 30 year bond foretells inflation...
STAGFLATION would mean a double failure by the Fed...Hyper-stagflation would call into question the continued existence of a "Federal" Reserve Board, run by the banking industry,in deciding our nation's monetary policy... >:D
The USDX touched an all time low today of 78.159.... >:D
USDX is 77.869 and collapsing... >:D
Today Net Bank, tomorrow the ....? >:D
Now that it is tomorrow,Citibank is next...It will receive a Fed engineered, private sector bailout of hundreds of billions worth of structured investment vehicles (SIV) by the banking industry...Accounting rules are allowing Wall Street to hide hundreds of billions in debt loses by pushing them off their balance sheets...Indeed,they can't figure out what these assets in packaged debt are even worth... >:D
In a meeting Monday night,Bernanke said the Fed "was prepared to REVERSE the policy easing if inflation pressures proved stronger than expected." Gee,I wonder if he had expected $85 oil,the highest gold price in 28 years,and the lowest USDX in history???
When asked if he thought the value of the dollar imparts inflation,Bernanke dodged the question by saying a fixed exchange rate would not be good for the economy... Gee,I wonder if he knows that native americans call that speaking with forked tongue... >:D
Forked tongue indeed- not counting energy and food in the core inflation numbers definitely qualifies!
Should be an interesting day.
Gold up+oil up+ USDX down=Fed inspired illusion of prosperity...
A depression in a sector ( such as housing) usually precedes a recession...
The stock markets may rally next year,based only on high inflation...
>:D
Today, stock markets continue to trade on rumors of further monetary inflation by the Fed ,to maintain the stealth of the secular bear market which has existed since 2000..Out here in the West,new homes sales spiked as builders dumped inventory at fire sale prices...The dollar remains moribund...Oil and precious metals continued their rise and service as a true measure of inflation...Nervous accountants at investment banks continue their sleepless nights,knowing that sales of CBO and SIV are but a month away,and true valuations will be uncovered... >:D
A stock market dependent on a Fed supplied fix, is a market at risk for painful withdrawal symptoms... >:D
A 1/4 point easing in the interest rates by the Feds should give us a pop up in the stock markets,as well as $100 a barrel oil,$800 gold, and further tumble in the dollars value to 75 USDX...It will not reinvigorate the housing industry, make overvalued assets (i.e. bad debts) more valuable, or put money in the hands of unemployed Americans to pay their credit cards...In December, America will realize they are in a recession, except unemployed Americans will be in a depression...In August,foreigners were net sellers of US Treasuries...One wonders how much longer the Fed will be in "control" of our interest rates,when our massive Federal debt is dependent on foreigners,especially Asians, continued purchase of US Treasuries with their surplus of US dollars...Avoiding increases in interest paid by US Treasuries appears unlikely... >:D
With the assistance of Alan Greenspan,the housing bubble took 5 years to produce over 60% price appreciation...It will take a few years for housing prices to drop 30%...The evaporation of trillions of dollars of household wealth will have a long term negative effect on consumer spending...Unemployment in housing related businesses will be over one million...Fed reduction of interest rates will have the effect on housing as if throwing grains of sand at a tsunami surge...Wasn't it Greenspan who said it was smart to get a variable rate mortgage??? >:D
So far,the Fed instigated inflation has given us $95 oil,$800 gold,and a 76 USDX...Despite this obvious double digit commodity and monetary inflation, the Commerce Dept had the gall yesterday to claim a gerrymandered GDP rise of 3.9% for the quarter... To achieve this figure,they assumed an annualized inflation rate of 0.8%...When our government says everything is fine,be afraid,be very afraid... >:D
The Fed and the government has granted Citigroup,J P Morgan,and Bank of America permission to buy,through the "Master Liquidity Enhancement Conduit" , mortgage backed assets off the banks balance sheets...Didn't Enron get prosecuted for this off balance sheet accounting??? You know that Wall Street is in desperate straits when the Fed approves criminal cover-up techniques... >:D
At a meeting in Tokyo today Alan Greenspan said the dollar's slide was neither favorable or unfavorable to the US economy,and he expected further losses in the US currency against east Asia currencies..He also stated, "...The discounting of the expectation of growth of the ( current accounts) deficit to this level has already affected the exchange rate.To say it is going to move further as a consequence of this is double-counting..."
Alan wears glasses that are supposed to correct his nearsightedness...There was alot of double-counting of Germany's current accounts deficit in 1922...It can have an increasingly negative effect on currency exchange rates...The dollars slide will result in withdrawal of foreign assets from America...It will necessitate higher yields on US treasuries to attract capital to maintain our massive national debt...While banks can manage an immunity to inflation,The American consumer doesn't stand much chance to maintain his standard of living in a high inflationary economy...Indeed,the dollars slide IS unfavorable to average Americans...
Who hires these people to protect our interests??? Oh I forgot,the banks do... >:D
Ben Bernanke looked sick today testifying before Congress...Perhaps he suffers from a sense of impending doom, knowing it is just a matter of time before they discover he murdered the dollar... >:D
Hedge funds heavily invested in mortgage backed securities have begun to freeze redemptions...They are using the excuse that it is impossible to value the worth of their securities...All they really need to do is start selling them to find their value...When the Hedge funds slam their door in the faces of their customers, institutions and accredited investors, they are incurring the anger of the rich and powerful...Corporate attorneys are going to get rich in the resulting suits ,and government regulation of Hedge funds will be created...
Even Citibank will need to do some fancy footwork to avoid being held accountable for their delay in reporting losses...The extent of damage from holding bad debt in the financial industry should be exposed as quickly as possible to minimize investor losses and to take steps to prevent financial firms from repeating the same mistakes... >:D
Bernanke also testified to Congress that estimates that set the total losses from subprime mortgages at about $150 Billion were probably " in the ballpark."... The total subprime market is about $2 Trillion... According to the ABX index,subprime mortgage CDO's are currently selling for 25 cents on the dollar...Paper losses in subprime are therefore $1.5 Trillion...Just when you thought it couldn't get worse,better quality residential mortgage CDO's are also selling at a big discount...
Either Bernanke committed perjury or he is playing ball in Wall Street's ballpark...They have different rules for the game... >:D
Despite the Fed's and The US Secretary's Pollyannaish predictions that a recession is unlikely and the US dollar "will shine", I have warned you that when the government says everything is fine,be afraid, be very afraid...Economist subdued predictions that any recession will be short lived has caused me to project our economic landscape changes from 2006 through 2009...
1. 3 million jobs lost
2. 6.4% unemployment
3. 2 million home foreclosures
4. house prices in recently over-heated markets dropping 25% from their highs
5 $120 a barrel of oil
6. $4 a gallon of gas
7 20% increase in price for Asian imports
8. major financial institutions unprofitable
9. cheap credit terms unavailable to business
10. USDX 60
11. farmers have a mini "dot com" profit revolution
Through this short term misery,the US stocks markets will suffer some major dips,but will recover number wise only because of a cheapened dollar...In 2010,we will be back to our illusion of prosperity... PS-the Swiss Franc will make a comeback >:D
Reality sucks for the bulls...Fannie and Freddie are doomed by their partially hidden SOP 03-3 losses...The ABX nose dive in GSE mortgages since the beginning of October has sent them into technical insolvency...They can't raise capital...How do you spell, "Federal government bailout" ???
PS--- my SKF and SRS are doing well today >:D
1.2 million homeowners will NOT see their mortgage rates frozen for 5 years...The Bush administration plan should be called, " the 2007 Full Employment Act for Lawyers"....The owners of the mortgages will be busy suing the mortgage servicers for holding back contracted interest earnings and devaluing their investment...This is more than a housing crisis...It is the greatest financial crisis since 1929...The Fed will keep lowering the interest rates through accelerating inflation and a further devaluation in the dollar..The Fed will attempt to save their employers,the banks,hedge funds, and Wall Street firms...The house of cards the financial industry created,through derivatives and other machinations, is falling down....Not all can be saved...The failed , bankrupt Citicorps of financial institutions must be put out of their zombie existence of the walking dead by a strong Resolution Trust agency to remove the dead bodies from the landscape...All government/industry action taken so far will fail...
Stock traders threw a hissy fit when the Fed only gave them a normal dose of feel good...These greedy addicts always want more, even if it eventually kills them...They will get over their little temper tantrum tomorrow and the stock prices and gold will go back up...Perhaps these investors have a subconscious realization that with on oncoming recession stock prices are seriously over-valued...I wait for the moment that their defense mechanisms break down ,and they awaken from their sleep which was induced by the calming reassurances of the Fed and Paulson ... Then a wave of fear sweeps the markets within a month..In morbid anticipation, I have 20% exposure to leveraged shorts on four indexes and 60% exposure to bonds and cash...Time will tell if my cynicism is prophetic or pathetic...
The Fed's continued lowering of interest rates encourages eventual inflation in prices and devaluation in the dollar...This may be good for banks and businesses,who can quickly adjust their pricing,but it is hard on American consumers whose wages adjust more slowly...In the last 3 months the USDX dropped like a rock from 80 to 75, only to mysteriously recover to 76...With the market forces unchanged from a devaluation mode, one must ponder what machinations are responsible for this recent recovery...I hope to find out the answer and will get back to you... >:D
Inflation has begun to lift its ugly head...Financial institutions have begun to disclose their losses...Interestingly, the dollar is making a comeback...None of these will impede Bernanke's relentless drive to lower interest rates...The Fed measured actions may not satisfy the traders on the stock market, but without the Fed, how much would their stocks be selling for??? What is the true state of America's economy??? Is it a hollowed out shell of its former self, with its productive capacity largely exported off shore, existing on credit, largely from other countries??? A credit crunch can't be very good for the largest user of credit in the world??? If we have high inflation, at least we may be able to pay our massive national debt and screw our foreign creditors... >:D
The markets continue to think denial is a river in Egypt, and bemoans a lack of their rightful Christmas rally... Meanwhile,the international credit crisis is evolving far beyond sub-prime mortgages...Bernanke is looking wide eyed at even the HELOC market running arrears late by 60 days at a 16.5% rate...Now that the Bond Insurers,like ACA Capital and MBIA, are becoming downgraded to non-viable corporations, the US government will face a choice of bailing them out or see over $300 billion in bond losses...Financial institutions have been low balling their losses by hiding many off their balance sheets...If the Federal Reserve is eventually forced to monetize all of the financial institutions losses, it will be well over $1 TRILLION...The world's financial industries are walking on eggs and close lipped,in danger of slipping and getting egg on its face...The gathering storm will hit eventually and made worse for the delay... >:D
The stock markets had their worst initial three days trading in the new year since 1932...Greenspan is being courted to serve on the board of sovereign funds, for his name--not his advise.... Debt payments on homes,cars, and credit cards are expected to deteriorate through 2008, with employment numbers worsening...Financial institutions will reduce or halt dividends,now they are admitting they are no longer profitable...The dollar has halted its rebound,now that the irrational belief that the Fed will fight inflation has faced reality...Gold and oil are higher, but won't breakout to new heights until our government admits we are in a recession...Bond prices will be the next bubble to burst...When inflation,created by the Fed, becomes an endemic feature of our economy,bond prices will drop down... >:D
Bernanke stepped in last week to reassure us that he will continue to lower interest rates until our dollars are the equal to Zimbabwe dollars...Britain is considering nationalizing Northern Rock Bank,while we are making progress in having Citibank become an Arab national bank...Profit announcements for American financial firms will do wonders for lowering our stock markets this coming week...Technical analysis and candlesticks will not light your way in markets next month... >:D
Havent posted for a while... but it looks like my speculative post back in june 2006 is showing to be correct. Stout about 3 months ago I decided to go all in on Gold. I own GLD, SLV, and GDX and even though this market has been through chaos the last few weeks.... My porfolio is staying steadly in green. I believe we are heading for the course of super stagflation.... Ben Bernake the government and the manipulation in this market will lead to the demise of the USD. I believe the root to this whole problem has been the USD all along ever since the loss of confidence in it during the early 1970s... everything is coming back to haunt us (runaway deficiet spending, inflation, foriegners dumping and refusing USD, deflation of real estate and other bubble assets, soaring energy costs and food costs....) and its hitting us all at once. I see this financial train wreck as the perfect storm. I have started to stock pile food and needed goods for a possible hyperinflation scenerio to play out. Good luck to all be prepared!
I expect a short term correction in gold, possibly manipulated by the powers that run this world...Long term gold is a safe investment, as I have held miners since 1998....
On Tuesday, I expect Bernanke to step in with an rate cut if the markets take a sizable tumble like the rest of the world.... This would be a mistake and simple postpone the inevitable Bear market force while creating more inflation...I believe the Federal Reserve capability to fine tune the economy has its limits, and those limits are restrained even more now that we have a "global economy"...
There is a good possibility that we will hit a short term low on Tuesday...Pay close attention tomorrow, as it may be a time to close shorts and go long if you are a trader... If you are an investor,2008 is mostly a Bear... Also,bond prices are reaching their peak, and soon should be sold to switch to cash assets... >:D
This rate cut today further shows that the FED is going to try to inflate its way out of this mess. I am certain we will see gold over $1,500 in the near future. Good luck to all tomorrow should be interesting.
I suspect the excessive Fed rate cut will stimulate the price of gold to about 1200 within the next two months...Because the market bottomed near my expected 11,471, I have sold my ProShare ultra short ETFs...I have also sold my bond mutual funds as they are close enough to their peak price that I don't want to be a pig...I am ready to go long , if Bernanke lovers are inspired to buy in mass...I suspect that any pop up in the markets will be short lived and the next correction down will be much worse...
The Feds actions cannot solve the credit crisis and pay the underlying bad debts...It can and will insure higher inflation in following months...The Fed today has successfully postponed the Bear market for a few weeks... >:D
Bernanke's application of 1.25 feel good (in 8 days) to the Markets should be sufficient for a short term suckers rally... I have gone long ,with the expectation of a further drop within weeks... It pays to be nimble in a volatile stock market..."Buy and hold" and "dollar cost averaging" led many to lose their butt in the recent bursting of the "tech bubble"... The current financial crisis promises to be much worse...If our government was honest, the GNP for the fourth quarter would have been a negative number... >:D
Due to the generosity of the Fed with YOUR inflated dollars,next week we will bask in the warmth of a suckers rally...The longevity of this mini rally is unknown, and it may be your last best chance to sell insanely over-valued bank and financial stocks...A storm gathers on the horizon, when the Arabs take oil off the dollar peg and they revalue their currency , the resulting whirlwind will lead the USDX down and the European central banks to drop their rates...The volatile instability in markets will be a sight to behold... >:D
Greenspan most recently said America is on the edge of a recession...What he didn't say is that the financial and housing related industries are in the midst of a great depression...If you look at the most recent corporate profits,it is only those two industries causing a reduction in profits...The Fed generosity in lowering interest rates has not yet created the suckers rally that should be expected...It will create 4&5 % annual inflation during the next few years...The USDX got stronger and precious metals held firm...The markets are misbehaving...Perhaps investors have a sense of impending doom...Not so fast!!! I still expect a suckers rally,eventually followed by a 10,000 DOW... There is money to be made in the markets during a recession ... >:D
Using their Bernanke provided voodoo TAF dollars,insolvent Citibanks are bailing out insolvent bond insurers....The markets respond to the rumor on Friday with a spectacular 11th hour rise...This is definitely fodder for my predicted suckers rally,as there is apparent endless supply of suckers playing the markets....
For those of you into triangles, current formations predict a near term breakout OR breakdown....I am betting on a short term breakout....Either direction, keep your finger on the mouse due to current market volatility... >:D
On Monday at an investment seminar in Jeddah ,Saudi Arabia,our beloved Alan Greenspan stated that their severe inflation would drop by dropping their pegs to the US dollar...The dollar has subsequently taken a nose dive below support at 75 USDX...It is heading to 72 or below...When the gulf States do drop their USD pegs, look out below...
More recently, Bernanke and Bush announced we are not in a recession...As confirmation that no one believes or listens to those two, the stock markets have gone down the last two days...
All this has been good for oil and precious metals industry investments...Perhaps we will peg the US dollar to the Zimbabwe dollar before this economic cycle is over... >:D
Will Bernanke ride to the rescue next week???
News of another estimate that bad debts would necessitate another $450 billion of write downs,some banks are expected to fail, and bond insurers need billions more to maintain a AAA rating, the markets,which were stalled at resistance, took a nose dive....That "triangle" I spoke of can now be interpreted as " BREAKDOWN"...Next week is liable to get really ugly...
With my finger on the mouse,I sold most longs and went to cash, while retaining a modest profit from the last month...Not only am I a coward, I also have a deep,enduring respect for market signals and economic realities...Your own due diligence is most likely to be better than Ben Bernanke's..... >:D
American markets are taking baby steps down,while Asian markets have no such hesitation...With the facts suggesting the down trend will accelerate...These include the national average retail price for gasoline will at least go up to $3.30 a gallon next month...Mighty hedge funds like Carlyle are collapsing....Formerly large bond insurers are not worth saving, as other formerly small bond insurers who didn't invest in mortgaged backed securities have taking over market shares....The Feds pumping dollars by TAFs in return for worthless bank debt may not revive Citibank( AKA: the walking dead)...
Bernanke may drop the fed funds rate another3/4 percent this month in another desperate attempt to save his employers---the banks,Wall Street,and the super rich....Insanity is defined as repeating that which doesn't work over and over,expecting different results...The lowly citizen consumers will pay the price for this attempted rescue of capitalism through inflation...Despite the soothing words of Bernanke and President Bush that we will avoid a recession,the American people know all intent and purpose we are in a recession... >:D
After Bernanke's sacrifice play on Tuesday,the suckers rallyed the markets...Wednesday, they woke up with with a hangover,and asked themselves what Bernanke did to them...He previously "loaned " banks dollars secured by collateral assets worth 60% or less of their face value in his TAF scheme...Tuesday's new scheme,called TSLF, Is to "loan" $200 billion in US Treasuries to large investment firms secured by collateral worth much less than their face value...This has been described as bartering prime for slime...This provides liquidity, freeing up credit which is the exact factor of easy credit which caused the problem...The hidden agenda is his employers: the banks,wall Street, and super rich can hide their insolvency on first quarter earning reports, hoping that the economy will begin to heal itself with the help of the Fed and Federal acts of desperation before second quarter earning results come out...Two pillars of the USA economy, real estate and financial industries, are still on the verge of coming down like the Twin Towers...
As I predicted on February 29th, The USDX hit 72...The Yen carry trade speculators will be selling everything tomorrow to cover ,as the Yen hit 100 per dollar a few hours ago...Since largely going to cash on February 29, I waited to see the new direction in the markets...I began shorts through SKF, SRS, DUG, and FXP. on Wednesday 12th..... >:D
Bernanke's desperation knows no limits,when he turns to FDR's New Deal schemes from the Great Depression to save Bear Stearns...Bush does a Hoover impression with his speech, "prosperity is just around the corner"... On Monday,J.P.Morgan will take over Bear Stearns for $2.00 a share after Friday's closing price of $30.00 a share...This calls into question what any of our financial firms are actually worth...The US Dollar is falling into a deep pit, making US stocks even more volatile to foreign investors... Bernanke will add to the dollar's fall on Tuesday....Hyper-inflation will stop the fall in house prices, and save Bernanke's beloved banker employers...He has not shown any mercy to the citizen consumer...The markets are likely have more surprises next week,so Thursday, I even bought some GLD... >:D
applaud stout7735
Bernanke has a shaky voice. I wish he could control it. lol
He makes me nervous when he talks.
Fools rush in where angels fear to tread...BSC fiasco is thought to be the bottom by those wanting to get an end of recession play...I believe the bottom is most likely AFTER the markets react to Bernanke depleting all of his "feel good" ammo of rate cuts and gloriously stands like George Armstrong Custer in defiance of the savage tribes of Congressmen, screaming for his scalp for killing the dollar and causing high inflation....Housing has not hit bottom...Financial institutions have only confessed to half of their losses... Unemployment has just begun...Household debt was 137% of disposable income in 2006...In 2008, The consumer is tapped out...DOW 10000 is more likely to be the bottom unless hyper-inflation gives us a DOW 20000... >:D
Our economy reminds me of a drowning man...He doesn't simply sink below the surface...He struggles to resurface several times,breaking back above the surface as he struggles to gasp a breath before becoming exhausted and surrenders to his fate...When the lifeguards like Paulson stands on the beach and shouts that everything is fine, Bush throws a rubber ducky short of the man, and Bernanke swims in the other direction to save his friends,the drowning man should know his eventual fate...
Our markets are showing an excellent opportunity for big money to sell more stock to naive retail investors before the next inevitable downturn...Some say our real inflation rate is currently above 9% and going higher...The Euro buys $1.60 USD...Oil breaks $120 per barrel...Agricultural products have their own bubble...Crack smokers on Wall Street celebrate Citigroup halved profits and creative accounting to send the PPS up 50% in a month....20% of home buyers will be upside down on their home mortgages by the end of this year...The depression in financial and housing related industries is spreading to airlines and trucking...Consumer confidence is not totally blind to this drowning spectacle... >:D
Financials made a comeback yesterday... These comebacks are based on desperate hope...The fundamental truth is rampant insolvency and decreasing asset values despite Bernanke shooting his wad with interest rate cuts to create inflation to rescue his employers, the banks and other financial institutions...Quasi governmental mortgage companies will not be allowed to totally fail, but their stockholders will lose their shirt...A few more bank failures will exhaust the FDIC reserves...Fed created inflation will hit double digits in real terms and cause a big hole in American pockets...The dollar will continue to go down to Monopoly money level worth...The only positive contra-indicator is Jim Cramer announcing the stock markets are doomed... >:D
Paulson announced that no small depositor has ever lost a dime in an FDIC insued account in 75 years... 75 years ago was 1933 when our nation had begun to recover from our last depression and we had a "banking holiday"...Your bank account is only as secure as the FDIC reserve,which can be exhausted by the failure of Citibank...The increasing insolvency of banks brought on by increasingly bad mortgage debt suggests that stockholders will lose...
If entire industries fail The stockholders will not be rescued,as the corporations will most likely be nationalized...The public concern with high inflation and unemployment will negate political principles....The age of deregulation is over now that its results are apparent...An economy based on innovative debt rather than production was not wealth building...
Bank of America quarterly profits drop 41% year over year, and the stock goes up...The effects of whatever investors are smoking gradually wear off until the stock price normalizes in after hours... Paulson says "confidence" is all important in the financial industry...When will investors recognize he is playing a confidence game ??? >:D
The chickens have come home to roost...The house of cards of intertwined,innovative debt instruments is collapsing and may bring down the entire financial industry like a nuclear chain reaction...Deleveraging is like no place to run to,no place to hide...The hedge funds of the super rich will be wiped from the face of the earth...The dollar is recently, extremely strong as a result of deleveraging, or maybe the EURO is just weaker... Gold is going to $700 an ounce or lower...Oil is on sale...There may be a run on retail banks before the election, which would guarantee a Democratic victory...My prior prediction of DOW 10,000 now seems bullish...My short ETFs (DUG,FXP,SKF,& SRS) had a good day today...Please try to remember that an insolvent,unprofitable corporation is worth no more than a penny stock no matter how big their name or revenue is...Keep your eyes wide open so that your retirement is not postponed until you die with your boots on... >:D
Bush threatens to address the nation on the economy, which always seems to lower the markets...After making a fortune off Americans, Bernanke warns that the banks and hedge funds depend on a $700 billion give away to maintain that fortune...Paulson demands to be crowned king to implement THE PLAN...They all rely on the continued stupidity of Congress to be successful...
The whole world wonders how the USA will ever get out of this mess with our current leadership...
>:D >:D >:D
The END will come when the $600 trillion derivative bubble bursts...A measly $700 billion will not save the financial industry...That could be better spent to fund bread lines and homeless shelters for the majority of Americans...Americans are withdrawing funds from banks,IRAs,401Ks,and selling homes in anticipation of further lower prices...Precious metal coins are difficult to find to purchase even at an increased premium...It appears the value of the dollar,treasuries, and stocks are artificially held up by the FED and foreign central banks...Our government leaders were accurately described by Jim Cramer, "They know NOTHING!!!!"....My current short ETNs of SKF and SRS are at risk due to their innovative financing and possible future government restrictions...With the current "no place to run to, and no place to hide" environment,perhaps the only safe long term investment is to buy farm land...
Depressions are a cyclical natural event in a capitalist economy...Perhaps government's fight with this mother nature only serves to delay or prolong the inevitable...The prosperity we have enjoyed during the last decade was based more on debt than production...The "Global Economy" has led to the export of our productive capacity and debts...We are more dependent on other countries than interdependent with them...I wonder if we are collapsing as fast as the Soviet Union did... >:D
Quote from: stout7735 on November 24, 2007, 10:05:15 PM
Despite the Fed's and The US Secretary's Pollyannaish predictions that a recession is unlikely and the US dollar "will shine", I have warned you that when the government says everything is fine,be afraid, be very afraid...Economist subdued predictions that any recession will be short lived has caused me to project our economic landscape changes from 2006 through 2009...
1. 3 million jobs lost
2. 6.4% unemployment
3. 2 million home foreclosures
4. house prices in recently over-heated markets dropping 25% from their highs
5 $120 a barrel of oil
6. $4 a gallon of gas
7 20% increase in price for Asian imports
8. major financial institutions unprofitable
9. cheap credit terms unavailable to business
10. USDX 60
11. farmers have a mini "dot com" profit revolution
Through this short term misery,the US stocks markets will suffer some major dips,but will recover number wise only because of a cheapened dollar...In 2010,we will be back to our illusion of prosperity... PS-the Swiss Franc will make a comeback >:D
Well the US dollar is shining due to deleveraging, yet it will reach USDX 60 in 2009 due to inflation and increased difficulty to the government in paying the higher interest on its higher debt...Other than that poor timing, you can call me a prophet one year later... >:D
Quote from: stout7735 on April 25, 2008, 11:09:59 PM
Our economy reminds me of a drowning man...He doesn't simply sink below the surface...He struggles to resurface several times,breaking back above the surface as he struggles to gasp a breath before becoming exhausted and surrenders to his fate...When the lifeguards like Paulson stands on the beach and shouts that everything is fine, Bush throws a rubber ducky short of the man, and Bernanke swims in the other direction to save his friends,the drowning man should know his eventual fate...
Our markets are showing an excellent opportunity for big money to sell more stock to naive retail investors before the next inevitable downturn...Some say our real inflation rate is currently above 9% and going higher...The Euro buys $1.60 USD...Oil breaks $120 per barrel...Agricultural products have their own bubble...Crack smokers on Wall Street celebrate Citigroup halved profits and creative accounting to send the PPS up 50% in a month....20% of home buyers will be upside down on their home mortgages by the end of this year...The depression in financial and housing related industries is spreading to airlines and trucking...Consumer confidence is not totally blind to this drowning spectacle... >:D
Look at Citigroup today...Is DOW 7500 the bottom??? As a true believer in Santa Claus, I am going long for a seasonal rally...But I will sell all longs prior to New Years, except for recent FNM and DXO buys.... >:D
nice comparison ;)
Nice graph....Even the crash of 1929 had a 25% Christmas rally... >:D
There was no big Santa Claus rally yet I was able to eke out 15% profit on News Year eve...There appears to be no Obama rally either...The reason is on the news...
A TARP is used to cover something up...The sad truth that is being covered up is the rescue actions don't pay off bad loans and banks are only halfway to their demise...Within a couple months the markets will see new lower lows and the Federal Reserve Board will be recognized as intellectually bankrupt...Bernanke will be shown the door,to join the increasing ranks of unemployed... >:D