Greenspan and Markets

[stout7735]

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...   

[stout7735]

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...     

[stout7735]

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...     

[stout7735]

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...

[nullzero]

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!

[stout7735]

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...       

[nullzero]

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.

[stout7735]

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...     

[stout7735]

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...       

[stout7735]

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...      

[stout7735]

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 ...   

[stout7735]

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...       

[stout7735]

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...       

[stout7735]

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.....

[stout7735]

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...