Greenspan and Markets

[stout7735]

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.....        

[stout7735]

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...     

[Houlahan]

applaud stout7735
Bernanke has a shaky voice. I wish he could control it. lol
He makes me nervous when he talks.

[stout7735]

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...     

[stout7735]

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...       

[stout7735]

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...       

[stout7735]

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...

[stout7735]

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      

[stout7735]

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...   

[stout7735]

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...

[stout7735]

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...     

[stout7735]

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     

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...     

[stout7735]

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...       

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....       

[la-onda]

nice comparison 

[stout7735]

Nice graph....Even the crash of 1929 had a 25% Christmas rally...