Monthly Archives: October 2008

Alan”The UnderTaker”Greenspan I am Shocked I was Wrong

Alan Greenspan , the Chairman of the Federal Reserve from 1987 to 2006 , said recently “I am Wrong…….  I’m Shocked …  I was Wrong about How the World Works”

The Dow was Down Another 312 Points to Close Friday at 8379. Casino Stocks were among those Taking a Beating. The Sell-Off is In Force , No Bottom In Sight. Perhaps a One-Day Rally on Monday? Many investors believe the Central Bank will cut rates by another half percent following the end of a two day meeting on October 29. Oil has Fallen $41 a Barrel in one month , closing in NY at $64.15

“We Are In The Midst of a Once in a Century Credit Tsunami” – Alan “The UnderTaker” Greenspan

Live Long And Prosper

Live Long And Prosper

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Dollar UP Gold DOWN

The Dollar jumped to MultiYear Highs Wednesday while Gold Prices Fell. Investors worldwide are Selling everything , including Gold. Gold for December delivery fell $20.50  closing at $714.70 an ounce in New York and at $720 an ounce in London. Funds were forced to sell assets such as gold to meet Margin Calls and weakness in European economies lifted the U.S. Dollar ,  pushing Gold Prices lower.

The Central Banks of the World are working together coordinating efforts. The world has to prop up the dollar right now. The dollar is the only thing showing value right now because that is where the Big Boys want you. Your playing poker against the people who mark the cards. All the data coming out of the FED shows the dollar is strong. The same people who print the money are the same people who show you the data.

The Dollar is the World’s Dominant Currency – Oil and Gold are Traded in Dollars. For some time , the US has been selling debt to other countries that print other currencies. Foreigners are holding large US Debt making their currency reliant on the Dollar staying strong , otherwise the dollar assets they hold are worth less and their currency is worth less. They can’t get paid if we collapse.

The dollar has rallied as the market crashed and foreign investors bought more United States Treasury Bonds. We’ve seen every asset class drop but Treasuries and the Dollar. Stocks , Commodities and  Corporate Bonds have Plunged. MARGIN CALL , GENTLEMEN. This DeLeveraging has caused what was supposed to be the Big Winner, Gold , to decline.

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The R Word Recession Sweeping the Globe

 Stocks ended Sharply Lower Wednesday with the DOW Tumbling 560 Points to close at 8469 after Negative  Corporate Profit Forecasts.  The Economic Downturn is drying up energy demand –  Oil Prices Fell Below $68 a Barrel.  Investors are worried that the “R” Word , Recession , an Economic Slowdown will Sweep the Globe.

The energy markets have also been weighed down by the weak stock market. Investors are more pessimistic about how long it will take the economy to recover from the current global financial meltdown.

The dollar’s strength this week , RELATIVE to other currencies , has contributed to oil’s decline. Investors often buy commodities like crude oil to hedge against a weakening dollar and then sell those investments when the dollar rebounds.

The World-Wide Economy hangs in the balance.

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Weapons of Financial Mass Destruction

The people who recognized the high likelihood of defaults were able to profit from that likelihood – First , they could sell the mortgage securities short – a straightforward wager that has long been available.

Second , they could buy credit default swaps (CDS) from banks and insurers like Merrill & AIG , who charged very little to the other side to make the bet. These were essentially a side bet that anyone could make about a certain mortgage bond or security. It paid off fantastically if the bond went into default or was close to default.

Where the junk mortgage bonds were in the hundreds of billions, the Credit Default Swaps were in the Tens of TRILLIONSCREDIT DEFAULT SWAPS were a STAGGERLINGLY LARGE $72 TRILLION DOLLARS – that’s a Seven with Thirteen ZERO’s Folks – $72,000,000,000,000

If the sellers of the Credit Default Swaps had to pay off in large part , the liability greatly exceeded the total bank capital in the United States and possibly in the world

The derivatives based upon the junk mortgage bonds could be , and were not in any way limited to the size of the mortgage. It is this liability that swamped the banks , investment banks and insurers. It is the Credit Default Swap Liability that broke AIG and Lehman Bros.

Lehman was so large that when it failed

Bankers panicked. If Lehman could fail , then anyone could fail. The banks that were still solvent figured they had better hoard their assets and stop making loans. This led to the ongoing credit freeze and economic downturn with a drastic fall in prices of all kinds of securities , real estate and commodities.

It also led to a massive credit squeeze on hedge funds , a credit dry up and monster fall of asset prices. This snowballed into forced stock and other assets on a huge scale leading to still greater falls in securitiy prices.  

The worldwide panic is still unfolding , leading to huge infusions of liquidity into the Worlds Banks and the semi-Nationalization of United States Banks to bolster world markets and economies. These were drastic steps for drastic times , all generated by derivatives.

Warren Buffett had warned us against them back in 2002 and again he was right. Buffett stated that  .. derivatives bought speculatively are WEAPONS OF FINANCIAL MASS DESTRUCTION .. the range of derivatives contracts is limited only by the imagination of man or sometimes , so it seems , MadMen.

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Carmageddon Detroit Doomsday US Auto Death Watch

 The recent Free-Fall Stock Plunge has put Both Ford & GM on DEATH WATCH. I suppose they’ll be handed over on silver platters to JPMorgan too. How about RothschildGM , CentralBankChrysler or RockefellerFord ? The CEO of Chrysler Fears the Collapse of the US auto industry amid the Credit Crisis and Wall Street Meltdown.

World’s Largest Chevrolet dealer files Bankruptcy.  Bill Heard Enterprises has filed for Chapter 11 bankruptcy protection. Bill Heard Chevy had grown into the world’s largest Chevrolet dealer with more than $2 billion in sales a year , but now just another casualty of an easy-credit economy that relied on a sub-prime consumer base to keep sales churning. The company simply does not have the resources needed to continue to operate.

As many as 600 new-vehicle retailers in the US may fold or consolidate with other dealers this year. Capital One will stop financing auto dealers inventories in New Jersey and New York this month.

Auto finance companies were as guilty as mortgage lenders in providing loans to subprime borrowers and the nightmare is going to ravage them too. The car business depends on the availability of credit at every level. GM will have to obtain new financing from the government or private debt/equity to remain in business in North America.

 

Billionaire investor Kirk Kerkorian announced he has sold 7.3 million shares in Ford for an average price of 2.43 dollars per share and plans to divest his whole stake – 133,500,000 shares  6 percent of ALL Outstanding Ford Shares. Wouldn’t that mean Ford shares are going to plummet Below $2 a share?

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Colin Powell – Obama will Electrify the Country

Former Republican Secretary of State & former 4 Star General, Colin Powell speaking on NBCs Meet the Press – endorsed Democratic candidate Barack Obama for President.

“ I can’t deny that it will be a historic event when an African-American becomes President and should that happen , all Americans should be proud —

that we have reached this point in our national history where such a thing could happen. It would also not only Electrify the Country , but Electrify the World.”

“ I come to this conclusion because of his ability to inspire, because of the inclusive nature of his campaign, because he is reaching out all across America.

A big job of the new president will be conveying a new image of American leadership, a new image of America’s role in the world.”

“ I think what the President has to do is to start using the power of the Oval Office and the power of his personality to convince the American people and to convince the World that America is solid.

America is going to move forward – and for that reason, I’ll be voting for Senator Barack Obama.” – Gen. Colin Powell

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The Iraqi People Have Spoken Get Out Occupier

 40,000 or more followers of Shiite cleric Muqtada al-Sadr rolled on Baghdad Saturday in a mass public demonstration and Protest to Extending the UN Mandate allowing US led Military Forces in Iraq. USA and Iraqi leaders face a Dec. 31 deadline to reach agreement on the deal. The protesters want Iraq’s Parliament to Reject a US-Iraqi security pact that would allow US led Forces in Iraq , another 3 years , until Dec 31 , 2011.

Al-Sadr, who is living in Iran , had an aide deliver his message:
“The Iraqi government has abandoned its duty before God and its people and referred the agreement to you knowing that ratifying it will stigmatize Iraq and its government for years to come. I am with every Sunni , Shiite or Christian who is opposed to the agreement – and I reject , condemn and renounce the presence of occupying forces and basis on our beloved land.
If they tell you that the agreement ends the presence of the occupation , let me tell you that the occupier will retain its bases. And whoever tells you that it gives us sovereignty is a liar,” al-Sadr said. “I am confident that you brothers in parliament will champion the will of the people over that of the occupier – Do not betray the people.
One banner in English said: “We refuse the existence of the US in Iraq.”

Folks , they don’t want us there , we’ve spent more than 2 TRILLION DOLLARS $2,000,000,000,000 –
we’ve lost more than 4100 Human Lives , Brave Soldiers “Just Following Orders”
Do You Think the Money Could Be Better INVESTED?
How does one put a Price Tag on Human Beings Lives?
We are Less Safe , Less Free , Less Prosperous
ENOUGH is ENOUGH
And ONCE AGAIN , US Congress Approval is Not Required for the pact to take effect.
I keep forgetting , WE THE PEOPLE , are NOT Living in a Democracy.
GET OUT OCCUPIER

GET OUT OCCUPIERNoAgreement YesIraq

In Rothschild Morgan Rockefeller We Trust

In Rothschild Morgan Rockefeller We Trust

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