during all this hoopla, i haven't seen too much erosion (if any) in advertising time on television (from the little i watch) - seems like the same schedule of 3-4 breaks every half hour on all stations.
i don't see a drop off in magazine advertising, either, when perusing the magazine racks.
are companies really that healthy to advertise, or
are they possibly committed in long-term contracts, or
are they throwing in the last bucks they can, or
even stepping up their competitiveness, or
are they also subsidized (surely some are)?
just looking at another angle.
red _________________ just cos things are fucked up doesn't mean it isn't progress...
Joined: 17 Sep 2006 Posts: 489 Location: A Wonderful World
Posted: Wed Oct 08, 2008 10:04 pm Post subject:
Found this today after a morning 'radio host' mentioned he seen this site back in 2004.
Seems pretty relevant to todays climate!
The website is called..."depression2007.com"
This is the home page.
How To Profit From The Coming Great Depression
That's the title of my new book. If that idea sounds outrageous, consider some of my past forecasts:
Through 1987 I was urging my readers to get out of the share market and buy property. That was considered "outrageous" at the time, too. But in the 12 months following the October 1987 share market crash property prices across Australia doubled. The All-ordinaries index fell 50%
In 1989/1990 I was predicting a massive crash in the Japanese Nikkei index and in property prices in Japan, followed by economic recession/depression there. That also was "outrageous." Japan, the post-war economic "miracle," was supposed to be "different." Japan is still a basket case. The share market lost more than 75% and property prices have fallen 50% to 80% across the board.
The headline of my July 1997 newsletter was Property - Full Boom Ahead! When the "Asian Crisis" broke the following month I stuck to my forecast. Prices have since doubled again.
In January 2000 the headline was: Gold Coast Property - The Boom We Have To Have.
In September 2003 I sold my own Gold Coast home (I am still renting, and will be for some time) and warned that the boom was over. Losses of 50% to 90% lie ahead. What you have seen so far is chicken feed.
Why is my advice so different from the mainstream and why do I get it right more often?
I have a massive philosophical difference with mainstream economists and other highly paid "experts" and "analysts" when it comes to forecasting, and even with their "explanations" for market moves after the event. I believe their approach is basically flawed.
Economists did not identify the last Great Depression as such until 1933, four years too late to warn the public and save them from massive financial losses and almost universal misery for many years. Their methodology has not changed. They are not likely to be able to warn you about this one either. But they will be quick to criticize negative mavericks like me who do not conform to the "orthodox" consensus view and are "preaching doom and gloom."
Actually I am not a negative person. In fact I am a super optimist at heart. But I am also a realist. And the reality is that another depression is inevitable, for two main reasons that cannot be avoided (see later). In fact Wall Street is already reflecting the early stages of a trend change that will lead to a catastrophic economic contraction that will engulf the world (including Australia) and which has the potential to be worse than the 1930's in its wealth-destroying consequences.
Why Economists Have a Brilliant Track Record of Getting It Wrong
Ask an economist what causes house prices to rise and fall. He or she will tell you it's supply and demand, interest rates, the economy, unemployment, immigration, etc. and possibly rattle off even more economic fundamentals. Ask a real estate agent and he or she will echo everything the economist has said, and probably add "shortage of land" and "location, location, location."
Well, consider this: Say in January 1987 you owned a four bedroom brick veneer home on a canal on the Gold Coast, and you listed it for sale at $100,000. It probably would have sat there for three months and you would have been lucky to get one nibble from a prospective buyer.
Yet 18 months later you could have put that same property back on the market for $200,000 - double the price - and it would probably have been snapped up the day you listed it.
Why? What changed, in the way of economic fundamentals, in that 18-month period? Not a thing. Did supply and demand change? No. Did interest rates fall? No. They actually rose - mortgage rates went from 11% to 17%! Did unemployment or immigration change? No. And what about "location, location, location?" In the bust that followed in 1989 to 1992 (which I also predicted) some of the most magnificent waterfront mansions around Sydney Harbour dropped 75% in value! (How quickly we forget). "Location" certainly didn't save them. And as for "shortage of land" - In Australia? You have to be joking. Tell the Japanese that "shortage of land" means property prices can't fall.
So what changed? And how did I know it was going to happen? That's what I write about in my newsletter and in my book.
I irreverently refer to economists and other "experts" who focus on fundamentals as the "Flat Earth Society." Their basic assumption is that events govern mood, when the opposite is the case. Because that basic assumption is flawed they cannot possibly forecast the future with any accuracy. They have to fluke it sometimes, of course. If you call "heads" often enough you will get the coin toss right sometimes, too. But how does that add value for you?
Even after the event they cannot get it right. But they feed you with so much crud through the media that you have been conditioned into never questioning their "explanations" as to why the market went up or why it went down. Let me illustrate that:
How often have you heard in recent months that "the share market fell today because the oil price rose yet again to another all-time high" or something similar. Sounds familiar? Have you ever questioned that? Never? Well consider this: In October 2002 the price of oil was about $US28 a barrel and the Dow Jones Index was around 7300 points. By October 2004 the oil price had almost doubled to $US55 a barrel. How far did the Dow fall in that same two year period? It rose nearly 50% to 10,600 points! Yet tomorrow if the Dow falls and the oil price rises you will be told the loss on the share market is "because the oil price rose." And you will believe it. Why? Because you have been conditioned by economists via the media. They are the "experts." They must know. That's why my forecast of a coming Great Depression seems so outrageous to you at this stage. But once you read my stuff I doubt that that will still be the case. Whenever you hear or read of a "bullish" forecast made by an economist, just delete the last syllable.
Another popular furphy at the moment is America's current account deficit (and Australia's). Each time a worse-than-expected deficit is announced this too is given as a "reason" for falls on the share market (except on days when the market goes up, in which case the "experts" fall back on "despite" or "shrugged off," etc.). Do you buy that one? Does the trade deficit affect the share market? Well, between 1982 and 1987 the U.S. went from being the world's largest creditor nation to becoming the world's largest debtor nation. The worst trade deterioration in their history. How far did the share market fall in that period? Wall Street experienced one of its greatest bull markets of all time in the five years between 1982 and 1987, as did the Australian share market. Yet to this day economists believe, as do the suckers who follow them, that current account deficits are "bad" for the share market. This is simply more Flat Earth Society nonsense.
When "the penny finally drops" for you and you understand the socionomic insight that mood governs events, and not the other way around, you are going to have a stupendous advantage over everyone else in the world who still believes the earth is flat because economists keep telling them every day in the media that it is flat and they never question it.
What drives financial markets, whether it be the share market, the property market, the gold market, bonds, or whatever, is not economic fundamentals. It is the unconscious herding impulse. And the fantastic advantage we have is that the mass social mood has a pattern to it.
Human nature never changes.The herd mentality never changes. An ancient philosopher once said that as an individual a human is a basically sane being; but as a member of a crowd he becomes a blockhead, or words to that effect. People go mad in crowds. And markets are simply crowds. As with individuals, crowd sentiment swings in cycles or waves of optimism and pessimism, with periods of complacency in between. At times there is even panic, motivated either by greed (manic boom) or fear (crash). But whereas the behaviour of an individual cannot be predicted with any great accuracy, crowd sentiment can. So if we can deduce from past patterns of crowd behaviour which way the herd is going to jump next, regardless of economic fundamentals, (these follow the mood change; they do not "cause" them - that's why the share market is always 6 to 12 months "ahead" of the economy) we will have an incredible advantage in knowing when to buy and when to sell.
I said that human nature never changes. Consider this: If I narrowed all of the rules of investment down to just one rule, what would it be? Simple: buy low - sell high. It's that easy. But it is human nature to do the opposite. Who wanted to buy property in 1987? Nobody. Property values had gone nowhere for almost a decade. Property was a dirty word. Only a lunatic would recommend buying property at that time (I have been called worse than that). Yet 12 to 18 months later, once property prices had doubled, everybody wanted to buy property. In 1987 what was everybody buying? Shares. Yet where was the share market? Sky high. So what should they have been doing? Selling! (Buy low - sell high). It's so simple, yet it is human nature to do the opposite. It will never change.
Are you beginning to get my drift? Economists and most others whom the media uses to feed you with their bull(ish) forecasts are part of the herd (as is the media and government). You can stick with them and buy at the top and sell at the bottom. Or you can think outside the box and take a look at the socionomic insight.There are a dozen or so different patterns of human crowd behaviour that keep repeating themselves over and over. And this patterning is "fractal." That is, there are smaller patterns within larger patterns, within even larger patterns, etc. So whether you are looking at a chart of the share market for yesterday or for the last one hundred years you will see the same pattern. The larger the pattern the more serious the consequences. Wall Street indices have just completed a 220-year pattern! Now do you understand why I say this downturn has the potential to be worse than the 1930s?
Fractal patterning is seen elsewhere in nature. Take a broccoli bush. Pull off one head of broccoli. What shape is the head? It is exactly the same shape as the bush. Now pull one segment off the head. What shape is it? The same as the head and the bush. Only the size is different. If you look at an atom under a microscope you will see a nucleus and electrons flying around it in orbit. Exactly the same pattern as our solar system. Only the size is different. Should it come as a surprise that patterns of human crowd behaviour are the same? It is the "rhythm of the universe."
Why did economists not identify the Great Depression after the 1929 Wall Street crash? Or, better still, why did they not see the crash coming? Because they were looking in the wrong places. As they are now. They do not see this one coming either. To this day economists cannot even explain what "caused" the October 1987 crash - even after the event! Why not? Because they are looking for economic or geopolitical "events" leading up to the crash. But there were none of any consequence. Meanwhile students of the Wave Principle can not only explain why it happened. They were forecasting it - before the event. So who would you rather follow?
Our Flawed Debt Money System
I said there were two reasons why the coming Great Depression cannot be avoided. The massive turn in social mood that has just begun is only one. The other is our fractional reserve banking system. And again economists, though they are taught this in elementary economics at school or in their first year at university, pay no attention to it.
There are three chapters in my book devoted to this subject. If you think that discovering that mood governs events, and not the other way around, is like finding out for the first time that the earth is round, when all of your life you have believed it was flat, this will be like finding out that Santa Claus is not true for the first time.
The general public has no idea where money comes from. Do you? If twenty years ago there was say $200 billion "in circulation" in Australia and today there is say $400 billion, where did that extra $200 billion come from and on what basis was it created? Who put it there and how did they know how much would be enough to finance the myriads of transactions every day? Was it the government? Was it the Reserve Bank? The Mint?
You don't know? Why don't you know? Aha, now there's an interesting question. Maybe you're not meant to know. Be ready for a shock when you read my book or my newsletters.
All I will say here is that our current money system, which was foisted on us by the IMF in 1947, when our weak-kneed politicians caved in to the same powers that foisted the Federal Reserve upon Americans in 1913, along with unconstitutional income tax, has sewn within it the seeds of its own destruction. Debt must rise exponentially while the money supply must ever shrink. A system like this has a use-by date. It has to implode in time. The last one expired in the 1930s. The current debt bubble has already surpassed 1929 as a percentage of GDP.
Consider the last depression. What caused it? (Apart from the change in social mood, that is). Was there any shortage of goods on the shelves in the shops? No. They were stocked to the rafters. Was there a shortage of manpower? No. Unemployment rose to 25% and more. So why could no-one afford to live? The only thing in short supply was money. Why? Money is not a resource. It merely represents resources. Just enough can be "printed" at any time so that all goods and services can be represented by money. What went wrong? The answers will disturb you, especially when you realize that we are facing a repeat performance right now. But this time you can avoid it if you act now!
How was Australia able to finance the first world war effort without any income tax? Why was income tax introduced anyway? You are going to learn that income tax (and the iniquitous GST) is neither legal nor necessary nor moral. The "tax cheats" are not those who try and hang on to the fruits of their own labour, as is their God-given right, "protected" by the "constitution" in most countries. The real "tax cheats" are the ones who impose it dishonestly and collect it and call Aussie Battlers "tax cheats."
If this is the first time you have subscribed to my work, welcome aboard. I hope you enjoy the ride
rustyh, the guy makes sense from an anthropo-philosophic viewpoint.
What drives financial markets, whether it be the share market, the property market, the gold market, bonds, or whatever, is not economic fundamentals. It is the unconscious herding impulse. And the fantastic advantage we have is that the mass social mood has a pattern to it.
What a novel idea for those with enough $ and power to take advantage of. Would you assume they wouldn't? Well, if one's government is set up to look as though they were a bunch of righteous saints, yes, that would go over - not only once, but each and every time... hence, history repeats itself.
Wonderful thing, that herding idea, eh? Now, where else do we suppose this practice is being used constantly?
Could it be
* political parties
* social (ahem) groups... y'know, like Freemasonry, the Mafia, street gangs, motorcycle clubs
* professional organizations
* think tanks
... and on and on, because we all have to belong to something, right?
This is why (generally speaking) the lone thinker who doesn't assemble well into an organization or group defaults into either crazy status (sometimes to the point of institutionalization) or is left without a support base in society. They cannot land meaningful work, the damned troublemakers, ha! (Unless they fake it well enough to pass as a sympathizer of things.)
The funny thing I see, which tends to become self-defeating, is when the free-thinking (and do-gooders with a conscience) group together, is that they too naturally seek a hierarchy and tend to become paranoid about who's doing and saying what amongst themselves. Throw power, money and sex into the picture (inevitable - PMS) and BAM, same shit with different flies.
So now you see why the foodchain is the way it is.
Sorry, this post goes off the original topic. But it's my philosophical point of view of the WTF factor.
red _________________ just cos things are fucked up doesn't mean it isn't progress...
Iceland’s stock exchange on Thursday suspended trading in all shares citing unusual market conditions after the country’s largest lender, Kaupthing Bank, followed domestic peers into state ownership.
The nationalisation of Kaupthing followed that of Landsbanki, owner of the Icesave savings business popular in the UK, and Glitnir earlier this week and pushed the island economy to the verge of collapse.
Does that spell it out enough?
Darling cool on rescuing councils caught out with Icesave investments
Ministers are to hold an emergency meeting with local council leaders this afternoon to discuss their demands to recover hundreds of millions of pounds invested by councils in collapsed icelandic banks.
But there was no sign that Alistair Darling, the Chancellor, is ready at the moment to extend his guarantee covering deposits from personal investors to town halls.
John Healey, the local government minister and Ian Pearson, a Treasury minister, are to meet leaders of the Local Government Association following growing concern from over 45 authorities who have put their cash into Icelandic banks.
Councillors insist that town halls followed guidance issued by Whitehall to spread their investments and try to secure a good return. Most checked with credit agencies before investing and were reassured that the Icelandic banks, including the troubled Landsbanki, had high ratings.
Kent County Council has deposited £50million in Icelandic banks and London councils have invested over £200million between them. Smaller district councils could be the worst hit as their investments, even if only a few million, is likely to be a higher proportion of their total budget.
It also emerged this morning that Transport for London and the Metropolitan Police Authority have assets in Icelandic banks which could push the total deposits up to over £1billion.
A spokesman for the Chartered Institute for Public Finance and Accountancy said the cash invested would have been from pension funds, reserves and council tax returns. “If the government says the money is not recoverable then it is going to make a real impact. There would be cuts in services and higher council tax.”
Margaret Eaton, chairman of the LGA said larger councils were not experiencing immediate cash flow problems, but she called on the Chancellor to help smaller councils until he could reassure them that their deposits were secure.
“These would be temporary, short term measures until the Chancellor can reassure councils that their deposits are protected in the same way as personal assets,” said Mrs Eaton. “Allowing councils to defer payment of money collected from business rates would help to raise millions of pounds to help plug any short term cash flow problems.
“Prudent financial management means that councils put their money into a diverse range of banks to make sure that any risk is spread to minimise the impact of problems in the financial markets. Town halls invested in Landsbanki as a reputable bank with a solid credit rating.”
Eric Pickles, shadow Communities Secretary said the Government was dithering in the face of a worsening problem.
“Hour by hour, it is clear that more and more councils have been exposed to the meltdown in Iceland's banks,” he said. “Councils have literally billions on deposit. If they now all panic, pull their money out in the safest option like Government bonds, there will be adverse consequences.
“The withdrawal of a huge amount of the money from the banking system will destabilise it further and harm liquidity. A lower rate of return from investments will also increase pressure on council tax bills in April,” he said.
Shares plunged in a catastrophic final hour of frenzied US trading on Thursday amid growing concerns about General Motors, Morgan Stanley and several big insurance companies.
Stocks, which had opened higher, dived into the close, with the S&P 500 index ending down 7.6 per cent at 909.92, while the Dow Jones Industrial Average lost 7.3 per cent to 8,579.19, closing below 9,000 for the first time since 2003. The S&P 500 is now down 42 per cent from its all-time high a year ago.
The sharp declines came as a near-three-week ban on short-selling was lifted.
Some pointed to the end of the ban to explain the dramatic fall in the share prices of GM and financial firms including Morgan Stanley.
The ban had prevented short selling – the practice of seeking to profit from selling borrowed shares and then buying back shares at lower prices later to return to the lender – on nearly 1,000 companies. It was lifted by the US Securities and Exchange Commission late on Wednesday night.
The brutal day of trading came as the White House said Treasury secretary Hank Paulson was “actively considering” injecting public capital into financial institutions in return for equity or prefered stock. The US scheme would be voluntary – unlike the UK bank bail-out plan, which forces banks to raise additional capital either from the markets or the government.
The US was not planning to make an imminent announcement on the recapitalisation plan, but analysts said it could be forced to do so by market developments.
Meanwhile, fresh doubts over the commitment of the world’s richest nations to work together to tackle the financial crisis emerged ahead of today’s meeting of finance ministers from the Group of Seven industrialised nations as France and the US poured cold water on a British proposal for the G7 to guarantee new bank debt.
The extreme market pressure came in spite of co-ordinated rate cuts across the globe on Wednesday and in Asia yesterday.
There was little sign of an easing in tensions in the money markets as the key three-month dollar London interbank rate rose to 4.75 per cent – nearly 2 percentage points higher since the middle of last month.
Asian shares had earlier staged a modest recovery. In London, the FTSE 100 fell 1.2 per cent, while the FTSE Eurofirst 300 index fell 2 per cent.
The yield on the two-year Treasury note was 2 basis points higher at 1.564 per cent while the yield on the 10-year note rose 14 basis points to 3.776 per cent.
The dollar and euro dropped against the yen as the late plunge in US stock markets sent investors fleeing from yen-funded carry trade bets.
Dominique Strauss-Kahn, head of the International Monetary Fund, added to the gloom when he said that the crisis had turned out worse than even the relatively pessimistic IMF forecasts had predicted and said that co-operative action beyond he G7 was needed to combat it.
Rather than simply adding a few big emerging market countries to the G7, all nations needed to consider what role they could play in combating the crisis, Mr Strauss-Kahn said.
LONDON (Reuters) - A diplomatic row broke out between Iceland and Britain Thursday over how to deal with hundreds of millions of pounds of British deposits trapped in collapsed Icelandic banks.
Prime Minister Gordon Brown said Iceland's failure to guarantee the deposits was "completely unacceptable."
"This is fundamentally a problem of an Icelandic registered company (and) Icelandic registered financial services authority -- they have failed not only the people of Iceland, they have failed the people of Britain," he told the BBC.
His Icelandic counterpart Geir Haarde had earlier expressed anger at Britain's use of anti-terror laws to freeze Icelandic assets in Britain, and said he had made his views clear to Chancellor Alistair Darling in a telephone call.
"That was not very pleasant. I'm afraid that not many governments would have taken that very kindly, to be put in that category and I told the Chancellor that we were not pleased with that...I could not regard us in any way as the people that this act is supposed to apply to -- terrorists," Haarde told a news conference.
Brown remained unrepentant, saying he had been left with no other option.
"I think the public ... will understand that when people's savings and deposits are at risk, we are entitled to take the action that is necessary to seize the assets if we are not going to get any other way of making it clear that people... will find that their savings and deposits are safe," he told Sky television.
"Now we took that action -- I don't apologise for it. I think it is the right thing to do in the circumstances."
British officials have said repeatedly this week that they were having difficulty "getting complete clarity" from Icelandic authorities on how British savers were exposed and whether they would be able to recover their deposits.
It emerged Thursday that 108 British local councils had a total of 799 million pounds on deposit with Icelandic banks.
Most of them will be able to continue to provide services, but the British government said it would help any councils with short-term cash flow problems on a case-by-case basis.
Iceland has taken control of three banks this week: Kaupthing, Landsbanki and Glitnir.
The British government has pledged to protect the deposits of all British retail savers with those banks, but has not extended this guarantee to corporate Icelandic savers.
Asian markets plunge after huge Wall Street losses
By TOMOKO A. HOSAKA Associated Press Writer
(AP:TOKYO) A massive sell-off on Wall Street and an escalating global
equity crisis sent Asian stocks plunging Friday, with Japan's benchmark
Nikkei 225 index tumbling more than 10 percent.
"Selling is unstoppable in New York and Tokyo," said Yutaka Miura, senior
strategist at Shinko Securities Co. Ltd. in Tokyo. "Investors were gripped
Hong Kong's Hang Seng index tumbled more than 8 percent, South
Korea's Kospi shed 7.4 percent, Shanghai's benchmark fell 4.1 percent,
and Singapore's Straits Times index was off 7.0 percent. In Syndey,
Australia's S&P/ASX200 was down 6.8 percent.
Friday's regional declines follow a 7.3 percent plunge in the Dow Jones
industrial average Thursday to close below the 9,000-line for the first time
in five years. Stocks nose-dived after a major credit-rating agency said it
might cut its rating on General Motors Corp. and Ford Motor Co., further
rattling investors already fretting over the impact of tight credit on the
The Dow's 2,271-point tumble over the last seven sessions is its steepest
seven-day point drop ever. Its seven-day percentage decline of 20.9
percent is the largest since the seven-day plunge ending Oct. 26, 1987,
when the Dow lost 23.8 percent. That sell-off included Black Monday, the
Oct. 19, 1987 market crash that saw the Dow fall nearly 23 percent in a
Lucinda Chan, associate director of Macquarie Equities in Sydney, called
the market moves "ghastly."
"It is a very different and very unprecedented climate at the moment,"
she said. "Growth is going to be a major concern in this market and that
is why the Australian market is getting a very hard pinch because we are
a commodity export nation."
Miura in Tokyo said the ongoing meltdown in global financial markets
showed "confusion and uncertainty" among investors worldwide.
Asia's falls come as finance ministers and central bankers from the Group
of Seven industrialized nations prepared to meet later Friday in
_________________ Minds are like parachutes.
They only function when open.
Three cheers for JP Morgan Chase.
Terrific piece of Last-Man-Standing.
Nice work, you leeches.
“I don't wish to spread alarm on the line people but the big issue
confronting the market is I'm afraid the health and sustainability of
Morgan Stanley and Goldman Sachs," Hugh Hendry, Partner and CIO
at Eclectica, told CNBC. "It is unimaginable that they can be allowed to
go, I suspect that they will be nationalized at some point today
or over the weekend," he add.
A government move to prop up an investment bank-turned bank-holding
company, such as Morgan or Goldman is all the more likely given the
growing consensus that says Paulson and Federal Reserve Chairman Ben
Bernanke erred in not rescuing Lehman Brothers three weeks ago, a date
which happens to coincide with the beginning of the market’s deep
Pressure has been mounting on Morgan Stanley for days now, amid
growing speculation Japan's Mitsubishi UFJ will not proceed with plans to
purchase a major stake. Goldman shares, in contrast, have held up
relatively well compared to the broader market.
They did IT is my take on the G-7 The IMF has unloaded a large amount of Gold, others within are doing the same. This shuts off a run for safety amid the burning debris on common stock and other poor mans tools.
I knew they would pull this, I could see it from a mile away. If they are running for cover why was it way down today? Simple. The meeting is full of the largest owners of Gold on the planet so they chip in a little coin from the proceeds, enough to stem the tide for a few days until the short term lending can become active once again. It will happen soon, very soon and it will cause the mother of all short squeezes which will produce a spike. THAT will be the time to look into the mirror and evaluate your choking point because they will test 8,000 again and maybe even 7,600 or so before this thing settles.
Somewhere I can hear Howard Cosell yelling: " DOWN GOES FRAZIER " " DOWN GOES FRAZIER " only he's talking about OIL. It cracked $ 80.00 about a month before I thought it would. That's why they were fighting like hell at around 92 trying to hold it up knowing full well that the floor under 80 is very very much further down the hole.
I've seen this kind of thing before ( like many here have ) only it's different this time around. Someone has a heavy hammer and I'm quite certain he'll show himself very very soon. Just as soon as his wagon is loaded with the fruits of his labor.
LEH's CDS shit was priced or ( FORCE SOLD/AUCTIONED ) today. On par of $1.00 they got 8.6 cents. Now I ask the smart people here? Does this make any freaking sense to any of you? It should if you understand how this BULLSHIT SCAM unfolded from the start. SOMEONE started a RUN on a Bank back in March, then a Broker/investment house a month or two later, this provided the fuel so the wild fire of short selling could take it's toll. It took such a devastating toll simply because SOMEONE was aware of bad loans so BAD that if they could pressure the equity ENOUGH they might force a MARGIN CALL or at a minimum send a serious message. They did, but where they phucked up was in not thinking through the amount of leverage Companies were/are carrying on their books and the impact a widespread PANIC SELLING ENVIRONMENT would have on the Markets.
With everyone needing to raise capital and when the WINDOW is closed, equities get sold to cover the margins. This is what happened and call me what you want but ( IMHO ) that's all that really happened. The credit crisis scare tactic is the glue holding this scam together. The proof is the FACT that GOLD isn't $1,500.00 per 0Z by now.
Someone, a group of a few, or a few entities know to most here is behind this whole thing and they used a few poorly run Companies to sow the seeds to pull it all off. London, New York city, maybe Asia by way of Washington DC is my thought on the whole thing. The G7-8 oh what's that silly 9-11 thing ( LIHOP ) for financial gain. Just imagine all the Gold they dumped at $1,000.00 per Oz in prep for the role of White Knight, not to mention what they off-loaded today.
They'll be back flush with cash to do it all again in another 10 years or so, just when Gold hits sub $400.00 per and there's a " CHICKEN " in every pot, or about the time when all of the people who ran to GOLD need to raise a little cash. They'll be the short older gentlemen in $3,000.00 suits and $500.00 loafers with a smile and a hand out, can't miss em.
A world of Events etched in history that we all are living
What a world we live in.
We can stop this by stop beating each other up first.
We are all here together and are experiencing the same events.
We can transform these events by moving together in unison as a force for love and anti to the destruction they wish us to be.
My contention is we are great and that is the reason why they are so afraid to let us move towards a time when no man is left to apathy and insignificance. No matter what I love you all and I espouse to be free in appreciation of you all.
Ultimately what we are seeing is the politics of fear at it's pinnacle.
They sycophants will loose.
loose or lose... the first is propbably what's happening now, but the latter may be where it ends up.
anyway, may i steal these words? they are poetic.
funny, looking back at YTD on all those Cramer-pumped stocks... MON, POT, MOS, the solars, etc... those were all at their highest around June-July, and now.... tada... THEY ARE GETTING CREAMED!!!!
Shorters looking for high-priced stocks to rape - yes
Investors selling actual shares to get the fuck out - yes
Somebody(ies) is/ are making up for their corporate and private losses here, i only suspect.
Mom and Pop's IRA and 401K - depends if they have control over it and whether their holding investment house bails out
Privatization of Soc Sec would have been so nice, wouldn't it?
Fuck yeah, I'm taking my $35 out of the bank. Just hoping whenever I deposit a check, it'll be there after it clears for me to come rescue it.
Good lord. Dow's another -500 today. Your taxes at work. (Just like all those road-side construction crews drinking coffee and repaving the same stretch of road every September.)
FAT finger in my hurries
Yeah other post is a bit of both
Long term contracts quarterly paid out (most are doled out in a 60 or 90 day period)
Doled out because we are now in a Corporatism like we have never seen before.
Both is true that many corporations have been in the black for years (hundred of millions to billions) and gives credence to this simulated event that we are seeing currently.
The american people as well as most in Europe were placed on the alter of a false Free market of overseas manufacturing interests which was nothing more than exported slavery. Now the POP PLastic slave owners are meant to pay. The psychological destruction of Capitalism which will bring in this G8 global financial system.
BTW: I appreciated Fintans latest audio and must listen again but what it has shown me more than anything is the system and how it never changes. Although we may feel better at some point the same people/families/groups come back and continue their plans.
I see this as nothing more than a well planned orchestrated event done in order to consolidate all aspects of human society and the masses who are lead by their emotions and brainwashing will buy it and explain to me how everything will be better once we all face facts and become a world collectivist society.
I always ask the inevitable question which is;
Who will be the ones in charge of this World Society?
Saying this I will leave this post with beautiful things:
Panic selling prompted a crash in global equities this week, sweeping many stock markets to their steepest ever falls as investors ignored efforts by governments and central banks to restore calm.
European shares had their worst week in history, falling 22 per cent, and Wall Street was on course for its biggest drop.
The FTSE 100 suffered its second biggest weekly fall in percentage terms - down 21 per cent - second only to the crash of October 1987.
Large-scale deleveraging by hedge funds and fears that the crisis originating in the credit markets would push the global economy into a deep recession helped drive stocks lower.
The falls came in spite of a co-ordinated rate cut by six central banks, the unveiling of a bold government rescue plan for UK banks, and a move by the US Federal Reserve to lend directly to borrowers in the commercial paper market.
Equities plummeted with the S&P 500 down 21.9 per cent over the week by mid-day yesterday in a week in which every trading session dragged stocks lower.
Morgan Stanley and Goldman Sachs were among the heaviest fallers on Friday.
Volatility as measured by the Chicago Board Options Exchange Vix index, known as Wall Street's fear gauge, jumped above the 70 mark for the first time.
Howard Wheeldon, senior strategist at BGC Partners, said: "Sadly it is now impossible to call the bottom of this market rout. Irrational fear has gripped and it seems that markets will now trash almost anything that walks. "What started as an asset based crisis is running into the realms of the worst financial crisis the world has ever seen."
The crisis in financial markets is spreading rapidly into the real economy, with the troubled car sector in sharp focus as investors weighed up the potential of a severe recession. Analysts see GM and Ford as a barometer for the manufacturing sector but also for public and political sentiment.
Mr Wheeldon said: "If these companies are now in serious trouble then so are the rest and it says that we are now not just talking recession. The negative message is not helped by more rating agency downgrades."
S&P reiterated its "sell" recommendation on GM as the ratings agency said it believed the downward spiral of the global stock markets would further reduce worldwide vehicles sales, dragging down remaining pockets of strength amid growing consumer fear.
Investors were looking ahead to the meeting of the G7 this weekend for signs that the governments of the leading industrial economies would come up with further co-ordinated measures to tackle the crisis.
Alan Ruskin, strategist at RBS Greenwich, said: "The idea of a bank holiday only makes sense if the G7 needs to buy the time to come up with the specifics. A holiday as a circuit breaker simply to calm the market down with no interim actions would probably do more harm than good."
Many investors are expecting another round of interest rate cuts next week but doubts remain about the effectiveness of intervention.
Mr Wheeldon, said: "The fear is that the ensuing global recession will be as deep as it may well be protracted. We well know that no amount of political therapy is going to sort out the vast number of problems we face unless the financial markets - banks - can be persuaded to interact. This must be the first priority of governments."
Bond volatility was also higher amid continued stress in money market rates and a historic dislocation in the US 30-year Treasury and swap rate sector.
Yields on government bonds rose, with the 10-year German Bund up 9 basis points on the week at 4.01 per cent.
US Treasury yields rose across all maturities early in the week and the yield on the 30-year bond briefly traded above the 30-year swap rate. By the end of the week the yield on the 2 year Treasury note was 4bp lower at 1.545 per cent while the yield on the 10 year was 26bp higher at 3.863 per cent.
Three-month dollar Libor, the key lending benchmark rate climbed to 4.82 per cent, the highest level in nearly 10 months, from 4.75 per cent a day earlier. The jump overshadowed a sharp drop in the overnight rate.
In currencies, the Japanese yen and Swiss franc were the chief beneficiaries of strong safe-haven flows, pushing the dollar below the psychological 100 level against the yen to Y98.87.
The dollar also dropped against the Swiss franc, sliding 1.1 per cent to SFr1.1152. The dollar gained 0.4 per cent against the euro, to $1.3529, and was up 0.7 per cent against the pound at $1.6963.
Commodities prices also fell. Nymex November West Texas Intermediate oil fell more than $5 to a low of $81.13 a barrel on Friday, the lowest level in more than a year, ignoring the decision by Opec to call an emergency meeting to discuss a production cut.
Gold rose 6.6 per cent on the week, amid signs that investors were paying record prices for popular bullion coins such as South Africa's Krugerrand.
G7 agrees global rescue plan
Five-point plan calls for 'urgent, immediate action'
US follows UK in move to buy shares in ailing banks
Government may be forced to take 50% stake in RBS
Larry Elliott, Heather Stewart and Andrew Clark
Saturday October 11 2008
A crisis meeting of finance ministers and central bank governors from the west's seven leading economies last night agreed to take "urgent and exceptional action" to bail out banks amid fears that a fresh wave of panic had pushed the global financial system to the brink of collapse.
The G7 agreed to take "all necessary steps" including adopting Britain's plans to part-nationalise banks in order to kick- start lending in frozen credit markets after Wall Street suffered the worst week in its history. With shares, oil and sterling all plunging at the end of a dramatic week, the G7 pledged to take decisive action and use all tools available to prevent more big western banks going bust.
The G7 issued a five-point plan in a short communique after meeting in Washington yesterday. It pledged to "ensure that our banks and other financial intermediaries, as needed, can raise capital from public as well as private sources in sufficient amounts to re-establish confidence and permit them to continue lending to households and businesses".
Facing the most severe stockmarket crash since 1929, Henry Paulson, the US treasury secretary, said last night the US would use some of the $700bn, earmarked by Congress to buy up Wall Street's "toxic waste", to buy stakes in US banks.
He said the government programme to purchase stock in private US financial firms will be open to a broad array of institutions, including banks, in an effort to help them raise money.
Paulson said the G7 finance ministers "finalised an aggressive action plan to address the turmoil in the global financial markets", and that they were focused on the need to stabilise the financial markets. He said it had never been more important to find "collective solutions".
The G7 was galvanised into action yesterday by a nerve-shredding month on the financial markets. Yesterday alone, the FTSE closed down 8.9%, slipping below the 4,000 mark for the first time in five years. It fell 381.74 points, to 3,932.06, a 21% fall over the week, wiping £250bn off the value of Britain's companies in the City's worst week since the crash of 1987.
Across Europe, every major market saw at least a fifth wiped off its value during the week. The Dow Jones industrial average fell more than 700 points at the opening bell, but later rallied to finish 128 points down on 8,451. The Dow has fallen by 18.1% this week.
Shares in UK banks RBS and HBOS were among the worst hit, with RBS falling 25% and HBOS 19%. The government may be forced to take a stake of up to 50% in RBS after its market capitalisation was reduced to £12bn last night.
With little sign that country-by-country plans have helped to kick-start lending, the G7 believes immediate action is vital to avoid a major slump.
The past four weeks have seen the biggest cut in growth forecasts in living memory, and the IMF has warned that the world economy is "on the cusp" of recession.
The chancellor, Alistair Darling, said: "If international cooperation is to mean anything, it means governments have to move on from simply agreeing a general approach, and doing something to resolve the problems we are facing today."
The chancellor hinted that the government would exact a price from UK bank chiefs deemed at fault for creating the crisis. He said taxpayers "won't accept people taking large risks that have had hugely damaging effects, not just on individual institutions, but on the wider economic system. Agreements will be negotiated."
Foreign exchange markets were also hit by panic. Sterling at one point slumped to $1.68, a five-year low against the dollar. Meanwhile, Gordon Brown dispatched a [sic] Treasury officials and lawyers to Reykjavik in an effort to reclaim some of the £1bn from British savers under threat from the collapse of Icelandic banks.
More details of the Treasury's rescue plan were revealed yesterday, with the recognition that if it fails, wholesale nationalisation of Britain's banking system is the only alternative.
The government will buy shares in banks at market prices, and place them in an arms-length fund. When the immediate crisis is over, the Treasury hopes to offload the shares to investors.
The five-point plan
Pledge to save key banks from collapse
Action to free-up credit and money markets by providing ample amounts of liquidity from central banks
Support for the part-nationalisation of banks and other institutions by the taxpayer purchase of shares
Stronger deposit protection schemes to reassure savers their money is safe
Force banks to disclose the true state of their losses
Last edited by atm on Sat Oct 11, 2008 1:08 am; edited 2 times in total
Lehman Brothers, the bust investment bank, triggered one of the biggest corporate debt defaults in history yesterday as it emerged that the US Federal Reserve is harbouring grave concerns about whether Washington’s $700 billion (£413 billion) bailout fund will avert a financial meltdown.
An auction of Lehman’s bonds yesterday determined that the bank’s borrowings were worth only 8.625 cents on the dollar. The valuation leaves the insurers of the debt a bill of about $365 billion. It is not clear whether the insurers, which are required to settle the bill in the next two weeks, will be able to pay – a development that could further undermine increasingly stressed capital markets.
The $365 billion default came as stock markets around the world suffered one of their worst days since the crash of 11 years ago. Panicking about the prospect of global recession, the FTSE 100 index of leading shares in London crashed within seconds of opening, losing 8.9 per cent of its value, its worse fall since October 1987.
The index recovered to close down 225 points, marking a 5 per cent decline, but more than a fifth was wiped off London shares this week alone. Issues in New York fluctuated wildly as the Dow Jones industrial average slumped by 312.14 points at lunchtime before closing at 8,451.19, down 128.00. Both markets had been scared by losses in Tokyo, where the Nikkei lost 10 per cent of its value.
Amid the mayhem across the world’s stock markets, senior Fed officials now doubt whether Washington’s bailout fund will work unless it is launched in some form in the next two weeks.
The Times has learnt that central bankers in America are anxious that if the Treasury is not able to accelerate the speed at which it launches its rescue scheme, it will have no effect. At the moment, the Treasury, which controls the fund, is working to a five-week schedule to get the rescue package up and running. Under present plans, the bailout fund is not expected to buy its first distressed mortgage-backed bonds until after the US elections on November 4.
It is understood that the Fed believes that this will be too late to help the banks that are suffocating under market conditions. Credit markets have frozen up and many banks have been cut off from being able to borrow from one another.
Mr Paulson’s bailout fund is designed to buy up distressed bonds held by troubled banks. This week the former chairman of Goldman Sachs appointed Neel Kashkari, one of his protégés at the Wall Street bank, to run the fund. Mr Kashkari had already been working closely with Mr Paulson during the negotiations over the passage of the “troubled asset relief programme” on Capitol Hill.
Mr Paulson is also considering a range of other forms of financial assistance, which include the Treasury using taxpayer funds to buy stakes in Wall Street banks. Under such a plan, the cash received in return for the shareholding would provide much-needed capital for the banks.
Lehman’s corporate debt default promises to increase the stress across global credit markets. Sean Egan, of the Egan-Jones ratings agency, said: “This is a killer. Lehman said a month ago that it was in terrific shape and now you can’t even get ten cents on the dollar for its debt.
“It underscores the deep structural flaws in our financial system, knocks confidence in the financial markets and raises the cost of capital. It also demonstrates that we are experiencing not only a crisis of confidence, but a crisis.”
About 350 banks and investors are thought to have insured an estimated $400 billion of Lehman’s debt through complex derivatives, known as credit default swaps. These include Pacific Investment Management, the manager of the world’s largest bond fund, Citadel, the US hedge fund, and American International Group, the insurer that the US Government recently bailed out with two loans totalling about $123 billion.
The Times has learnt that the US Treasury has been overwhelmed with requests from executives of other beleaguered sectors who are seeking a similar bailout scheme for themselves.
It is thought that representatives from the US car and airline industries have approached the Government for assistance. It is understood that Mr Paulson does not believe that it is his job to help them. Rather, he is intent on addressing the root problems of the financial crisis.
Financial crisis: World leaders pledge to part-nationalise swathes of global banking
World leaders have pledged to part-nationalise swathes of the global banking system as part of a drastic international plan to halt the panic gripping financial markets and prevent the crisis from descending into a global depression.
By Edmund Conway, Economics Editor, in Washington
Last Updated: 12:25PM BST 11 Oct 2008
Finance ministers from the Group of Seven leading world economies, including the UK and US, said they stood ready to pump public money into banks in order to prevent them from collapse.
The agreement came as Chancellor Alistair Darling admitted that the UK was facing "turbulence the like of which we have never seen" and after markets ended their worst week in history, with shares having fallen by more than a fifth on all leading stock exchanges.
The G7 presented a five-point "Plan of Action" to arrest the turmoil, including, most significantly a promise to "ensure that our banks…can raise capital from public and well as private sources, in sufficient amounts to re-establish confidence and permit them to continue lending to households and businesses."
It leaves the G7 – which also includes Japan, France, Italy and Canada – open to start buying bank shares with taxpayers' cash.
US Treasury Sectretary Hank Paulson said he was preparing to use the American $700bn bail-out scheme to fund buying troubled banks' shares. It mirrors Gordon Brown's £50 billion bail-out of Britain's struggling institutions unveiled earlier this week.
With investors gripped by panic, the FTSE 100 has fallen by 21 per cent this week, and yesterday alone suffered a drop of 8.9 per cent – the third biggest in history.
Despite assurances from President George W Bush, shares in Wall Street fell for an eighth successive day on Friday, while the pound and the euro slumped against other currencies.
The agreement produced last night by finance ministers in Washington is thought to represent a last-ditch attempt for governments to prevent the financial crisis from worsening yet further next week. Some experts fear that unless it succeeds in boosting confidence the financial system may collapse entirely, threatening a worse economic slump than was experienced in the 1930s.
The G7 statement, which was among the most eagerly awaited in recent history, said: "[We agree] today that the current situation calls for urgent and exceptional action."
Mr Paulson described the G7 statement as "an aggressive action plan to address the turmoil in global financial markets and the stresses on our financial institutions."
Among the five pledges was a promise to protect savers' deposits when banks collapse.
It came after Mr Darling and Bank of England Governor Mervyn King pledged to do everything in their power to prevent economic catastrophe. On a frenzied day in financial centres across the world, Mr Darling urged his fellow ministers to "step up to the mark and do something"
Fears will remain about whether the plan is enough to arrest the decline in shares, since the UK plan did not prevent further falls in equities. However, the plan is as far-ranging and dramatic as many, including Mr Darling, had hoped.
Around $4,600 billion has been wiped off the value of shares worldwide this week – more than one and a half times the total amount of cash generated by the UK economy last year.
Experts said yesterday that confidence was unlikely to return to markets until they were convinced that all major economies would take similar forthright steps to rescue the global banking systems.
On a frenzied day in financial exchanges throughout the world:
- The FTSE 100 dropped beneath the talismanic 4,000 mark for the first time since 2003, dropping 381.74 points to 3932.06. Money markets remained frozen.
- The pound dropped to its weakest level in five years, slumping below $1.70 against the dollar. By last night it was down almost a cent and a half to $1.69485.
- Oil prices dropped beneath the $80 a barrel mark for the first time in a year.
- President George W Bush pledged to end the vicious cycle of "uncertainty and fear" but offered no new remedies for the problem. Presidential candidate Barack Obama urged G7 ministers to do something to end the turmoil.
- The Icelandic Prime Minister admitted domestic customers will get priority over British savers as the country's banks are wound up. It also emerged that the International Monetary Fund has sent emissaries to Iceland, and may arrange a bail- out package within days – the first IMF rescue of a major economy since Britain in the 1970s.
As he went into the G7 meeting, held alongside the annual IMF meetings in the US capital this weekend, Mr Darling said the world stood on a dangerous tipping point.
"We like everybody else have been affected by turbulence the like of which we have never seen," he said. "We need to strengthen the financial system," he said. "If international co-operation is to mean anything it means governments need to move on from talking about a general approach and actually doing something to resolve the problems that we face."
With the financial turmoil worsening by the day, fears are growing for the health of the wider economy. Most economists now believe the UK is already in recession, and the International Monetary Fund this week slashed its forecasts for British economic growth by more than any other advanced economy. With businesses unable to get finance, there are now fears the UK could suffer a depression that lasts not for months but for years, with rising unemployment and falling profits.
Mr King said: "Central banks will work together as we demonstrated this week, to ensure sufficient short term liquidity is provided to stabilise banking systems. But it is also vital that governments work together to ensure their banking systems are recapitalised to enable them to lend to finance spending in the real economy."
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