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Fintan
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PostPosted: Mon Sep 15, 2008 11:54 am    Post subject: Audio: 9/11 & Globalist Crash-Con-omics Reply with quote

Quote:

The Next Level Show - 30th September, 2008

9/11 & Globalist CrashConomics

The carefully staged timing of the inevitable implosion of
the US financial markets has now hit a rock of public resistance.
Fintan Dunne details how these planned events are inextricably
linked to 9/11 and the Globalist New Economic Order; and shows
how we got here and where we are soon headed.


LISTEN:
Broadband Mp3 Audio
http://BreakForNews.com/audio/BeautifulTruth080930a.mp3
Click to Play or Right-Click to 'Save As' and Download.

Dialup Mp3 Audio
http://BreakForNews.com/audio/BeautifulTruth080930.mp3
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Quote:


"The tectonic plates beneath the world financial
system are shifting, and there is going to be

a new financial world order that will be born of this."

- Peter Kenny, managing director at Knight Capital Group Inc

http://www.bloomberg.com/apps/news?pid=20601087&sid=abVpg8xJDMWk&refer=home


PREVIOUS ECONOMIC
ANALYSIS AUDIO:


Quote:

The Next Level Show - 19th September, 2008

Economic Icebergs & Opportunity

US markets are rallying from yet another staged 'crisis' on the way
to impact with the economic iceberg -the real one- which lies ahead.
This particular crisis marks the formal first move to Third World economic
status and a socialist command economy. And yet, despite this, we are all
also on the cusp of opportunity. Fintan Dunne analyses the Meltdown.


LISTEN:
Broadband Mp3 Audio
http://BreakForNews.com/audio/BeautifulTruth080919a.mp3
Click to Play or Right-Click to 'Save As' and Download.

Dialup Mp3 Audio
http://BreakForNews.com/audio/BeautifulTruth080919.mp3
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Quote:
REFERENCES

Opportunities in the Impending Perfect Storm
http://news.goldseek.com/GoldSeek/1220634300.php

Surviving The Credit Chaos
http://www.gold-eagle.com/editorials_08/kasun091608.html

Is the Party Over?
http://www.greenfaucet.com/the-market/is-the-party-over

Extraordinary Measures Today, a Financial Funeral Tomorrow
http://www.greenfaucet.com/the-market/extraordinary-measures-today-a-financial-funeral-tomorrow/94888

Stop Trading!: Financial Terrorism?
http://www.cnbc.com/id/26778065

Traders: Washington Has Awakened
http://www.cnbc.com/id/26778945

Middle classes face ruin as Argentina's crisis widens
http://www.guardian.co.uk/world/2001/dec/23/argentina.sophiearie

A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075
http://www.cbo.gov/doc.cfm?index=3521&type=0


Quote:
The Worst Is Yet to Come

BY CHRIS PUPLAVA

Last week I took a look at why consumers were so depressed. In short,
my conclusion was that consumers were finally coming to terms with their
balance sheets and this wakeup call: that you can’t borrow your way
indefinitely to maintain ones standard of living. Consumers will be forced
to save and consume less as the liquidity trough of cheap credit has been
removed. As Warren Buffet said, “Only when the tide goes out do you
discover who’s been swimming naked.” .......



The banks are now paying for their complete lapse in lending standards
as financial losses continue to mount. Total commercial bank delinquent
loans and leases have surpassed levels seen in the prior recession.
Moreover, the rate of growth in noncurrent loans and leases is one for the
record books as current deterioration in bank loans surpasses the rates
seen in the prior two recessions.



http://www.financialsense.com/Market/cpuplava/2008/0827.html


Quote:
Ex-Finance Ministers Offer U.S. Economic Advice

by David Kestenbaum

Morning Edition, September 15, 2008 · When the U.S. Treasury stepped in to save Fannie Mae and Freddie Mac this month, the public got a reminder of just how interconnected the economies of the world have become. What began as a problem in the U.S. mortgage market, with people borrowing too much to buy houses here, ended up threatening to drag down the entire global economy.

With the news of the Fannie and Freddie bailout still unfolding, former finance ministers from around the world met last week to discuss global economic stability. Some of them had a polite suggestion for the U.S., namely that a little international advice might have helped stave off the crisis.

The ministers met at the University of Virginia, beneath the grand dome where Thomas Jefferson once kept his library. They were cordial, but also frank. Maybe the U.S. should get a financial checkup, they suggested, from the International Monetary Fund.

"Now I think the time has come," said Yashwant Sinha, former finance minister of India. "After the crisis here ... the U.S. should accept some monitoring by the IMF." Sinha thinks an IMF review might have sounded an additional warning about America's still-unfolding mortgage crisis.

It's worth noting that the IMF is the world agency that countries turn to when they're in serious trouble, as Argentina has done during its recent flirtation with the brink. The IMF functions as a kind of global loan shark.

http://www.npr.org/templates/story/story.php?storyId=94617079


Quote:
Hey U.S., welcome to the Third World!

It's been a quick slide from economic superpower to economic basket case.

Rosa Brooks - September 18, 2008

Dear United States, Welcome to the Third World!

It's not every day that a superpower makes a bid to transform itself into
a Third World nation, and we here at the World Bank and the International
Monetary Fund
want to be among the first to welcome you to the community
of states in desperate need of international economic assistance.


As you spiral into a catastrophic financial meltdown, we are delighted to
respond to your Treasury Department's request that we undertake a joint
stability assessment of your financial sector. In these turbulent times, we
can provide services ranging from subsidized loans to expert advisors
willing to perform an emergency overhaul of your entire government.

As you know, some outside intervention in your economy is overdue. Last
week -- even before Wall Street's latest collapse -- 13 former finance
ministers convened at the University of Virginia and agreed that you must
fix your "broken financial system." Australia's Peter Costello noted that
lately you've been "exporting instability" in world markets, and Yashwant
Sinha, former finance minister of India, concluded, "The time has come.
The U.S. should accept some monitoring by the IMF
."

We hope you won't feel embarrassed as we assess the stability of your
economy and suggest needed changes. Remember, many other countries
have been in your shoes. We've bailed out the economies of Argentina,
Brazil, Indonesia and South Korea. But whether our work is in Sudan,
Bangladesh or now the United States, our experts are committed to
intervening in national economies with care and sensitivity.

We thus want to acknowledge the progress you have made in your
evolution from economic superpower to economic basket case. Normally,
such a process might take 100 years or more. With your oscillation
between free-market extremism and nationalization of private companies,
however, you have successfully achieved, in a few short years, many of
the key hallmarks of Third World economies
.

Your policies of irresponsible government deregulation in critical sectors
allowed you to rapidly develop an energy crisis, a housing crisis, a credit
crisis and a financial market crisis, all at once
, and accompanied (and
partly caused) by impressive levels of corruption and speculation.
Meanwhile, those of your political leaders charged with oversight were
either napping or in bed with corporate lobbyists.

Take John McCain, your Republican presidential nominee, whose senior
staff includes half a dozen prominent former lobbyists. As he recently put
it, "I was chairman of the [Senate] Commerce Committee that oversights
every part of the economy." No question about it: Your leaders' failure to
notice the damage done by irresponsible deregulation was indeed an
oversight of epic proportions.

Now you are facing the consequences. Income inequality has increased,
as the rich have gotten windfalls while the middle class has seen incomes
stagnate. Fewer and fewer of your citizens have access to affordable
housing, healthcare or security in retirement. Even life expectancy has
dropped. And when your economic woes went from chronic to acute, you
responded -- like so many Third World states have -- with an extensive
program of nationalizing private companies and assets. Your mortgage
giants Fannie Mae and Freddie Mac are now state owned and controlled,
and this week your reinsurance giant AIG was effectively nationalized,
with the Federal Reserve Board seizing an 80% equity stake in the flailing
company.

Some might deride this as socialism.
But desperate times call for desperate measures.


Admittedly, your transition to Third World status is far from over, and it
won't be painless.
At first, for instance, you may find it hard to get used
to the shantytowns that will replace the exurban sprawl of McMansions
that helped fuel the real estate speculation bubble. But in time, such
shantytowns will simply become part of the landscape. Similarly, as
unemployment rates continue to rise, you will initially struggle to find a
use for the expanding pool of angry, jobless young men. But you will
gradually realize that you can recruit them to fight in a ceaseless round
of armed conflicts, a solution that has been utilized by many other Third
World states before you. Indeed, with your wars in Iraq and Afghanistan,
you are off to an excellent start.

Perhaps this letter comes as a surprise to you, and you feel you're not
fully ready to join the Third World. Don't let this feeling concern you.
Though you may never have realized it, you've been preparing for this
moment for years.


http://www.latimes.com/news/opinion/la-oe-brooks18-2008sep18,0,6908905.column

READ COMMENTS ON THIS ARTICLE:
http://www.latimes.com/news/opinion/la-oew-rb18-2008sep18,0,7265214.graffitiboard



Quote:
CONTINUING FROM RELATED TOPIC:
Audio: Bear Stearns & Dollar Death
http://breakfornews.com/forum/viewtopic.php?t=4129


Gosh! How unexpected. NOT.
I mean, sheep-shearing is a predictable
seasonal event, ain't it? Go figger.

Quote:
"Anybody who thinks the housing crisis
is over is on some kind of illegal drug,"


- W. Howard Morris, chief investment officer for Prairie & Tireman
http://www.freep.com/apps/pbcs.dll/article?AID=/20080915/COL07/80915046

Housing crisis? This has nothing to do with housing.
Did the money to inflate housing came from space?

Quote:
I Hate Being Right All The Time...

Commentary By Number Six
Watching the Watchers

Let us begin as follows, let's go back a few pieces to this one I wrote,
which suggested a major bank was going to implode.


I hate being right....!

By now, it's all over the web: Lehman just went nipples skyward:

Quote:
In the biggest reshaping of the financial industry since the Great
Depression, two of Wall Street's most storied firms, Merrill Lynch & Co.
and Lehman Brothers Holdings Inc., headed toward extinction.
Link

New York-based Lehman, founded 158 years ago, said early today that it
filed for Chapter 11 bankruptcy protection after failing to find a buyer.
Merrill Lynch, 94 years old and also based in New York, agreed to sell
itself to Bank of America Corp. for $50 billion in an emergency deal
hashed out yesterday.

Oh, just a few bucks in the hole...some $600 BILLION of them. And there
is an error here: Lehman rode out the Great Depression.

But, not this one they ain't.


And didn't someone, not long ago, say that this was unforeseen, that
"we've seen the worst of this". Duh-huh. Like didn't the techs see the
most of the water seconds after the Titanic smacked the iceberg?

What's causing all of this?

Quote:
The engines that powered record growth in the financial industry over the
last decade -- cheap credit and surging property values -- have been
thrust into reverse. Companies that once thrived on making real estate
loans and holding assets bought with borrowed money are now under
siege, giving the upper hand to those less reliant on leverage and holding
the fewest assets tied to property.

Here's what happened, WTW fans, it's pretty darned simple:

See, years ago, we elected a dumbass wooden actor to be the Prez. He
and his cronies get into power. They decide it's time to hatch a ticking
time bomb called...Reaganomics, which, in simpler terms means...a
license to fuck shit up.

Companies, banks, corporations all begged: "We can't make money with
all these pesky regulations in our way!" So, from Raygun to Bush to Bill to
Bozo, we've deregulated and deregulated. We now have criminals running
the entire financial empire.


The same goddamned criminals who begged for redoing personal
bankruptcy laws, so they could clean up. So funny, as this law now forces
more and more to just let their homes go, and the banks end up
with...yeppers...not a damned dime!

Ah, yes, see kids, this is what happens when you allow the corporations
to run things:
Their greed overloads their common sense. We feel sorry
for those Lehman workers who now, like so many, must go find other
employment, but it's impossible to feel sorry for Lehman, for any of these
criminal enterprises that begged, borrowed and stole their way...into total
annihilation.

Nobody told these banks to sell El Cheapo loans to those who really
cannot afford; nobody told them to hand out credit cards like free passes
at a Britany Spears show; and nobody told them that the way to play with
fire...is to stand way back when you do.

So, how's that Raygunomics working out, you stupid conservatives?

http://watchingthewatchers.org/news/1452/i-hate-being-right-all-time


But hey, don't panic.
Let's be optimistic.
Let's party!

Hint: A CounterParty........

Quote:
Don’t panic: The rot is being cleared from the system

Levi Folk, Financial Post - Monday, September 15, 2008

Shrinkage of the U.S. financial sector is well underway -- and is not
clearly over -- with the announcement Monday morning that 158-year-old
investment bank Lehman Brothers underwent bankruptcy filing and that
competitor firm Merrill Lynch would be sold to Bank of America for US$50-
billion in an all-stock deal.
After struggling for survival over the past few
months, Lehman Brothers failed to find a white knight on the weekend --
someone brave enough to assume the risks of its highly dubious
mortgage assets, estimated as high as US$80-billion.

Barclays PLC was one of those of potential suitors that threw in the towel
on the weekend after failing to secure any sort of federal guarantee. The
U.S. government refused to provide guarantees to any potential buyers
for any of Lehman's liabilities after having stepped up to the plate to bail
out mortgage lenders Fannie Mae and Freddie Mac earlier this month and
rival investment bank Bear Stearns back in March.

So Lehman's assets will have to be liquidated through bankruptcy. Unlike
Bear Stearns, Lehman has had the benefit of accessing funds directly
from the Fed through its discount window, which partly explains why the
government is refusing to use its own balance sheet to save Lehman. This
process will place additional stress on the U.S. financial system for two
reasons.

Firstly, the unwinding of Lehman's mortgage securities will likely happen
at knockdown prices that will add to the losses at other investment banks
who are holding similar securities on their books. As price discovery
continues to happen in a highly fraught and pessimistic market
environment, expect write downs to continue to mount.

Financial institutions are struggling from a shortage of capital as equity
prices continue to fall and assets continue to be written down. They are
desperate to raise capital
, as the Lehman Brothers case attests to, and
they are being forced to shrink their balance sheets as a result.

Secondly, the failure of Lehman Brothers creates issues of counterparty
failure on credit default swaps (CDS)
written on Lehman Brothers bonds.
A CDS is a credit derivative that guarantees the buyer on the underlying
bond in the case of default. There are an estimated US$60-trillion in credit
derivatives outstanding and it is unclear of the value of contracts
guaranteeing Lehman Bonds or the value of credit securities on Lehman's
books.

Lehman is ranked the seventh biggest counterparty in credit derivates by
Fitch Ratings according to Reuters. So as the various derivatives are
unwound over the coming weeks, we could see knock-on effects on other
investment banks or hedge funds that have concentrated exposure to
Lehman Brothers.

The hard line taken by U.S. Treasury secretary Hank Paulson is ultimately
a positive for the markets
in the long run because it is removing the
moral hazard that it created by bailing out Bear Stearns and forcing the
weakest players out of the market. Rather than lay motionless on federal
life support, like so many Japanese banks did in the 90s, we are reaching
a moment of pain and capitulation that will allow the US financial system
to recover more quickly.

The decision by Merrill Lynch to be sold is an obvious recognition of the
risks that come from remaining undercapitalized in a market that is
undergoing a brutal deleveraging process. The reality is that many
financial institutions remain undercapitalized and the possibility of more
failures remains real. U.S. insurance giant AIG is scrambling to raise
capital after suffering losses and is seeing its share price decimated in
recent days.

We have to turn back to the housing market to look for a stock market
bottom, and we are definitely getting closer to that point. We may get a
relief rally over the next month as the market recognizes that the rot is
being cleared from the system, but this deleveraging process is unlikely
to end until we see a bottom in the housing market.

The bailout of Fannie Mae and Freddie Mac by the US Treasury has
brought down US mortgage rates significantly thus making housing more
affordable. But until we see significant signs of housing recovery, more
painful failures may be announced and more weakness in the stock
market is in store.

http://www.financialpost.com/news/story.html?id=792225

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Last edited by Fintan on Sun Nov 16, 2008 11:15 pm; edited 18 times in total
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duane



Joined: 07 Mar 2007
Posts: 554
Location: western pennsylvania

PostPosted: Mon Sep 15, 2008 1:09 pm    Post subject: Reply with quote

Fintan,

no worry, we just need to hold on until the election Very Happy

http://kdka.com/politics/palin.colorado.event.2.817834.html

Palin Takes Her Wall Street Message To Colorado
GOLDEN, Colo. (CBS) ― Republican vice presidential candidate Sarah Palin told Colorado Monday morning she wants to go to Washington to "shake things up." Palin started her remarks talking about the new unease on Wall Street caused by the bankruptcy at Lehman Brothers.

Palin called the Lehman bankruptcy a crisis and says the nation's financial regulatory system needs a "complete overhaul." She says financial reforms would be a top priority for her and Republican nominee John McCain.



wall street needs "shaken up" fur shure. hurricane ike, right idea, wrong place

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Fintan
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Joined: 18 Jan 2006
Posts: 8188

PostPosted: Mon Sep 15, 2008 1:14 pm    Post subject: Reply with quote

Ok, for what it's worth,
Here's Don Harrold's take:


Quote:
The Storm is Upon Us:
Lehman, Merrill Lynch, Bank of America


http://www.youtube.com/watch?v=ZM2QXmeRGcA

He doesn't know who to blame?!

Let me just say for now, that this financial crisis and
the events of 9/11 are deeply, inextricably linked.

Speaking of who to blame,
here's a good laugh: Laughing Laughing

Quote:
J.P. Morgan’s Pep Talk and ‘New Rules of the Road’ on Risk

WSJ - September 15, 2008, 10:15 am - by Robin Sidel

J.P. Morgan Chase moved quickly to shore up confidence among its
troops after the tumultuous weekend, ordering bankers to pick up their
phones and soothe nervous customers.


“Our primary objective is to assure clients that J.P. Morgan is still
operating from a position of strength, that we are here to help them and
that recent events should not prompt them to take actions that may not
be in their best interests longer,” according to an internal memo sent by
investment bank co-heads Steve Black and Bill Winters shortly after
midnight.....

The memo, reviewed by The Wall Street Journal, said J.P. Morgan was
establishing new “rules of the road” regarding risk and trading decisions.
The bank set up a “risk management command center” led by John
Hogan
, chief risk officer of the investment bank, and Brian Sankey, who
is Mr. Hogan’s deputy and global head of credit risk. Further details
weren’t available.

The investment bank chiefs also nudged bankers to respond quickly to
clients–and each other.

“We all should err on the side of over communicating over the next
several weeks, and we ask that you return calls from your colleagues as
quickly as possible to facilitate decision making,” the memo said.

http://blogs.wsj.com/deals/2008/09/15/jp-morgans-pep-talk-and-new-rules-of-the-road-on-risk/

"Operating from a position of strength", Eh?

That's putting it mildly.

Remind me. Who bought Bear Stearns....?

Oh yeah, it was JPMorgan Chase & Co.

Luckily, JPM are operating with very deep pockets
and can draw on a solid line of infinite cedit here.

From YOU.

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Fintan
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PostPosted: Mon Sep 15, 2008 4:54 pm    Post subject: Reply with quote

Here's the core cartel at work:

Quote:
Small banks, it seems, have precious few friends these days; even the
big banks worry about surviving alone, and so they're pooling their
resources. $7 billion each, to be precise, from Bank of America,
Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs,
JP Morgan Chase, Merrill Lynch, Morgan Stanley, and UBS
-- which
makes $70 billion in total. Any bank on the list can borrow up to a third
of that sum ($23 billion), using anything it has lying around as collateral:
real estate, paperclips, the Gerhard Richter in the lobby.

Who's not on the list? There aren't any French or Dutch or Spanish or
Italian or Japanese banks, for starters, and there's only Barclays from
the UK
: no HSBC, no RBS. But any big American bank with a significant
investment-banking operation seems to be there. And Merrill Lynch is
on the list twice, if you include Bank of America. Does that mean the
merged operation will have put up $14 billion for the right to borrow $23
billion? My guess is that once the merger closes, Merrill will drop out of
the consortium.

If you're looking for silver linings, it's clearly the investment banks which
are most worried right now, not the big commercial banks in Europe or
even in the US (Wells Fargo). When Wall Street's alpha males stop
competing and start cooperating like this, you know you're living in
historic times.

http://seekingalpha.com/article/95525-wall-street-huddles-for-safety

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Wu Li



Joined: 20 Feb 2007
Posts: 573

PostPosted: Mon Sep 15, 2008 6:49 pm    Post subject: Reply with quote

The people will suffer and this is the saddest outcome of all of this.
It seems to me that most I have dealt with in the last week or so are in complete denial. As I state things like "things are really bad with this economy" or "be grateful to still have a job" I get a zombie response every time. every time!

My own portfolio is down about 45%. My portfolio is a joke since I have cashed out most of it two years ago. I kept a few stocks in my own denial but what is left I will choose to go down with the ship. I guess I am keeping a few that I feel may still have a leg to stand on.

Either way as long as the MSM keep selling the HOPE for Change from both parties people will just watch and eat it all up as if it was a soap opera.

Is it all really that bad? I thought that maybe I was someone who was a bit too critical. I see now as yours and my own predictions somewhat come to pass that sometimes the truth behind everything is just that simple.
My hope is that in the coming times more and more will wake up to the fact that their are very cynical people out there who do not believe a free Human race is a good thing.

Well my fellow Human Beings we are at the cusp
and just think Idea we still have the US election to look forward.

4th largest Bank in US history GONE!!
BAC buy MERRIL
MORE to come no doubt in my mind which will be much less publicized.
I have a few I think we will see but I rather not!

I hate to sound dramatic but WOW!
This is complete insanity.
and after all of this once again history repeats itself.

Are people that stupid or maybe is humanity just that trusting.
trying to keep a bit optimistic .
I am so frustrated and at a loss.

Neutral

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atm



Joined: 16 Apr 2006
Posts: 3862

PostPosted: Tue Sep 16, 2008 1:41 am    Post subject: Reply with quote

What a load of moaning minnies you are. Get real:

Quote:
George Bush said: "I know Americans are concerned about the adjustments taking place in our financial markets. At the White House and throughout my administration, we're focused on them. We're working to reduce disruptions and minimise the impact of these financial market developments on the broader economy."

http://www.guardian.co.uk/business/2008/sep/16/marketturmoil.lehmanbrothers



Seriously though:


Quote:


Wall Street's bloody Sunday


The crisis gripping the US financial markets shows no signs of ending after an unprecedented weekend of drama


Richard Adams
guardian.co.uk,
Monday September 15 2008 07:36 BST

http://www.guardian.co.uk/commentisfree/cifamerica/2008/sep/15/useconomy.creditcrunch

Has Wall Street ever seen a weekend like the one it has just been through? Perhaps, in the depths of thegreat depression - but nothing in recent memory, not even the collapse of the hedge fund LTCM 10 years ago, comes close to the drama and crisis that the US financial system is going through.

In case you haven't been paying attention, here's what's happening. Lehman Brothers, one of the largest and oldest US investment banks, is going bust, barring an unlikely last-minute government bailout. Merrill Lynch, for years one of the titans of Wall Street, hocked itself in a firesale to a rival, Bank of America. And AIG, one of the world's largest insurance firms, is begging for a $40bn emergency loan from the US government to stave off its own destruction. In the words of the Wall Street Journal: "The American financial system was shaken to its core".

And that was just on Sunday.

It doesn't pay to take the weekend off on Wall Street these days – it was just last Sunday that the US Treasury confirmed it was taking control of Fannie Mae and Freddie Mac – the vast American mortgage agencies – at a cost to the taxpayer estimated to eventually range between zero dollars and a few hundred billion.

And as the minutes ticked over from Sunday to Monday on the US east coast, Lehman Brothers finally threw in its towel and filed for bankruptcy. In one way or another it will be the end for a bank that started in Alabama back in 1844 – a sticky end considering that last year it had sales of $57bn and only a few months ago was named by Business Week magazine in its 50 top performing companies for 2008. (Business Week's citation, in hindsight, looks wise: "Still, the firm is highly leveraged. The final throes of the global credit contraction will test just how good it really is." Now we know.)

What links all these once-buoyant institutions? All of them – from Fannie Mae to AIG – have been caught up in the bonfire of the vanities that was the US housing market, the same underlying cause that six months ago saw the combined forces of Wall Street and Washington rush to prop up and then dismember another former investment banking stalwart, Bear Stearns.

As the housing market turned toxic, so the loans that Bear Stearns, Lehman Brothers, Fannie Mae et al, had cheerfully advanced, bought up, repackaged and insured, lost value. The Federal Reserve, abetted by the US Treasury, pumped cash into the financial markets to prevent them seizing up. But their efforts were hampered by the very financial instruments that the masters of Wall Street had invented.

The blizzard of options and derivatives the banks have used in recent years are byzantine in their complexity, making it very difficult to value the potential losses on the books.

That's why the emergence of AIG may be the most troubling event of Wall Street's Bloody Sunday.

While the fall of Lehman Brothers was no surprise – in recent weeks the bank has desperately tried to raise fresh capital and sell its most profitable arms – AIG is in a different league as (until recently) one of the largest financial institutions in the world of any type.

It has (or it did have) a trillion dollars worth of assets. But despite all that, it too is suffering from the shaky mortgages it holds, as well as the mortgage insurance contracts it has underwritten. Now it needs to borrow money on the financial markets on anything other than punitive terms – and this is the root cause of its problem.

To raise funds AIG needs to show potential lenders what its assets are – and so is forced to put price tags on the swamp of mortgages and derivatives it is holding.

As the New York Times reports, AIG has been valuing its mortgage junk bonds at far higher than the likes of Lehman Brothers, and so the hole in its accounts is bigger than expected.

If that's the case at AIG and Lehman Brothers, then the existential question facing Wall Street this morning – as it has on so many recent mornings – is how do you put a value on something that no one wants to buy? You can wait, and hope that something (a housing market recovery?) turns up.

You can hope the government gets you out of the jam. But otherwise: when no one wants to buy something, its value diminishes towards nought. And until that problem is solved, next Sunday could be just as exciting as the last two.

But we won't even have to wait that long: today is shaping up to be hectic as well, with credit rating agencies poised to downgrade AIG, and stock markets around the world opening to the sound of "sell" orders whizzing through the ethernet.




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Fintan
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PostPosted: Tue Sep 16, 2008 4:58 am    Post subject: Reply with quote

One of the few commentators worth reading:

Quote:
Who's next after Lehman Brothers is fed to the wolves?

By Ambrose Evans-Pritchard
Last Updated: 10:11am BST 16/09/2008

One can date the onset of the Great Depression from December 1930 with
the collapse of the Bank of the United States, a mid-size lender to the
Jewish community in New York.


It is often alleged that the Anglo elites let the bank fail from motives of
anti-semitic malice.

True or not, the consequences were dire for almost everybody. The failure
set off a worldwide run on US gold deposits (ie, the dollar), and forced the
Federal Reserve to raise interest rates into the slump. Some 4,000 lenders
were ultimately driven to the wall.

We will find out soon enough whether the decision to throw Lehman
Brothers to the wolves over the weekend was any wiser. Princeton
economist Paul Krugman has accused the US Treasury and the Fed of
playing "Russian roulette" with the financial system, warning that the
shadow banking network could disintegrate within days.

The hunting packs switched instantly to AIG yesterday, driving down its
shares by 70pc in early trading. The world's biggest insurer is suddenly on
the brink of collapse as well. The killer virus is striking deep into a whole
new sector of the financial system.

"This is a potentially very dangerous situation," said Professor Tim
Congdon from the London School of Economics.

"Banking system capital is being wiped out. The risk is that this could lead
to a contraction of credit and set off a self-reinforcing downward spiral,
leading to the sort of debt-deflation we saw in the 1930s.


"It is already clear that money growth has ground to a halt over the past
three months. We must prevent it from actually contracting. If the Fed and
European Central Bank don't cut interest rates soon, it is going to be a
problem," he said.

When creditors cut off funding to Bear Stearns in March, the Fed reacted
with dramatic speed. It invoked nuclear powers under Article 13 (3) of its
charter, allowing it - in "unusual and exigent circumstances" - to take
credit liabilities on to its own books for the first time since the Roosevelt
era.

It was fiercely criticised for rescuing Wall Street from its own folly, but the
risk was a meltdown in the vast, untested market for derivatives. Bear
Stearns alone had over $13 trillion in contracts, with heavy exposure to
the turbo-charged CDS credit swaps that so terrify the New York Fed.

Nobody was ready for a derivatives shock at that time. This time,
hopefully, they are. The Bear Stearns bail-out gave the banks an extra six
months to clean up their positions and lower exposure. Hence the orderly
unwinding of trades at an emergency session of the International Swaps
and Derivatives Association on Sunday afternoon.

With the tail risk of a derivatives Chernobyl out of the way, the Fed and
the Treasury at last feel safe enough to strike a blow against moral
hazard. The line has to be drawn somewhere.

Unlike mortgage giants Fannie Mae and Freddie Mac, broker dealers are
not crucial pillars of the US housing market. Lehman is an optimal
candidate for ritual sacrifice.


While the appearances of free market discipline have been upheld, the
reality of the weekend events is a further lurch towards socialism, or
state capitalism if you prefer.

The Fed's lending window has been widened, allowing all forms of
investment grade paper to be used as collateral in exchange for
taxpayer credit.


Even equities are now admitted, though under a disguised formula. "With
investment banks falling like ninepins, the Fed may have decided that it
would be prudent to provide some official underpinning for equity market
values and hope to avoid a stockmarket collapse," said Stephen Lewis,
chief economist at Insinger de Beaufort.

Yet the dangers remain acute, even after the move to shield Merrill Lynch
from contagion by orchestrating a shotgun wedding with Bank of America.

The credit crunch is about to bite deeper. The interest rate on Tier 1 debt
for typical banks has jumped by 125 basis points since Friday. "This is a
violent effect," said Willem Sels, credit strategist at Dresdner Kleinwort.

The closely-watched Libor/OIS spread on three-month money in the US
has risen to 105 basis points, pointing to a lending crunch over the winter.
Europe's iTraxx Crossover index measuring default risk on junk debt has
surged to over 600.

"There is a flight to quality. People are hoarding liquidity and this is going
to prove very damaging. What concerns me is that the banks refused to
take on Lehman's bad assets even at a low valuation, and that tells you
they still don't know where the clearing level is for this mortgage debt," he
said.

As this newspaper has long feared, the world is now faced with both a
tightening credit squeeze and a synchronised hard-landing across most of
the world economy.


The eurozone and Japan are almost certainly in recession already. Britain
will follow soon.

America is plummeting into a second downward leg as the fiscal stimulus
package fades and the exports mini-boom stalls. China cut interest rates
yesterday following a sharp fall in property prices over the summer.

Superficially, one can blame Lehman and its ilk for the excesses that led to this crisis.

However, the root cause lies in the actions of governments across the
Western world. They held interest rates too low for much of the past two
decades, and encouraged the debt burden to explode to unprecedented
levels.

This reckless experiment has left our societies acutely vulnerable to a
sudden reversal of debt issuance, or ''deleveraging" as it is known. The
ferocious purge now under way will come at a high human cost. Millions in
Britain, Europe, the US, and the rest of the world will lose their jobs over
the next two years, through no fault of their own.

Having caused this crisis, it would now be remiss for governments to
pursue a policy of strict debt liquidation in the name of capitalist purity.

As the bankruptcies mount, the state will have an obligation to step in to
preserve social stability. If that means the temporary nationalisation of
large chunks of the Western economy, so be it.

This is too grave a crisis for ideological preening and free market
infantilism. May those calling for debt liquidation ''a l'outrance" be the
first in line to lose their jobs.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/09/16/ccambrose116.xml

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LonePunman



Joined: 09 Jan 2008
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PostPosted: Tue Sep 16, 2008 5:32 am    Post subject: Reply with quote

The most important lesson of all is once again completely missed.

buying stocks is a form of gambling.

Its an attempt to make money without working.


Its an immoral, "ought to be illegal" scam in which some small fry punks try to latch onto the coattails of a bigtime con artist thief. Most of them fall off, and provide additional profits for the professional assholes.

Its what happens when (like most investors), you refuse to invest in your own family and friends, neighbourhood and community, county, state, country (in that order).

People sell their own brothers and sisters into slavery and poverty, in order to make a few bucks in a "more reliable" investment, a self-fulfilling prophecy that comes around to ass-rape you everytime suckers.

Had all these people taken their (dubiously) 'hard-earned' cash and provided local help, jobs, and community support structures and services, they'd now live in prosperous, debt-free neighbourhoods, safe from the flakey schemes of conmen and murderers.

You make your bed, you sleep in it. What goes around comes around.

Every rejected brother, father, son, cousin knows this obvious, heart-breaking lesson, and suffers directly from the stupid, selfish greedy business decisions of their own relatives and "friends".

Jesus told you so.

Throw your stocks and bonds out the window and your money around on the street - soon even the US dollar will be worthless, and you'll be lucky to have to roll up your sleeves and dig ditches for a piece of bread.


Even gold will be a joke when the smarter farmers are rationing their food among themselves in gated coops.

So long you selfish assholes. Burn your stocks to keep warm.

The safest investment is in your own neighbour. If nothing else, you can at least keep track of your investment.
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Fintan
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PostPosted: Tue Sep 16, 2008 6:44 am    Post subject: Reply with quote

Back on 17th March, 2008 when
Bear Stearns was gobled up, I wrote:

Quote:
~Slick financial cannibalism alert~
~This ain't even nearly over
~
http://breakfornews.com/forum/viewtopic.php?p=41645#41645

And even now, let me reiterate:

~This still ain't even nearly over~

David Hirst was calling it right back in August.
It's worth a read. It contains actual realism.

Quote:
If the global economy is as safe as houses.....,
then there's a crash on the way


David Hirst - August 20, 2008

I TRY to be very, very careful about calling a crash. Others are not. But
most of the economic "yea-sayers" are, as usual, finding a bottom, like
our friend from A Midsummer Night's Dream, who had no bottom.


For a few weeks I have been hearing of a big one coming, a very bad
moon rising. I have, until now watched and wondered, but as the evidence
mounts, the muttering of a major bank collapse that will bring the whole
show down around our heads increases.

Ambrose Evans-Pritchard of London's The Daily Telegraph is reporting
"the US money supply has experienced the sharpest contraction in
modern history, heightening the risk of a Wall Street crunch and a severe
economic slowdown
.

"Data compiled by Lombard Street Research shows that the M3 'broad
money' aggregates fell by almost $US50 billion in July, the biggest one-
month fall since modern records began in 1959."

This might, on its own, be dismissed as Ambrose doing what he does best,
hunting down headlines. But this article does not exist in a vacuum.

Unhappily, Professor Nouriel Roubini is in a glum mood even by his
standards.

"The UK economy is not my brief," he writes, "but I see that hedge funds
are circulating a report from the US guru Jeremy Grantham predicting a
very bad end to Gordon Brown's debt experiment.

"The UK housing event is probably second only to the Japanese 1990 land
bubble in the Real Estate Bubble Hall of Fame. UK house prices could
easily decline 50% from the peak, and at that lower level they would still
be higher than they were in 1997 as a multiple of income." That is one hell
of a call.


"If prices go all the way back to trend, and history says that is extremely
likely, then the UK financial system will need some serious bail-outs and
the global ripples will be substantial," says Grantham.

Roubini notes that for months the exchange markets ignored this
impending train crash, just as they ignored the property bust in Europe's
Latin Bloc, or the little detail that UBS alone had just lost the equivalent of
8% of Switzerland's GDP. All they cared about in the currency pits was the
interest rate gap: US low, Europe high.

"Now," Roubini writes, "the paradigm has flipped. The Fed may have been
right after all to slash rates to 2%. The European Central Bank may have
panicked by tightening in July. Note that the elder Swiss National Bank did
not do anything so rash.

"Bulls now believe America is turning the corner. Financial stocks are up
20% since early July. Some 'monoline' bond insurers have risen 1200% in
a month as fears of Gotterdammerung give way to sheer intoxicating
relief, and a 'short-squeeze'. Such are bear-trap rallies.

"Regrettably, I remain beset by gloom. The US fiscal stimulus package
that kept spending afloat in the second quarter is running out fast. There
is nothing yet to replace it. The export boom cannot keep adding juice as
the global crunch hits. My fear is that the US will tip into a second, deeper
leg of the downturn, setting off a wave of savage job cuts. This will start to
feel more like a real depression
.

"The futures market is pricing a 33% fall in US house prices from peak to
trough, based on the Case-Shiller index. Banks have not come close to
writing off implied losses on this scale
."

Daniel Alpert from Westwood Capital predicts that a mere 28% fall would
alone lead to a $US5.4 trillion haircut in US household wealth, and leave
lenders nursing $US1.25 trillion in losses. So far they have confessed to
less than $US500 billion.

Meredith Whitney, the Oppenheimer Bank's Cassandra, predicts a
gruesome 40% fall in prices. "I do not think we are near the end of write-
downs. I continue to see capital levels going lower, and stocks going
lower," she said.


"So no," says Roubini, "this painful ordeal is far from over. We are not
witnessing a dollar rally so much as a collapse in European and
commodity currencies. The race to the bottom has begun in earnest."

In an interview with CNBC, David Kotok of Cumberland Advisors
argued that the financial crisis is only about halfway over
and another
leg down is in the offing. His main reason is that banks have continuing
needs for capital and at current costs in the markets, the maths doesn't
work. Some banks will be unable to raise funds privately.

Link

What we are watching is the Anti-lock Braking of Finance.

You know.....
Stop the wheel, release, stop again, release.....
Until the car comes to a halt.

Keep that seat belt on.
Take a look at this sucker:

Quote:

Here's more from Ambrose Evans-Pritchard, also back in August:

Quote:
Sharp US money supply contraction points to Wall Street crunch ahead

By Ambrose Evans-Pritchard - 19/08/2008

The US money supply has experienced the sharpest contraction in modern history, heightening the risk of a Wall Street crunch and a severe economic slowdown in coming months.

Data compiled by Lombard Street Research shows that the M3 ''broad money" aggregates fell by almost $50bn (£26.8bn) in July, the biggest one-month fall since modern records began in 1959.

"Monthly data for July show that the broad money growth has almost collapsed," said Gabriel Stein, the group's leading monetary economist.

On a three-month basis, the M3 growth rate has fallen from almost 19pc earlier this year to just 2.1pc (annualised) for the period from May to July. This is below the rate of inflation, implying a shrinkage in real terms.

The growth in bank loans has turned negative to a halt since March.

"It's obviously worrying. People either can't borrow, or don't want to borrow even if they can," said Mr Stein.

Monetarists say it is the sharpness of the drop that is most disturbing, rather than the absolute level. Moves of this speed are extremely rare.

The overall debt burden in the US economy is currently at record levels, raising concerns that a recession - if it occurs - could set off a sharp downward spiral.

Household debt is now 131pc of disposable income, compared with 93pc at the top the dotcom bubble, 79pc in the property boom of the late-1980s, and 62pc at the end of the 1970s.

The M3 data measures both cash and a wide range of bank instruments. It tends to provide an early warning signal of major shifts in the economy, although the US Federal Reserve took the controversial decision to stop reporting the statistics in 2005 on the grounds that the modern financial system had rendered the data obsolete.

Monetarists insist that shifts in M3 are a lead indicator of asset prices moves, typically six months or so ahead. If so, the latest collapse points to a grim autumn for Wall Street and for the American property market. As a rule of thumb, the data gives a one-year advance signal on economic growth, and a two-year signal on future inflation.

"There are always short-term blips but over the long run M3 has repeatedly shown itself good leading indicator," said Mr Stein.

He cautioned that the three-month shifts in M3 can be highly volatile.

M3 surged after the onset of the credit crunch, but this was chiefly a distortion caused by the near total paralysis in parts of the American commercial paper market. Borrowers were forced to take out bank loans instead. The commercial paper market has yet to recover.

The University of Michigan's index of consumer sentiment has fallen to the lowest level since the 1980s recession.

The US economy is without doubt facing severe headwinds
going into the autumn
.

Richard Fisher, the ultra-hawkish head of the Dallas Federal Reserve,
warned over the weekend that growth would be near "zero" in the
second half of the year.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/19/cnusecon119.xml

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LonePunman



Joined: 09 Jan 2008
Posts: 70

PostPosted: Tue Sep 16, 2008 7:41 am    Post subject: Reply with quote

Just had to add this tidbit:

Quote:
Link
http://seekingalpha.com/article/95129-fdic-insurance-fund-it-doesn-t-actually-exist

Quote:
When FDIC head Shelia Bair says her agency might have to bolster the FDIC's insurance fund with Treasury borrowings to pay for the new spate of bank failures, a lot of us, this 40-year banking veteran included, assumed there's an actual FDIC fund in need of bolstering.

We were wrong. As a former FDIC chairman, Bill Isaac, points out here, the FDIC Insurance Fund is an accounting fiction. It takes in premiums from banks, then turns those premiums over to the Treasury, which adds the money to the government's general coffers for "spending . . . on missiles, school lunches, water projects, and the like."

The insurance premiums aren't really premiums at all, therefore. They're a tax by another name.

Actually, it's worse than that. The FDIC, persisting in the myth that its fund really is an insurance pool, now proposes to raise the "premiums" it charges banks to make up for the "fund's" coming shortfall. The financially weakest banks will be hit with the biggest tax hikes.

Which makes absolutely no sense. You don't need me to tell you the banking industry is on the ropes. The last thing it needs (or the economy needs, for that matter) is an expense hike that will inhibit banks' ability to rebuild capital, extend new loans, or both. If the FDIC wants to raise its bank tax once the industry has recovered, I suppose that's fine. But to raise taxes on the industry now is perhaps the dumbest thing the agency can possibly do. At the margin, the FDIC will be helping bring about more of the failures it says it wants to prevent.

But this is the government we're talking about, so logic goes out the window. First, the FDIC insists its mythical bank insurance fund exists, when it really doesn't. Then the agency does what it can to run the imaginary fund's finances straight into the ground. Your tax dollars (sorry, "premiums") at work. . . .

Link
http://www.securagroup.com/news/archives/articles/2008/AB080827.pdf
Quote:
Once upon a time, there was indeed a segregated FDIC fund. During the Johnson
Administration, someone had the bright idea to put the FDIC into the federal budget as a way to
reduce the deficit. This was in the good old days when the FDIC always produced a surplus.
Putting the FDIC on budget reduced the deficits being created by spending on the Great Society
programs in tandem with the war in Vietnam.
The reality is that there is no FDIC fund. Anything the FDIC lays out to handle a bank
failure must be borrowed by the Treasury, which adds to the federal deficit. The total amount of
the current outlay is charged against the federal budget even if recoveries are expected in the
future, as problem assets are collected by the FDIC. That’s the case whether the FDIC’s nominal
balance at the Treasury is positive or negative.


So basically we have to borrower for this just like we borrower for everything else??


--------------------------------------------------------------------------------

Slow dancing in a burning room.

Don't tase me, bro!!
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RedMahna



Joined: 07 Sep 2006
Posts: 1512
Location: USA

PostPosted: Tue Sep 16, 2008 9:52 am    Post subject: Reply with quote

LonePunman:
Quote:
Had all these people taken their (dubiously) 'hard-earned' cash and provided local help, jobs, and community support structures and services, they'd now live in prosperous, debt-free neighbourhoods, safe from the flakey schemes of conmen and murderers.


well, i agree in the philosophy and the consequential element of doing it this way or that way... it seems logical.

alas, even down to the community, the bastards of greed live.

here in the south i see it more so than in the so-called cold & rude north (what the southerners deem liberal country). as i am a non-church participant and a non-holy-rolling jesus' name-spewing neighbor in my neck of the woods, i can feel guaranteed not to ever expect any sort of cooperation from my fellow humans so long as they are holier than moi.

let me just say something i never intended to ever say, lest one of these individuals find my cute little liberal posting (or more like commie posting to them), i have walked the walk of their crucified deity - and continue to do so - expecting different results... nay, i have come to humble myself to the acceptance that i will meet a similar fate, if not physically, than most definitely emotionally. it is NOT ABOUT BROTHERHOOD OF MAN.

oh, it is about "brotherhood" of one thing or another, but certainly not that of humanity itself, thank you very much. i'm afraid we'll end up all one color and religion and still find something or someone to blame for our bad hair day.

back to reality (and hey, LonePunman, i do intend to keep trying)... and the stock market:

it is gambling. it is legal. it is devious. it was designed to seem like participation in the growth of good society-enriching corporate organizations. it however is legally in the accounting world designed as part and parcel of optional financial recovery/ restructuring to avoid a meltdown of capital for a non-trading company. this is not a quote. those are my words. you can research how to do a statement of financial standing for personal or business use in approaching banks to legitamize oneself for borrowing capital - one of the means to show intent and responsibility is to propose an IPO process.

in other words - i should like to use your money for my venture and pay my bills with it, if need be. i may even reward you. of course, it is not a guarantee how well or if i can reward you, but the more of you chip in, the blue-er we'll be. care to join me?

red

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duane



Joined: 07 Mar 2007
Posts: 554
Location: western pennsylvania

PostPosted: Tue Sep 16, 2008 9:54 am    Post subject: Reply with quote

from the Nightly Business Report on PBS (please buy stocks)

don't worry, don't panic, think of this as an opportunity, the market will come back, send money


http://www.pbs.org/nbr/site/onair/transcripts/080915b/

The Vanguard Group's John Bogle Offers Advice For Individual Investors
Monday, September 15, 2008

PAUL KANGAS: Joining me now with more about what today's developments mean for individual investors is John Bogle, the founder of the Vanguard Group. And, Jack, welcome back to NIGHTLY BUSINESS REPORT.

JOHN "JACK" BOGLE, FOUNDER, VANGUARD GROUP: Always good to be with you, Paul.

KANGAS: Jack, you and I have both been around long enough on the Street to have seen more than a few bear market sell-offs like today's. But historically the markets always seem to come back. Is this one any different?

BOGLE: Yes, it's different in a number of ways. First, Paul, I can say, this is my 10th bear market by actual count. Defined, as you know, as a market that goes down 20 percent or more. And we've had a lot worse than this. Our viewers should remember that in 1987, in a single day, the market went down 23 percent. This seems like kind of small potatoes compared to that. But what's different about this one in my recollection is that the other nine were pretty much financial market issues. You know, the market got too high, too high a price-to-earnings ratio, too high -- maybe earnings were going to decline. And it went down and it came back and was confined to the financial system. This one is spreading beyond the financial system. It's spreading in our productive system, and it's spreading into our economy. The financial side has kind of overpowered the financial banks a little bit like those levees down in New Orleans and gotten into the real economy. And you see this, of course, very clearly in things like the mortgage situation, home ownership situation. We're also going to see it in our big cities. Think of what's going to happen to New York the way the financial system is in crisis right there in that city. Financial capital of the world. So this is different and it's going to be tougher.

KANGAS: Well, with today's 500-point plunge in the Dow, some investors are downright terrified. What's your best advice to them?

BOGLE: Well, my advice to just about anybody is, times of terror or times of financial crisis are terrible times to make decisions. You know, let's be a little bit patient here. You know, the best time to buy stocks, Paul, as everybody knows, is what John Templeton calls "the time of maximum pessimism." Now I don't think we're at the time of maximum pessimism, but we've sure come a long way from that optimism of last summer through about October. The market is down 23 percent I think since then.

KANGAS: Do you see the action as suggesting some kind of a bottom is forming within the next few weeks or so or days?

BOGLE: I don't know how to guess what the market does, but the one thing I think we should be aware of is this has been a speculator-driven market. The trading volumes are unprecedented in the financial history of the country. The turnover in the stock market is double what it was in 1929. That's a different kettle of fish, Paul, from an investment market. Believe me, the value of American business, the value of the American economy did not drop by 4.5 percent today. It didn't drop at all. It might have even grown a little bit. So this is the market taking its ups and downs on expectations of what's coming next. And of course, we don't know what's coming next in the markets. And of course we ought to be aware that we're in for a tough time. But I think the best advice I could give to anybody is think about the probabilities that things will get worse or better, and then importantly, once you've tried to assess the probabilities, which I'd say are somewhat on the downside, think about the consequences to you. You know, if you're heavily leveraged today and the consequences are you'll be bankrupt tomorrow, you have no choice but to get out. But if you're a long-term investor, just think about this for a minute. If from these levels the earnings of American business or the Standard & Poor's 500 grow at 7 percent a year, they'll be twice as high 10 years from now as they are today. They'll be double what they are today. And I think that's not an unreasonable expectation. And that's what creates value in the long run.

KANGAS: That's very good advice, indeed. I appreciate it very much, Jack. And I want to thank you for taking time to be with us today.

BOGLE: My pleasure.

KANGAS: My guest, John Bogle, the founder of the Vanguard Group.

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