Info Thread: Updates on US Financial Markets & Govt interventions

[Double D]

Re: Due Diligence: Here's what's happening to US Financial Market

I had a dream. I was paddleing a boat as hard as possible and sweat had all but blinded me. Fear gripped me as I began thinking I was going to sink. I was fighting for my life to get to high ground. My whole life passed before my eyes. Then as I wiped away the sweat and tried to focus, I was on the shore probably 50 ft from the water. It seems as if everyone is in this mode. Certain that we will sink if we dont "bail out" but no one knows for sure. Could be the shore is closer than it appears. I dont like the thought of the government seizing private business. It seems almost socialist. But if the experts can be trusted and they say we must do this then I guess that we must. I just hope it works!

 

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[memenode]

Re: Due Diligence: Here's what's happening to US Financial Market

Unfortunately Double D it wont work. I know that almost as a matter of fact because its logic is simple: you can't solve a problem the same way you created it. Einstein would agree.

And it IS socialist.

 

[unicon]

Re: Due Diligence: Here's what's happening to US Financial Market

Very good! Does that then mean we compound the problem??

When it is approved the stock market should plummet??

 

[memenode]

Re: Due Diligence: Here's what's happening to US Financial Market

From what I understand it will probably just stall the collapse for a little while at the expense of making it even a bigger one than it would otherwise be.

I would suppose what could happen as a result of it is everything that would happen anyway, only with the bail out it would cause additional problems (supercharged inflation, potential dollar collapse?).

It's about neverending debt. Banks are failing because of bad debt, and what they want to do is add even MORE bad debt. Sure we can keep adding more and more and more and so on indefinitely, NOT. At some point hyperinflation or some other market effect kicks in to put a quick death to it. And when it comes to the economy I think quick death hurts most.

 

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[andviv]

Re: Due Diligence: Here's what's happening to US Financial Market

I think it is a great time to start selling bunkers with provisions for 6 months. They must sell like hot cakes. Too bad the seller will only be able to accept gold bars and/or coins as any other currency disappeared... so that also means the seller must build two bunkers, one for him/herself and family, one for his/her gold bars and coins.

 

[RJP]

Due Diligence: Here's what's happening to US Financial Markets

Here's a link to a piece by Mike Whitney:

http://www.thefastlanetomillions.co...sion/16696-people-vs-banksters.html#post63521

 

[Russ H]

Re: Due Diligence: Here's what's happening to US Financial Market

Here's the latest info about the bailout bill:

Congress reaches outline of bailout bill deal - Yahoo! News

-Russ H.

 

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[RJP]

Re: Due Diligence: Here's what's happening to US Financial Market

Link to the Weiss Research White Paper submitted to Congress

http://www.moneyandmarkets.com/files/documents/Final-Bailout-White-Paper.pdf

A lot of valuable information and data in here. This was submitted to Congress. Definately worth reading

For those who have not checked out the rating of you bank(s) yet, there are a few tables in this report: "Largest Banks and Thrifts at Risk", "Largest Banks with the most Residential Morgage Exposure", "Largest Banks with Heavy Exposure to Nonperforming Residential Morgages", and "U.S. Banks and Thrifts believed to be at Risk of Faliure".

(to check your bank's rating: go to thestreet.com - financial strength ratings under portfolio tools) Why not play it safe.

 

[RJP]

Re: Due Diligence: Here's what's happening to US Financial Market

This stuff is comming very fast now.

Brits nationalze B&B yesterday.
Link: BBC NEWS | Business | Treasury to nationalise B&B bank
I just heard the talking heads this morning say the we (U.S.) will be backing it??

First Norhern Rock, now B&B ..... possible Fortis next? No doubt Fortis is huge.
Link to Kristol's article: A Genuine and Immediate Crisis
First time I hear this on the TV this morning also. Will we be bailing them out too? Let's bail out the world. Fortis goes back to before Belgium's establishment in 1831. Their balance sheet is larger than the GDP of Belgium. They are also the largest private employer in Belgium. Half of the country banks there. They are a banking/insurance group and said to be as large as AIG. If you think Kristol is playing alarmist, here's a link to the BBC article: BBC NEWS | Business | Fortis is 'keystone' European bank

This is dominoes.

 

[china]

Re: Due Diligence: Here's what's happening to US Financial Market

china-

Andviv's "unfriendly reminder" was specifically to YOU, since you have been called on breaking forum rules before. I thought he put it rather nicely.

Russ,

Someone thought I was trying to sell something here before (I think it might have been you?) and that was a misunderstanding since I have nothing to sell.

Anyway, I'm not big on politics either except in a general sort of way since I realize that politics do influence how the economy works. I'm not for or against either party. It's a fact that the bailout is political since it is politicians doing all the work and yes, we are being sold on the fact that it has to be done "right now, right away" or else the world will end -- which is how we were sold the War in Iraq. I believe we should treat this with a healthy dose of skepticism. That is all I was trying to say in my post and, based on that, I don't really feel it was a "political" post. I don't know how else someone would say exactly that without making any mention of politics. The whole thing is being handled by, ummm, politicians.

Thanks for reminding me the forum has bigger goals.

 

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[Russ H]

Re: Due Diligence: Here's what's happening to US Financial Market

Update:

European banks rescued as U.S. bailout vote nears - Yahoo! News

-Russ H.

 

[andviv]

Re: Due Diligence: Here's what's happening to US Financial Market

so, bailout rejected... now what?

Bailout moves towards congressional approval - Sep. 29, 2008

 

[LightHouse]

Re: Due Diligence: Here's what's happening to US Financial Market

andviv, one of the news channels suggested that they are scrambling to recover it by making changes. I do not know how that will work out however.

I read about half of the bailout so far, fairly interesting points but i will refrain from posting as they may soon have absolutely no relevance. DJIA looks to be getting hammered.

 

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[hakrjak]

Re: Due Diligence: Here's what's happening to US Financial Market

I think it is a great time to start selling bunkers with provisions for 6 months. They must sell like hot cakes. Too bad the seller will only be able to accept gold bars and/or coins as any other currency disappeared... so that also means the seller must build two bunkers, one for him/herself and family, one for his/her gold bars and coins.

I hear ya brother. I have my 50 pound bag of rice for the family, canned goods, and 1000 rounds of ammo for the guns, in case we run out of supplies and I need to venture out and aquire more from the neighbors who weren't as prepared as I was haha

- Hakrjak

 

[Russ H]

Re: Due Diligence: Here's what's happening to US Financial Market

More updates:

Senate to vote on rescue plan with added tax cut - Yahoo! News

-Russ H.

 

[unicon]

Re: Due Diligence: Here's what's happening to US Financial Market

Just some thoughts here as this thing evolves, Identities are getting more prioritized and emphasized!

The importance of tax cuts are so much more important than cash injections, Why?

Because tax cuts are a result of production and efficiency not disassociation with reality throwing money at non-production. This only creates a devaluation of the dollar.

Tax cuts are in a way based upon reality not a disassociation with reality.

Tax cuts in a successful economy are an indication of optimum success and production.

Where we are now is a result of the opposite of real production and mass laziness! In other words throwing dollars at something unearned is a leverage indicator for bad health. It is like giving someone a raise without corresponding improvement.

If government was so productive, why not just print money and not tax at all - that is in essence what they are doing now?? - Welfare concept applied to own people!

Tax cuts actually "Prevent" incompetance!!!

Increasing taxes in a "Throwing money" enviornment is more laziness packed on existing laziness which accelerates the problem.

Hard times and no money at the very least clenses the system, and brings back the dollar. This is the vasilation between unreal comfort zone and hard reality.

In essence taxation (especially unearned) is a prime indicator of nations true health. A healthy and growing economy will have low taxes by definition.

This whole problem emphasizes the problem of focus on leverage beyond limits and boundaries versus increased real government revenue from lower and lower tax rates.

The tax revenues were from selling leveraged instruments world wide (redistribution) which had no substance which was theft.

The only way out is real work and production which cannot be purchased with devalued dollars.

Will the countries who bought worthless securities with real production revenues (like China) continue to buy - the answer is no, this is a measured credibility lost.

We will know when health and the cure is instituted by a "decreasing taxes" focus by the government. That focus has never existed because it means the govenment must live within its means as it is now a function of the domestic economy. The domestic economy is not a function of government.

Because the overall domestic economy is not a function of government (changed from 1930's) this increase independence means certain sectors are less affected by the government then ever before - this is the evolution. The destructive impact of government is limited even though they try hard (tax and spend). The destructive impact is overseas (nationalizing debt), but even 3rd world countries are catching on, the arrogance of government is catching up to them.

The best investments for productive companies now is the repurchase of their own stock (Microsoft). Why would Microsoft invest outward with devalued dollars when they can invest in themselves where they have control? Microsoft is healthy with no debt, individuals are doing the same thing - contracting and going inward.

The govenment is not going inward, it is attempting to spend more, it is printing money, it is increasing debt, it has not learned the lesson. The focus is a boomerang it cannot pass off, nationalize, or hide anymore - it is running out of its capacity to deceive. Tax revenues will dry up as the capacity to collect hard dollars decreases even with a high rate. This capacity issue is facing a reconciliation of irresistable forces.

The primary job of government is enforcement not welfare, one is hard the other easy.

Welcome to the new Jungle!!

I predict that the biggest change will not be dollar devaluation but an entire restructuring of government and accountability!!!

 

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[Russ H]

Re: Due Diligence: Here's what's happening to US Financial Market

Senate approves $700 bln financial bailout - Yahoo! News

Wow, it must be close to midnight in Washington.

On to the House . . .

-Russ H.

 

[LightHouse]

Re: Due Diligence: Here's what's happening to US Financial Market

Senate approves $700 bln financial bailout - Yahoo! News

Wow, it must be close to midnight in Washington.

On to the House . . .

-Russ H.

its 10:46PM here russ!

 

[Russ H]

Re: Due Diligence: Here's what's happening to US Financial Market

Oops. Sorry.

Still, that's a late night session for the Senate.

-Russ H.

 

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[china]

Re: Due Diligence: Here's what's happening to US Financial Market

I hope the house votes down the bill again.

This was originally a 3 page bill. It was expanded to 110 pages with virtually no changes to the basic idea. It's now at nearly 500 pages with no changes to the basic idea but a has a gazillion pork products added on to it.

 

[randallg99]

Re: Due Diligence: Here's what's happening to US Financial Market

the bill does not address the underlying problem of banks not lending.... more transparency is needed but this bill suspends mark to market accounting (just like the house's original bill)

It doesn't look like the stock markets will like the proposal, but it might stave off a really bad financial crisis for another day.

europe trading higher probably in hopes that their legislation/ICB is taking notes how to do their bailout/rescue plan....

US banks were leveraged 15x while European are leveraged 50x.... Europe is a disaster in the making.... and the US is in no financial position to help british bank system

 

[randallg99]

Re: Due Diligence: Here's what's happening to US Financial Market

do your DD. all 451 pages....

http://online.wsj.com/public/resources/documents/senatebillAYO08C32_xml.pdf

 

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[Russ H]

Re: Due Diligence: Here's what's happening to US Financial Market

More updates:

Bailout focus on House as crisis spreads - Yahoo! News

Some big numbers in there. Almost 2 TRILLION dollars.

-Russ H.

 

[Russ H]

Re: Due Diligence: Here's what's happening to US Financial Market

US banks were leveraged 15x while European are leveraged 50x.... Europe is a disaster in the making....

Did not know this.

Thanks.

-Russ H.

 

[RJP]

Re: Due Diligence: Here's what's happening to US Financial Market

Interesting article from Silveraxis (educational also if you want to learn about some of this stuff). He pegs the begining of the Fed's bankrupy as Sept. 17, the day they launched the Supplementary Financing Program. I believe in the article he points out that Sept. 17 was the same day as the historic $100 gold jump.

SILVERAXIS - TODAY IN SILVER » Windbag Wisdom

Europe is also dealing w/these problems. At this point, it could be a race to the bottom.

Lots of economists predict deflation first as the credit markets continue to shut down and the economy contracts, forcing businesses to cut prices, stop advertising, layoff employees, etc... So one theory is that a short period of deflation will then be followed by a longer period of high inflation.

 

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[RJP]

Re: Due Diligence: Here's what's happening to US Financial Market

O.K. ... how does the article I posted relate to our personal wealth. To me, it's about moving my portfolio into safe mode and making adjustments (best I can) to respond to the quickly and ever changing environment.

The preceding article represents yet another perspective/analysis of possible inflation brought on by the monetization of the banking assets. If you agree with the analysis of the author, then the principle question is where to invest to preserve wealth. (That is ... if you think the recent moves by the Fed are going to cause hyperinflation). I believe this does somewhat explain the rush to PM's (gold) and the current shortage of the physicals. Personally, I will not go out too far in PM's because it seems ... at least part of it .... is based on panic.

On the other hand, if you believe the USD will continue to remain the world reserve currency .... and with the current situation being global .... then the other currencies should beat the USD to the bottom.

I will continue to seek out as much analysis as I can to keep up with what's happening .... but for now, I remain in 60% cash (USD) and the remainder spread in GLD (gold ETF), CEF (also gold - Central Fund of Canada), SRS, and Swiss Francs. (Oh yeah .... there is that one solar ETF I've been waiting for a rally to sell out of).

I still believe there will be a period of dis-inflation brought on by the contracting economy, before a period of high inflation. I will watch for a flight of capital by central banks out of the USD, and capital controls by the US gov. which could signal worst to come. Mean while, I will play it safe.

 

[Russ H]

Re: Due Diligence: Here's what's happening to US Financial Market

Rep speed for you, RJP, for this last post.

The second part of your 2 posts is why I come to the fastlane.

I appreciate your reading MJ's post and stepping up to the plate.

Analyzing the who/why/how/when is great-- but it gets us nowhere if we don't take the next step:

WHAT DO WE DO NEXT.

A big thank you. :smx9:

-Russ H.

 

[china]

Re: Due Diligence: Here's what's happening to US Financial Market

I will continue to seek out as much analysis as I can to keep up with what's happening .... but for now, I remain in 60% cash (USD) and the remainder spread in GLD (gold ETF), CEF (also gold - Central Fund of Canada), SRS, and Swiss Francs. (Oh yeah .... there is that one solar ETF I've been waiting for a rally to sell out of).

I posted this on the stock board, but I'll repost it here...

Gold ETFs give you shares in the ETF. You are not entitled to the gold held within the ETF. They are similar to mutual funds where you buy something based on what the mutual fund holds -- but you never own the individual stocks and you will NEVER own the individual stocks. You own shares in a trust.

The Gold ETFs operate the same way. The gold belongs to the guys who originally bought the gold and put it in the trust. You are buying something that is supposed to "track the value of the price of gold."

If you think about this, this is really ideal for those who own those actual gold bars the ETF is holding. The ones who own them can now play with the futures/options markets: shorting, etc. -- and they can affect the market price without worry because they actually have the gold (though it's stored in the ETF) to put behind it.

Think of all the broke bankers who are recapitalizing on your back. That's what it amounts to. Physical gold no longer relates to the paper price of gold. (Ditto with silver.) Your 1/10 share of GLD will not buy you 1/10 of an ounce of real gold.

If you really want to own precious metals, I'd suggest you cash in on the ETF and just buy the metals.

 

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[china]

Re: Due Diligence: Here's what's happening to US Financial Market

All of the markets are falling now: Asia, USA, Europe.

I would suggest holding cash or metals (not ETFs but bullion coin metals or even jewelry).

I'm an oddball but I would also suggest holding prime art and antiques that appeal to those outside of the USA (Middle East in particular). A prime antique would be something incredibly rare (one of a kind). Persian carpets are good -- but you need to really study up on them and you need to market them to the middle east. Huge natural diamonds are good, along with exotic colored diamonds. Again, you need to be an expert.

There are a lot of valuable things in the USA. The problems are that most of them require cash to buy. You also need to be plugged into a network that can sell what you buy or that you can sell into. It's great if you can find the items you want to find but you need the connections to make good money on the items after you find them.

Anyway, bad times are GOOD! You simply need to take advantage of the things that are there to take advantage of.

I started my business back in the early 1990s when the USA was having a recession. I did very well. I expect to do well now too since I know what I'm doing this time around. (Last time, I did well by chance.)

 

[Russ H]

Re: Due Diligence: Here's what's happening to US Financial Market

Big Fed short term loan deal:

Fed to buy massive amounts of short-term debts - Yahoo! News

-Russ H.