A Visual Guide to the Financial Crisis
WallStats.com
Nov 13, 2008
http://blog.mint.com/blog/finance-core/
a-visual-guide-to-the-financial-crisis/
Almost overnight, the talking heads went from perpetuating the euphoria of investors to rushing to pronounce the economy dead. Last year, when lenders started dropping like flies as foreclosures rose and margins were called, the problems of Wall Street became more and more apparent, and lending guidelines were tightened to the point that many individuals were stuck in their time-bomb loans, and thus began a vicious cycle. But what led to this? Here is a visual guide to help you understand the events leading up to the bailout.
Click here for the Source Article
Saturday, November 15, 2008
Friday, November 14, 2008
Why Gold Might Soar Over the Next Four Weeks
Why Gold Might Soar Over the Next Four Weeks
Patrick A. Heller
Oct 28, 2008
http://www.numismaster.com/ta/numis/
Article.jsp?ad=article&ArticleId=5514
Whether or not you acknowledge past efforts by the U.S. government with other governments, central banks and private trading partners to suppress the gold spot price, events coming to pass in the next four weeks could create overwhelming pressure causing much higher gold prices.
Last Friday, the Taiwan government announced that it had completely liquidated its holdings of Fannie Mae, Freddie Mac and Ginnie Mae bonds. If a long-time ally of the United States is willing to admit that it is bailing out of dollar-denominated debt, will other nations continue to show restraint?
Last Friday and Saturday, leaders from 43 Asian and European nations met in Beijing to discuss the global financial crisis. The United States was specifically excluded from this meeting.
These events are just appetizers on what is coming up in the next few weeks:
- Oct. 28: Comex November gold and silver options expire.
- Oct. 28-29: The Federal Open Market Committee meets to discuss, among other subjects, the possible 0.5 percent reduction in benchmark interest rates.
- Oct. 29: Last trading day for COMEX and Chicago Board of Trade gold and silver futures contracts.
- Nov. 4: The U.S. elections will be held and end the need for politicians seeking re-election to try to look good for the voters.
- Nov. 6: European Central Bank meeting at which one of the subjects will be cutting benchmark interest rates.
- By Nov. 10: Adrian Douglas's Market Force Analysis" indicates that the temporary bear market rally in the value of the U.S. dollar will come to an end.
- Nov. 15: The G-8 summit meeting in New York City will discuss plans to reform the international financial and monetary system. There is a strong likelihood that one of the major topics will be the replacement of the U.S. dollar as the major international currency.
- Nov. 20: December gold options expire. Currently, there are about 70 percent more outstanding call options (which gives the owner the right to buy gold at the contract price) than there are put options (which give the seller the right to sell gold at the contract price). If the price of gold starts to rise to any degree, owners of call options might be able to demand physical gold for their contracts at below-market prices. Thus, any modest rise in gold prices could lead to an extreme supply squeeze and rocketing prices.
Other continuing pressures for higher precious metals prices include:
- The TOCOM, the Tokyo Commodities Exchange, provides daily reports of trading positions for major traders. Goldman Sachs and six other firms had huge short gold positions in early 2006. Goldman Sachs and these others have been continuously reducing their short positions. Late last week, Goldman Sachs TOCOM gold position turned into a net long of 370 contracts. The other large short sellers as a group are in their lowest short position in the past 30 months. These companies now have less incentive to want to hold down gold prices.
- There is a significant effort underway by would-be gold and silver buyers, dismayed by the current high premiums for physical gold and silver to purchase December COMEX contracts and ask for physical delivery of the 100-ounce gold and 1,000-ounce silver ingots. Since the COMEX only has a tiny coverage of physical metal for its outstanding contracts, there is a growing risk that the COMEX gold and silver contracts may default. If this occurs, the COMEX allows contracts to be settled for cash rather than gold or silver. If defaults occur, the spot prices for physical gold and silver will soar instantly.
- AIG, America's largest insurance company and beneficiary of over $100 billion in government liquidity over the past six weeks, is still at great risk of financial collapse. From a high of $63.68 per share within the past year, the stock settled at $1.35 on Oct. 27. AIG is widely regarded as holding the largest number of gold and silver derivatives (especially silver) of any company in the world. If it fails, the counterparties on these derivatives contracts could be forced to quickly acquire large quantities of gold and silver to minimize their financial losses.
It would only take one or a few of these events to get out of control for the prices of gold and silver to explode.
The U.S. government and its partners are pulling as many strings as it can to try to hold down prices. A large number of 400-ounce gold bars have been appearing on the market with markings that indicate that they may either be coming from the U.S. Treasury or International Monetary Fund reserves. The IMF is not yet authorized to sell any gold, but apparently can lease gold without restriction. If it becomes public knowledge that the U.S. or the IMF is sneaking gold onto the market to help hold down prices, the news will actually have the opposite effect because it would represent an admission that the U.S. dollar deserves to be worth much less than it is today.
For other news and articles on NumisMaster.com, Click Here.
Patrick A. Heller
Oct 28, 2008
http://www.numismaster.com/ta/numis/
Article.jsp?ad=article&ArticleId=5514
Whether or not you acknowledge past efforts by the U.S. government with other governments, central banks and private trading partners to suppress the gold spot price, events coming to pass in the next four weeks could create overwhelming pressure causing much higher gold prices.
Last Friday, the Taiwan government announced that it had completely liquidated its holdings of Fannie Mae, Freddie Mac and Ginnie Mae bonds. If a long-time ally of the United States is willing to admit that it is bailing out of dollar-denominated debt, will other nations continue to show restraint?
Last Friday and Saturday, leaders from 43 Asian and European nations met in Beijing to discuss the global financial crisis. The United States was specifically excluded from this meeting.
These events are just appetizers on what is coming up in the next few weeks:
- Oct. 28: Comex November gold and silver options expire.
- Oct. 28-29: The Federal Open Market Committee meets to discuss, among other subjects, the possible 0.5 percent reduction in benchmark interest rates.
- Oct. 29: Last trading day for COMEX and Chicago Board of Trade gold and silver futures contracts.
- Nov. 4: The U.S. elections will be held and end the need for politicians seeking re-election to try to look good for the voters.
- Nov. 6: European Central Bank meeting at which one of the subjects will be cutting benchmark interest rates.
- By Nov. 10: Adrian Douglas's Market Force Analysis" indicates that the temporary bear market rally in the value of the U.S. dollar will come to an end.
- Nov. 15: The G-8 summit meeting in New York City will discuss plans to reform the international financial and monetary system. There is a strong likelihood that one of the major topics will be the replacement of the U.S. dollar as the major international currency.
- Nov. 20: December gold options expire. Currently, there are about 70 percent more outstanding call options (which gives the owner the right to buy gold at the contract price) than there are put options (which give the seller the right to sell gold at the contract price). If the price of gold starts to rise to any degree, owners of call options might be able to demand physical gold for their contracts at below-market prices. Thus, any modest rise in gold prices could lead to an extreme supply squeeze and rocketing prices.
Other continuing pressures for higher precious metals prices include:
- The TOCOM, the Tokyo Commodities Exchange, provides daily reports of trading positions for major traders. Goldman Sachs and six other firms had huge short gold positions in early 2006. Goldman Sachs and these others have been continuously reducing their short positions. Late last week, Goldman Sachs TOCOM gold position turned into a net long of 370 contracts. The other large short sellers as a group are in their lowest short position in the past 30 months. These companies now have less incentive to want to hold down gold prices.
- There is a significant effort underway by would-be gold and silver buyers, dismayed by the current high premiums for physical gold and silver to purchase December COMEX contracts and ask for physical delivery of the 100-ounce gold and 1,000-ounce silver ingots. Since the COMEX only has a tiny coverage of physical metal for its outstanding contracts, there is a growing risk that the COMEX gold and silver contracts may default. If this occurs, the COMEX allows contracts to be settled for cash rather than gold or silver. If defaults occur, the spot prices for physical gold and silver will soar instantly.
- AIG, America's largest insurance company and beneficiary of over $100 billion in government liquidity over the past six weeks, is still at great risk of financial collapse. From a high of $63.68 per share within the past year, the stock settled at $1.35 on Oct. 27. AIG is widely regarded as holding the largest number of gold and silver derivatives (especially silver) of any company in the world. If it fails, the counterparties on these derivatives contracts could be forced to quickly acquire large quantities of gold and silver to minimize their financial losses.
It would only take one or a few of these events to get out of control for the prices of gold and silver to explode.
The U.S. government and its partners are pulling as many strings as it can to try to hold down prices. A large number of 400-ounce gold bars have been appearing on the market with markings that indicate that they may either be coming from the U.S. Treasury or International Monetary Fund reserves. The IMF is not yet authorized to sell any gold, but apparently can lease gold without restriction. If it becomes public knowledge that the U.S. or the IMF is sneaking gold onto the market to help hold down prices, the news will actually have the opposite effect because it would represent an admission that the U.S. dollar deserves to be worth much less than it is today.
For other news and articles on NumisMaster.com, Click Here.
Thursday, November 13, 2008
Surviving the “Contained Depression”
Surviving the “Contained Depression”
Paul Kedrosky
Nov 11, 2008
http://paul.kedrosky.com/archives/
2008/11/11/surviving_the_c.html
Interesting David Levy piece in the current issue of Institutional Investor. Here is the money ‘graf(s):
Without the government’s containment the economy would indeed ace another Great Depression, but fortunately, nothing so dire will occur. The government will prevent a collapse of the financial system and partially buffer the damage to the economy, containing the depression. The government will succeed not because it is wise about economic affairs or because it won’t make mistakes. Rather, it will have no choice but to keep patching holes in the financial sector, and its sheer size and presence guarantee a sizable fiscal stabilization. The government has virtually unlimited power to intervene to protect the basic functioning of the financial system, and in an emergency can spend whatever is necessary. Although government solutions will not fix the fundamental problems that will cause the depression, they will limit the financial fallout. By the end of the contained depression, the government will likely have committed trillions between rescue operations and running huge deficits. And although some may complain about the price tag, it will be a bargain for enabling us to avoid another Great Depression.
Levy thinks we will be out the other side in late 2009 or early 2010, albeit out in a tepid way.
Paul Kedrosky
Nov 11, 2008
http://paul.kedrosky.com/archives/
2008/11/11/surviving_the_c.html
Interesting David Levy piece in the current issue of Institutional Investor. Here is the money ‘graf(s):
Without the government’s containment the economy would indeed ace another Great Depression, but fortunately, nothing so dire will occur. The government will prevent a collapse of the financial system and partially buffer the damage to the economy, containing the depression. The government will succeed not because it is wise about economic affairs or because it won’t make mistakes. Rather, it will have no choice but to keep patching holes in the financial sector, and its sheer size and presence guarantee a sizable fiscal stabilization. The government has virtually unlimited power to intervene to protect the basic functioning of the financial system, and in an emergency can spend whatever is necessary. Although government solutions will not fix the fundamental problems that will cause the depression, they will limit the financial fallout. By the end of the contained depression, the government will likely have committed trillions between rescue operations and running huge deficits. And although some may complain about the price tag, it will be a bargain for enabling us to avoid another Great Depression.
Levy thinks we will be out the other side in late 2009 or early 2010, albeit out in a tepid way.
Wednesday, November 12, 2008
Georgia congressman warns of Obama dictatorship
Georgia congressman warns of Obama dictatorship
The Revealer
Nov 10, 2008
http://www.abovetopsecret.com/forum/thread410524/pg1
Broun cited a July speech by Obama that has circulated on the Internet in which the then-Democratic presidential candidate called for a civilian force to take some of the national security burden off the military.
"That's exactly what Hitler did in Nazi Germany and it's exactly what the Soviet Union did," Broun said. "When he's proposing to have a national security force that's answering to him, that is as strong as the U.S. military, he's showing me signs of being Marxist."
Obama's comments about a national security force came during a speech in Colorado about building a new civil service corps. Among other things, he called for expanding the nation's foreign service and doubling the size of the Peace Corps "to renew our diplomacy."
"We cannot continue to rely only on our military in order to achieve the national security objectives that we've set," Obama said in July. "We've got to have a civilian national security force that's just as powerful, just as strong, just as well-funded."
Broun said he also believes Obama likely will move to ban gun ownership if he does build a national police force.
Click here to view Source Article
The Revealer
Nov 10, 2008
http://www.abovetopsecret.com/forum/thread410524/pg1
Broun cited a July speech by Obama that has circulated on the Internet in which the then-Democratic presidential candidate called for a civilian force to take some of the national security burden off the military.
"That's exactly what Hitler did in Nazi Germany and it's exactly what the Soviet Union did," Broun said. "When he's proposing to have a national security force that's answering to him, that is as strong as the U.S. military, he's showing me signs of being Marxist."
Obama's comments about a national security force came during a speech in Colorado about building a new civil service corps. Among other things, he called for expanding the nation's foreign service and doubling the size of the Peace Corps "to renew our diplomacy."
"We cannot continue to rely only on our military in order to achieve the national security objectives that we've set," Obama said in July. "We've got to have a civilian national security force that's just as powerful, just as strong, just as well-funded."
Broun said he also believes Obama likely will move to ban gun ownership if he does build a national police force.
Click here to view Source Article
Sunday, November 9, 2008
I'm changing as fast as I can!
I'm changing as fast as I can!
Patrice Lewis
Nov 08, 2008
http://www.worldnetdaily.com/
index.php?fa=PAGE.view&pageId=80410
Well, on the bright side, there were no riots in the streets following Tuesday's election. This is good.
On the other hand, Obama got elected president. We also have a Democrat majority in the Senate. Therefore, we must prepare to "change." This is bad.
I truly believe we are heading into one of the most divisive times in our nation's history, and it won't have anything to do with skin color. (How tired I am of hearing that argument.) It will have everything to do with socialism vs. free-market economics. Dependence vs. independence.
During a recent history lesson with my homeschooled daughters, we discussed some of the highlights of ancient Greek civilization and its contributions to our current culture. I told the girls about Hippocrates and the Hippocratic oath, a portion of which can be summed up as "First, do no harm."
Maybe this could apply to the Obama administration. First, do not harm us.
Unfortunately, new presidents merely take an oath to support and defend the Constitution, and we all know how well that oath is fulfilled. So a plea to "do no harm" will undoubtedly fall on deaf ears.
By implication, we can assume that the "changes" that will be forced upon us in the next four years will harm us. More than ever before, now is the time to cultivate personal independence – or as much as you can in our fettered condition. The less you need the government, the more you weaken it. The more dependent you are on government, the more power it has.
It was Supreme Court Justice William O. Douglas (1939-1975) who said, "The right to be left alone is indeed the beginning of all freedom." Keep that in mind as you consider the following suggestions.
(1) Prepare to hunker down. Interpret this as you will.
(2) If you have any, hide your money – otherwise it will be spread around. The best way to spread your own wealth on your own terms is to hire people to work for you. But of course, you knew that already.
(3) Take your kids out of public school. Schools are going to become nothing but Marxist pressure cookers. They're already socialist indoctrination centers. Have you any idea what they're teaching in kindergarten these days, much less high school? Better find out.
(4) If you're Joe the Plumber, hide. Quickly. Otherwise your life for the next four years will be a living hell. Obama supporters have demonstrated they like to retaliate, so you're not safe.
(5) Buy guns and ammunition. Especially ammunition. The tools necessary for self-defense and to keep our government under at least a modicum of control are going to quickly become unavailable. Perhaps not banned outright – that would cause riots – but the taxes on these tools of self-reliance will be raised so high that the effect will be the same.
(6) Don't surrender to guilt. Opposing the new world order coming your way is not selfish. The "best interests of all" are code words for state slavery. "From each according to his abilities, to each according to his needs" is the death of liberty and the definition of Marxism. Duh.
(7) Stockpile some resources, because it's only a matter of time before our terrorist enemies (who are delighted with the outcome of the election) will launch something nasty our way. Terrorists love weak or untried rulers because they prefer to strike vulnerable targets. We just bared our throats.
(8) Move. Whatever your political affiliation, it's always best to live in a place with like-minded people. (Idaho might be worth considering.) Just make sure the place you move to has people whose concepts of liberty agree with yours.
(9) Start looking for other news sources, because it's very likely that your favorite conservative radio talk-show host will go out of business once the (ahem) "Fairness" Doctrine gets re-implemented.
(10) Buy light bulbs. There is no possible way our new green president will lift the absurd imminent ban on incandescent light bulbs. Unless you want your home to look like the inside of a train station lavatory in 2012, you'd better stock up on incandescents while you can. (Obviously lights bulbs are a metaphor for all the "for your own good" changes that will be shoved upon us.)
(11) Go to church. All the morals and values that we once cherished in this country – traditional marriage, sanctity of life, family values – are going to become so condemned that churches will be our only sanctuaries.
(12) Strengthen your family, your community, your state. Obama has said that an economy is built from the bottom up. In that he is entirely wrong (poor people don't hire – only rich people do that). But liberty most certainly IS built from the bottom up. Start by strengthening yourself. Next, your family. Support your neighbors. Build your community. Get involved with your state. The days of sitting on your hands must be over.
(13) Find another job. Or preferably, several. Don't give up your current job, of course, but as the economy continues to nosedive, it is best to cultivate your marketable skills and diversify your income sources. The more income irons you have in the fire, the better.
(14) Never never never never trust that the upcoming administration will do anything in your best interest. If the government offers you something that seems too good to be true, assume that it is. Education, medical care, housing and other benefits are never free – they cost something down the line. And the cost is always freedom. Take warning.
Obviously this list barely scratches the surface. If you use your head, you can think of many more. But better hurry up. Change is coming, like it or not.
But the thing about "change" is that it can work both ways. The ordinary Joe Plumbers of this country can change, too – and it may not be in the direction the government will like.
Tough patooties.
Patrice Lewis
Nov 08, 2008
http://www.worldnetdaily.com/
index.php?fa=PAGE.view&pageId=80410
Well, on the bright side, there were no riots in the streets following Tuesday's election. This is good.
On the other hand, Obama got elected president. We also have a Democrat majority in the Senate. Therefore, we must prepare to "change." This is bad.
I truly believe we are heading into one of the most divisive times in our nation's history, and it won't have anything to do with skin color. (How tired I am of hearing that argument.) It will have everything to do with socialism vs. free-market economics. Dependence vs. independence.
During a recent history lesson with my homeschooled daughters, we discussed some of the highlights of ancient Greek civilization and its contributions to our current culture. I told the girls about Hippocrates and the Hippocratic oath, a portion of which can be summed up as "First, do no harm."
Maybe this could apply to the Obama administration. First, do not harm us.
Unfortunately, new presidents merely take an oath to support and defend the Constitution, and we all know how well that oath is fulfilled. So a plea to "do no harm" will undoubtedly fall on deaf ears.
By implication, we can assume that the "changes" that will be forced upon us in the next four years will harm us. More than ever before, now is the time to cultivate personal independence – or as much as you can in our fettered condition. The less you need the government, the more you weaken it. The more dependent you are on government, the more power it has.
It was Supreme Court Justice William O. Douglas (1939-1975) who said, "The right to be left alone is indeed the beginning of all freedom." Keep that in mind as you consider the following suggestions.
(1) Prepare to hunker down. Interpret this as you will.
(2) If you have any, hide your money – otherwise it will be spread around. The best way to spread your own wealth on your own terms is to hire people to work for you. But of course, you knew that already.
(3) Take your kids out of public school. Schools are going to become nothing but Marxist pressure cookers. They're already socialist indoctrination centers. Have you any idea what they're teaching in kindergarten these days, much less high school? Better find out.
(4) If you're Joe the Plumber, hide. Quickly. Otherwise your life for the next four years will be a living hell. Obama supporters have demonstrated they like to retaliate, so you're not safe.
(5) Buy guns and ammunition. Especially ammunition. The tools necessary for self-defense and to keep our government under at least a modicum of control are going to quickly become unavailable. Perhaps not banned outright – that would cause riots – but the taxes on these tools of self-reliance will be raised so high that the effect will be the same.
(6) Don't surrender to guilt. Opposing the new world order coming your way is not selfish. The "best interests of all" are code words for state slavery. "From each according to his abilities, to each according to his needs" is the death of liberty and the definition of Marxism. Duh.
(7) Stockpile some resources, because it's only a matter of time before our terrorist enemies (who are delighted with the outcome of the election) will launch something nasty our way. Terrorists love weak or untried rulers because they prefer to strike vulnerable targets. We just bared our throats.
(8) Move. Whatever your political affiliation, it's always best to live in a place with like-minded people. (Idaho might be worth considering.) Just make sure the place you move to has people whose concepts of liberty agree with yours.
(9) Start looking for other news sources, because it's very likely that your favorite conservative radio talk-show host will go out of business once the (ahem) "Fairness" Doctrine gets re-implemented.
(10) Buy light bulbs. There is no possible way our new green president will lift the absurd imminent ban on incandescent light bulbs. Unless you want your home to look like the inside of a train station lavatory in 2012, you'd better stock up on incandescents while you can. (Obviously lights bulbs are a metaphor for all the "for your own good" changes that will be shoved upon us.)
(11) Go to church. All the morals and values that we once cherished in this country – traditional marriage, sanctity of life, family values – are going to become so condemned that churches will be our only sanctuaries.
(12) Strengthen your family, your community, your state. Obama has said that an economy is built from the bottom up. In that he is entirely wrong (poor people don't hire – only rich people do that). But liberty most certainly IS built from the bottom up. Start by strengthening yourself. Next, your family. Support your neighbors. Build your community. Get involved with your state. The days of sitting on your hands must be over.
(13) Find another job. Or preferably, several. Don't give up your current job, of course, but as the economy continues to nosedive, it is best to cultivate your marketable skills and diversify your income sources. The more income irons you have in the fire, the better.
(14) Never never never never trust that the upcoming administration will do anything in your best interest. If the government offers you something that seems too good to be true, assume that it is. Education, medical care, housing and other benefits are never free – they cost something down the line. And the cost is always freedom. Take warning.
Obviously this list barely scratches the surface. If you use your head, you can think of many more. But better hurry up. Change is coming, like it or not.
But the thing about "change" is that it can work both ways. The ordinary Joe Plumbers of this country can change, too – and it may not be in the direction the government will like.
Tough patooties.
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