Saturday, January 19, 2008
The End of a Powerful Week in Finance
The End of a Powerful Week in Finance Author: Jim Sinclair Posted On: Friday, January 18, 2008, 6:29:00 PM EST Nothing said by either luminary addresses the problem, including those that developed this afternoon by the downgrade of the debt of Ambac, one of the four major bond insurers, MBIA, MGIC and similar companies dealing in OTC Default Derivatives. Should S&P and Moody take similar action, which is expected, two trillion in debt should also be downgraded. The downgrade of the debt of the guarantor must impact the debt they have guaranteed. So the two trillion is debt that may well and should be downgraded now is another domino of titanic size. This afternoon's problems are new and their size says both Kings Are Wearing No Clothes" with respect to their presentations of Thursday and today. The general equities market must be calmed. Should the Dow crater, another major domino falls. Let's see how the PPT (Price Protection Team) brings the Dow in Tuesday morning in pre U.S. trading and then how Tuesday closes. The DOW better be higher each day than the indices are before U.S. trading or as the last two days demonstrated, the PPT has lost its tight control of the equities markets. Watch the pre-open indices and closing Dow very closely. If the equity markets cannot be calmed then: If you have not protected yourself, you may only have days to do so. Protection amounts to a simple act: As much as possible eliminate financial agents between you and your assets. Own gold or equivalents equal to one half of your liquid net worth. Then you insure your entire net worth. Do not have margin debt. If you have debt you must own gold fully paid equal to that debt to insure it.
http://www.jsmineset.com/
Thursday the Chairman of the Federal Reserve expressed his support for a significant fiscal and monetary stimulus as a preemptive strike against a U.S. recession. The market answered by dropping over 300 points. Today the President of the U.S. broadly outlined a non-specific plan for economic stimulation. After the Administration's plan for $150 billion of economic stimulation was made public, the DOW closed almost 60 points lower. The result of the Bernanke/Adminstration fiscal and monetary stimulus is a total Dow decline of 479 points, according to my calculations.
http://www.jsmineset.com/cwsimages/Miscfiles/5704_Dan18-01-08Fin.pdf Excellent charts from Trader Dan Norcini
Thursday, January 17, 2008
Wall St. in trouble as dollar reaches all time lows
Citigroup & Merrill Lynch At Risk Of Bankruptcy?
Major Wall St. Banks LOSSES Exceed ASSETS
Merrill Lynch Under SEC Investigation
Citigroup and Merrill Lynch take drastic steps over subprime fallout
Examining the nature of the assets being written down suggests that we are not close to the end of Wall Street's bad news. Subprime mortgages and the asset-backed derivatives thereof form a large part of the write-offs, but even in this area we do not appear to be approaching the bottom of the cycle. If, as seems likely, my own August 2006 forecast of a 15-20% decline in house prices and a $1 trillion write-off from the $11 trillion in mortgage debt is close to accurate, Wall Street should still have several hundred billion to go, even in that area - total write-offs so far, including the new Citigroup and Merrill Lynch announcements, only just top $100 billion.
Thursday, January 10, 2008
Revealed: a new bank rip-off
Some of Britain's biggest banks have unscrupulously exploited last month's base rate cut by failing to pass on the benefits to mortgage holders, yet at the same time imposing even bigger cuts on interest accruing to savings accounts.
http://money.independent.co.uk/personal_finance/invest_save/article3318006.ece
Customers may be able to win payouts of hundreds of millions of pounds from banks again this year.
http://money.independent.co.uk/personal_finance/loans_credit/article3318008.ece
Monday, January 7, 2008
Saturday, January 5, 2008
Fed pumping money, food crisis, taxpayer bailout of housing bubble
Forget oil, the new global crisis is food
the Fed is increasing its 'special auctions' to $30-billion to keep the banksters in the black
Citibank has instituted new ATM withdrawal limits
What will we do if big two go bust?
They don't know it, but taxpayers stand to lose billions as the housing bubble bursts. And in a bipartisan effort to "do something" to save the housing market, President Bush and the Democratic Congress appear set to put taxpayers on the hook for billions more.
Thursday, January 3, 2008
Wednesday, January 2, 2008
Tuesday, January 1, 2008
New Years News
http://www.reuters.com/article/ousiv/idUSL3013544320071230
Bin Laden remarks make Gulf dollar peg likelier
The home page of the company Web site says, "Crypto AG is the preferred top-security partner for civilian and military authorities worldwide. Security is our business and will always remain our business."
http://www.recombinomics.com/News/01010805/H5N1_Egypt_Spike.html Last season there was a spike in cases in March, but those cases were mild and there were no reported fatalities. In contrast, the current outbreak has a high frequency of reported cases couple with a high case fatality rate.
Monday, December 31, 2007
Friday, December 28, 2007
Saxo grim 2008 forecast
A forecast made by Denmark-based Saxo Bank, chaos will take a grip on the world in 2008. Oil prices will skyrocket to 175 dollars per barrel, the Chinese market will collapse by 40 percent, whereas the U.S. will suffer a 25-percent setback. All this will happen because of the mortgage crisis in the USA which already slows down the U.S. economy.... http://english.pravda.ru/world/americas/25-12-2007/103144-economy-0
Tuesday, December 25, 2007
Crisis may make 1929 look a 'walk in the park'
Section 13 (3) allows the Fed to take emergency action when banks become "unwilling or very reluctant to provide credit". A vote by five governors can - in "exigent circumstances" - authorise the bank to lend money to anybody, and take upon itself the credit risk. This clause has not been evoked since the Slump.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/23/cccrisis123.xml
Saturday, December 22, 2007
Fatwa against the dollar
Fatwa against the dollar?
Posted by Ambrose Evans-Pritchard on 17 Dec 2007 at 14:38
Tags: oil, dollar, Saudi Arabia, Fatwa
To all intents and purposes, the Wahabi religious establishment of Saudi Arabia has just issued a fatwa against the US dollar. This bears watching.
Ali al-Naimi, Saudi Arabia's oil minister
Anti-dollar clerics have lobbied Ali al-Naimi, the Saudi oil minister
A message issued by 26 leading clerics warns that inflation has reached intolerable levels in the Gulf kingdom.
While it does not vilify the dollar explicitly, the apparent political aim is to undermine the country's dollar peg.
"The rulers should seek to try to remedy this crisis in a way that would ease people's suffering."
"We direct this message to the rulers and officials: we remind you of Prophet Mohammad's words that you are shepherds who are responsible for your flock," it said.
The statement was posted across the Islamic world. The background to this has been a raging debate in Gulf religious and economic circles about the destructive effects of the sliding dollar.
Among the lead-authors is Sheikh Nasser al-Omar, known for his fatwa against US-led forces in Iraq.
He has long preached the collapse of American-led capitalism, and now sees a perfect moment to plunge the knife. We can guess that al-Qaeda Inc is thinking along the same lines.
My own hunch is that the next al-Qaeda strike will not be a symbolic blow to a great building or city, but rather a carefully-timed economic blow: either by cutting – or trying to cut - the oil jugular, or by trying to precipitate a run on the dollar.
The Gulf pegs are preventing the region from taking action to stop the oil boom spiralling out of control.
Half the Mid-East is now overheating. Property booms have reached unstable extremes in almost all the oil states. Construction has become maniacal.
CPI inflation is 5.35pc in Saudi Arabia, the highest in over ten years. It has reached 10.1pc in the United Arab Emirates and 12.2pc in Qatar.
The dollar pegs – designed to anchor the currencies – are now forcing the Petrodollar economies to import US devaluation and monetary stimulus.
What has been a simmering problem for over a year, has become untenable since the Federal Reserve began slashing interest rates.
The Gulf has roughly $3.5trn under management in wealth funds and central banks, so a dollar shift makes waves.
Qatar has already slashed the dollar holding of its future generation fund from 40pc to 98pc.
Stephen Lewis, global strategist at Insinger de Beaufort, said the Fatwa was ominous.
"The Saudi government has been the one institution in the region battling to preserve the oil link with the dollar. If these clerics are able to wear down Saudi resistance, this could breach the bulwark. The dollar would quite likely be abandoned as the chief currency for pricing oil in world markets," he said.
If the Mid-East breaks the pegs, a chain reaction threatens to follow across Asia. China now has 6.9pc inflation. It may have to ditch its cheap yuan policy soon enough anyway, or face the sort of double digit rises that destroy regimes.
The Saudi royal family rules by a delicate compromise. Although pro-Western in military and economic alliances, it relies on the endorsement of the Wahabi clerics as a key source of legitimacy.
Reluctance to confront this menacing bloc is the main reason why Riyadh tolerated - and helped – the Bin Laden network for so long.
The statement called on the Saudis to take action to stop food price soaring to fresh highs, if necessary with subsidies on key staples.
For now, the dollar is bouncing back. Speculative flows have swung back from euros to dollars after America's CPI inflation shock of 4.3pc released last week.
One week's data mean nothing. As the Fed cuts rates ever further to the cushion US property crash bites, Mid-East inflation will go from bad to seriously ugly with the policies now in place.
The Saudis, Qataris, and Emirates have all said they will preserve the pegs. But fatwas tend to up the ante.
Posted by Ambrose Evans-Pritchard on 17 Dec 2007 at 14:38
http://blogs.telegraph.co.uk/business/ambrosevanspritchard/december07/fatwa.htm
Tuesday, December 18, 2007
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