REadACt

When China starts to flood the rich lists

2008-10-26T10:46:00.000-07:00

The milkpowder contamination case, SanLu brand is the instigator to tighther regulations in the food processing industry, they say that a crisis is onli the way to correct things and to make any deviation back to the original course, and i believe china food processing industry have always lack the standard required to make food edible, consumers buy for the mere fact, either it is cheaper, or it is a brand that has been build since earlier generations, like the white rabbit sweet, the can of mackarel with black beans, the tauchu, etc.If the downline can have more tighter regulatory boards then the factory standards will uphold and china production quality standard would be recognized .

In fact , this has what they have been striving for these years, to balance between cost structure and creating quality products, but somehow somewhere the items got a bit tainted with chemicals, first lead now melamine, but it will be a pragmatic leap to the regulatory boards of China and this new chapter will be a new one where quality must be assured and this one off set back is countered with the acienct Shih Huang Ti style, burnt all the books and we shall be in control, the chinese burnt all the goods and now they hope to turn a new leaf. Chinese have great adaptability one thing for sure, as long as there is a patent by hook or by crook they will be able to take that patent and make the product china made, u can throw a chinamen into a den with the lions and he may still either wrestle his way out like Wu SOng, or he may just talk his way out by trading with the lion.

Chinese must learn to innovate and create, strive for inventions, not trailing the back of technology, when the strong hold can learn to create and i believe with such a huge population, intellectual property is not a problem, they will create a whole new technological industrialization era in the china industries, maintaining a low domestic cost structure and high efficiency with tightly regulated standards of qualities.

Expect the unemployment in the US to show and unwind in countries outside america, they either sack u or they send u to another branch outside asia to replace the management for a lower wage, those previously reporting to u might be still employed as they did not misjudged and made wrong bets, they guy u were screwing for the blend coffee and slow report handin would be the guy taking your position, imagine your entire department being closed down and company cutting production at all cost due to the global slowdown.

Psychologically this is devastating to watch, emotionally it will impact any citizen that is alive and watching, if u think isolation is ur game, think again, all who lived thru the depression, understands the depression, even the rich fear it as it clamped on their tails so close they almost got dragged in to the pits together with the rest. One thing i believe could help the people is thier prudent and healthy financial practices, savings and cash holdings, proper allocation of capital is the right way to live. Social problems are going to rise, crime rates are going to balloon, like it or not if u have a license for any armory possession i suggest u take up some artillery and stack up for safety. The us is already bancrupt i fear it can hold for only that much, the only possible help the citizens can do is being euphoric about the amount of cash poured in to the system, and hope that it would play it way down to homeowners and depositors.

All eyes to the GDP report

2008-10-25T10:35:00.000-07:00

The mark to start the recession period is here, most of the wall street traders think its too late to even consider the start of a recession, the path has long begun before the first stimulus plan to initiate a tax rebate, all the money they put in temporary can boots the gdp figures and earnings but the effects are weary when the banks hoard and flee to the feds for even more money as they cannot even supply the withdrawal from depositors.

There are many news report predicting what the feds will cut, but in my book it is never significant as first the figures are mostly just a mere forecast and bench mark, it is not the actual lending rate, if one would keep a close eye, they would have to see the LIBOR and the loan term, the longer term sold the more chances that bankers are loosening a bit. The feds rates onli mark the movements in the financial floors and does not have a mind of its own, the onli difference it makes now is that it does not affect LIBOR, Libor is in frenzy mode so is the Index.

What we going to look at is how the dollar rally can sustain, if things are going to continue to unwind, dollar rally is going to be stronger but it is going to loose the steam once, things start to look a bit better and when the housing price has a bottom

Commodities, inflation, and rate cuts

2008-10-22T06:56:00.000-07:00

Who dare to bet that interest rates are going up, nobody as the feds wont have the balls to raise them, it is either maintained or lower down, the bet now is to lower another 50 basis point, then it would be a carry trade instrument, many have shown exposure to currency positions that are not known to the public and with such sudden spike in borrowing banks mights start to have carry trade using the dollar in the next 5 years, The japanese delayed and protected their banks and today we see that the peak was never revisited, when the printing continues inflation will roam the US and prices of commodities have no where but up !

I believe that there is no way the bancrupt US government can continue to support their acts of proping the dollar and pushing it out to the consumers, if slowdown happens in a more severe manner, consumption appetite will fall, and we have slimmer us citizens in terms of size and wallet. Long term rates have no where to go but up if we take a look at the printing engines production, and i would urge commodity holders to not forget the fact that commodities have strong fundamentals and they are scarce, and expensive to produce, new oil are going to cost around 65-70 per barrel, u tell me who would sell ?

read up

2008-10-18T03:22:00.000-07:00

Read and Relax , dont panic dont go against the feds

2008-10-18T02:01:00.000-07:00

I can tell u the financial market deteoriation is going to eat up even more market capitalization and leave you wondering where has all the money suddenly vanished to ? You might probably stand back and ask where can i put the cash that is safe and not going to lose value, then u start to think hell i have diversified my asset and practiced the asset allocation of 10,20,20,30,10.. 10% fixed rate bonds/ deposits,20% cash, 20%gold,30% stocks,10% in risky security.

Then u start to form a thought, i dun think all will go bust at once, so diversified is going to keep me safe, I think one way u are right and the other way u are wrong! If the dollar really go bust, only gold is going to safe u! But if central bankers cartel is going to manipulate gold prices again, how would u guarantee it is going to bail your portfolio from total destruction, as u all know average cost of producing oil stands at65-72 level, deflation of assets has started to infect commodities but below cost would send the sellers to hoard oil and push it up again.

I mean if u feel the dollar will be the one going up and interest rates are coming down, hell ur bonds are going to take a hit, shares are going to plummet, as exports drop affect gdp, inflation will kick in food prices, ur cash holding has not the same purchasing power and suddenly all looks so much more expensive like when gasoline was 4 bucks.

Then i recalled an article titles SPEND spend SPend, that emphasize on spending smart as the prudent investor, spending at the current value not onli ensures that ur purchasing power is maintained and chances of losing purchasing power decrease in a volatile economic period, and in addition to spend wise may also mean to restock for ur biz when time is rite, to replenish staples before pricing sparks, but if purchasing power is par by earning power, if income is consistent but spending keeps increase it will affect our balance sheet/portfolio.... Are there nothing that is sure and concrete in the world ? i am asking the same question, so a trading plan, is inevitable

8,500 succumb or Stand out

2008-10-16T14:54:00.000-07:00

If the saying Americans are always first to lead, it would be my say that they are leading the bear rally, with 1000 point swings, now u start seeings a approximately 700 swing from the bottom daily, but really where does it brings us, weekly we are still a bit lag from the top, there are no higher high call, to confirm an entry.

Technology are really leading and it is their earning that are least affected and not to mention inflation data that were stable, who could blame inflation of scared of creeping out the door when it has been strained by banks around the world, reverting back to the dollar, boosting its value for a short term grace. I scold myself for not calling a temporary top in gold since they are going to do some prime pumping for the dollar and the entire mortgage market.

End of the day, when the real situation arises and liquidity is not available , we are going to see our legs get dipped in paint and soil again, tainted in red, but as that day comes i suggest enjoy the current rally, Dow vs usd correlations remains utmost strong and i believe that it is the way it is being played now, what say u give a comment. I have called for a technology rally from my first post now it has given me one, i wanna know till when it can last? Ambac wants to be saved, are they significant enough?

euros ..near 1.35
oil near their average producing price
Yen still far from target since crisis did not unveil that badly
Gold, sold as they rush with the rally
Commodities might spark a rally from this point onwards as long as inflation remains low concern, it will give an indirect approval to print more trust me if u can skin this cat!!!

--~~ trade according to plan; discipline will ensure safety and perseverance~~--

The plasticity of the DOW and Human Nature

2008-10-14T03:02:00.000-07:00

1000 points up to make it look good

-suddenly all cries that subprime is over, dont forget that the crisis has just begun to unfold

-not that i want to stop u big guys from skinning a fat cat, u only find lipid accumulated beneath a thin layer of dermis.

-but the central bankers are buying equity stakes of banks, financial will lead but again how long before another lehman strikes,

-bonds and treasuries risk are higher than before, even the ever safe municiple bonds are now deemed as Financial WMD

-dollar have weakened and the pound & euro is strenghthening,

-if one had collected gold as i instructed with a sound mind and doing some home work, one would be a bit well off

-mortgages are still around to be foreclosed and defaulted.

-By next year march, the bankers have to repay the loans

-Central bankers are tapping ever tap and pipe they have until the drought starts,

-Euro cannot buy treasury papers, so it is good and bad if liquidity is a problem

-the japanese wishes to start their domination plan again like WW II, they used the bicycles now they are riding the bicycle notes to the top rank IMF bankers

-Oil has rise in tandem with the yen and euro.

Take a birds view before jumping into the market, there will be more calls in the market but i'll be the maverick to pUt them .

financial crisis

2008-10-12T18:23:00.000-07:00

As a psychology student, one might always conclude that we understand the way the human mind reacts, the way our cognitive process is being deemed, the reactions and ways to counter is already mastered by us. We can have ample sets of theoretical solutions to different problems, and i can also tell you what are the different stages when we face with anxiety, fear, loss, grief, greed, etc. BUt is it essential to determine the way we react, it is the way discipline is learned after experiencing all these levels of gyrations not only bounded to the indice but our own mental indice.

One day our moods can swing from sudden outburst, to sudden breakdown if being affected by the environment, sentiments, people we care, loss of close ones, or destruction of wealth accumulated through many years of hardwork. I believe no one is prone from the effects of emotion guided behaviors and as mere mortals, even psychologist can only delay the process and induce insight into those that have already faced breakdown, or mental instabilities. Challenging an individual to face all their challenges in life with a clear mind is harder than climbing Mount. Everest. At least you go in a team to conquer the mountain, in reality u are alone, you have to look into your pockets, take care of ur self, look after people around u be considerate, understand the people you interact, be cautious with what comes out your mouth , think right, act right and lastly learn to release what is build up as stress or tension .

This is worst than your daily wall street trading, worst than being a computer, the information we take in with onli 10 % of brain power is more than what your basic desktop or laptop can receive at once before overloading and overheating itself. Human need to always look for some place as a guide, look for information and strategy to imitate for success. But when the situation is vague or ambiguous, or filled with uncertainty we only able to look for direction among the mist. Nobody wants to risk anything for nothing, if the assets are not priced right for the last time, we are going to see the markets react again, Lehmans swaps were priced fairly cheap but it was the volumne traded and the companies involved not making a sound that helped the markets recover, Libor rates slumped that day, markets were poured with liquidity, and EU, America government swear to flood the market to spark a bear rally.BEAR RALLy

Euro 1.35x i hope will hold, yen is still strong but short term plays are permissible, if euro strengthens i believe pound will follow through , if the sale of assets and Feds + treasury buying into banks equity we might see lending start and the second wave of dollar collapse

Either way we are at crossroads to allow assets to deflate, or allow hyperinflation to occur and inflate the dollar, debase the value but push equity up thru illusionary valuations. GOld my fren is still facing shortage in physical form, paper traders are only the ones manipulating them, the usual pattern of fall after European physsical market closed and rise when asian markets open is repeating itself to tell that only the central bankers cartel is manipulating paper traders of gold.

Dollar and Gold manipulation

2008-10-10T21:08:00.000-07:00

Gold sways from 930 dow to 849,

Dow swings 1000points,

Dollar is up at 82 dollar,

Yen weaken against the dollar to 100level support for usd, always trade with a TS, FR for dollar is about 101-102, fundamental wise dollar are still going down the hole.

Hyperinflationary period might happen, wage scale might contract, unemployment are still going to increase, business will continue slowdown, before the president steps up socialism is the approach politicians are going to use to protect lobbyist!!!!!

Congress is also under the control of treasuries, social securities are going to be the next bubble, treasuries itself is also a problem, bonds are starting to implode, the confidence is being derailed to believe that it is going down confidently

Dollar is fiat, and made out of thin air, take a long term perspective and only time can tell, the decline in gold today only happen when london physical market closed, comex traders/ paper traders....or should i said manipulation in gold prices are the reason in the plummet. Pension plans are going to be in jepardy, americans are going to see some social problems later, crime rates are going to upheavel !!! I would only say buy gold in every pull back and thats what i am going to do.

Banks are continue to go bust, only social partners of the government and lobbyist are going to be protected. Be prepare to fled to save haven, if more banks are going to bust the only market we are going to have is the unemployment market and intellectual employment market, or selection of intellectual property or experts in different fields and export them to countries like china, and india.

Understand to trade the volatility, there must be a great plan, establish a level of risk tolerance and available credit to be lost incase trade moves antagonistically, and lastly trade with discipline.

TS and protecting your profit

2008-10-10T06:00:00.000-07:00

Look at the reversal in EUROs to the 1.35x level, if one had protect their paper gains this would not be a problem, strategize your trade plan. Yen is flaring very strong and we are looking at the foreign assets unwinding, or some say the lehman assets unwinding as well! i am clueless but the fact credit is euro is also tight i think the downfall is as limited as the us just the scale is also smaller. YEN might look at a furthur appreciation to 96 against the dollar, personal two cents.

What the US has as an EDGE

2008-10-10T05:21:00.000-07:00

When i first mention, the unemployment will shoot up and the paulson plan will not work, it is the mere fact that the root of the problem is still far from being addressed. Liquidity and recapitalization of banks are the way to go if they want to avoid a coming depression. Depression is no more a word, a status that the Americans might face if the fiscal spending, and required policies are not being done.

If banks cannot find the confidence to lend there must be a root that leads to the lack of confidence, and they must look into the underlying problem and not just treat the symptoms, it is like giving steriods or morphine to patients, putting them thru euphoria onli to return sick later on. Recapitalization can happen in many ways, we are hearing call from great economist that the bail out are a must, the feds are doing the right thing, yes they are doing the right thing if they want to prolong the effects and create a softlanding, but is that what the nation wants? The plummets speaks for itself, the loss in market cap speaks for itself. The market anticipates, and if the nation feels its in a recession it goes down 5-- points, if it feels a depression is coming it wipes off 800 points twice to show that they must be priced into zero earnings and future bancruptcy occurence.

What we must know is that the method of inflating out of the problem if applied and coordinated at a global scale will surely reach the root, when one person is deviant, it does mean its wrong, it is only against the norm, but when every banker, every troubled nation is doing it, it is going to be acceptable. Tell something wrong a hundred thousand times, people might believe u. Honorable Jim ROgers, have made a lot of right calls, and has retired a long time ago, he only invest and invest for his future generation, for his self fulfillment, for the entire excitement of investing. He would not mislead the government if he wants the future is good for his decendents, he realize that the feds and bankers are wrong, he acknowledge that markets should be allowed to fail, let the weak banks be possessed and resold to the stronger banks, guarantee the deposits of the citizens, encourage savings schemes ( monthly fixed amount savings, inflation adjusted savings plan, savings plan interest yield that are attractive, introduce different tier interest yields for more savings)

Let those who made mistakes fail but softly, nationalization by the UK and european banks are a good move, but they have to start selling the failed banks assets to the stronger banks as it is also unwise to be burdening the taxpayers money, foreclosures and defaults have to be reviewed and delayed to allow the nation a longer period of repayment and flexibility, sudden increase in defaults and foreclosures benefit no one at this level of crisis, the feds should allow a certain group that are affected to delay their mortgage defaults and repay in payments that are longer tenure and lower monthly payments, but at a higher interest rates, a ten year mortgage loan if restructured in to a 15 , or 20 year mortgage repayment could help delay the pain in holders.

Banks are required to provide transparency on their holdings in MBS, CDO,CDS, or any assets, and allow the SEC to regulate the transaction and strength of the banks before intervene and making capital injections, either thru buying their shares, issuance of warrants, nationalization, set up a regulatory body that will run auctions of troubled assets write off from the balance sheets, dilution effects might take in but it will pump the capital into banks.

The US are now flooded with financial experts as layoff have taken the job off many people, this cannot continue, and they realise that and this is why the entire world is working on different avenues to save the us from going broke! China would have to step up as they have been building their muscles for just too long to flex it infront of the judges, if they make the move they might replace the worlds greatest economy and allow the financial market be shore with greater wave of liquidity and capital. There will be more corporations going bust, more weak companies will die, market correction is not over, support levels are stupid, Technical analysis can only be used in markets where fear and volatility do not dominate, it is ok to be panic and sell stupidly, but when herds are reacting from fear of losing everything, it is no more a panic sell issue, it is capitulation. Nikkei lost almost 20percent HSI is fluctuating at a 7-8 % range downwards, if this is not capitulation i do not know what is capitulation.

TRading with a game plan

2008-10-09T22:57:00.000-07:00

Respect Stops, understand your personal risk tolerance!! These two investment principles are there for a reason please practice it!!

Current markets are for trading only, no more buy and hold unless you are a cash printing machine. Volatility shown in the US swings are far greater than any swing trader could handle, i do not know how many a-b-c are there in the dow in a day, but hit n run is definitely the strategy of the year. Look at sectors that will be positive to any positive news in asset prices, as we are beginning to look at home buyers, the first herd of kiasu people that want to profit from home prices that decline 30% - 45%.

UNDER stand that the financial market is still in being wrench and squeezed for any liquidity, the only way to reignite the banking system is thru continuous lending and by hoarding cash, bankers understand it is also not a smart move, as they are still paying interest to deposits, and they need to move the cash one way or another, make use of rate cuts to hedge in lending risk that what the feds are asking you to do, with the emergence of two bank holdings, deposits might be a way to slowly save them from the troubled loans, but remember policies and fiscal measures must be efficient and effective to show any help or improvement in financial markets. I believe there are some experts that say a bull run emerges from recessions and it is often during the recessive periods people gambling and speculative alter-egos come out and tell them maybe we have gone thru enough, or maybe it is not that bad after all, and the bull rides on that mentality.

Buffet has seen enough to understand every recession or stock plummet gone through would only lead to a stronger bounce up wards until another financial wreck appear. Gold is looking strong and if it can hold at this level for this two weeks i believe it has to go up, DOLLAR is only temporary supported by the foreign funds unlocking their capital from regional and emerging markets, commodities, bonds, etc. Till we see any fundamental change in the dollar i dont see why the 81 or 8x level must hold for long. We have to wait the bear rally cannot hold then all hell break lose for the dollar, the onli hope we have is to transfer more dollar holdings abroad, transfer more inflation abroad from america. Maybe they can inflate the dollar away from troubles.

yen, euro, gold whats next

2008-10-08T18:00:00.000-07:00

Play the crisis have never been this lucrative, and the second short position should have been closed yesterday for usd/yen. Like i said always have a cut, loss or PT level as it is crucial to protect paper gains, and do not let the greed lose a short from two nights before at 101.5 would be sufficient to make u happy till the week end when u closed it last nite at 99 level, and gold has spiked by 35 points last night should we start profit taking, preserve your capital and play with house money only always set a cut loss point and move the TS up according to profit as you need to protect your gains.

Looks like the treasury for 10 years note have started to decline with a sudden coordinated move to cut rate, i mention in many of my previous post that this is a coordinated move to support the USd and maintain its hegemony status in the world trade, and the FT zones is another way to make support to the debased fiats.

One point we should take note is that while coordinated actions are suppressing any sellers in the dollar we are going to look at the bigger picture with the furthur inflated dollar and unlimited printing press working hours. Yen is currency to look at when we predict the unloading of foreign assets from countries outside the dollar, the dollar looks good at the moment but it is only better to establish a short position, the higher it goes the more shorts will start to appear as fundamental wise, debt to gdp shoot up, deficit shot up, the money supply shot up , unemployment shot up what else shot up the dollar shot up in contrary to the decline it should have experienced.

To justify my statements are the value of gold which trailed the dollars appreciation, this is no change in the major trend of the dollar, it only depicts an illusionist waving his magic wand and putting a cloak on the dollar fundamental to push it up. Gold is telling us the story that it is not true to continue buying the dollar story as history shows whenever the increase in the dollar value the gold price would drop but these few weeks are turning the story around. THIS furthur confirms that the dollar index only reflects the weakness in euros and the other currencies they are benchmarking, the other indicator is the value of yen appreciating against both euros and dollar, shows that it is unloading of assets and reverting back to dollar from the carry trades that were supporting the dollar.

With a global coordination to speculate and manipulate the dollar to deflect any selldown of the dollar will only provide a safehaven in gold, as it is the one true denomination that is considered as world currency, where else can you find an equal status of valuation in the entire world accepted so widely!! It is the mastercard and visa of currency, it is the godiva of chocolates, it is the creme de la creme of the purchasing power protector. It also strikes me as China has no intention of appreciating the RMB and so is yen, they both hold large reserves in the dollar, which would emerge as a better currency to hold when the dollar bubble go bust, the treasuries will be sold down , interest rates will go no where but up!!! liquidity is only another archaic phoneme combinations when they are holding fiats that are obsolete.

read up when there is nothing left to do

2008-10-07T05:43:00.000-07:00

Throw in an intraday trade?
Buying for long term?
Bottom or no bottom?
The fact is we are deeply oversold for another technical rebound from last nites show!

Europe is gonna bail out?
Aussie start to loosen abit, carry trade over? Other banks and countries to follow? as i said this move is coordinated, inflate everyone out, export the inflation to third world and producing countries, and emerging economies, burden everyone else with the financial plough they raked themselves. Yen is under attack at this moment, dollar and europe will be back in demand? no body knows but i would hell love to reenter yen later :) when rates are too low we look at countries like Brazil SGD, CHY, Euros, NZD, when inflation starts to take effect look at the AUD CNDwhen commodities make a move .

Taking into account utilitise and energy stocks, telcos, and tech companies, looking at liquor, ciggies, and food consumer products companies at this moment, China food producers are underpressured despite some being cleared off the Melamine claims.

what did i tell ya abt lending in euros.. its the same up tight story, all of them are linked, lets see the 1.35 level hold on.
Crude oil being supported 5 bucks up
Europe bankers seek government intervention at a immediate level.RBS the next?
Russia moves faster with more rubbles in banks
Anyone likes the blame game?
Weekly report
Ireland pegs
carry trade is died? yen to outperform? or are money reverting back to euro and usd
Coordinate it well and we might be better, now they blame LIBOR, why not blame human response to fear as well.
the BRIC LATAM, ASIAN emerging market story tell me the foreign funds pull out i buy that
we are living in a world of black markets
chance to buy?>
Buy a bunch or mortgage when all banks are being tied, they will hoard even more cash while unloading the mess to the taxpayers. The shopping sprees starts now.
They are lending out more effectively, talking about arbitrage
Commercial paper buying , hope can help in short term loans free up some liquidity
Is this the bottom since there are so many fearful, capitulation is not seen? recession cant be avoided? i thought they were already in the recession.
Dr. Faber himself loves the gold in every portfolio

Euro, is it too low?

2008-10-06T17:57:00.000-07:00

If you had trigger ur PT level last nite when the dol,ar against yen was at the 100 level kudos and congratulation, with the dollar pulling back so much are we looking at a short term rise in the euros, they are holding back fairly well at the 1.35x level and gold i might say dint not disappoint many traders last night, however commodities remain the concern and natural gas is looking very interesting so is crude oil.

Fellow blogger Dali mentioned and it strike me that with all the bad news around destroying the demand and the excess supply we are still seeing oil at the 88-90 levels, it shows that it has outperformed itself , anyways there is nothing much which i can continue pressing on the economy outlook, the only thing i can say that it is up to the new president of america to steer the country out of a recession(inflationary one). Deflationary asset prices are most likely being floored at this few months and i might even consider buying some myself, as the feds are setting a bottom, they wont sell to u at any price lower than they bought!

They have the holding power as long as we are seeing headline that china is buying treasuries, the onli reason is to keep their currency controlled and not appreciating at a higher rate. Trading FX is fun, tiring, intense but at the same time luck bound sometimes. Good luck

yen, signals the demise of carry trade, commodity and gold

2008-10-05T19:50:00.001-07:00

yen has been on the rise since my buy call, and if one has timed the entry well, you would be in PT level 1, and please only play with house money on the moment, there would be anytime a movement to counter the appreciating dollar, it looks like there are a few waves more for the dollar if we take an elliot view, but practice caution, gold has suffered some pullback and is in wave 2, i am looking to add a some position from my first which is bought at an average of 760- 780, one must take a long term perspective when investing in gold as it is first not yielding anything in terms of dividend or interest, but we can be quite sure that it will keep our purchasing power compared to the rest.

There have been some movements, in china RMbi carry trading, and HK dollar as both are looking at great fundamentals, onli to worry is the HK dollar peg, if the dollar realli retreats we are going to see a rise in it?? u tell me euro have been a great short but the selling pressure is slowly reducing and fundamental wise although we are looking at bail outs and the spending of euros in currency swapping we are to realise that the European are only facing subprime and CDOs valued at half of the US, the banks are also hoarding up the Euros, lending cost has shot up and that will surely boost the value of the Euros.

Oil is still a scarce commodity and we are looking at petrol stations that are sold out in the gas they have in storage, demand has pulled back but opec will reduce the supply once demand is too much, they wish to stabilize the price at the 100 dollar level, as it is a supply and demand game in the long term consider a position in the future markets.

uncertainty and a sense of false hope

2008-09-30T17:06:00.000-07:00

Either way a bill is passed or not, we still had a 16 % decline in real estate prices, we are looking at layoffs in financial sector, lucky for us there are still other institutions to employ, but like i say there is going to be a pool of financial whiz waiting for us to pick up later.

The dollar rally upon weakness of the European financial woes, the bail outs are large but not as significant as the US's but bear in mind the hoarding of cash has made lending hard, retail and consumers will be hit first and stay out of retail unless u see light coming.

-yen might be a good play as i do not see the dollar further strengthening, Euro might be a bet as well when we start hearing that deal being thrown out shows confidence in the foundation of their banks and real estate sector. what ever is in the us is in the europe but in half the size, Euro interest rates are still double the americans.

In a dire situation to act

2008-09-29T19:16:00.000-07:00

Congress representative will take the blame for all, like the short sellers, little did they knew that last Monday we could have seen a 700 plunge if not for short covers, today we have no short covers to save us, no reason for government intervention, no reason to unleash the plunge protection team as there is an urgency to create panic mode, a panic mode to ask congress to pass the second bill that they are going to propose in a similar pattern of the 700 billion plan.

Either ways by hook or by crook the Feds are going to bail their counter parts, either a single powerful push, or a rate cut, both ways would strongly benefit bank and still face a drought in liquidity. The short term rates, Ted spread, Libor are not going to give in to lending so easy.

To act is to change a situation for better or worse, or in this case worst, i think the congress are persisting on holding and adapting to the principles of free market cap although they deny it, we are going in to see the dollar give a strong fight back only to give in to the fact that now the bill has been rejected a rate cut is imminent.

When we talk about this entire issue, first we take hold on what was the purpose of this bailout, to provide liquidity, to allow business to have turnover, short term loans, to free the banks out of liquidity woes, to stabilize the real estate markets, to bring up the employment as corporations have enough capital to squeeze for expansion. Dividends must go for big corporations, in such a dire insolvent situation, i strongly urge to look into the corporations cash rich, as they have the capabilities to buy buy buy.

So back to the plan we need to propose a direct route to provide cash to the down line and not shove it up the banks or major corporations. Since nationalization is such a trend in every country nowadays, why not first empower the FDIC to increase insurance in deposits, provide an emergency insurance scheme for the mortgages that facing foreclosure, the insurance that will ensure that only immediate defaults or foreclosures are going to get the delays in payment backed by the income of holders, the amount of real estate holding, the cash deposits they have and the tax they file.
If businesses have problem with solvency or expansion, enact a bill to pass to boost R&D, Expansion, Business premise Purchase, Acquisition, privileges in form of tax rebates, reliefs, and impose higher taxation on sin goods, like gambling, investment banks, use a multi tier income taxation that are more specific and well researched, Buffet once said that the taxation he faced was so low he rather give out shares to the public to compensate for his earnings. This shows how the reassessment of income tax has to be done immediately, high level CEO , hedge funds, speculators are not being taxed as much as loyal business operators.

A loan or scheme would be proposed to allow businesses to take up but at the market rate but with a longer repayment, 10 years etc or a 1 year loan with the direct opr rates, this are ways to provide liquidity, and not a rate cut that only transfers cash from the feds to the banks and they hoard it up to push rates so high they will earn from all the low yields in deposits, the taxation arbitrage is too large to ignore.

Remember to allow medicare, pensions, 401k,social security funds to be partially withdraw only for settling of mortgage debts, businesses, or unemployed for a certain period to sustain livinghood. Allow a certain percentage to be withdrawn, and those who requires emergency finance support will be required to go thru financial counselling and accessing their financial strenght and assess the ability to repay. The nationalized corporations will have to intervene with the pays of its employees setting the different level of schemes to access the efficiency of job done and the equivalent pay to the employee.

Regulations in accounting standards like the prices of assets, declarations of real estate holdings, etc, must be clear and not being manipulated. Since there have been many talks on accounting standards flaws, i believe the streets are not wrong to impose stronger regulations.

What we want is to go through this crisis and return with stronger banks, stronger financial regulations, eliminate the weaklings and flaws in the financial systems, the cost is unbearable but with the bill rejected we are in for a quicker, more painful cut in the economy, but the moment all the dust is settled, the Americans will make a stronger comeback, and we should not take a shortcut. I mean the storm has just started, 60 cents valuation to the dollar is still too high for direct intervention in Real estate markets, let the private corporations strike deals amongst themselves, eventually they will have to lend when the writedowns are too much to bear.

When the lending starts, or when the prices have significantly gone down, and significantly i value at about 30 cents to 50 cents to a dollar, it is a more viable justification for heavy massive artiliry to be churned out to the depreciating assets. At this moment, at this price and at this level, valuations are overboard for all the wall street corporations 20x p/e, and if we remove financials in the S&p, Dow we are still seeing positive growth. Interventions are still too early we need to focus on putting the money on the streets more and stimulate production, consumption of domestic products.

Are we in for a quick boost from the government?

2008-09-28T17:04:00.000-07:00

The final plan is out..
when any quick fix does not pack a punch , double its size, now 700 billion whats next ? 2 trillion?
David announce in CNBC the banks are so afraid of lending they took out 10% of the 700 billion package in terms of commercial paper in 2 weeks...
Iraq starts buying
wachovia bid war
china green cars.... alternative energy is in play
preparing for worst?
Blame short sellers?
synopsis
BnB nationalize
Rating agencies at work
a study of the plan-no factual basis or justification!!!!!
If they pass the bill, we wil see a mixed signal in dollar holders, as they go in stages the first stage will almost see a run in the dollar as the need to cut rates have to be put on hold and be replaced by higher interest rate to replace the flow of money pumped in the system.
Most government are prim proping their own financial system, please note that asia banks have very small USD denominated assets. Contagion will be limited in the asian financial system, the size of US writedowns and foreclosure easily doubles the total of Europe's
Growing demand in gold
Shortage in the gold
A scheme to debase all together to protect the dollar
Seems like they are going to approve the bill
They will have power to increase rates, they are going to have to raise the rates.!!but they wont have the balls to raise the rates, most likely hold it thru.
Nz trade deficit, milk sudden demand boost will push the deficit down further.

We are all waiting for the path to clear before taking actions, holding cash and staying sideline is KING, and yen looks attractive as the surrounding carry trade unfolds back to the dollar.

Deflationaty assets in an inflationary recession

2008-09-26T06:05:00.000-07:00

the issue here is about deleverage and insolvency, how can you solve the CDS market by persisting with 700 billion, is the amount even close to 62 trillion, and 1.3k trillion money market, i do not want to see a period of contracting production, even more retrenched workers from the pullback in foreign funds into their own countries to save their economy. High interest rates for future loan applications is only a footstep away.

Why not index the entire mortgage security to set a value, sell it in bonds that are insured, make it government backed and use the 700 billion to help mortgage holders to refinance their mortgage, change the repayment periods and allow payment to be paid in fixed rates or real opr rates supplied and monitored by the feds open a direct route of lending for the public in terms of emergency loans. Why limit to the banks only, open it to public and set up centres that provide exposure to the available options for mortgage holders, iou holders.

USD vs Debt

2008-09-24T16:56:00.000-07:00

When we talk about a debt estimate we are looking at 9.5 trillion before the new stimulus package, before the numerous bail outs this year, before even considering the amount of money they have pumped into the system based on all the socialism practices that the federal reserves have made, and the US is a debt nation everybody knows that from 2000 national debt was at the 5 trillion level and till 2008 an estimate of 9.5 trillion before considering any stimulus package, before calculating the increase in debt from all the subprime bails. Dollar have declined from a height of 120( 2001) to the lows of yesterday 76 meaning there would be a 24 cents differences of the dollar compared to the par value of the index 100.

A whopping 44 points which is about 1/3 of the value in dollars with the increase of 5 trillion dollars in debt and not to mention the debt to gdp has risen to about 70% imagine the margin of squeezing the dollar for future bail out, if they told u the value of cds are 62 trillion, that is without considering the CDOs and the private leverages some hedge funds are enjoying at the period of wealth. We might not be able to figure out the entire valuation of the toxic derivatives, hence how would the government according to the paulson plan value the assets of american subprime holders. And the significance of increasing the 1 trillion debt is 20% of the accumulated debt from 2000-2008f. does this imply the dollar to take a 6 % plunge in value to justify and adjust to the level of debt?
If social security and medicare were to be demolished and the burden on the government would be eased and since free market in the US is already History why not allocate these social security and medicare in terms of income tax rebates, unemployment funding, etc, does it even make a difference at this level, we see the chart above demonstrates the wonderful governance of kennedy, Carter, i would not highlight Nixon as he sold the gold at bottom . But it was the administration of Reagans that had instill the values of being in debt to the nation, while the nation is in debt everyday, passing on cost to every dollar bill holder, it is discouraging for banks to hold cash, for the nation to hold cash, so they will spend and consume to boost the economy hence, consumption is the highest weightage in the gdp of america , and there is when producing becomes consuming nation. Thats when inflation will kill a nation of consumers, a family of wolves will eventually fight when food sources are scarce.

We need to understand that the RTC could made a profit as the scale of a bailout was significant enough, we did not see 40 to 1 leverage back then, we did not see 150 to 1 leverage back then, when the bank could put 10% payment of home loans and use the remaining 90% to give approval to another 9 more applicants, that already a 10-1 ratio in bank deposit to loan application, add that to a mortgage applicant who refinances his home for another, thats another 20 application, and add that to the securitization of these mortgages, from Freddie and Fannie, and allowing mortgage companies to remortgage the assets to issue more mortgages, allowing americans to take up more homes, and lastly take into consideration hedge funds buying these MBS, CDS, CDO and the insurers, the 700 billion is not going to make a significance.

What we should be tainting with all the money left is to stimulate spending and growth in sectors that are mildly affected, stipulate supply sectors to grow and start producing more instead of buying, we are not a warehouse to store, Americans have the greatest minds and manipulators in history. Nobody likes to live in an era where the tax is going to be very high, property tax, income tax, the unneccessary spending is only going to prolong the pain and damage, currency pressure will lift the rates in the future if not, only to see capitulation in dollar holders. Gold would definitely benefit.

Why they just wont learn, consumers are going to go down, pulling the economy with them, recession has already struck the US, a depression next?

A read up on us debt, the future social security payment in the next 20 years will boost the debt to a minimum 13 trilllion in 2013 minimal terms.

2009 budget forecast

Dollar pressured?

US patriotism and bailouts

The problem is not over, is merely a start
Short sale ban is going to cut of liquidity in market
Look at banks there are stil some way to go
Cramers is selling Americans now, cut the rates i understand but 700 billion
Uncertainty roams Wall Street and everyone in the world
No bailout would only take the rally away and fix the fundamental according to natures law, let the failure correct themselves may the best bank wins.
You need FBI to value the assets, so how the feds come out with 700 billion:>?
cost hurting miners? merger and buyout of Junior mining firms almost imminent.
Technical analysis on GOLD
Look a week back and see how things can sentiment be engineered
Bush talking about the influx of foreign funds and the nation being greed and took advantage of the leverage given, but bank given these leverage values, SEC gave approval, the government did not question the assets as collateral, as the insured assets, no questions ask by who? banks? insurer? private mortgage companies? why bail them out now. Bush is saying that with these down fall of institution the america will demise, but failing to acknowledge that how irresponsible that he wants to use americas taxpayers money to pay for mistakes made by private insitutions.
How would they ensure banks will continue lending, how would they engineer a bottom in real estate market, are they going to pull the current valuation down to set a bottom, banks are large enough to create a downwards effect in other nations

Volatility wil let those who missed the boat to get on board

2008-09-23T16:15:00.000-07:00

Dollar has been fighting back, and if you had read all my post the decline in the stock market these two days was forewarn and investors if heeded my calls, should understand not to jump in just so yet, at least not when the coast is far from clear, a short term trade isn't painful if well planned, we just have to stick to PT and CL points, understand the level of losses one could take.

As the people are pushing for a bottom, Buffets buying spending approximately 12-15billion to date, does that mean it is over? Or is he just betting that all would be a bottom when the 7--billion pumps in to the system, i mean real estate marts are never a V recovery instrument, and you are not going to see confidence in a long period of time unless you start to see the bonds being upgraded, real estate being bought up ,long waiting list. Hell this chrismas could be worst as many have lost their savings to the bears, not to realise that inflation has also joined the eating spree in the wallet.

The rule is simple, back to basics people, since bonds, stocks can be downgraded, lifestyle have to be realistic and flexible, yes.. talk is cheap but its a even hard fact that u might have to face when the bills arrive, better cut it now and save some cash for later, the more persistent you are the worst things will get. Working is not that bad, its not like in malaysia where you get paid tiny weeny and work for long hours. I used to work 15-16 hours minimum a day and have worked 18-20 hour shift before the pay per hour is 5 ringgits or about1.20 dollar/hr.

Get a skill, this is the only thing i urge all, with a skill you'll be safe for life, combine that skill with entreprenuership, you'll make more than a living, entreprise your business later in life you get a millionaire, manage you entreprise well you'll get your billions. Martha Stewart was only good in cooking, and craft, but she was known for stock manipulation, wonderful business, and her ability to assimilate into trends of technology and entreprising her business into an online giant has made a strong comeback.

Take the big picture, global slowdown, selfish nations will care no one but themselves.

Humility

10 skills, these are living skills, i mean get a skill that you can sell!! but bear in mind all skills are an advantage to u!

Abolish social security, replace it with a something privatized, put in a retirement fund index and all shall throw into this pool.

You can try to drown a hole with water but its gonna leak out eventually

when there is hardly any direction in the market, people start think it is all good for the dollar rmb GDP is abt 13 trillion and the deficit fights in 10-11 trillion in debt

When the feds are the hedge funds, we downgrade them, when they buy all the CDS we hike the rates, when they face the defaults, we cry with them. Throw away those green notes. They are fiat throw them and race to asylum.
Easy to bang start and bang close
Silver viable? not as safe as gold/? i mean coins still have silver content! right?
a 6 month bull in gold, he bangs that the government are here to cover their loans.
Its the government , blame them ! How are we going to get out of this Pretcher.
Woots, China is worried, you must be too!2 trillion of reserves, 2/3 in financial ailing company bonds? US have to bail them now is for sure. International Trade relations

read up pt 2

2008-09-23T01:22:00.001-07:00

My buy call on gold and oil, still stays till long term, but please don rush in at any price do your study or at least adopt a longer term investment perspective.

Read these, not much to be said

2008-09-22T23:23:00.000-07:00

Gold and commodities are facing another round of volatilty baby, this is due to the fact the market in forex and commodities is relatively small and easy to bang before start and close, but do not let it blind our outlooks for a gloom in dollar, to play out the volatility take a future comex or nymex contract.

One man who had great hindsight

Is it too late to do something, property tax is negliable in GDP terms compared to the 1 trillion dollar floor set by paulson, minimum 1 trillion maximum??

Mobius says templeton will make it great this year would u buy equities now? why risk the 10 - 20 % for something that might drop another 3000 points more, is the risk worth it? value investing must be practiced with prudence and great risk management, calculated risk/rewards is crucial.

Even politicians know magnitude of such a proposal, and if it does not save America, it shall wipe america with the DOLLAR COLLAPSE/ bubble.

If bulls are not fighting back, i don't know who are!!! biggest jump

Other companies jump into the pool for help?reinsurance must be hell now.

like i say cash cows are waiting to buy, getting a loan today will be the best move, i have stressed that debt will be repaid in cheaper dollar. The future for accounting regulation, "foreign exchange gain will be part of core calculations in balance sheet, analyst would said, COKE had improved significantly from sales overseas and the foreign exchange gains of 25% boost the dividend payouts" example.

Not much of a rally? dead cat bouncing up n down

Insiders , the name says it all it might be them push to sell.

To late to gain enlightenment. You need resurrection now.

Another time for LBO but from foreign funds, biggest interventionist market open to the public, where multiple SWF , banks, central cartels work together to clear this mess. I said it once and say it again no point holding dollars, buy something!!!!

Back my dollar bashings please, 1 trillion my god thats the cheapest after discount?

I don't know about u, i say buy Oil n Gold, save some for natural Gas, Buy Aud, buy the Euro

2008-09-22T06:27:00.000-07:00

You tell me where else would you trade, please buy at your own risk, and consult your brokers as it is solely your own responsibility, if you profitted do share some with me :)... be selective in entries, do your home work!

This has been one of the historical indicators for the central bankers to resort when manipulating prices. Beta
Is the bull coming?15% up W-o-W
2,500 is the fair value for gold, supply is still contracting while demand increases, you tell me this simple signal?
What are the Feds and Treasury doing to your Dollar?
the debased dollar, inflationary food, raw material, commodity and utility prices , and defaltionary real estate, savings, bond value. US tastes its own medicine.
If you search, Dow was heading for 8.5k if they did not shore the cash up.
I said inflation is the problem they will face, read this, the national debt cannot be repaid and compromise of 70% US GDP. Kill social security and medicure, push health insurance.
Gold , it is not many times we can see what is going to happen ahead!!!

Asian Vs America

2008-09-21T20:15:00.000-07:00

Malaysia and a whole load of Asian countries facing the 97 financial crisis, the thai intervene, Bhat sell down, Korean loan, Japan lends, etc.

During the crisis, the Americas came in with their free market strategies, talking about letting the failed companies work their way through, keeping the interest rates high as ceiling, and the intervention of IMF into the way we govern and run our companies, foreign funds were being deflected away by the implosion in currency value, the only differences is that those countries that did not take a loan from IMF worked their way up .

It was not easy, Taiwan from an agriculture and industrialization balance, worked the uphill task, china thru underground practices to traders, diligent planters and miners, had made their economy so powerful that if the spending did not grow so fast, saving could increase another year or two the economy would be even stronger. Inflation was never a problem for them until the 2005 ,where we start to hear about storm, disasters, and the sudden explosion in china bullrun. Capital control was still imminent in the chinese as they do not want to get a too large exposure to external forces after all they were a communist country.

Writing this we understand that the hoarding of cash by banks would create deflationary pressure, but do bear in mind that would be deflationary in Real estate and lending market. How about retail spending, utility energy production, labour market, food and agricultural markets, lean hogs and real pork prices in china have increased significantly and we would continue to see the upward momentum in food prices as population is not going to drop dramatically.

The US should had follow their own suggestions like keeping their interest rates high up to protect the capital and reserves, and deposits. Keep the money market with less money supply, instill the practice of saving in the nation of debt, these are practices that could one day lead them up again, instead of encouraging them to take up even more loan in terms of credit spending and the modeling of their entire government practices. Why would they save when it is not even worth saving anymore.

Keep free market mechanisms working, when a bank fails many would go down but that would not cost the nation and the dollar much but they would argue that liquidity must be given to the big financials, if they go down they wil bring down many. But many of those broke down together were gamblers in the first place, did they not understand the power of deleveraging of assets, they should be taught a lesson like the 97 currency speculators and defenders as the US would put it. But instead they walked the path most criticized which is the bail out route, Malaysia had danaharta, US had federal reserve, TARP,FDIC, etc. We bought out pn4 co, GLC, and inject cash, they buy out FFmae,Bearsterns, AIG and they have TARP for troubled assets.

Will cash hoarding result to Foreign funds diversifing their holding to some where out of their country if so today we are looking at the start of carry trade, the debase of USD will force Fund managers to start buying currency with higher yield and benefit from inflationary food prices as demand shortage will herd prices up not to mention cost increase. Oil have the full support from OPEC remember when they did not want it too high 146 was the peak and is now looking at 100 dollar as support, it will realise at least when OPEC wants that as a base. OnG fabrication and mining does not come cheap, so is gold production.

AUD n CHF is viable, the Chinese are very anxious about dollar holding, i would be cautious about gold entry as they would need to push the dollar up, but market force are fighting any attempts of manipulation, bear in mind the feds manipulated the currency with a desk of foreign bankers and central bankers, looking at volatility, fear, beta changes. We must also take a long term view in terms of food prices, they are going no where but up, how many times have u hear macdonald cut big mac's price, they have only revised up and never down. Sugar is in a high demand era, together with milk and coffee, take a good look at entry points and definitely see natural gas as alternative plays come in.

Please do not pass the 700 billion bill as the US citizens will see their money value shrink regardless of inflation or deflation, economy was always about fairness and balance in the system, so when there is a bank collapse the demise will bring the forward of a real strong financial institution. Not every financial institution qualifies to be a bank.

Take a contrarian view

2008-09-21T16:26:00.000-07:00

On the current crisis the financial market is holding up on to, we sure have to salute the top guns for being able to us their stature and influence to put up with manipulation of funds to shore up investments and the equity market. Treasury yields are still near all time low and getting lower every minute, as i assume there would still be some problems getting people to buy those notes more over hold. If i were treasury holders i would have sold all the bills and shift to anything that is safer or holdings that will protect my assets against depreciation of the dollar.

If one steps back again, and take the birds eye view, Mr. Paulson although adamant but contradictory, has always wanted to back the dollar badly, he acclaims that his motives are to defend the dollar from a further depreciation and 25% was suffice to diminish the value of the US debt they were holding, but from his latest act to propose for the bill to finance 700billion USD in the market would certainly boost the US nation into a 6.6 % increase in national debt. It is suffice to say that the actions to have the" troubled asset relief program " would debase the currency and suppress any yields still exist in them, all from the action of both the feds and the treasury secretary. The view now is certainly paradoxical.

Now we must always access the situation from both sides, yes the debt will be increased to a level where dollar must depreciate another 1 % minimal to justify any increase in debts, but who is going to continue selling the dollar cheaper? To what level are they going to give up the entire dollar as the common denomination used, it is not impossible to have such a scenario since the Euro has a more stable outlook compared to the dollar, at least they are not giving the money out at such a rate us printing press are.

The Euro interest rates are still at least double of those in US, but ... there is always a but Henry Paulson is putting his hopes high on the appreciation in inflation to boost the CPI and the price of real estate which may have a very feeble push in certain parts of America where real estate have already down 30% average speaking, although pricing is very individualistic and objectivity bears on buyers. They are running the funds on a reverse auction for the lowest and most competitive pricing from banks. If anyone is going to take it harsh it is the further write downs after the Troubled Assets Relief Program buys a property or default or security from 60 cents to the dollar , at the price of 20 -30 cents, that halves the value of securities held by banks.

This would be taken badly by banks and in terms of liquidity they are going to be dried up even more, but i view as long as the real estate market does not bottom and rebound we are not going to be able to feel the effects of the TARP yet, they are engineering a bottom, giving hope that they will buy only at the cheapest and receive warrants for the cent they pay in, returning the gains to the US government and from the returns covering back the loans and debt from the US foreign counterparts holding bonds and buying treasuries and the dollars.

But with all the dust and mist surrounding the asset market and the diminishing valuation of dollars from the heavy selling of yields would turn the entire economy into a hyper inflationary recession cycle before going deep into a depression. The only people happy now are Americans spending habits using more credit cards to pay for goods as their repayment would be in cheaper dollars, no wonder they are happy to take up even more loans.

I believe that asset prices will stay afloat for a while since the US government is going to buy them , but afloat at what level and for how long until we need to see the people suffer another round of Bailouts as banks took too much of a writedown, and a rate cut is either imminent or targeted loans by federal reserve parties come to their doorstep.

But, if this bill passed is well accepted and manage to stimulate bankers to lend, for business to be financed and turnovers, for mortgage loans pending for the past 6 months approved, auto sectors will see some light as well, the nation will benefit from our socialist government to help us invest the money we pay in tax, and hopefully it will not go to the top guns and financial institutes who benefit from offloading mortgage holding cheap and gain off disposal. As the trend of paying high rank CEOs with fat luscious bonuses continue , I dont see the need for the Feds to intervene, moreover risk the money of the US nation.

Have a nice weekend

2008-09-20T18:25:00.001-07:00

Have Fun

Domino?FDIC who bails them

Short Squeezed covering pushed

Crisis?what crisis? they said that during 97'

I called 100 u followed?

http://www.usagold.com/live/price-break.html

Capitalizm departure

Ambac post

gold

Pretcher speaks 1929

Eur/USD all they know

We all drink coffee, now that we are stress we are drinking more

Are they inflating everyone out of the mess?

2008-09-19T17:05:00.000-07:00

The greatest rally has come, two days of combined gains of 790 points in the dow Jones, wow!! and how much intra-week gains did we have? Is it another classic Bear Rally, this dead cats bouncing you might be thinkin but how high more. Read this post

Deflation was never the concern of America, it is the increase in COL and the depreciation of real estate assets happening concurrently, the only think we saw that really changed was the entire administration style from L-F capitalism , into socialism and with a hell lot of bail out, but to what extent i ask again. The feds are going to be chopped this time, and i don't see why we should not terminate a federal reserve that only purpose there is to direct money into the pocket of cronysm practicioneers. AIG have great skills in building relationship, PR, they bring you close enough to slowly slice up your wallet while you remained happy. DEFLATION?

When i was posting a few days back, they had already put in quarter of a trillion in the system, that was a rough calculation i made, and i said the feds had to take a loan! Even the bankers need a loan now, but who are to regulate their accounting standars , who will be the one who manages all the money movements. They were here to bail out all the wrong investors, but at the same time they allow their intervention to be profitable in the wrong hands.

After the Bear Sterns, Fed Stimulus plans, Numerous amount of cash injections, Fannie and Freddie bail, the ban of shorts, what more do i need to say, the dow still went from 14,000 to 11,000 did the cash infusion worked? If i were an option trader, i would write a put, if i were trading index i would short it big time probably take a double down short! Fundamentally they are not even close to the exit. Technically we are oversold, we are now covering the shorts, we are edging to the mean, but hell if that means after this the support will turn to resistence and we will plough again. 1929 by 80% plummet after a 18% rally.

Treasury is running around to get a loan to support the money used by the feds, even government this big needs to raise cash?Inflation is coming in big time like it or not, and just take a look at indicators, the dollar is up but its an empty can of sardine! TIPS is way strong even though treasury are down, no one willing to risk buying it low! you dont see another 1 trillion being wasted down the road, well i do and that will leave a hole in the deficit we are running and its unfair to everybody.

Bailout with a cost to the american, check the RTC cost figure and calculate with inflation calculator, i did my research and the figure reported in the article was less than the those held by RTC back then.
Crude oil is standing strong and together with gold, what sign do u think its giving?I*f*****n
will feds bring america down with them?
They are going to be more indebt than any history book can tell you! They are just not big enough, buying devalued assets will not restore Real Estate price!
Gold report 2007 if you bought since 2007 this is a point to reconsider adding somemore
If this dont convince to hold gold, kill the dollar against Euro i don't know what to expect

Of the acts, and a conspiracy theory by nations around America, would we see the demise of a great economy

2008-09-19T03:40:00.000-07:00

Everybody is facing it besides the corrupts and crony. A true story and destructing in wealth, who should be blame? Federal reserve board chairman requires no election of public but they manage the wealth and money creation, so it's not about blaming but making a change.

George soros have the brain of Einsten and he was famed by draconian moves in currency trading, was a scapegoat like all the short sellers now, being blamed for causing the massive selldown of AIG and Lehman, they must have no idea what is market force, and they think everybody is imbecile to believe their conspiracy. Soros saw this ahead and like as usual he sounded to the public that further damage in wealth destruction was coming.

the article

China and all the big guns are waiting to start shooting, CIC is making its move and Buffet is taking advantage in the crisis to bang on companies that involved in power production, with so much storms and casualities, I foresee more spending would be incurred in this sector, Buffet is scrapping an elephant with a small scapula.

Did this help contribute to the surge, i dont see a down fall caused by shorts but the shorts sparked yesterdays opening rally.``So many shorts were pushed into covering,'' said Jean- Marie Eveillard, who manages $35 billion at First Eagle Funds in New York.

The regulators and financial institute giants, market leaders are revisiting the same route that ended them here in the first place, why not be critical and do something that would be beneficial and not further land US in banana republic (bigpicture.typepad.com).Indeed a nostalgic new chapter of the feds and the financial legislator boards.

I have a conspiracy theory that i do not know could be true, but the big guns could have been planning to accumulate as much USD as they can in term of bonds and treasury, etc and they are waiting hawkishly and patiently, a vulture of nature to devour the failed American Nation, all the reserves would be converted to their strengthening currency and with the conversion of currency shore the SWF they own nationally, and carry out a acquisition so big it could replace the world largest economy. This transition at least does minimal damage as private equity does not change in operations but only ownership in terms of nationality.

Lets take a look at countries with massive USD reserves:

It used to be japan to suppress the Yen value

Current Standings of reserve in terms of country and their SWF

Talking about US Reserves, bills , TIPS, STRIPS how they manage.

These Black Gold SWF are waiting too AbuDhabi

This is the start , there will be more LBO

What would happen when stock market capitulation takes place, the ratio between bank assets and Stock market Capitalization is almost 1:1 , the relief i take is that the significance of equity protectionism is being upheld at the cost of a different asset class, but will this spark the era of massive Asian-American MNCs? Middle Eastern owned American corporations? LBO is not out of the picture yet!!!! There would be a price for everything.

Ample of cash , temporary relief,Technical Rebound, is the rally sustainable? the path is not cleared yet

2008-09-18T16:45:00.003-07:00

If you did not read all the post below, i mentioned that gold will be sold down again and again, yen would give a tight fight but the defend on the dollar is stronger from Paulson-Benar ke ni? coalition. They want to defend the dollar but at the current scenario they are defending it so that have margin of safety to bash it down, the fact that they are bailing out all the conglomerates show that they are not practicing accounting regulation that is prudent, they do not regulate the financial market but open a new chapter to assimilation and coordinated actions in cash injection.

If CPI and GDP were the real indicators as they shown, i am fine go all the way to buy them out, bail it out, but the policy makers are contradicting themselves, creating false hope by picking dollars from thin air, by selling treasuries made of thin air, they have to do something for the dollar or else when people start to desert the dollar, start to view its intrinsically fiat value, foreign countries will either transfer all their reserve in to Sovereign wealth funds and switch a portion to safer shores. The tumble will lead to a series of dominoe effect, this is the reason the have to hold up at least the dollar.

Gold is being bashed at the moment i write, commodities as well, but hold that sell button, think again as an investor and not a trader, or speculator, these rally sparked by temporary injection of cash, what if the injection is dissolved as fast as they were injected? Would a band aid help to hide the wound, only to learn end of the day band aids fall of! Not everyday is a shining day, and not everyday is gloomy, price actions work in the market, there would be time when a price is justified to buy by majority, but those are herds, that usually go bust and starts to sell until minority steps in. Short term gains are meant for volatile periods but do not buy and hold, at least not yet, if the market is really recovering we could head 15k in the next year so why risk for that small 10 - 20 - 30% gain.

I read a post that says that if you provide enough money you can solve almost anything, but not this mess. Not in a market where employment is not there, where wealth distribution is held back, where we are not able to gain from the so called fiscal stimulus plan which is nothing fiscal about. Rate cuts, cash injections, have they not paid enough the money they pay could feed another nation for so long and so long, the money used for war is to the extent where words cannot be used to describe, where no layman would imagine holding unless there is a hyperinflation and the currency goes way off course (Zimbab).

Russia led the rally by 18%, euro FtSe n DJstoxx 50 all led in three digits, HSI gave in 1.4 k gains, us futures are triple digit earlier, but is this all an illusion by temporary pumping of the dollar and cash injection, if u gave me quarter of a trillion to pump into the market i dont see why its not going up, but for how long and how fast the cash would disappear again. This effort is inline with naked short selling banned remember they have 3 days to cover the naked position. This is final would the 3 days rally last, or is this an opportunity to buy commodities?

China - The Last Mohican?

China , Feds, Dollar and the great manipulation of words and figures

2008-09-18T16:45:00.002-07:00

The autopsy, the diagnosis, the treatment, are they injecting morphine?

How to spark a rally in bad times and bad news

China’s not in trouble if they wanted to own America

Cut AIG open and u see china and Greenburg

Read on china and gold

The feds’ are BROKE

The unraveling of the truth in currency manipulation

Read up on china bulls!!

They knew it all along?

Did they want gains in the first place they wanted a cheaper Yuan, they wanted to contain inflation, china’s inflation was low until the 2004-2007 period, where retail , crude had a jack off.

Cash management and china

When tigers meet lions

They bought too much? China needs to export everything somewhere

Read up more

2008-09-18T16:45:00.001-07:00

Will the new plan limit systemic risk, mitigate financial lesion, are we giving free cash away to the corporations while nationalizing the cost? Would commodities be the safe haven, they are being sold down for the dollar, yen was weaker against the dollar but only giving up after a strong dollar fight from 104.

Yesterday, every commodity, PM trader, yen trader was against a great trader, the central banker they would want to represent market force, the invisible hands PPT took place, look at the pivots in the daily chart, they think we are blind! If 900 is sold down in gold then what about those holding from one thousand and levels above 900, are traders stupid. Did any equity holders profit last night averagely speaking?

Are you still going to buy treasuries, and bonds, reaction from bond holders are very clear, yields are shadowed by the feds throw 20 day -70 day bills, while talking no tax payers money is involved, with a deficit there won't be any left to use that's why they need the loan. Debasing the dollar and intervene with the market is the only option to shore the financial market up but to what extent and what cost imposed on the dollar, and to what level of manipulation of indicators can the public deem legal?

As BHC investment said long time ago, the policy makers are taking a paradigm shift, in my view since Greenspan when they intervened in private corporations, they stepped in to hand them the last load!!! They told all others in crisis previously to allow banks to fail, and they are now sweeping the dirt they made!!!

Is this the traditional safe-haven for dollar holders?I'll risk a shift
Dollar Bear Rally, it come down from 120-110-108-105 a 103-104 is a rally??kidding
can i buy some time and hope pls! at least i am doing something, Rogers ask me to quit doing something!
Buy it all up pls and make all Americans more indebted
I said it last night, they say its now!!! Mind me, the only concern in China's mind is growth percentage, i mean the whole world is looking at a recession and slowdown, china is looking at what growth should they allow the economy to head.
Opium anyone?
SEC played a role in exemption, but they need higher authorities and referrals to pass the exemptions. Stop the blame game!! be proactive
Is financial patriotism considered as communism? Capitalist days are over, hey take risk don't worry there is always another bailout.
Invisible hands? push them all down
Water n energy ? Crops and agriculture? Food and consumer products? Buffet starts his move, yesterday i said all were eager to step in the light!!!! he steps first!!!!
Take a long term approach, don't buy when its not cheap? missed the boat just wait they sell it down again!!!
Read this, fear returns and they are still shorting!!
He knows how to put it nice, but its the truth
More money to lend, Bernanke took a loan for the lenders
He is right , man-made disaster but he did not mention his involvement
For the opening surge
Another RTC read below

RTC those days, a new plan today! Are you ready??

2008-09-18T16:45:00.000-07:00

Resolution Trust Corporation, 1989 was proposed to solve insolvent savings and loans mainly to dispose the stockpile of rubbish real estate holdings. The spinning of foreclosures started with Home Owners Loan Corporation (1933) for the management in refinancing mortgages and foreclosure of mortgage defaults which include auction and selling of foreclosures. Then there was the Federal Asset Disposition Association (1985) to help sell and manage assets under the Federal Loans and Savings Insurance Corporations.

All that were concerning RTC were the tangible foreclosed real estate holdings, commercial loan papers, Non Performing Loans, Loan applications, defaults, equity interest , partnership, JV. The size of RTC those days were considered as huge as a junkyard full of metal parts that are gigantic and immobile. The treasury secretary disclosed that the 750 – 1000 S&L accountable to them amounts to anywhere from 408 billion to 560 billion and the amount of cost to them to dispose the entire holding would stand at about 89 – 132 billion.

5 hundred sixty billion dollar bailout those days would cost = (What cost $560,000,000,000 in 1989 would cost $925,317,102,574.91 in 2007) which is about close to a trillion dollar. If you compared to the terms today you might as well flip it around 50 times that figure and you are close to the total CDO and CDS plus mortgage backed securities being valued. But, all must realize that this is near the beginning of the storm, the hurricane has just uprooted the few tree and your neighbors’ home when it hits you, all you can do is hide in the basement or take shelter at safety room full of pillows and your important documents buried underground. It would be a long way for that storm to go on as we have not seen massive further devaluation of real estate and asset pricing, FDIC have not sounded the alarm, the feds are still picking money from all around him including from thin air.

Can you tell me if RTC was so successful, the Bush Administration had a sound policy making and economic hindsight, and then what are we doing here savoring the taste of subprime mess. Everyone is involved no matter you accepts the fact or deny. They are taking a route that has been taken in 1989 and if it failed you the last time, it probably gonna fail you another.
The only question is how long will it delay the process, are you going to start another government arm to cover the defaults and foreclosure of the post 1989 upcoming RTC. Stop dumping taxpayers money and start initiate in fiscal spending to boost manufacturing, agriculture, production. Give more exemption to local goods and incentives to boost the use of locally produced goods, take a look at boosting productivity in local corporations involved, start helping US producers sell their products, trade unions, government schemes, these are a better alternative to boost the economy instead of the MAY tax rebate, come on!!!!! Education funds, employment under government agencies, start to help those recently unemployed through seminar, employment opportunity, and mass employment schemes thru recruitment agencies.

That is just on top of the entire foreclosure scheme, how about the front line, these defaults would have been flipped a few times just to reach the top, if included valuations from FADA and HOLC the figures would have jumped. And I quote Bush to say this “he will take any actions necessary to stabilize markets in the face of a crisis that is shaking confidence in the nation's financial system.” And you would come to think that what if Trillions weren’t spend on the war, would crude oil jumped? Would deficits narrow down? And once again where will all the ammunition and war machineries go to?

The Feds are buying time, they need the support of the nation and all the time to wipe this mess up, the DOW rallied last night, but did your holdings surge a lot? And if you look at the chart last night, initially no one was confident about the plan and the Dow went to negative zone, only to see some short covering after SEC stepped up and the move of invisible hands, check the sell down of gold, would precious metal of such great demand being sparked with such great sell down regardless of intrinsic and extrinsic valuation, treasuries are still too near the OPR, Libor is still a mile away from the rates, we are still seeing bank not providing loan. The new plan was to buy hope and confidence, America needs hope, the rest of the world looking upon them needs hope.

This situation is like a family crisis, where the brother does not talk to the father but the father acknowledges that his son needs money for his home loan, he has no job anymore. So the father pushes the money to the sister to give to the brother to pay his loan. That is what the entire situation looks like, when the mess will end I would not know, but I am keen to look at how the big illiquid, immobile, insignificant papers and toxic derivatives being held by the government and FDIC has to clear. When the Real Estate market further demise, investors continue to look at areas to flea to and that would be none other than gold.

update on posts below

2008-09-18T05:58:00.000-07:00

I think China is being a vulture now, they know they holding massive portions of DOllars, they have tons of cash, they can buy, they have the capital and the financial means, they might strike when the crisis implodes too many a time, wait and see they are as impatient as "ants on a hot pot"

Asia + US

2008-09-18T02:08:00.000-07:00

Desperations in raising capital, ECB BOJ nFeds make a joint effort to save markets.

By Bloomberg,
Central Banks Offer Extra Funds to Calm Money Markets (Update2)
By John Fraher and Simon Kennedy

Sept. 18 (Bloomberg) -- The Federal Reserve, the European Central Bank and the Bank of Japan united with their counterparts around the world to offer an additional $180 billion to markets facing their worst crisis since the 1920s.

The Fed said it authorized central banks to auction the funds to ``to address the continued elevated pressures in U.S. dollar short-term funding markets.'' Policy makers ``continue to work together closely and will take appropriate steps to address the ongoing pressures,'' a joint release said. The Bank of England, the Bank of Canada and the Swiss National Bank also participated.

Finance officials have struggled to restore confidence in markets this week as concern mounted more banks will follow Lehman Brothers Holdings Inc. into bankruptcy. The cost to hedge against losses on U.S. government debt climbed to a record yesterday, the U.K. government was forced to sponsor a rescue of mortgage lender HBOS Plc and Russia poured money into its banks.

``There's a complete lack of faith in the markets,'' said Jim O'Neill, chief economist at Goldman Sachs Group Inc. in London. ``There's a lot of cash hoarding and people losing trust in banks, so the central banks are acting to relieve that. This might not be the last time they have to act.''
Limit Doubled

The Fed said the ECB has been authorized to double its existing limit to $110 billion from $55 billion and the Swiss central bank can offer an extra $15 billion. New swap facilities with the Bank of Japan, the Bank of England and the Bank of Canada amount to $60 billion, $40 billion and $10 billion, respectively.

The Bank of Japan said its dollar-swap agreement will be conducted ``appropriately in view of the prevailing market conditions.'' That statement was published after its policy board held an emergency meeting in Tokyo today.

The action is the latest attempt by central bankers to coordinate their response to the financial crisis. In December, they joined forces to boost dollar liquidity around the world after interest-rate reductions in the U.S., the U.K. and Canada failed to ease concerns about bank lending.
The announcement boosted European shares and U.S. futures, which have been pummeled this week as contagion spread through financial markets. Europe's Dow Jones Stoxx 600 Index, which has dropped 8 percent this week, gained 0.8 percent to 260.15. Futures on the Standard & Poor's 500 Index added 1.2 percent. More than $19 trillion has been wiped off the value of global stock markets since Oct. 31.

Failure to calm markets will see central banks inject even more cash, said Robert Barrie, an economist at Credit Suisse Group in London. Other options central banks could take include accepting greater collateral denominated in foreign currencies and increasing lending to banks abroad.

``The lack of dollars has been making the financial crisis worse around the world, which is why we now have this coordinated response,'' Barrie said.

The markets gonna like this move, but again for how long? It is these coordinated actions that make taxpayers suffer and deprive the public proper utilization of funds, what happened to corporate governence and the function of a government?

Malaysia reacted well with these news with the come back of CPO and the positive sentiments implanted by the foreigns but i think some short-covering had to do with all the buying or else the last minute fizzle from - 5 to -11points should not be ignored , the market will give impression that no one will be allowed to fail with the government , not knowing that it is their money used to resuscitate the dead banks! Hang Seng was bouncing from a key support level of17500-16500, with the news it closed with almost no changes from a milestone up, lets see some updates :-

first reactionof last nites closing
US and Europe takes the baits( i quote More than $19 trillion has been wiped off global stock- market value but the valuation of CDOs are between 50 to 80 trillion, thats still a 4:1 ratio)- bankers are still not lending they are exploiting the loans by 302 basis.
The very optimistic trader, confident and making profits in a bear market (pro)
we are at that time of the year near festive season, retail should be a great indicator of the economy, visa, Amex, Master should benefit, but outlook is still gloomy for me to start buying.
The devils advocate
China's the giant to scoop, WB waiting people to strip
Prepare to face the Axe, develop a great skill and sell it it is going to save your life
Now they can solve things, dont do anything, Selling will ease at a point, how about when it is zero?
No protectionism, if AIG can pull thru the crisis, the biggest beneficiary would be the feds and the nation, but how does profits transfer to the public?
If fear and excuberant is an indicator, it would dominate all indicators
Will he save Americans, traditionally elections in US and rallies run concurrently
Job market
Short sellers, are you the culprit?
the oracle

Take a step forward and see

2008-09-17T16:39:00.003-07:00

The graph can be interpreted in many ways, an Arabian trader once said the KLSE will make it its' just a cup and handle formation, then we look it as a head and shoulder, and plus current instability and economy obsticles, fundamentally Malaysia is more sound compared to some countries, but when there is no leader in a nation we cease to spark a bull in such market, foreign funds might only plough in when the coast is clear, meanwhile 950 is a level to support or else we are looking at regions of 880-900 for a stronger support if the Americano Sneezes!!!!

Weakness in The US and regional areas of asia will bring down the currency, and that is the only support the dollar has, MYR has its fair share of woes and is looking at Sustainable CPO to back up a rally, can we look at that direction if the commodities spark a bullrun, i mean we are still in the process of biofuel acclaimation should we start to have hopes that CPO run will come back??

Look at the lines they are being violated at this moment of the blog being post, please note that there would be technical rebounds between range, but based on the outlook any rally could be short-lived, bearing the fact that the feds do not allow corporations to fail might satisfy what traders want in short term. There are some theories that the transition among American Government Administration periods they would not allow things to fail, but even with efforts to avoid misery we end up at this level, the actual scenario could be worst if capitalism is practiced by book. The Us Banks & Financial Institutions Market Capitalization has shrink about 4 trillion and more to come as deleverage process will unfold the mystery, u dare risk your money??

courtesy of NYtimes.com and the bigpicture.typepad.com; these are great sites view them as frequent as possible

We all have to face the mess, so HOW?

2008-09-17T16:39:00.002-07:00

After this wreckage in the financial market explodes with pass and gangrene, we are going to see the rotten flesh infect the everyday lives of people. Closure of shops, the demise of real estate prime property, fire sales, auctions, families losing homes, a sudden drastic change in lifestyle and the inevitable cut down in spending and life’s will be even difficult. Unemployment will further burden the government in terms of spending and widen the deficit, they should probably cut back in social approach and start some fiscal spending in terms of construction and in manufacturing that can boost productivity of the country.

I see no way that we can save an entire economy without these familiar terminology : efficiency, effectiveness, leadership , prudence, management, productivity, ROI ,ROE,ROA, etc. We are going to hold back and grind our teeth thru the entire rollercoaster ride, many are going to suffer, they are going to break down, I urge them not to, families should not be so narrow minded, be supportive, your family is your stronghold. People renting will definitely increase and there is nothing wrong about renting to all of you out there, it is a method to cut back your spending, if today is not your day One day will be your day.

Empower yourself, don’t seek short cuts anymore, work hard, longer hours if have too, improve your skills, think and innovate, express your creativity and bang on whatever abilities you have. Even selling sandwich could bring back the tycoon who failed Thailand. Access your situation and think about your personal strengths and weakness, start with something that is accessible, approachable, easy and understandable. Complexity equates to risky, when you don’t understand how are you going to sell to yourself, your boss or the customers. Find support in whatever you do, trust yourself but only after enough research and confrontations, you may think it is right but another person’s view is another perspective. Only when you step out of the light and allow others to be under it you will know the position you are at.

Emotional and any breakdown must be handled properly, you not only have to look at yourselves, understand you are never a single unit, even though you feel nobody cares, but plenty will care when u reach out. It is when u close your doors we cannot reach out to you.

Economy is about the relativism of the roles every individual plays, may it be the wall street trader, the commodity trader, the free market players, the central bankers, the banks, the business owners, the everyday workers, unemployed , house wives, the old, the young, the baby, all are considered as a unit. This shows how dynamism works, when dynamism I mean not everything work directly and physically, moreover with the tech era, digitalized interaction will allow people from across continents to meet and intermingle.

Dynamism when reacting with relativity will show that no single human being will not be tied up and this is the core belief of chain reaction, in this economy it has shown that everything works both ways, the buyer the seller, the gains the loss, the poor the rich, the scoundrel and the Hero. Psychologically speaking it is the ego and Id in everyone and the mechanism that triggers it to function at an edge.

Leave me some comments I will get back to you write down your email and we can correspond!!

Read this now

2008-09-17T16:39:00.001-07:00

With the downfall of equities, people will turn to look at different alternatives they might use to able to defend their purchasing power from being scrapped away. If you take a look on my right i am a big fan of GOLD and yesterday we have had a comeback run in this precious metal. This is one way to preserve the Purchasing power, it is not a interest return investment scheme, it is not going to give you short term gains, it is not dividend paying; let me tell you it is a shelter in a storm, a finite metal that has been conditioned by men to value against Fiat money, u can deny the fact that gold holds nothing against the dollar, but you cannot underestimate the differences in terms of valuations (inflation V.s Goldprice; Dollar today V.s Gold Price)

Stocks will continue to take more beatings, any rally is non sustainable in the bigger picture! Falling 400 points is nothing, take 20 % fall for first cover, another 20% , another 10% your 100% retracement point is being raided what are you going to do? Cry? Come on tell me how many people are trading commodities futures? How many are considering taking on GOLD? Is it as populated as the stocks? You can short it but are you the central Banker? Wouldn't you like to arbitage on the valuation differences!! Dont follow the herds or stand being slaughter!! With a debased dollar, i would throw it for GOLD, yen is making a comeback from carry-trading uncertainties , take a look!!! Would the common denomination change in the future? would you still want to hold fiats compared to actual bullion and physical currency, it is finite so bear in mind the valuations is going to rocket.

Demand for Gold did not shrink but increased over the past few months, prices are not seen as sold down but being manipulated, safehaven, take a longer term perspective. If you don't believe me, in two years compare the DOW to Gold price. More and more fiat money are being created, more and more liquidity is being pumped up, the more inflated money is going to be, the more debased a currency the more likely i would abandon it. I mean what are reserves for in the first place when u don't need to defend your currency!

I am not asking you to jump into the pool blindly, do some research and do not attempt to time markets! After all, it is not part of investing to time a market, and it is even heavier priority not to lose insight and control over self when investing. At least not like cramer, bu...Bu... bu.... BUll S***!!! This could be the start of another round of bull in commodities, people keep in mind that Oil has retraced a lot, it could not be justified in surrounding nations that produce oil to keep selling at such a low price, OPEC will cut supply to boost pricing and curb too much supply, are you still shorting it? Lean hog, Soy, CPO, Sugar, Natural Gas are still waiting to bounce, if equity is not the safehaven, Hedge funds will raid the Commodities......Defecits, Debt that are haunting them(cheaper dollar pays debts cheap), dollar pumping, shorting of gold by CB cartels.

and they say this :

-The U.S. government is now on the hook for future Fannie (FNM)/Freddie (FRE) losses. Total losses will depend on the severity of the housing/credit debacle, but it isn't a stretch to imagine losses in the $1 trillion range.

-The U.S. budget deficit in August alone was $112 billion.

-The U.S budget deficit is forecast to be $407 billion in 2008 and a record $438 billion in 2009.

-The $438 billion for 2009 does not include any funds used to "conserve" Freddie or Fannie or any new fiscal stimulus package, and it doesn't account for the full cost of the Iraq War (let alone any new incursion into Iran, the Caucasus region, or Pakistan/Afghanistan).

-About the only thing supporting GDP growth in the past two quarters has been net exports, thanks to the falling value of the dollar. The recent strength in the dollar is likely to blunt this tailwind.

-The risk of competitive currency devaluations is very real as every country battles for a piece of the shrinking pie of investment and consumption spending.

-The Fed continues to swap high-quality Treasury securities for garbage securities.

-U.S. unfunded liabilities range from $50 trillion to $95 trillion (depending on the assumptions used).

"Even the intelligent investor is likely to need considerable willpower to keep from following the crowd."
- Benjamin Graham

" currency that has taken the test of time , none other than gold/silver"

who Leaps ?

A failure to keep the insurers, what more after banks

1999? imagine the dollar index at 76 how abt gold n oil?

Now they start to tell you this

Look at GATA they have the best Vids and writings

Panic? no gold rush yet

is it a correction or manipulation; i mean how high dollar can go?

Beware mortgage application were high, but why are they cheap?

deleveraging

1600?2200?what is the value of gold

Hey don be so sour! mistakes are made by man! we are all men(hyperinflation?)
Hedge funds involved big time, no wonder Bernake sat them down Sunday(HF or CB cartel?)Pls note the -ve correlations dollar to gold, and how sell downs that dont see fundamentals and pricing!Must see this

** at this time Crude oil looks like a round curve waiting to head up? only worries are slowdown in demand as people will not spend more**

The Feds need help? The worst is not over!!!

2008-09-17T16:39:00.000-07:00

" I could clone Einstein several hundrend times, and yet still unable to work on the mortgages they covered"- WB

When I say Feds involved, the Feds are truly involved(see this)!!! Take a look at the Bottom part of post 1, I mentioned that who is next and today we see blood on the streets again, as you see I only suggest you o hold if you can take a devaluation of up to 50% in the few months till 2009 period where I foresee many uncertainty and unwinding is half way thru!! They say we are half way there but 62 trillion of CDS show that we are less than half way thru, the market acts as a sweeper, to clear the path of dust and dirt. Feds need to act super fast and clear AIG illiquid position as soon as possible, more money created in thin air they fight the gold bug no longer!!! 20 day bill, 76 day bills what will the rates look like you tell me, see this: (bloomberg)

US Treasury rates

“No one and I emphasize no one can beat the forces of nature and the market force! WB followers of then hear that market are irrational, and now when all are still swimming with their tops off, I assume he is behind their listing out his Buys when the downturn strips all holders to their birthday suits!” Many large corporations are still holding cash and we look at Microsoft, Coke, we look at sovereign wealth funds, the new hedge funds, Funds that promote 100% capital perseverance, C.Ds! There are still companies that are worth taking a look and it is all about timing! We all know that any sane human would be stupid to try time markets; I suggest is study behavioral patterns, take the big downfalls to compare, what are the reactions when bottoms show!

You will argue that we have technical indicators, hell I love TA they study price behavior, but its those things that is futile as it will tell u the volume, distribution, the buying pattern, the selling pattern, at a certain level, a certain price, with the assumption that price have a memory! Bear in mind, Bear!! That we are now in a situation that is so new, and such a glum that no one can explain to what extent the severity of toxic loans are going to haunt us to!!!

Look at stocks that are able to produce results to downstream and upstream in the line, look into their book values, their debts, their tangible assets and assets, think of their management as a operation focused which is to boost on their productivity and efficiency! In such a situation, we need to tell ourselves there will be no more easy money, we’ve been working smart too long, so smart we buried ourselves! Analyst reports are a bunch of excrement full of foul smell and waste, would you follow the guide of analyst who keeps that Strong BUY but yet he doesn’t buy!!! Why give the call when you are not confident with your interpretation.

Buy stocks that are undervalued, I would just say that Warren bought stocks that have 2x the value of what he was paying, or what he valued them at and you should be doing what he has been doing for so long! Cut the speculation act, do not play with thin lines unless you have a closet full of cash, even full of cash are you sure all this cash won’t be deemed as FIAT when dollar loses its front line defense! The dollar lose sight of gold today, and it shows that efforts to manipulate gold prices are gone, Feds books also need tidying! What is that news going on now Wachovia is going to merge? Read post 1 bottom. I have been nothing but spot on, we have more derailing to go, either we see a strong nationalization of assets, a big wave of mergers and acquisitions, or else we see a massive devaluation of equity, real estate and debased currency!

All the options above are assumptions and it up to you to judge yourself give me some comments. AIG have a wide range of products, and cannot be allowed to fail… think yourself if government buys their dirty loans, and gives them ample cash, what does that imply? Would you buy a business that has a central weight in all aspects of life in 130 countries and basically all walks of life!! I am not stating a buy cause I am worry to what extent the dilution will affect the price but take a look at its holdings vS assets Vs debts Vs premium.

At the time writing China investment Corp has begun its actions spreading its possible wing to take in Morgan Stanley which was about to take Wachovia in a merger, i reiterate many companies are sitting on cash piles, waiting the correct moment like this to buy a US business, Chinese are real capitalist compared to Americans.(Buffett Style) Wa Mu have no other options but to Auction itself out, would anyone take a stake in that company?

In the process

2008-09-17T06:31:00.000-07:00

Some views: u tell me ding dong!!
- the finance minister is always assumed by the PRIME mInister
-Anwar awaits response
-Somethings brewing behind
-S@PP is as fishy as the moustache
-Ku Li ousts?
-MCA & Gerakan pulling some actS?
-Soi Leck says he is promoted what say u!!!!
-Mahatir makes a comeback
-Khairy voices but is he really up for it!!HE plays loyalty card the
-Maybe we need some Conservatorship in the political scenario, any bailouts?
-RPK 'n' Teresa's last Hope -- Wa Chai!!
-Why YOYOL not detained
-Why kiss-my-ail a-mate not detained
-kiss the perpetrators @** in jail pls.
-We need to take the Archimedean point to look at the situation as a whole
-would the change bring new vision, hope, and lead us to a better horizon?
-would there be another wrong decision made by the people choosing the wrong people
-History has said it that the citizens are stronger than the Country
-We have to think of a better tomorrow
-Change always comes with a cost
-The sky is always clear after a storm, it is the mess we pick up(is it going to leave a biug pile of junk)
-Fellow Blogger detained i thought he can write his thoughts after all thinking is not wrong ma!!!
-Should we appeal to abolishment/confinement of the prescript in human thoughts, speech, and litereature, nobody should be a sectarian!!

Useful links

2008-09-17T02:55:00.000-07:00

Post Comments on the Future of The Economy in The States and how the contagion spread to Asia would affect countries like Singapore and Malaysia.

Read up ye' all, there will be even more unraveling in the US economy we have a handful of mortgage defaults and jeopardized banks and financial institutes, Subprime spares no one, the Feds and so call experts engineered this fall themselves. Risk management is as important as asset allocation and management.

2008 Black Monday and more Financial Irregularities to come ( Part2)

2008-09-17T02:16:00.000-07:00

After Barclays purchase of Lehmans investment arm and Bank of America 50 Billion buyout, the Feds have written another cheque to supply money to the markets to help finance AIG illiquid situation. If AIG does not receive the money supply quick enough we are about to see an illiquid insurer turn to an insolvent corporation! Looking at the extent of AIG insurance coverage and CDS it gonna pack one hell of a punch to the Recession Americans were denying so bad. Even worst, would be a recession turned to depression. The news was received with happiness around wall street although there were no rate cut. Despite such adamant activity to defend the dollar, (sell down the gold futures and buy the dollar, the yen/ dollar rallied from 103 – 105 yesterday) the feds cleverly contradict themselves by giving out big chunk of taxpayers’ money that they fully utilized till deficit to the other financial banks.

Asia reacted strongly as well with all the liquidity and the bail-out plan mostly due to the fact that Foreign Funds from US do not need to pull back, the bailout in my humble view was already pre-determined on Sunday together with the OPR. The Credit default Swaps are shooting up like stars with the fear surrounding bank and the unwillingness to open up to the public.
Damm, why not just nationalize most of the banks still around and regulate the entire real estate and mortgage markets, issue re-employment schemes and benefits to the employees, pay fat bonus to CEO and Board directors.

Let’s take a look at the way Asia reacted. Sustainable rally I doubt.

• Initial Report Before Confirmation
• Nikkei looks Up and Retrace a bit
• Tokyo Rises ; HSI^ retreats
• Is it a dead cat?
• China comeback?
• Japanese defensive stance, carry trade unwinding, stronger Yen?
The offer from the states to AIG is imminent as the decline of AIG in the entire market would spur effects globally and turn the already slowdown into depression as it has services in over 130 countries, ranging from general insurance, Credit default swaps, derivates, mortgages, corporate loans and retirement and hedge funds, the fact that all the CDO unwinding and downgrade of bonds leads to CDS and the main provider for these mortgage backed bonds and CDO insurance is none other than the great AIG.

The credit mess is deleveraging and clearing up the only question pondering investors is till when we need to witness and bear the consequences of flawed financial experts. With listings in Tokyo and Ireland the impact there would be quite detrimental (I doubt there would be a safe spot for them) and if the money is not provided the fate of its 30000 employees would be questionable, looks like this time employment claims and reports on the US would look too good. And McCain thought it was sound!

AIG managed to raise 20 billion in capital yet is insufficient and require another 85 billion in terms of shares, warrants, etc which would dilute the company even further, are we going to see another battered MNC worth 2 dollars? Even Morgan Stanley is closely monitoring the Short Term Loan Rates that shot up to 6% two days ago and all these points that the illiquid situation is driving the debt management and bonds rating to the edge of another round of collapse. Morgan Stanley’s earning were on par with analysts expectations but still to avoid the fate of Lehman’s’ they are on the brink of considering being acquired or a merger. For your information there are only less than a handful of banks with AA ratings on Bonds and most of it left is in Australia, evaluate the economy yourself.

Globalization is indeed a double edged sword, the Chinese have a saying that “water can keep u afloat and can make u drown.” MNC have enjoyed earnings too good for too long thru good management of debts and premiums until they forgotten that it is all about book-keeping when dealing with money and when the debt gets out of control they are going to fail themselves.

The feds’ efforts of pushing money into the banks will only allow the bank to generate more money with the liquidity provided through arbitrage of interest rates differences between loan and deposits. At the same time, this will cease bankers to provide emergency funds to the market. These are the actions of corporation’s desperation to save themselves first instead of bail others. The extent of financial failure is so bad that the feds have paid JPMorgan according to CNBC just to help settle the dust in Lehman, how reluctant to bail Lehman , the feds did not give in submissively but instead fought against the tides only to know that the tides where fully against them.

• take a look

No safe-haven
In the market now, there would not spare anyone as the giants sneeze we catch a cold worst still pneumonia, the Money markets which were thought to be the safest are under siege as well, latest news were about a 14 year old Reserve have fallen to less than 1 dollar per share making them to withheld all withdrawals, this is only the initial stage of Lehman’s debt write offs, the unfolding of Lehman’s assets and debts will soon roam the market with more pain and blood, the weakness of AIG may save US from Armageddon or Mayhem but it will not bring them under refuge from financial sell down. More blood has to be shed, markets have to correct, and the only choice we have to make now is to preserve our purchasing power, to hold cash or convert into commodities? Are u a long term holder of US equity, are you able to take a 5 year hold? Are u willing to take a dive of up to 30 % or 40% of your capital? These are questions that we must ask ourselves!!!

2008 Black Monday and more Financial Irregularities to come ( Part1)

2008-09-15T23:44:00.000-07:00

This time it has the significance in terms of figures of the 1987 crash, everywhere was filled with anxiety and uncertainty in Wall Street, even abroad the effects was not unknown, the signs of a Sunday Emergency Session opened show how tensed and tight the situation was and it was not going to be easy on the Feds, they won’t have the balls to raise the rates, they have to battle the Inflationary pressure, defend the Dollar and the Financial Giants. They have to choose now who are allowed to fail and who must never be allowed to bring down the world with them. 1987 the Dow took a big plunge of 508 points , so did the Monday news become official that Lehman’s would be forced out of the picture, I mean it was bitter but who decides who to bail-out ? Is this still a capitalist country? With the valuation of 25x Per is there more slumps to visit to clear out the forest, or Buffett says swim naked?

Lehman Brothers had survived the Long Term Capital Management crash, 1987, 1997 stock massive devaluation, the Dot Com Bubble, but Subprime Wreaked the ship and sank them to file for bankruptcy protection. Even the September 11 WTC attack could not move the American Stronghold, but the subprime mess deflowered them and wreaked the fortress with massive toxic derivatives deleveraging and a Big default Note to the mortgage issuance. Indeed another Black Monday for the history of America and this contagion has spread to all around the world. Previous talks of decoupling from the America Subprime suddenly subsided when no one in Wall Street could tell the amount of securities held by this Giant.

We want to take a look at the Subprime mess chronologically, from 2007 around May to July there were news about the mortgage defaults which were too heavy and burdened banks around please note I am addressing the problem in a very demeanor manner, we have the mortgage companies holding defaults that are mere paper or certificates. Then we have the companies who couldn’t bear the massive leverage and declared bankrupt, the DOW back then was about 13,266 average speaking during June and they manage to pull a rally of suppressing the poison pill to about 14000. That’s when July mortgage payments were still unable to recover and the rates were sky rocketing, we see Countrywide ailed, Bear Sterns bought at $2 per share, massive write down till to date where the write downs could not be justified with the insignificant amount of cash raised, they said 100 Billion dollars was an injection to save the market then came a note to save the market with 300 more Billion then lastly they revalued and said the derivatives cost 1 trillion.

Investors are looking at the limelight that the Americano government could extend their interventionist arm to feed banks with big amount of “fiat dollars”, this type of intervention did not exist officially or could I say is used to be represented by a figure known as the PPT but now intervention is on the surface and publicly known, we take a look a Feds open discount windows, Fed short term liquidity boost, Fed open intervention with banks, Fed injection of liquidity , massive Fire sale, buyouts and bailouts what more to say with the invisible hands in the markets. Mind you but financial markets work in a cycle and not in a full upward manner, what would this imply to gamblers and those that place bets with evil grins. Rogers said this is a corrupt act to make winds for financial giants to sail with tax-payers money and this in turn will spur inflation bugs to bite our holdings, we can see that even the manipulation of data with M3; M1 data retracted from the feds office, economic indicators adjustments, and this would debase the dollar so badly that inflation is spread to others to make US look deflated and yes the US giants have done nothing better to increase the trade deficit band and exported nothing extra including their inflation problems to all around.

What we look upon here would be the safe-haven to protect our deposits and our cash, we could see Buffett has some strong strings that he can pull for information, he withdrawn all deposit insurance applications before the announcement last Friday about Lehman brothers, if only he was socially responsible and could give a stronger hint instead of reiterating that the action to nationalize Freddie and Fannie was his course of actions, many would have been spared. The short term oversold condition and the desensitization of all the news of financial dysfunction will probably bounce the dead cat, but nobody!.. I reiterate nobody in this globalized economic situation may it be a GIANT, or even central bankers be spared if the American Giants fails, even they cough Asian equities could catch cold worst still pneumonia. The financial markets need to fail themselves and embrace themselves thru the rough ride to appear sound and develop a secure foundation in the economy.

The ride to unwind all the financial mess, derivatives trading, etc is on the way, with banks refrained from provide liquidity shows that they acknowledge the risk they are facing and the importance to defend their depositors. It is the banks fundamental function to protect deposits and generate profits using a small proportion of their deposits. But it is the lack of liquidity to help banks to turn around and fill the debts , and that is what the Feds has been used to justify all their action, people are missing the point that the banks fail and we will see even more buying , mergers and acquisition, these reforms are taking process to improve the fundamentals. Banks need to clear their reserve with bad loans and divest the failed real estate in a downhill market. All in all these will pave a way to make banks and the US economy make a comeback in a bigger bang given that the Feds does not debase the currency too much and inflate the economy.

Please remember this is just the American chapter, the unfolding of rubbish holdings would overturn the European economy and sovereign wealth funds that have holdings in all the crumbling financial institutions.

Take a Look Below and think which would be next:
BOFA Vs Merrill Lynch
Freddie & Fannie Vs Federal Reserves
Wachovia
UBG
AIG Vs MBIA Vs AMBAC
Morgan Stanley Vs Goldman Sachs
Citigroup Vs Wells Fargo