http://market-ticker.denninger.net

The Senate votes some time between now and Saturday, unless we stop it.

We had better stop it.

Harry

http://www.forumpictureprocessor.com/gallery.asp?gallery=876

Fannie and Freddie can't be fixed.  They're geared at somewhere between 65 and 200:1, depending on what you count and how.

The money simply isn't there.

If we bail them out, we will add a trillion to our federal debt immediately.  This will spike the long end of the yield curve.

The result will be much higher mortgage rates.

And every other kind of interest rate.  Not just on houses.

If they blow or go into runoff, we will get higher mortgage rates.

But other parts of lending will be unaffected.

If you want to see massive unemployment, cut off credit to business and you will make that happen.  If we backstop Freddie and Fannie, there is a very high probability that we will see exactly that.

This bill is a monstrous mistake, and significantly raises the risk we will have a Depression.

Investing?  http://tickerforum.org and http://market-ticker.org
Diving?  http://scubaforum.org

They cannot be fixed, so this is just a delay taht will make the final outcome worse, rather than better

You will witness the destruction of a our curency

http://www.youtube.com/watch?v=-VV6ST1Pmk4

http://www.youtube.com/watch?v=ubkM9VX2qdQ&feature=related

http://www.youtube.com/watch?v=O5vEM-FlMtg&feature=related

I guess we'll have to agree to disagree on this one.  In different times, a bailout may not be the best idea, but right now, if FM and FM fail, the market will tank, jobs will go away, welfare and bankruptcies will skyrocket, etc.  It's all about consumer confidence.  It may be delaying the inevitable, but hopefully when they finally do fail, the economy will be better able to handle it.

Harry

The housing market needs to take a sharp nose dive to get in line with pay around the country.  Housing prices far outpaced what Americans could afford.  Companies stretched the housing bubble out even farther than it should have went by lending to people that did not deserve the loans.  Consumers also bear a lot of the resposibility as well for taking such loans when they should have known better.  Just because a financial institution tells you that you can afford something does not mean that you can afford it. 

The economy/housing market/companies need a sharp rude awakening to bring things back in line.

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

Jon

Harry

Semper FI

Cape Horn 21'

Moving the wheel faster towards a new world order.

It may sound crazy but it's true. Nothing you can do about it. Just go on living and hope for the best.

It keeps on coming up on the financial news media stations all the time but it's short little interviews with people who are saying this is what is happening. It's not main stream news.

Hopefully I'm wrong!!!

 Mark

 Pensacola,FL

It doesn't matter what we think.  What matters is whether the debt service requirements can be met.

Since this bill was introduced the bond market has taken 15% of your home's value by jacking mortgage interest rates.  That's WITH "assurance" of this passage.

It may get much, much worse.

You can't bail someone out by taking money from one pocket and putting it in the other.

Investing?  http://tickerforum.org and http://market-ticker.org
Diving?  http://scubaforum.org

Fannie and Freddie debt put on credit watch NEGATIVE.

Why?

The Government will insist on super-senior status.  Therefore, their EXISTING debtholders will get raped like an ape.

You thought this was a GOOD idea?  Uh, no, its a VERY BAD idea.

This is precisely the sort of thing I expected to happen, and now IT IS.

There is still time to stop this abortion of a bill - Call Martinez, Nelson and Bush.

THIS BILL MUST NOT PASS.

Investing?  http://tickerforum.org and http://market-ticker.org
Diving?  http://scubaforum.org

We now will get to see if I'm right about the consequences, or wrong and this is "the savior."

Anyone for odds?

Investing?  http://tickerforum.org and http://market-ticker.org
Diving?  http://scubaforum.org

You called this website a bunch of fringe, conspiracy, lunatics and gold nuts

http://financialsense.com/fsu/editorials/rebels/2008/0725.html

Now it looks like Karl Denniger is preaching to the choir

Karl, you can't save them all buddy

Got Gold ?

for anyone interested

They are changing their stripes Nat.  You might want to pay attention to that.

Never mind that Gold hasn't done that $1300 rocketshot many were predicting, has it? 

Ever wonder why?

You should.

As for Sinclair, same deal - where's that $1300, $1600, $3000/oz gold?

Hmmmm.

Investing?  http://tickerforum.org and http://market-ticker.org
Diving?  http://scubaforum.org

Sinclair hasn't changed his prediction other than to say if anything he has underestimated

Before Jan 11 2011  $1600 per oz

and high quality producers at multiples of thier current prices

shed's some light on how the traditional banking system was hijacked.

http://www.financialsense.com/editorials/engdahl/main.html

Ok, truth time.

Here is the chart of GLD (Gold ETF, 1/10th the price of gold continuous contract with very little slippage, actually buys the physical metal behind the contract):

And here is the chart of the SPX, the S&P 500:

We will take the opening prices on January 2nd, and the closing prices of Friday, and analyze two strategies - buy and hold Gold, and short and hold the SPX, both with zero leverage (that is, simply purchasing or shorting the underlying instrument.)

On January 2nd, GLD opened at $83.56 and closed Friday at $91.69.

Buying gold on the first of the year has returned (thus far) 9.7%.  Not bad.

On January 2nd, the SPX opened at 1467.  Friday, it closed at 1257.

Shorting the SPX has returned 16.7% thus far, or close to double the return obtained by buying Gold.

Both strategies have produced a positive return in an overall down market, therefore, both are "winners" compared to the traditional "buy and hold the market index" strategy.

However, on a measure of return, shorting the SPX has been the standout winner compared to buying metals, without question.

I think the folks talking about buying Gold MINERS need to have their head examined.  AUY, Yamana Gold, began the year at $13.21.  It closed Friday at $12.76, for a net LOSS thus far this year.  The GDX, or the miners ETF, began the year at $49.35.  It closed Friday at $44.26, or a ten percent LOSS!

People seem to forget that mining is a very petroleum intensive business.  It consumes copious amounts of energy and not just in the obvious places; the large tires used on the heavy equipment, for example, are all made out of OIL. 

Junior miners are very highly geared, in that they are essentially all bets "on the come" for future appreciation and "believed to be recoverable but not yet economically proven" deposits.  Small shifts in the cost of production are often the difference between a stock that shoots the moon and one that is an outright zero.

Unless you believe that energy prices are about to collapse mining stocks are insanely speculative, and juniors even more so.  If you're going to point at juniors as an "investment" and try to make an argument for them then someone trading other parts of the market should be using futures or even options as their comparison against your total return over the next 12 months.

If you believe we are about to collapse into hyperinflation you must first explain why the bankers, of which The Fed is a part, would permit such a thing to happen.  Why, for example, would they loan you $300,000 to buy a house and then be willing to accept repayment of that $300,000 in dollars that, in aggregate, wouldn't even purchase a small car?

The "Argentina" crowd, and there are a lot of them, ignore the fact that Argentina and other nations that have undergone this sort of collapse had their national debt denominated in something other than their native currency, and thus the bankers were not destroyed by the event, nor did the bankers have any effective means of stopping the government from doing it.  Neither is true in The United States, and until you can explain why a banker would be willing to allow you to borrow a large sum of money that will buy a house and then pay them back with a large sum of money that is now only worth enough to buy a few loaves of bread (if that), you've got a problem with your thesis.

Investing?  http://tickerforum.org and http://market-ticker.org
Diving?  http://scubaforum.org

http://financialsense.com/fsu/editorials/schiff/2008/0731.html

http://financialsense.com/fsu/editorials/deepcaster/2008/0801.html

Opportunities & Threats from
the "Paper Money" Regime

by DeepCaster LLC, deepcaster.com | August 1, 2008

Print

The banks have begun falling…first Bear Stearns, then IndyMac, and Heritage…The Climacteric we forecast has begun.

The Threat of Systemic Collapse about which Deepcaster (and, increasingly, others) has written is also increasing.

But in this Threat there are several Opportunities.  The August Opportunity is the first significant one, which we note below.

To fully appreciate The Threat and identify The Opportunities, it is essential first to briefly review how we came to be in this precarious position.

The Root Cause of The Systemic Threat

The root cause of The Threat lies in the structure, functioning and policies of the private-for-profit “U.S.” Federal Reserve.

Various international private banks, several of which are headquartered in Europe, own the “United States” Federal Reserve Bank.

These International Bankers, acting through their “U.S.” Fed, make money by creating money out of “thin air” as eloquently described by the Dean of the Newsletter Writers, Richard Russell:

“I still can’t get over the whole Federal Reserve racket.”

Consider the following - - let’s take a situation where the U.S. government needs money.  The U.S. doesn’t just issue United States Notes, which, of course it could.  These notes would be dollars backed by the full faith and credit of the United States.  No, the U.S. doesn’t issue dollars straight out of the U.S. Treasury.

This is what the U.S. does - - it issues Treasury Bonds.  The U.S. then sells these bonds to the Fed.  The Fed buys the bonds.  Wait, how does the Fed pay for the bonds?  The Fed simply creates money “out of thin air” (book-keeping entry) with which it buys the bonds.  The money that the Fed creates from nowhere then goes to the U.S.  The Fed holds the U.S. bonds, and the unbelievable irony is that the U.S. then pays interest on the very bonds that the U.S. itself issued.  (With great profit to the private owners of The Fed - - Ed. Note)  The mind boggles.

The damnable result is that the Fed effectively controls the U.S. money supply.  The Fed is …not even a branch of the U.S. government.  The Fed is not mentioned in the Constitution of the United States.  No Constitutional amendment was ever created or voted on to accept the Fed.  The Constitutionality of the Federal Reserve has never come before the Supreme Court.  The Fed is a private bank that keeps the U.S. forever in debt - - or I should say in increasing debt along with ever rising interest payments.

How did the Fed get away with this outrage?  A tiny secretive group of bankers sneaked through a bill in 1913 at a time when many in Congress were absent.  Those who were there and voted for the bill didn’t realize (as so often happens) what they were voting for (shades of the shameful 2002 vote to hand over to President Bush the power to decide on war with Iraq).”

Richard Russell, “Richards Remarks,” dowtheoryletters.com, March 27 2007

After President Wilson signed the Federal Reserve Act into law in 1913, he reportedly said, “I am a most unhappy man, I have unwittingly ruined my country…a great industrial nation is now controlled by its system of credit…the growth of the nation, therefore, and all of our activities are in the hands of a few men…”

Insightful economic forecaster Ian Gordon notes several negative consequences of the nearly 100-year reign of The Fed, consequences with which we cope today.

“Since its inception in 1913, the Federal Reserve Board has been responsible for almost 95% devaluation of the U.S. Dollar.  All this has been achieved through its ability to continually inflate the money supply.

click the link to continue