DOW lowest since april . Down below 12,600.

finance.yahoo.com...


the dow had a rough day, and most foreign index's will probably follow suit later today.

the future looks bleak and the fed is pushing on a string.

earnings are going to be lower going forward, with continued revisions downward likely IMO

all most all of economic growth was due to expansion of debt in the last few years. that expansion of debt also known as the credit cycle is meeting it's demise and the consumer is 1. not being extended the cheap credit he was used to. 2. watching his home value shrink in a housing deflation. this deflation will last at least a few more years.

here is a chart of the banking stocks index, no words are needed

image.minyanville.com...

good thing for us their is some lag time before the economy mirrors the chart.


the drop in consumer spending will lead to a continuing spike in unemployment.

note that the uptick in ARM's resets just recently saw a spike which will continue thru most of the year, foreclosure is a process over time, where the ARM reset's and then typically a few months of payments are attempted, then a few missed, then foreclosure, i would expect a wave of higher foreclosures late in the spring carrying on thru the year. I am currently looking for the silver lining.

listen to this on bubble vision , where these guys must tip toe and be very optomistic with their thoughts, because they don't want to start the panic, and still i think most will get the picture, esp. after the 2:30 mark

image.minyanville.com...

[edit on 8-1-2008 by cpdaman]

This is te site I check every morning for financial new. They use web bot .

www.independencejournal.com...

So It Begins

Big drop? Big bounce! With the price of gold up more than $17 as I start writing this morning, the first time on my agenda is a nice 'atta boy' for myself. This weekend, I told subscribers to Peoplenomics to be alert to a test of 12,743 - and if that level failed, then we could see a sudden drop to test 12,518, and if that failed, 10,400 would be our next stopping point. No worries today, though: With four bounces off the resistance, a rally - at least at the open - seems like a lock today.



As you can see from a quick glance at the daily chart for the Monday session, there was a real powerful spurt of buying in the last half-hour of trading, without which my first line in the sand would likely have given way. Does this mean the market is finally out of the woods? Far from it. None of the problems which existed last week and combined the Dow down several hundred points has really changed.


[edit on 1/8/2008 by zman]

the peak oil theory says that economy depends on petrol . If you take a look on a 30 years graphic with how Dow evolved as well as the petrol used by the US economy you see a high resemblance . There is less and less petrol to share for more and more people. Also the new factor - economical boom of China (and India ) that started to absorb jobs , businesses and petrol . In the beginning i remember mostly unskilled going to China as corporation wanted to take advantage of unprotected cheap labor force. In the latter days we see more and more skilled jobs migrating to China and India ( Microsoft , BAE , car manufacturers , aerospace parts etc) .The only chance of survival for the wealth of the Western society would be an exceptionally skilled work force .. but i see it also in India and China...

Originally posted by zman
None of the problems which existed last week and combined the Dow down several hundred points has really changed.

keep in mind that the 30 DOW components of Today

are not the same components/corporations...i.e.: driving forces of the economy... as the DOW was ---- Only a year ago !


there's a new sub-set of driving forces at work here

Major support levels broken. Money exiting the broads...finding a home in commodities. Gold wanting to reclaim it's currency status.

Father of Bush tax cuts: Recession likely

Flight to gold as investors lose faith in money


*A heads-up to Gools, St Udio...cpdaman, and anyone else that follows Jim Willie. JW is on board for an audio interview at the CometGold Forum. Exact scheduling will be posted here. The Jim Sinclair interview could be available by Friday

anyone can look at fundamentals and predict a recession NOW.

the question to me is wether we get a depression

if you haven't notieced a pattern in predictions from most TV economists they all air on the side of caution. The predictions are always revised to account for conditions being worse than expected take the housing sector as an example.

before you go on TV they most likely coach you and say "okay give them your analysis , but better not use the D -word and keep things to an optomistic tone" that is because the "tv experts" opinions shape people's expectations and investment and buying and spending behavior.

I am truly tired of talking about the U.S economy in particular in a negative light but their is truly nothing but a nightmare on the horizon.

so many jobs in the service sector. so many people's financial futures are in jeopardy.

i would be willing to bet the U.S gov't has known what the heck lies down the road for a while, and there has to be some sort of plan i hope, because gov'ts worst fear is a large amount of angry citizens and the disorder it causes. My only concern is that the political shmoes don't really care, and they only think in the short term (i.e do whatever it takes to get re-elected) and to hell with what happens when they leave) while the military most likely has a plan and it would likely be co-ordinated with the U.N because 1. most of our troops are overseas) 2. alot of countrys will feel the pain from this credit cycle down turn.

some high ranking decison makers in the mutli national elitist groups trying to use this period to erase the soverign nation state and pave the way for a Global solution. these are obviously strong words and predictions and i stand by them.


one more prediction that you can take to the bank is that money will flow into gold and silver and probably palladium and platinum, for a while.

[edit on 8-1-2008 by cpdaman]

Hello everyone, I've been following these discussions from the sidelines as opposed to participating. (New job in September so havn't had that much time to post.) Glad to see that OBE1, St. Udio, and cpdaman are still involved in this financial discussion on various posts. I guess I was a little early back in Sep. (early is still wrong with money on the line, which thankfully I moved to cash and short term bond funds when I went back to work.)

Looks like the PTB have given up trying to keep the pump going now that the holidays are over. I'm skeptical of Gold at the moment, I can't decide if we are heading into a deflationary recession (basically a Depression which would hit gold too), a hyper-inflationary environment ( where gold would rocket even more), or some type of stagflationary environment ( where i think gold would do okay). Also i think gold may dip due to selling to cover margin calls.

It being an election year expect the Fed, the President, and Congress to intervene in their own ways over the next few weeks/months. I'm almost certain we are in a "bear market" and the recent economic data seems to all but synch that we are in a recession at least, not merely mid-cycle slowdown.I think we have the potential for a crash, but who knows. I hope that the soon-to-be retiring boomers have allocated assetts accordingly but I doubt it given that generations past. They really have the most to lose in a market event.

I lived with hyperinflation in my country two years! Even have a lot of money from that period as was worthless.

Originally posted by jefwane
Looks like the PTB have given up trying to keep the pump going now that the holidays are over. I'm skeptical of Gold at the moment, I can't decide if we are heading into a deflationary recession (basically a Depression which would hit gold too),

Deflation - no. Deflation with depression would happen if FED stops insanely printing money and rise interest rates. And that's not going to happen as banks would be massively gone into bankruptcy.

Originally posted by jefwane
a hyper-inflationary environment ( where gold would rocket even more), or some type of stagflationary environment ( where i think gold would do okay). Also i think gold may dip due to selling to cover margin calls.

So, Bernanke choose to print money like there is no tomorrow. Print more money for liquidity! And that lead into hyperinflation. Bernanke thinks that credit expansion doesn't have to stop and that caused boom can be prolonged forever [just with printing more fiat money]. Hyperinflation is drastically more dangeous than depression!

The world prices of oil, gold, weat, metals, various commodities are high and will be more higher because of inflation of US dollar!



[edit on 9-1-2008 by Vojvoda]

[edit on 9-1-2008 by Vojvoda]

[edit on 9-1-2008 by Vojvoda]

Goldman Sachs Says To Short Gold In 08

Editor's Note: This should be an indicator to buy gold. Goldman Sachs is going to put out bad information to people in hopes that they can buy at lower levels. Full Text

Maybe you guys remember the 'short alert' put-out by Goldman that rattled the weak-hands in November? As you can see by the editors note...he was one writer that understands the game.

Below are related excerpts from Adrian Douglas posted on a Goldman Sachs stock board yesterday. Thread title: How GS Stabs its Clients in the Back

"It is very clear that the Goldman Sachs call to their clients to short gold in 2008 was a complete set-up....

The other aspect of this story is that Goldman recommended to their clients that they short gold while they themselves took delivery of 5.5 tonnes!!!…and that is only a trade that we know about! They have also been aggressively reducing their short position on the TOCOM for 18 months from 56,000 contracts short to 8000 contracts...."


How it works

delete

[edit on 10-1-2008 by cpdaman]

Originally posted by Vojvoda
I lived with hyperinflation in my country two years! Even have a lot of money from that period as was worthless.

Originally posted by jefwane
Looks like the PTB have given up trying to keep the pump going now that the holidays are over. I'm skeptical of Gold at the moment, I can't decide if we are heading into a deflationary recession (basically a Depression which would hit gold too),

Deflation - no. Deflation with depression would happen if FED stops insanely printing money and rise interest rates. And that's not going to happen as banks would be massively gone into bankruptcy.

Originally posted by jefwane
a hyper-inflationary environment ( where gold would rocket even more), or some type of stagflationary environment ( where i think gold would do okay). Also i think gold may dip due to selling to cover margin calls.

So, Bernanke choose to print money like there is no tomorrow. Print more money for liquidity!

And that lead into hyperinflation. Bernanke thinks that credit expansion doesn't have to stop and that caused boom can be prolonged forever [just with printing more fiat money].

Hyperinflation is drastically more dangeous than depression!

The world prices of oil, gold, weat, metals, various commodities are high and will be more higher because of inflation of US dollar!



[edit on 9-1-2008 by Vojvoda]

[edit on 9-1-2008 by Vojvoda]

[edit on 9-1-2008 by Vojvoda]

well deflation vs. inflation is a silly argument IMO. it leads one to believe there can only be one or the other. Are there not many asset classes, stocks, bonds, houses

well houses are deflating, or more accurately Dis-inflating, if they continue to lose value past their 2001 days i would say deflating, but honestly it is semantics there

bonds have begun to deflate as well, this trend is not as solid as houses or as hopeless IMO

unless you live in a cave, you can see cost of living expenses are inflating

Food is inflating, especially in foreign country's.

Insurance prices are inflating, medical costs are inflating.

Energy prices inflating

Stocks Marke indexes are stagnating with many individual stocks deflating rapidly , namely homebuilders and financials (actually financial's just about crashed)

Precious metals are inflating

so alot of Asset prices are deflating and a lot of Costs of living are inflating. Bad combo. Precious metals are one of the only Investment assets that really over performing.

Also the fed is not really printing like mad and all those headlines like "fed injects 40 billion" are all just rollovers i.e old temporary loan was due, so they just reissued the same loan , because the problem hasn't been solved (credit crunch or insolvency crunch)

the devaluation of the u.s dollar will cause things priced in dollar to be re-adjusted.

Hyperinflation is a word throw about a bit too much. inflation in money printing may occur but i think a deflation in credit is about to occur because banks are tightening their lending standards. Also it would be very difficult to hyperinflate the world's reserve currency. A small little country sure, but the united states and a world reserve currency. that would be a challenge

also sure they can print some money ( not sure if it can catch up w/ deflating credit) but even if it can , the fed can't determine where that money flows. i.e Asset values can continue to deflate in a situation where money inflation outpaces any negative trend in credit, although in that situation i see metals flying high.

it will be intresting to see how long the foreign country's can continue to peg their currency's to the dollar, because if the fed lowers to say 3% that will cause very dangerous inflation in foreign country's, and civilian disorder w rising prices for many costs of living.

IMO many economists overestimate the ability of the FED to really do much. I also think Political decisions will have a great deal of an effect on the monetary policy's and this political body in the U.S is getting desperate.

The problem is very simple.

most people have no idea the differnece between Capital, Cash Flow and investments.

Your house is not an investment vehicle. If you have a rentals, then they are investment vehicles that also produce cash flow and can become Capital, IF, IF, IF, you treat it as a business.

If the house a person lives in is being used to purchase a car, vacation, or other depreciating expense, then this coming recession will force the hand of the homeowner.

On the other hand, people that invested in Good gold mining companies, or any other hard asset for that matter, are doing very well. Most natural resources are doing well, and will continue for the next few years.

Inflation, deflation, etc......these are results of idiotic fiscal policies, in the USA is is nearly free credit and ridiculous subprime loans to people that had no business buying a house. Now the market will adjust, and take away what was never theirs to begin with.

Gold has been in a 25 year depressed market, it is adjusting to where it should be in relation to currencies and value of those currencies. This is true of nearly all metals...even lead/Zinc has outperformed equity markets in the last 5 years.

Investing today must be offensive, not defensive philosophy. The Western Markets are bleeding, while Eastern markets continue paying dividends... Eastern economies are not based on Credit. Invest in China Mobile, Petro-China, etc...these are excellent equities that will continue to appreciate.

Originally posted by cpdaman
well deflation vs. inflation is a silly argument IMO. it leads one to believe there can only be one or the other. Are there not many asset classes, stocks, bonds, houses

Sorry, but you don’t understand deflation and inflation, and as I see some basics of economy. There is no deflation/inflation of products, financial instruments, commodities and etc like you wrote. Inflation is defined as the increase in the price of some set of goods and services in a given economy over a period of time. Deflation is vice versa. And Japan is only one country in the world (with two-three another irrelevant) with deflation.

Originally posted by cpdaman
well houses are deflating, or more accurately Dis-inflating, if they continue to lose value past their 2001 days i would say deflating, but honestly it is semantics there

bonds have begun to deflate as well, this trend is not as solid as houses or as hopeless IMO

Read what I wrote. You talk about prices, not inflation/deflation.

Originally posted by cpdaman
unless you live in a cave, you can see cost of living expenses are inflating

Food is inflating, especially in foreign country's.

Insurance prices are inflating, medical costs are inflating.

Energy prices inflating

Stocks Marke indexes are stagnating with many individual stocks deflating rapidly , namely homebuilders and financials (actually financial's just about crashed)

Precious metals are inflating

so alot of Asset prices are deflating and a lot of Costs of living are inflating. Bad combo. Precious metals are one of the only Investment assets that really over performing.

Again, you talk about prices not inflation.

Originally posted by cpdaman
Also the fed is not really printing like mad and all those headlines like "fed injects 40 billion" are all just rollovers i.e old temporary loan was due, so they just reissued the same loan , because the problem hasn't been solved (credit crunch or insolvency crunch)

the devaluation of the u.s dollar will cause things priced in dollar to be re-adjusted.

Hyperinflation is a word throw about a bit too much. inflation in money printing may occur but i think a deflation in credit is about to occur because banks are tightening their lending standards. Also it would be very difficult to hyperinflate the world's reserve currency. A small little country sure, but the united states and a world reserve currency. that would be a challenge

If there is no inflation then world prices in US dollar wouldn’t sky rocket for last year. Rising prices of gold and oil are clear indication of inflation. And we don’t know how exactly large is M3 as FED doesn’t announce it which is scandalous!
And world central banks are in massive process of dumping US $ as oil trade is shifting to euro, and even to yen and ruble. World monopoly of USA via $ is coming to end.

Originally posted by cpdaman
also sure they can print some money ( not sure if it can catch up w/ deflating credit) but even if it can , the fed can't determine where that money flows. i.e Asset values can continue to deflate in a situation where money inflation outpaces any negative trend in credit, although in that situation i see metals flying high.

Ok, read what Bernanke wrote about Great Depression and you’ll understand what that idiot is doing. Helicopter Ben concluded that Great Depression wouldn’t occur if FED continued to pump more liquidity. What I bolded is the key and Bernanke doesn’t understand it.



[edit on 10-1-2008 by Vojvoda]

[edit on 10-1-2008 by Vojvoda]

[edit on 10-1-2008 by Vojvoda]

Originally posted by cpdaman
it will be intresting to see how long the foreign country's can continue to peg their currency's to the dollar, because if the fed lowers to say 3% that will cause very dangerous inflation in foreign country's, and civilian disorder w rising prices for many costs of living.

If you want, I’ll post you newest analysis. You’ll be surprised which countries already profit from US inflation or you’ll firstly try to guess.

Originally posted by cpdaman
IMO many economists overestimate the ability of the FED to really do much. I also think Political decisions will have a great deal of an effect on the monetary policy's and this political body in the U.S is getting desperate.

FED was cause of Great Depression, their policies. FED has much more power than 1920s, so... And Bernanke is now in position to prove his theory in reality. Read my signature [if you didn't yet].



[edit on 10-1-2008 by Vojvoda]

[edit on 10-1-2008 by Vojvoda]

ok so what is really going on here and how will it effect American citizens who make under $75,000 a year?
I see inflation everywhere my grocery store, my electric bill, my water bill.
Inflation is burying my family and we DO NOT live outside our means, in fact if we cant pay cash for it we dont get it which means we buy food, pay our mortgage, pay our utilities and put some gas in the car. But a year and a half ago I had left over $$$ each month to put away or buy my son the winter coat he needs. Now we have nothing left over and some months run in the red.
So I ask again, what is really happening, what should we expect, when will the shoe drop and how does the future, say 43 months down the road, look?

The Fed to the rescue
In a speech Thursday, Federal Reserve chairman Ben Bernanke says central bank ready to cut interest rates again in order to support lagging economy.

money.cnn.com...

Ha ha ha ! Bernanke and FED decided to finish off dollar to save banks just as I write [and many other]. FED will cut interest rates in inflation. Just like adding gasoline on fire to go out. Finish off US $ Ben – print more fiat money and cut off interest rates.

vojvoda

i apologize for using the word "inflation" and "deflation" in real world examples that are actually representitive of reality.

When referring to ASSET CLASSES and things people can relate to the use of the words Inflatition and deflation are very prudent. We do not live in the "boxes" from which certain defintions emanate from.

Do you actually believe the "Helicopter Ben" crap? He wrote that to boost investor confidence and create this "magical belief" that the fed will come to the rescue. The fed is all talk. The fed can lower intrest rates all they wish, but this WILL NOT AUTOMATICALLY lead to more M3 credit, Bill Gross of Pimpco describes how lending within the context of falling home prices and the falling underlying capital of banks will be very inelastic to intrest rate cuts. And sure the GOv't has a printing press (not the fed) if the fed want's to accept more U.S treasury notes in exchange for dealing out more federal reserve notes (dollars) but they can't direct where the money goes, you think they are going to lend the U.S endless amounts of debt "money" so it can flow into GOLD? btw this was a serious question.

interest rate cuts will however, boost profits for our saudi shiek friends while their citizens drown under consumer price inflation.

kinda like you buy stakes and provide capital for our insolvent banks thru you soverign wealth funds, and we'll lower intrest rates and line your oil pockets, but this is just a shot in the dark, after all inflation has been one of our biggest exports over the last few years, maybe you have better insight as to who specifically benefit from the rate cuts.

i do agree that the fed caused the great depression, and i do believe that was intentional. One of the biggest benefits of denial is peace of mind, and one of the biggest consequences is ignorance, the "fed" was NOT EVER INTENDED to create a "healthy functioning economy" but just to provide the illusion and indebt the country much like the IMF and World bank provide "credit to other country" that they can't pay back so they can enslave them and CONTROL them, not to mention grab their resources when they default. And ever corrupt govt's love the idea of a fed that's first priority is to inflate because they (the gov't) hate the idea of balancing a budget and fiscal responsibility.

I am especially worried about unemployment getting out of control as consumer's ease spending, because that is a cycle that may feed on itself.


[edit on 10-1-2008 by cpdaman]

Within the last 4 days I have covered all of my short positions (either natural or synthetic) except for 4 stocks. I am currently still short MBI, COF, ABK and MTG. I am still long quite a few companies and have a few long positions in a commodities account. I was short 23 different stocks at one point. Things are coming close to a bottom. I have long been forecasting a down turn in the markets. My buy points are a close below 12,000 and an intra-day trade of 1325 on the S&P. As long as we do not close below 1325 I am backing up the truck and reversing my positions. 2007 was my best year in the stock market to date. I learned a lot of lessons after the Clinton induced bubble in the late 1990's. Y2K was the biggest Ponzi scam the Country ever saw.

cpdaman and the rest

You have to watch this video. Everything is very well explained.
The Collapsing American Dollar


cpdaman

As I told you, I lived in hyperinflation 2 years.

1993 - beggining

1993 - later

You see: from 5K to 500B. Now this is for me, but then, it was matter of survival. Almost whole middle class was wiped out.


But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.
www.federalreserve.gov...

[edit on 11-1-2008 by Vojvoda]

Originally posted by cpdaman
vojvoda

i apologize for using the word "inflation" and "deflation" in real world examples that are actually representitive of reality.

OK.

Originally posted by cpdaman
Do you actually believe the "Helicopter Ben" crap? He wrote that to boost investor confidence and create this "magical belief" that the fed will come to the rescue. The fed is all talk. The fed can lower intrest rates all they wish, but this WILL NOT AUTOMATICALLY lead to more M3 credit, Bill Gross of Pimpco describes how lending within the context of falling home prices and the falling underlying capital of banks will be very inelastic to intrest rate cuts. And sure the GOv't has a printing press (not the fed) if the fed want's to accept more U.S treasury notes in exchange for dealing out more federal reserve notes (dollars) but they can't direct where the money goes, you think they are going to lend the U.S endless amounts of debt "money" so it can flow into GOLD? btw this was a serious question.

OK, when country has problem with higher inflation than normal, CB raise interest rates to fight it, not cut off. Cutting off money become cheaper and that just boost inflation.
Some sectors in US economy [actually the main] like finance, housing, and auto are in the worst condition than recession. Increasing interest rates will crash economy [1929] so FED decided to weaken dollar more and more. So, you got weaker and weaker dollar with rising inflation [and the greatest victim of inflation is middle class ].
Lower interest rates => cheaper and more money => larger M3 => higher inflation

Proverb: When you're living on borrowed money, you're living on borrowed time.

Btw, I watched in CNN two weeks ago how US soldiers live in Germany. They hardly live because of so weak dollar as they hardly can buy anything in Germany for average income of $2000!

Originally posted by cpdaman
interest rate cuts will however, boost profits for our saudi shiek friends while their citizens drown under consumer price inflation.

You have right, but it is primary done for saving commercial banks pumping more liquidity into them [which are btw owners of FED as you know].

Originally posted by cpdaman
kinda like you buy stakes and provide capital for our insolvent banks thru you soverign wealth funds, and we'll lower intrest rates and line your oil pockets, but this is just a shot in the dark, after all inflation has been one of our biggest exports over the last few years, maybe you have better insight as to who specifically benefit from the rate cuts.

You know what is biggest difference between FED in 1920s and now? FED couldn’t be last lender of commercial banks in 1920s, but now can.

Originally posted by cpdaman
i do agree that the fed caused the great depression, and i do believe that was intentional.

Every serious economist agrees that FED caused Great Depression.

Originally posted by cpdaman
One of the biggest benefits of denial is peace of mind, and one of the biggest consequences is ignorance, the "fed" was NOT EVER INTENDED to create a "healthy functioning economy" but just to provide the illusion and indebt the country much like the IMF and World bank provide "credit to other country" that they can't pay back so they can enslave them and CONTROL them, not to mention grab their resources when they default. And ever corrupt govt's love the idea of a fed that's first priority is to inflate because they (the gov't) hate the idea of balancing a budget and fiscal responsibility.

Yes, yes, but Breton Woods’s agreement allowed USA to become superpower, and from 1973 petrodollar allowed USA to tax out whole world! And that is coming to end.
If OPEC countries, PR China, Russia and Japan dump $ by night, world would finish in Armageddon.