Ya know, if the US Automakers had any spine, they would declare bankruptcy immediately. Boot the unions and the overly fat pension plans.
Then they would set up corporate offices offshore, Caymans, Jamaica, whatever works best.
Then they renegotiate all their labor contracts, sans unions, and they can compete and beat the foreign automakers and they don't have to listen to the US Congress or deal with US taxes. If I were in their position, I'd be worried about what new taxes may come down the pike. Our new overlords don't like profit.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Another day, another $800b! teck ticker, yahoo finance
$600b to go to Fannie and Freddie and Ginnie and FHLB $200b to TALF to shore up consumer-related asset-backed securities.
Monday WE gave Citi-taxpayers $306b.
The total tally bailout exceeds $8.5 TRILLION!
Americans' outrage at the staggering size of the bailouts is understandable. "But if there's no credit intermediation, there is no economy. Period, end of story," Brusuelas says. "They're doing what they have to do. In the long-term let's hope it works, because if it doesn't we're going to be in for a long, dark winter."
i just saw on cnbc.com that Chris Locke of Oystertrade.com say charts predict S&P up to 1,000 and gold to $1,250.
"I'm expecting a pre-Christmas rally that will take us up towards the high rally points we saw late-September and into October, around the 1,000 level, probably the minimum for this move."
With every week bringing another last-minute-over-the-weekend bailout of some bank...I personally don't have the "nads" to hold onto anything longer than one day.
The CDS spreads on British debt jumped even higher on Tuesday, touching 100 at one stage. This is a little frightening.
I suspect it reflects fear that the liabilities of the British-based banks -- which include HSBC and Standard Chartered, with all their global exposure, as well as RBS, Barclays, Lloyds TSB, HBOS, and Northern Rock -- are disturbingly large for the size of the UK economy.
Britain has no real debt in foreign currencies. Like other AAA states, it borrows in its own currency. This is a lifesaver.
However, and here is the awful catch, some of these private banks have vast dollar positions, so as more of them fall into the hands of the British state (partially or fully) the dollar debt implicitly moves across onto the sovereign balance sheet.
This is not a subject that I have seen discussed anywhere, but it is worth pondering. What killed Iceland was the dollar/euro debts of its three big banks, not its own sovereign debt in Krona. It is the dollar liabilities of Russia's banks and companies that is now causing a run on the rouble.
Here lies the real danger of taking over all these banks so nonchalantly.
I suspect that some hedge funds have already spotted this Achilles Heel and are now testing the trade.
(Although a US hedge fund told me last weekend he was targeting the default risk in five other countries in Europe -- and the EIB -- but not British debt because he thought that the UK's role as a military power and a permanent UN Security Council member provided an extra shield, ie the global order has too much political investment in Britain to let it happen. I have no idea whether this is a good judgement, but I pass it on)
By the way, my colleague Yvette Essen showed me the CDS data on some of the US states. These are quite revealing too.
Michigan 192 California 165 Nevada 164 New Jersey 150 Ohio 104
So, California is now priced as a greater bankruptcy risk than Slovakia 150.
<< <i>I wont be happy until the people responsible
for this financial mess go to jail and have their
personal wealth confiscated by the Government. >>
But Bear, some of these people ARE the government.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Citigroup says gold could rise above $2,000 next year as world unravels
Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world's monetary system with liquidity, according to an internal client note from the US bank Citigroup.
By Ambrose Evans-Pritchard Last Updated: 4:48PM GMT 26 Nov 2008
<< <i>Interesting to note that when we had gold and silver backing our currency, that was the time of the biggest swings of inflation, except pf course the early days when even tobacco was money.
Not true. The biggest swings have occured since 1971 and they form a wave of increasing amplitude (ie each successive bout of inflation and recession was worse than the previous). It still all comes to monetary policy by banks. This is the FED opening the spigot wider during each bout of "growth" followed by them shutting off the spigot more quickly. Each cycle is more severe than the previous. This next cycle will be a Deusie. In the panics of the 1800's it was the regional and local banks that either contracted or increased their money stocks that gave us inflation or panics. Even when their was gold backing the currency, it was the bankers again reducing the amount of gold backing the local currencies that created the panics. If one compares the panics of the 1800's with the panics we've had over the past 95 years, they are all very similar in that it was not gold nor paper money that caused the problems....but the bankers themselves. Don't blame gold or even tobacco when it really comes down to greedy bankers who just always have to have more than the last time.
roadrunner >>
Looking at the chart, which we shall assume is accurate for conversation's sake, we can all probably agree that War caused the largest spikes of inflation except for the 1970s? This makes sense to me personally because resources were being gobbled up at a alarming rate and in many cases destroyed needing to be replaced over and over again until the war was over.
I think we can also agree that most bank panics happened during a time when there was deflation taking place at the same time? Yet oddly enough even with inflation going wild several times after WWI we have had no bank panics marked on the chart.
It is curious to note and I think we can all agree that inflation has taken place non stop since the US dollar became the world's reserve currency after WWII? Yet during this time the US blossomed into a power house with a high standard of living that still seems to be taking place to this day. Riding the hog until the well runs dry I suppose and people no longer want to buy our govt debt or hold our dollars as a reserve.
I also think most people here would agree deflation has probably finally set in after 50+ years? There are many signs of this taking place be it in real estate, commodities, or what have you.
So if I were to lay blame it would be:
1. Early US history it would be the discovery stage of what would work for us. Tobacco was not very wise when the average family could grow money in their backyard. Our govt was so immature no one would trust paper money. We kept sending our hard currency overseas for things we could not make here. We had no choice but to experiment.
2. Middle history of the US would be banker greed. If they tried to be more stable in how they operated maybe they would have survived. No guarantee of their accounts by anyone. Either grab it or lose it when the stampede started by the people.
3. WWI and WWII which set the stage for every other major country becoming a shattered wreck and our currency becoming the reserve. Our govt abused that privilege and here we are. The Federal govt has spent like pigs not just on war.. but on everything else under the sun. It grew like a fat pig with an endless supply of feed.
So to blame bankers might not be a good enough blanket statement to cover the cause as a whole. It seems to me we are in this current mess because we the people elected boobs to office and allowed them to spend like mad at the federal level. (War is one thing.. that is what the Federal govt is supposed to handle.. but everything else grew also). "Ask what your country can do for you, instead of what you can do for your country" is our new slogan that has to stop.
Sad but true... we need a recession that will make the feds realize they have to stop spending and cut cut cut once we have the slightest long term chance for a rebound.
I just think that rampant inflation is a ways away yet. I am hoping that GM going bankrupt will be the wake up call for the feds. It is not too late to change our ways. I am still optimistic.
That is why I feel gold and silver have a while to go yet before we see huge increases if our govt does not change it ways. I guess that is why we disagree so much. I am still an optimist. Young and naive ;-) >>
Havent visited this thread in over a week. Been awfully busy. Also haven given my interpretation of the inflation chart, yet, but wanted to say that fc has made some interesting points.
<< <i>Ya know, if the US Automakers had any spine, they would declare bankruptcy immediately. Boot the unions and the overly fat pension plans.
Then they would set up corporate offices offshore, Caymans, Jamaica, whatever works best.
Then they renegotiate all their labor contracts, sans unions, and they can compete and beat the foreign automakers and they don't have to listen to the US Congress or deal with US taxes. If I were in their position, I'd be worried about what new taxes may come down the pike. Our new overlords don't like profit. >>
what data ??? did i miss something in the news what did we get postive this week other then the new elect pres talking out about his great spending which we don't have any way to pay for please list all these great events this week cohook i'm sure the board will confrin your finding
Jim Willie is still as critical as ever on the FED and Treasury game plan. His prediction for a realistic gold disconnect very soon which could bump prices up hundreds of dollars in a day are the very reason it's getting dicey to try and trade this market.
The paper vs. physical battle rages on........
The USDollar DX index has topped. Conversely, the gold price has bottomed. Each has experienced a clear vivid pronounced reversal off the extreme. Signs point to December as being a battleground month. The moving averages have begun to reverse, a more stable signal. A MACD crossover is near, which would give a billboard notice to technical traders. Beware that this is the phony paper gold price. Actual large physical gold transactions are conducted at prices in excess of $1,000 per ounce. The undue influence of paper price discovery is soon to end. As the Gladiator said in the 1999 movie by the same name, to the phony emperor who usurped power, "The time will soon come to an end for you to honor yourself." Expect severe discontinuity in the gold price in the next few months, maybe sooner. If Keiser and others are correct, and the assault on the COMEX gold succeeds to liberate its price, a gap up is assured, a big gap up, like a few hundred dollars per ounce. Now is the time to hold firm your gold and silver metal. Sell the children, but do not sell the precious metal......Jim Willie
These forecasters have correctly predicted the current mess, they have only at times gotten the timing wrong.
On this Thanksgiving day we can all be thankful we live in a socialist country, which can just print all the money we need, ha ha ha
Government bailout hits $8.5 trillion
Kathleen Pender Wednesday, November 26, 2008
The federal government committed an additional $800 billion to two new loan programs on Tuesday, bringing its cumulative commitment to financial rescue initiatives to a staggering $8.5 trillion, according to Bloomberg News.
That sum represents almost 60 percent of the nation's estimated gross domestic product.
Given the unprecedented size and complexity of these programs and the fact that many have never been tried before, it's impossible to predict how much they will cost taxpayers. The final cost won't be known for many years.
The money has been committed to a wide array of programs, including loans and loan guarantees, asset purchases, equity investments in financial companies, tax breaks for banks, help for struggling homeowners and a currency stabilization fund.
Most of the money, about $5.5 trillion, comes from the Federal Reserve, which as an independent entity does not need congressional approval to lend money to banks or, in "unusual and exigent circumstances," to other financial institutions.
The worst deal for taxpayers could be the Citigroup deal announced late Sunday. The government agreed to buy an additional $20 billion in preferred stock and absorb up to $249 billion in losses on troubled assets owned by Citi.
Given that Citigroup's entire market value on Friday was $20.5 billion, "instead of taking that $20 billion in preferred shares we could have bought the company," he says.
I am more solvent and have more net assets that are free & clear than does Citigroup. They should give me the bailout money. I couldn't do worse than their management has done.
Q: Are You Printing Money? Bernanke: Not Literally
A well written article that gave me some views I had not considered before. Note that they figure on a minimum of $15 TRILLION and up to $40 TRILLION to complete the CDS unwinding. Continue the bailout bonanza only assures a worse ending.
Household debt has almost doubled since 1999 to around 160 percent of incomes, a higher ratio than in the U.S. and U.K., according to AMP Capital Investors. The median national house price soared about 140 percent in the same period.
<< <i>Ya know, if the US Automakers had any spine, they would declare bankruptcy immediately. Boot the unions and the overly fat pension plans.
Then they would set up corporate offices offshore, Caymans, Jamaica, whatever works best.
Then they renegotiate all their labor contracts, sans unions, and they can compete and beat the foreign automakers and they don't have to listen to the US Congress or deal with US taxes. If I were in their position, I'd be worried about what new taxes may come down the pike. Our new overlords don't like profit. >>
The problem with US auotomakers isn't unions. It is management that doesn't have any spine.
They also don't have scruples, common sense, or a hint of foresight but without balls they'd have little or no use for these anyway.
What they do have is the willingness to collude with other auto companies for the purposes of setting prices, costs, and even advertising.
<< <i>what data ??? did i miss something in the news what did we get postive this week other then the new elect pres talking out about his great spending which we don't have any way to pay for please list all these great events this week cohook i'm sure the board will confrin your finding >>
Wayneme,
I am not going to get into a debate about how the market works. It is for you to learn and understand.
But, just to back up my comment about the Thanksgiving week being historically good for equities I will provide the follow data.
This week the SP500 is up about 10%. In 2007 the SP500 was down about 1% during Thanksgiving but up about 4% the follow 2 weeks. In 2006 the SP500 was unchanged during Thanksgiving and up about 1% the follow week. In 2005 the SP500 was up about 1% during Thanksgiving week. In 2004 The SP500 was up about 1% during Thanksgiving week. In 2003 the Sp500 was up about 2.4% during Thanksgiving week. In 2002 the Sp500 was up about 0.75% during Thanksgiving week.
Do not confuse the economic news with the daily fluctuation of the stock market. I dont think I have said a single positive thing about the US economy or any other global economy, in over a year. Please do not try to confront me on economic data or intermarket relativities.
A well written article that gave me some views I had not considered before. Note that they figure on a minimum of $15 TRILLION and up to $40 TRILLION to complete the CDS unwinding. Continue the bailout bonanza only assures a worse ending.
roadrunner >>
This is what I have been thinking all along. I do not think the Pres-elect will allow these companies to fold. Thus enabling my premise of deflation to continue for quite some time. There are ways around the deflationary scenario, but I doubt our elected officials have the wherewithall to make it happen.
This week the SP500 is up about 10%. In 2007 the SP500 was down about 1% during Thanksgiving but up about 4% the follow 2 weeks. In 2006 the SP500 was unchanged during Thanksgiving and up about 1% the follow week. In 2005 the SP500 was up about 1% during Thanksgiving week. In 2004 The SP500 was up about 1% during Thanksgiving week. In 2003 the Sp500 was up about 2.4% during Thanksgiving week. In 2002 the Sp500 was up about 0.75% during Thanksgiving week.
I don't find these comparisons all that meaningful. In fact, the short term moves in the S&P are more at the mercy of quick fund trading and the PPT. The 10% recovery is merely a pushback from TPTB to keep from falling below the 7500-8000 cliff and on to 6500. Comparing the state of the financial system at Thanksgiving 2008 to previous years in apples and oranges. With trillions being pumped into the system today (and nothing in prior years), how does a couple of trading days during a historical vacation week set the tone for the following year? There's not one anti-gold bug here who would give any creedance to gold's recent $100+ run-up (>15%) as a harbinger of anything good to come considering all the factors at play. So why is a brief rise in the S&P different? I'll be the first to admit that a good bump between now and March is due in the S&P. But 10% trading swings are now going to be the rule. It's one of the few ways the Wall Streeters can make any money....designed volatility. We know J6P and 401K holders won't be profiting. It's also very likely that another round of bad bank news can knock the S&P to <7000 before it eventually rebounds.
A well written article that gave me some views I had not considered before. Note that they figure on a minimum of $15 TRILLION and up to $40 TRILLION to complete the CDS unwinding. Continue the bailout bonanza only assures a worse ending.
roadrunner >>
That's the best explanation I've seen so far about why Congress has been unwilling to let the automakers go into bankrupcy.
<< <i>This week the SP500 is up about 10%. In 2007 the SP500 was down about 1% during Thanksgiving but up about 4% the follow 2 weeks. In 2006 the SP500 was unchanged during Thanksgiving and up about 1% the follow week. In 2005 the SP500 was up about 1% during Thanksgiving week. In 2004 The SP500 was up about 1% during Thanksgiving week. In 2003 the Sp500 was up about 2.4% during Thanksgiving week. In 2002 the Sp500 was up about 0.75% during Thanksgiving week.
I don't find these comparisons all that meaningful. In fact, the short term moves in the S&P are more at the mercy of quick fund trading and the PPT. The 10% recovery is merely a pushback from TPTB to keep from falling below the 7500-8000 cliff and on to 6500. Comparing the state of the financial system at Thanksgiving 2008 to previous years in apples and oranges. With trillions being pumped into the system today (and nothing in prior years), how does a couple of trading days during a historical vacation week set the tone for the following year? There's not one anti-gold bug here who would give any creedance to gold's recent $100+ run-up (>15%) as a harbinger of anything good to come considering all the factors at play. So why is a brief rise in the S&P different? I'll be the first to admit that a good bump between now and March is due in the S&P. But 10% trading swings are now going to be the rule. It's one of the few ways the Wall Streeters can make any money....designed volatility. We know J6P and 401K holders won't be profiting. It's also very likely that another round of bad bank news can knock the S&P to <7000 before it eventually rebounds.
roadrunner >>
Perhaps I just say I dont find anything meaningful about gold being higher during Thanksgiving. Why you fight all the time?
I am not making any comparison to the state if the financial system in 2008 to the past. Very simply, you posted a link saying gold usually does well during Thanksgiving. I simply posted that equities do well during Thanksgiving. Nothing more. I am not advocating equities or precious metals. I never said it set any tone for the coming year. In fact, I can guarantee you that you do not want to know my possible target for the DOW. But I'll give a hint, it wont be making new highs any time soon.
There's not one anti-gold bug here who would give any creedance to gold's recent $100+ run-up (>15%) as a harbinger of anything good to come considering all the factors at play
Gold had a similiar $100 move about 2 months ago. Then it hit a recent low. I dont think you can say it is definately a harbinger of things to come. Perhaps, but no one knows.
<< <i>hi all, been away for awile. I hope you all made loads of cash selling euros....
so what is new? >>
OK, OK, we'll have to get you up to speed. We have new leadership, Dear Leader, we like/have to say. You can't criticize....sensitive. The dollar has failed and so has gold and silver and you need to PM me for proper distribution of those worthless assets. Don't listen to anyone else. There is much paranoia going around... Not only do banks not trust each other neither do politicians...imagine.
Oh, and...I know you would think that Hillary won the top-dog stop if you just look at the picks to the cabinet....but...it's really crazy.....the change-guy....he picked this cabinet? I guess he adheres to the saying of keep your friends close and your enemies closer.
OK, now the shocker...gas....the type that goes into your SUV is $1.69 here. And global warming...the people now in charge call it climate change. They needed to get the "change" thing in there. Guns and ammo are gone...can't find them at the local feed store.
I hope this helps...but it's just the tip of the iceberg.
Oh, forgot...your 401k has been taken over to bailout bank CEO's. Otherwise, all is cool.
Ren >>
So angry, the fact is they are working to prevent the total collapse and have been... Most of us have not been in the loop, so a little more time is needed before the big picture is see in real dollars.
To get you up to speed in the currency market I offer this service.
1. the euro has failed, no surprise there. 2. the swiss frank had also tanked. this is what im calling the relocation of the money. yes its true, a redistribution of wealth is underway, you need not look any further for the next phase of the follow the money game. I am anticipating a huge move in dollar yen. we are underway in the continued falure of the dollar to the yen, but this one in particular is do to the carry trade.
A reversal is in the mist. we could only hope to see continued weakness here until funds can be located into a currency account in which you will sell yens and buy dollars.
The bottom is very very close... I dont have enough time to reflect on this FACT or go into detail of the other currency relocations just be prepared to jump in when the time is right. soon very soon...
Humblepie
I have found power in the mysteries of thought.
It is always a question of knowing and seeing, and not that of believing.
Our virtues, and our failings are inseparable, like force, and matter. When they separate, man is no more.
Perhaps I just say I dont find anything meaningful about gold being higher during Thanksgiving.
I found it meaningful because of the hammering gold has taken in the past 4 months, and now a sign of dollar topping, and gold apparently bottoming. The dollar can't deleverage it's way back to 121 again.
I can guarantee you that you do not want to know my possible target for the DOW. But I'll give a hint, it wont be making new highs any time soon.
Dow double topped in late fall 2007. Does anyone not believe the next all time high is probably 10-20 years away? Now it's just a matter of figuring out how low it's going to go. I can see the Dow bottoming at anything from 1000-6000. But I think a 2500-4500 number is more realistic. If I had to bet I'd place a roulette chip on 2800. It's just a number though. This is where Dow/gold ratio goes to 1.
<< <i>hi all, been away for awile. I hope you all made loads of cash selling euros....
so what is new? >>
OK, OK, we'll have to get you up to speed. We have new leadership, Dear Leader, we like/have to say. You can't criticize....sensitive. The dollar has failed and so has gold and silver and you need to PM me for proper distribution of those worthless assets. Don't listen to anyone else. There is much paranoia going around... Not only do banks not trust each other neither do politicians...imagine.
Oh, and...I know you would think that Hillary won the top-dog stop if you just look at the picks to the cabinet....but...it's really crazy.....the change-guy....he picked this cabinet? I guess he adheres to the saying of keep your friends close and your enemies closer.
OK, now the shocker...gas....the type that goes into your SUV is $1.69 here. And global warming...the people now in charge call it climate change. They needed to get the "change" thing in there. Guns and ammo are gone...can't find them at the local feed store.
I hope this helps...but it's just the tip of the iceberg.
Oh, forgot...your 401k has been taken over to bailout bank CEO's. Otherwise, all is cool.
Ren >>
So angry, the fact is they are working to prevent the total collapse and have been... Most of us have not been in the loop, so a little more time is needed before the big picture is see in real dollars.
>>>>
I am angry because our elected and appointed officials have destroyed our country. We have government schools brainwashing our children. We have elected officials that go rogue and not what the people want. We have a medical industry prescribing a prozac nation. We have fat-bodies that have no pride in themselves and/or the country. We have citizens and illegaos who bought McMansions on a McDonalds salary with no remorse or conscience. We have people who believe it is their right to live a "Paris" lifestyle on credit. We have uber-libs that have disdain for our fighting/freedom force. We have a media that incrementally perverses our society. We have illegals/criminals that have more rights than taxpaying citizens. We have the sexually challenged individuals who feel to attack Christians for everything no matter the relevance and no matter what the voter outcome. We have professors teaching revisionist history to shape young minds into self-loathing Americans. We don't need a little more time to get the big picture. The big picture is our Republic is on the verge of collapse...socially, economically and spiritually.
Hank has put more money at this bailout then all the World Wars and panics combined in this country's history. And the end effect will be socialism and hyper-inflation within this next presidential term. I don't blame BO yet...he is a mere cog in the cycle. I would not give him so much credit. This credit crisis is 20+ years in the making and our politicians and citizens have been looking the other way because of their own greed. And now we are between a rock and a hard place...bankruptcy or bailout. Deflate or Inflate. We know where this story ends because we have Bernake and Paulson at the helm.
Have a little faith, the real dollar manipulation is found, and has been seen in the currency market itself. So dont discount the fact that these billions of dollars the government has put to work, are working to artificially inflate the dollar..
Just look at what has happened to dollar Canadian currency, the dollar has gone up exponentially to this currency..
Have you missed the boat?
I don't think so, THERE STILL IS TIME, but billions have been moved to swiss, British, and Australian BANKS DURING THE DOLLAR SLIDE.
For the most part the dollar is out of the woods...
It takes time to see this move, and how the control of gold silver, and oil has been used in the process, by your government.
They should have told us, but they didn't....
THE YEN WILL FOLLOW THE SAME TREND...
Humblepie
I have found power in the mysteries of thought.
It is always a question of knowing and seeing, and not that of believing.
Our virtues, and our failings are inseparable, like force, and matter. When they separate, man is no more.
OK, OK, we'll have to get you up to speed. We have new leadership, Dear Leader, we like/have to say. You can't criticize....sensitive. The dollar has failed and so has gold and silver and you need to PM me for proper distribution of those worthless assets. Don't listen to anyone else. There is much paranoia going around... Not only do banks not trust each other neither do politicians...imagine.
Oh, and...I know you would think that Hillary won the top-dog stop if you just look at the picks to the cabinet....but...it's really crazy.....the change-guy....he picked this cabinet? I guess he adheres to the saying of keep your friends close and your enemies closer.
OK, now the shocker...gas....the type that goes into your SUV is $1.69 here. And global warming...the people now in charge call it climate change. They needed to get the "change" thing in there. Guns and ammo are gone...can't find them at the local feed store.
I hope this helps...but it's just the tip of the iceberg.
Oh, forgot...your 401k has been taken over to bailout bank CEO's. Otherwise, all is cool.
Ren
Great Post! I must have glossed over it before. Regular at $1.59 here now. Gotta check out the gun show today, see what's the buzz.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>Ya know, if the US Automakers had any spine, they would declare bankruptcy immediately. Boot the unions and the overly fat pension plans.
Then they would set up corporate offices offshore, Caymans, Jamaica, whatever works best.
Then they renegotiate all their labor contracts, sans unions, and they can compete and beat the foreign automakers and they don't have to listen to the US Congress or deal with US taxes. If I were in their position, I'd be worried about what new taxes may come down the pike. Our new overlords don't like profit. >>
The problem with US auotomakers isn't unions. It is management that doesn't have any spine.
They also don't have scruples, common sense, or a hint of foresight but without balls they'd have little or no use for these anyway.
What they do have is the willingness to collude with other auto companies for the purposes of setting prices, costs, and even advertising. >>
the "serpent" IMHO is the UAW...Congress and automaker Board Members are to blame as well...executives, they are more "generals". I agree that any foresight went out the door decades ago..with Congress and the policies of the big 3.
IMHO BK is the only way that they will be able to survive....and survive means a radical change from what they are now. BK will kill the serpent and take the operations out of the hands of the Board of Directors....
I guess all is well in the world. Five straight up days in the "markets" and 3% over year gain on black friday. Time to get back in the stock market and buy houses. All is well, all is well.
Can you elaborate on your view that the USD is going to continue to remain bullish for quite some time? I don't think I've seen anyone else profess that view as strongly as you have. At what levels of the USD index are you expecting to see over the next couple of years? A complete recovery to the 2001 levels of .120 and then further gains? What previous time frame in history will this recovery most closely resemble?
Can you elaborate on your view that the USD is going to continue to remain bullish for quite some time? I don't think I've seen anyone else profess that view as strongly as you have. At what levels of the USD index are you expecting to see over the next couple of years? A complete recovery to the 2001 levels of .120 and then further gains? What previous time frame in history will this recovery most closely resemble?
roadrunner >>
I'm waiting for a recovery against the yen.. It has not happened as of yet, but has against most other currency.
we can be bullish on dollar yen soon, but further weakness may take it to the .80 level. I don't think that will be the case, but short term it may be the blessing im waiting for. the reversal against yen will have to take place above the last recent high of 110.
The 110. to 120. level should be the first barriers to be broken. on this I'm hoping to see the move in only a few days to weeks to a month, but 140. in 2 years is conservative in my view.
Things can move fast in currency's as seen in the 3 month recovery of dollar to most other currency pairs.The only question is are dollars over bought now? Will the dollar slide against other currency's, but recover against the yen?
The follow the money game can be manipulated in this way.. In hopes of not being wrong, if the dollar moves higher to yen its possible it can be short lived short term, but then your talking about further manipulation, and that will not be a good thing. STOP LOSS triggers to protect you from such a thing...
Most will say the dollar will go lower to dollar yen, but how soon? Is there another 3 month manipulation underway now? Can dollar recover to yen, and fall to the other major currency's? I think the later is true..
Another question I have is, can a dollar recover to the yen, and not slide to the Euro wile metal, and oil prices remain move higher? Keep in mind the dollar has not recovered to the yen during metals, and oils slide over the past 3 months.
Humblepie
I have found power in the mysteries of thought.
It is always a question of knowing and seeing, and not that of believing.
Our virtues, and our failings are inseparable, like force, and matter. When they separate, man is no more.
I'm waiting for a recovery against the yen.. It has not happened as of yet, but has against most other currency.
The yen carry trade unwindings have certainly helped the yen to show strength. It's a matter of when the unwinding finally ends in the carry trade and in the derivative contracts unwinding. Hard to say what is real with these major forces superimposed over the markets. Everything I've seen shows a double top in the dollar and a retreat back to the lower 80's due. At the same time oil and other commodities should bump back some. I guess it's hard for me to be bullish on bankrupt currencies. I won't be buying Icelandic Kroners anytime soon no matter how low they go. Considering the massive manipulations in all the markets since July, who can say what is real?
Do you have any links to good sources that explain this topic in more detail? Odd that in the 100's of articles I've read since the summer, I haven't seen one taking the above stance. And I do look at countra-commodity and stock views. If the dollar moves to .140 that would ensure a strong move back up in the S&P and Dow, probably to new highs. I don't see anyone discussing those possibilities. To me that seems extremely remote.
"The yen carry trade unwindings have certainly helped the yen to show strength" -- I definitely agree with this statement, though it might be said that the unwinding is returning the yen to a more realistic valuation -- ie, the carry trade was depressing the yen. Whether the dollar strengthens against the yen will likely depend on (or correlate with) interest rate trends in the US; as long as interest rates remain as low as they are in the US, it is hard to see the dollar strengthening against the yen.
A thought-provoking article linking 1971 fiat, to rising interest rates through 1980-82, then generally falling interest rates ever since. The end result being a constant loss of labor that slowly chokes off the economy. In essence, low interest rates are the disease, not the cure, all stemming from leaving a gold-backed currency.
<< <i>"The yen carry trade unwindings have certainly helped the yen to show strength" -- I definitely agree with this statement, though it might be said that the unwinding is returning the yen to a more realistic valuation -- ie, the carry trade was depressing the yen. Whether the dollar strengthens against the yen will likely depend on (or correlate with) interest rate trends in the US; as long as interest rates remain as low as they are in the US, it is hard to see the dollar strengthening against the yen. >>
today we see the further weakness. they have been saying the U.S. may take interest rates even lower. realistically a new all time low is nearing ...
so for the most part I agree with your outlook. near term..
A good entry point will be in the low .80 and is expected, if we get there.
risk will also be low if we get there anytime soon for a long dollar entry against the yen..
This in my opinion will mark a turning point. How time, lines up, or coincides with federal, and japans future interest rate cuts should give an idea of the time frame involved, and the next leg for the future of our dollar.
The Euro is on the move...
Humblepie
I have found power in the mysteries of thought.
It is always a question of knowing and seeing, and not that of believing.
Our virtues, and our failings are inseparable, like force, and matter. When they separate, man is no more.
i stumbled across this article from early this year from the Boston Globe. apologies in advance if it has been posted but felt it worth a peek for some
A thought-provoking article linking 1971 fiat, to rising interest rates through 1980-82, then generally falling interest rates ever since. The end result being a constant loss of labor that slowly chokes off the economy. In essence, low interest rates are the disease, not the cure, all stemming from leaving a gold-backed currency.
roadrunner >>
Very interesting article, the problem is would the new administration listen?
This is a quote from the article you linked:
"Labor could be the savior of the country in forcing a return to constitutional money at the eleventh hour, by demanding that the Obama administration open the U.S. Mint to gold and silver. That measure would enable the brakes on the money-train. It would stabilize foreign exchange and interest rates and stop the shredding machine, now spinning out of control, from destroying capital. This would be labor’s finest hour: saving the United States from financial ruin and ignominy."
CONSTITUTIONAL MONEY being the key.
Here is a quote about what the new administration is quoted as saying about Hillary Clinton's appointment to Sec of State:
"Dreisdach said as long as Democrats control the Senate, the Obama transition team won't worry about this provision in the Constitution.
"The Obama team is well aware of it and they have dismissed it," Dreisdach said. "I find it hard to believe that a Democratic majority will take a different view.""
This was predicted last year in this thread and now we get to see it's form. It will be an interesting choice between bailing out the banks, bailing out the automakers, or bailing out the states. I suspect the states will not fare as well as the banks, in some odd twist of fate and the automakers, imho, are burnt toast on a pointy stick...no soup for you. It is quite a presumption to assume that the federal government would be placed in a position to underwrite all the state enacted assistance programs. There are going to be some unfunded state programs and the most interesting thing will be what programs get cut from state funding. I have my thoughts on this but will spare you the grief.
Oh, and while we are at it, there was an interesting discussion on the O'Riley factor yesterday about the car bailout. This interviewee said it plain and simple..."Hey, these guys are car salesmen, they are trying to sell you a new car but you don't get the car, you just pay the money."
This was very succinct to me because the reported capitalization of GM is around 8 billion right now and they are asking for 9. We could buy the whole operation for 8 billion. I think the rub here is that the fed doesn't want to get tagged with all the pension liabilities that it would have to accept with a buy out. The problem is that if they are allowed to go bankrupt then the US would probably get tagged with the pension liabilities anyway. This deal is bad if we do this and bad if we do that. Ever walk away from a car deal?
<< <i>This was predicted last year in this thread and now we get to see it's form. It will be an interesting choice between bailing out the banks, bailing out the automakers, or bailing out the states. I suspect the states will not fare as well as the banks, in some odd twist of fate and the automakers, imho, are burnt toast on a pointy stick...no soup for you. It is quite a presumption to assume that the federal government would be placed in a position to underwrite all the state enacted assistance programs. There are going to be some unfunded state programs and the most interesting thing will be what programs get cut from state funding. I have my thoughts on this but will spare you the grief.
yup the sixth(?) largest economy's State government is outta, or will be outta money soon. there is a "one for one" plan on the table but no one wants one of the 1's, just the other 1.
a tripling of the vehicle licensing fee (to what it once was) will probably happen, beyond that?...some talk of raising the sales tax...
What is the largest component of a good or service's cost? Labor or raw materials?
While I believe raw materials costs can be quite volatile, it is in fact rising labor costs that lead to sustained inflation. Afterall once you give someone a raise it is difficult to take it back. And as has been written here and beaten to death by politicians over the past few months, wages have not kept pace with rising materials costs, and this is partly why we have seen such a sudden downturn in the economy. People were subsidizing their incomes through the use of credit. When the credit dried up, the economy stopped.
Now to further my contention of deflation, what would happen if wages actually began to fall? Sounds crazy, right? Well, here are my 2 cents. I believe unions have kept wages at artificially high levels. And by wages I mean salary and benefits. Today unions cover more than 1 in 8 workers in this county from hotel services to nuclear power plant operators. The average weekly salary of a union employee is $863 per week vs. $663 per week for non-union. So union workers get paid 30% more for doing the same work. No we have the largest employers in this country going under due in large part to an overwhelming burden placed on them via unions. This is what I think is going to happen---the unions will all fail within 10 years. In times of economic prosperity as we have enjoyed for 2 generations it is the worker who carries the big stick, but when then economy fails that stick is passed to the employer. And the deeper the economy sinks, the bigger the stick becomes.
So, I see it nearly impossible for inflation to get any foothold and I offer these 2 headlines of evidence that wages will be falling.
1. AK Steel plans salaried workforce pay cut, other cost reduction measures
Co announces that in response to the recent unanticipated and major downturn in the economy, which has resulted in sharply lower demand for some of the company's products, it announces that it is implementing a salaried employee cost reduction program. Among the elements in the program are plans to implement an indefinite 5% pay reduction for salaried employees on Jan 1, 2009. The pay reduction will affect all salaried employees, including the company's CEO and all executive officers. The company said it plans to implement other salaried workforce cost reductions, including freezing the defined benefit plan for salaried employees and replacing it with a defined contribution retirement benefit, and offering temporary incentives for voluntary retirements. The temporary retirement incentive program will end on Feb 6, 2009. The company said it could not rule out the need for involuntary salaried job reductions if the pay reduction and voluntary retirements do not produce adequate cost savings.
2. YRC Worldwide Teamsters Employees to vote on contract modifications; proposal includes 10% wage reduction and ownership stake
Co announces that its Yellow Transportation, Roadway, Holland and New Penn business units have asked their union employees represented by the International Brotherhood of Teamsters to modify the company's current labor agreements. While working on a longer-term solution to this issue, YRCW is seeking immediate cost savings through proposed changes for the remainder of the contract including: 10% reduction in all wages paid, inclusive of scheduled increases; Suspension of Cost of Living Adjustments.
The UAW also announced that it would seek to reduce benefits.
Do not read this as my being negative on gold, I am merely saying that if gold does indeed go higher, it will not be due to inflationary pressures. Remember, all this money that is being printed is not really going into the money supply. If it was actively being lent out that would be another story, but this printed money is just going to the banks so your savings account statement doesnt give you a big surprise. This newly created money will never see the public, JMHO.
Comments
Then they would set up corporate offices offshore, Caymans, Jamaica, whatever works best.
Then they renegotiate all their labor contracts, sans unions, and they can compete and beat the foreign automakers and they don't have to listen to the US Congress or deal with US taxes. If I were in their position, I'd be worried about what new taxes may come down the pike. Our new overlords don't like profit.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
$600b to go to Fannie and Freddie and Ginnie and FHLB
$200b to TALF to shore up consumer-related asset-backed securities.
Monday WE gave Citi-taxpayers $306b.
The total tally bailout exceeds $8.5 TRILLION!
Americans' outrage at the staggering size of the bailouts is understandable. "But if there's no credit intermediation, there is no economy. Period, end of story," Brusuelas says. "They're doing what they have to do. In the long-term let's hope it works, because if it doesn't we're going to be in for a long, dark winter."
Ren
An interesting trend over the past 6 years.
roadrunner
"I'm expecting a pre-Christmas rally that will take us up towards the high rally points we saw late-September and into October, around the 1,000 level, probably the minimum for this move."
With every week bringing another last-minute-over-the-weekend bailout of some bank...I personally don't have the "nads" to hold onto anything longer than one day.
Ren
Citigroup collapses! Banking Shutdown Possible
I suspect it reflects fear that the liabilities of the British-based banks -- which include HSBC and Standard Chartered, with all their global exposure, as well as RBS, Barclays, Lloyds TSB, HBOS, and Northern Rock -- are disturbingly large for the size of the UK economy.
Britain has no real debt in foreign currencies. Like other AAA states, it borrows in its own currency. This is a lifesaver.
However, and here is the awful catch, some of these private banks have vast dollar positions, so as more of them fall into the hands of the British state (partially or fully) the dollar debt implicitly moves across onto the sovereign balance sheet.
This is not a subject that I have seen discussed anywhere, but it is worth pondering. What killed Iceland was the dollar/euro debts of its three big banks, not its own sovereign debt in Krona. It is the dollar liabilities of Russia's banks and companies that is now causing a run on the rouble.
Here lies the real danger of taking over all these banks so nonchalantly.
I suspect that some hedge funds have already spotted this Achilles Heel and are now testing the trade.
(Although a US hedge fund told me last weekend he was targeting the default risk in five other countries in Europe -- and the EIB -- but not British debt because he thought that the UK's role as a military power and a permanent UN Security Council member provided an extra shield, ie the global order has too much political investment in Britain to let it happen. I have no idea whether this is a good judgement, but I pass it on)
By the way, my colleague Yvette Essen showed me the CDS data on some of the US states. These are quite revealing too.
Michigan 192
California 165
Nevada 164
New Jersey 150
Ohio 104
So, California is now priced as a greater bankruptcy risk than Slovakia 150.
From the Telegraph
Link
Here's a warning parable for coin collectors...
for this financial mess go to jail and have their
personal wealth confiscated by the Government.
Camelot
<< <i>I wont be happy until the people responsible
for this financial mess go to jail and have their
personal wealth confiscated by the Government. >>
But Bear, some of these people ARE the government.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
yes the budget and economic stability for CA is tenuous.
CALPERS (the state workers pension plan) is the single largest investor in the market (i think)
there is talk here of tripling the car registration renewal tax among other things.
we have a decent "governator" yet little piglets running amonk in the Capitol building
housing has tanked after farmland was turn into "burbs"
everybody have a peacefull turkey day and remebr what is important in life
Citigroup says gold could rise above $2,000 next year as world unravels
Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world's monetary system with liquidity, according to an internal client note from the US bank Citigroup.
By Ambrose Evans-Pritchard
Last Updated: 4:48PM GMT 26 Nov 2008
<< <i>
<< <i>Interesting to note that when we had gold and silver backing our
currency, that was the time of the biggest swings of inflation, except
pf course the early days when even tobacco was money.
Not true. The biggest swings have occured since 1971 and they form a wave of increasing amplitude (ie each successive bout of inflation and recession was worse than the previous). It still all comes to monetary policy by banks. This is the FED opening the spigot wider during each bout of "growth" followed by them shutting off the spigot more quickly. Each cycle is more severe than the previous. This next cycle will be a Deusie. In the panics of the 1800's it was the regional and local banks that either contracted or increased their money stocks that gave us inflation or panics. Even when their was gold backing the currency, it was the bankers again reducing the amount of gold backing the local currencies that created the panics. If one compares the panics of the 1800's with the panics we've had over the past 95 years, they are all very similar in that it was not gold nor paper money that caused the problems....but the bankers themselves. Don't blame gold or even tobacco when it really comes down to greedy bankers who just always have to have more than the last time.
roadrunner >>
Looking at the chart, which we shall assume is accurate for conversation's sake, we can all probably agree that War caused
the largest spikes of inflation except for the 1970s? This makes sense
to me personally because resources were being gobbled up at a
alarming rate and in many cases destroyed needing to be replaced
over and over again until the war was over.
I think we can also agree that most bank panics happened during
a time when there was deflation taking place at the same time? Yet
oddly enough even with inflation going wild several times after WWI
we have had no bank panics marked on the chart.
It is curious to note and I think we can all agree that inflation has taken
place non stop since the US dollar became the world's reserve currency
after WWII? Yet during this time the US blossomed into a power house
with a high standard of living that still seems to be taking place to this
day. Riding the hog until the well runs dry I suppose and people no
longer want to buy our govt debt or hold our dollars as a reserve.
I also think most people here would agree deflation has probably finally
set in after 50+ years? There are many signs of this taking place be
it in real estate, commodities, or what have you.
So if I were to lay blame it would be:
1. Early US history it would be the discovery stage of what would work for us. Tobacco was not very wise when the average family
could grow money in their backyard. Our govt was so immature no
one would trust paper money. We kept sending our hard currency
overseas for things we could not make here. We had no choice but
to experiment.
2. Middle history of the US would be banker greed. If they tried to be
more stable in how they operated maybe they would have survived.
No guarantee of their accounts by anyone. Either grab it or lose it
when the stampede started by the people.
3. WWI and WWII which set the stage for every other major country
becoming a shattered wreck and our currency becoming the reserve.
Our govt abused that privilege and here we are. The Federal govt
has spent like pigs not just on war.. but on everything else under
the sun. It grew like a fat pig with an endless supply of feed.
So to blame bankers might not be a good enough blanket statement
to cover the cause as a whole. It seems to me we are in this current
mess because we the people elected boobs to office and allowed
them to spend like mad at the federal level. (War is one thing.. that
is what the Federal govt is supposed to handle.. but everything else
grew also). "Ask what your country can do for you, instead of what
you can do for your country" is our new slogan that has to stop.
Sad but true... we need a recession that will make the feds realize
they have to stop spending and cut cut cut once we have the slightest
long term chance for a rebound.
I just think that rampant inflation is a ways away yet. I am hoping
that GM going bankrupt will be the wake up call for the feds. It is not
too late to change our ways. I am still optimistic.
That is why I feel gold and silver have a while to go yet before we see
huge increases if our govt does not change it ways. I guess that is
why we disagree so much. I am still an optimist. Young and naive ;-) >>
Havent visited this thread in over a week. Been awfully busy. Also haven given my interpretation of the inflation chart, yet, but wanted to say that fc has made some interesting points.
Knowledge is the enemy of fear
<< <i>Ya know, if the US Automakers had any spine, they would declare bankruptcy immediately. Boot the unions and the overly fat pension plans.
Then they would set up corporate offices offshore, Caymans, Jamaica, whatever works best.
Then they renegotiate all their labor contracts, sans unions, and they can compete and beat the foreign automakers and they don't have to listen to the US Congress or deal with US taxes. If I were in their position, I'd be worried about what new taxes may come down the pike. Our new overlords don't like profit. >>
Knowledge is the enemy of fear
<< <i>Thanksgiving week Wed-Friday has not been a good week to go short on gold
An interesting trend over the past 6 years.
roadrunner >>
The Thanksgiving week has historically been very good for equities as well.
Knowledge is the enemy of fear
what did we get postive this week other then the new elect pres
talking out about his great spending which we don't have any way to pay for
please list all these great events this week cohook i'm sure the board will confrin your finding
The paper vs. physical battle rages on........
The USDollar DX index has topped. Conversely, the gold price has bottomed. Each has experienced a clear vivid pronounced reversal off the extreme. Signs point to December as being a battleground month. The moving averages have begun to reverse, a more stable signal. A MACD crossover is near, which would give a billboard notice to technical traders. Beware that this is the phony paper gold price. Actual large physical gold transactions are conducted at prices in excess of $1,000 per ounce. The undue influence of paper price discovery is soon to end. As the Gladiator said in the 1999 movie by the same name, to the phony emperor who usurped power, "The time will soon come to an end for you to honor yourself." Expect severe discontinuity in the gold price in the next few months, maybe sooner. If Keiser and others are correct, and the assault on the COMEX gold succeeds to liberate its price, a gap up is assured, a big gap up, like a few hundred dollars per ounce. Now is the time to hold firm your gold and silver metal. Sell the children, but do not sell the precious metal......Jim Willie
These forecasters have correctly predicted the current mess, they have only at times gotten the timing wrong.
roadrunner
Government bailout hits $8.5 trillion
Kathleen Pender
Wednesday, November 26, 2008
The federal government committed an additional $800 billion to two new loan programs on Tuesday, bringing its cumulative commitment to financial rescue initiatives to a staggering $8.5 trillion, according to Bloomberg News.
That sum represents almost 60 percent of the nation's estimated gross domestic product.
Given the unprecedented size and complexity of these programs and the fact that many have never been tried before, it's impossible to predict how much they will cost taxpayers. The final cost won't be known for many years.
The money has been committed to a wide array of programs, including loans and loan guarantees, asset purchases, equity investments in financial companies, tax breaks for banks, help for struggling homeowners and a currency stabilization fund.
Most of the money, about $5.5 trillion, comes from the Federal Reserve, which as an independent entity does not need congressional approval to lend money to banks or, in "unusual and exigent circumstances," to other financial institutions.
The worst deal for taxpayers could be the Citigroup deal announced late Sunday. The government agreed to buy an additional $20 billion in preferred stock and absorb up to $249 billion in losses on troubled assets owned by Citi.
Given that Citigroup's entire market value on Friday was $20.5 billion, "instead of taking that $20 billion in preferred shares we could have bought the company," he says.
I knew it would happen.
A well written article that gave me some views I had not considered before. Note that they figure on a minimum of $15 TRILLION and up to $40 TRILLION to complete the CDS unwinding. Continue the bailout bonanza only assures a worse ending.
roadrunner
Household debt has almost doubled since 1999 to around 160 percent of incomes, a higher ratio than in the U.S. and U.K., according to AMP Capital Investors. The median national house price soared about 140 percent in the same period.
http://www.bloomberg.com/apps/news?pid=20601081&sid=aBGpZWYKLiWE&refer=australia
Knowledge is the enemy of fear
<< <i>Ya know, if the US Automakers had any spine, they would declare bankruptcy immediately. Boot the unions and the overly fat pension plans.
Then they would set up corporate offices offshore, Caymans, Jamaica, whatever works best.
Then they renegotiate all their labor contracts, sans unions, and they can compete and beat the foreign automakers and they don't have to listen to the US Congress or deal with US taxes. If I were in their position, I'd be worried about what new taxes may come down the pike. Our new overlords don't like profit. >>
The problem with US auotomakers isn't unions. It is management that doesn't have any spine.
They also don't have scruples, common sense, or a hint of foresight but without balls they'd have
little or no use for these anyway.
What they do have is the willingness to collude with other auto companies for the purposes of
setting prices, costs, and even advertising.
<< <i>what data ??? did i miss something in the news
what did we get postive this week other then the new elect pres
talking out about his great spending which we don't have any way to pay for
please list all these great events this week cohook i'm sure the board will confrin your finding >>
Wayneme,
I am not going to get into a debate about how the market works. It is for you to learn and understand.
But, just to back up my comment about the Thanksgiving week being historically good for equities I will provide the follow data.
This week the SP500 is up about 10%.
In 2007 the SP500 was down about 1% during Thanksgiving but up about 4% the follow 2 weeks.
In 2006 the SP500 was unchanged during Thanksgiving and up about 1% the follow week.
In 2005 the SP500 was up about 1% during Thanksgiving week.
In 2004 The SP500 was up about 1% during Thanksgiving week.
In 2003 the Sp500 was up about 2.4% during Thanksgiving week.
In 2002 the Sp500 was up about 0.75% during Thanksgiving week.
Do not confuse the economic news with the daily fluctuation of the stock market. I dont think I have said a single positive thing about the US economy or any other global economy, in over a year. Please do not try to confront me on economic data or intermarket relativities.
Knowledge is the enemy of fear
<< <i>One view on how to end the Credit Default Swaps carnage quickly
A well written article that gave me some views I had not considered before. Note that they figure on a minimum of $15 TRILLION and up to $40 TRILLION to complete the CDS unwinding. Continue the bailout bonanza only assures a worse ending.
roadrunner >>
This is what I have been thinking all along. I do not think the Pres-elect will allow these companies to fold. Thus enabling my premise of deflation to continue for quite some time. There are ways around the deflationary scenario, but I doubt our elected officials have the wherewithall to make it happen.
Knowledge is the enemy of fear
In 2007 the SP500 was down about 1% during Thanksgiving but up about 4% the follow 2 weeks.
In 2006 the SP500 was unchanged during Thanksgiving and up about 1% the follow week.
In 2005 the SP500 was up about 1% during Thanksgiving week.
In 2004 The SP500 was up about 1% during Thanksgiving week.
In 2003 the Sp500 was up about 2.4% during Thanksgiving week.
In 2002 the Sp500 was up about 0.75% during Thanksgiving week.
I don't find these comparisons all that meaningful. In fact, the short term moves in the S&P are more at the mercy of quick fund trading and the PPT. The 10% recovery is merely a pushback from TPTB to keep from falling below the 7500-8000 cliff and on to 6500. Comparing the state of the financial system at Thanksgiving 2008 to previous years in apples and oranges. With trillions being pumped into the system today (and nothing in prior years), how does a couple of trading days during a historical vacation week set the tone for the following year? There's not one anti-gold bug here who would give any creedance to gold's recent $100+ run-up (>15%) as a harbinger of anything good to come considering all the factors at play. So why is a brief rise in the S&P different? I'll be the first to admit that a good bump between now and March is due in the S&P. But 10% trading swings are now going to be the rule. It's one of the few ways the Wall Streeters can make any money....designed volatility. We know J6P and 401K holders won't be profiting. It's also very likely that another round of bad bank news can knock the S&P to <7000 before it eventually rebounds.
roadrunner
<< <i>One view on how to end the Credit Default Swaps carnage quickly
A well written article that gave me some views I had not considered before. Note that they figure on a minimum of $15 TRILLION and up to $40 TRILLION to complete the CDS unwinding. Continue the bailout bonanza only assures a worse ending.
roadrunner >>
That's the best explanation I've seen so far about why Congress has been unwilling to let the automakers go into bankrupcy.
Here's a warning parable for coin collectors...
<< <i>This week the SP500 is up about 10%.
In 2007 the SP500 was down about 1% during Thanksgiving but up about 4% the follow 2 weeks.
In 2006 the SP500 was unchanged during Thanksgiving and up about 1% the follow week.
In 2005 the SP500 was up about 1% during Thanksgiving week.
In 2004 The SP500 was up about 1% during Thanksgiving week.
In 2003 the Sp500 was up about 2.4% during Thanksgiving week.
In 2002 the Sp500 was up about 0.75% during Thanksgiving week.
I don't find these comparisons all that meaningful. In fact, the short term moves in the S&P are more at the mercy of quick fund trading and the PPT. The 10% recovery is merely a pushback from TPTB to keep from falling below the 7500-8000 cliff and on to 6500. Comparing the state of the financial system at Thanksgiving 2008 to previous years in apples and oranges. With trillions being pumped into the system today (and nothing in prior years), how does a couple of trading days during a historical vacation week set the tone for the following year? There's not one anti-gold bug here who would give any creedance to gold's recent $100+ run-up (>15%) as a harbinger of anything good to come considering all the factors at play. So why is a brief rise in the S&P different? I'll be the first to admit that a good bump between now and March is due in the S&P. But 10% trading swings are now going to be the rule. It's one of the few ways the Wall Streeters can make any money....designed volatility. We know J6P and 401K holders won't be profiting. It's also very likely that another round of bad bank news can knock the S&P to <7000 before it eventually rebounds.
roadrunner >>
Perhaps I just say I dont find anything meaningful about gold being higher during Thanksgiving. Why you fight all the time?
I am not making any comparison to the state if the financial system in 2008 to the past. Very simply, you posted a link saying gold usually does well during Thanksgiving. I simply posted that equities do well during Thanksgiving. Nothing more. I am not advocating equities or precious metals. I never said it set any tone for the coming year. In fact, I can guarantee you that you do not want to know my possible target for the DOW. But I'll give a hint, it wont be making new highs any time soon.
There's not one anti-gold bug here who would give any creedance to gold's recent $100+ run-up (>15%) as a harbinger of anything good to come considering all the factors at play
Gold had a similiar $100 move about 2 months ago. Then it hit a recent low. I dont think you can say it is definately a harbinger of things to come. Perhaps, but no one knows.
Knowledge is the enemy of fear
<< <i>
<< <i>hi all, been away for awile.
I hope you all made loads of cash selling euros....
so what is new? >>
OK, OK, we'll have to get you up to speed. We have new leadership, Dear Leader, we like/have to say. You can't criticize....sensitive. The dollar has failed and so has gold and silver and you need to PM me for proper distribution of those worthless assets. Don't listen to anyone else. There is much paranoia going around... Not only do banks not trust each other neither do politicians...imagine.
Oh, and...I know you would think that Hillary won the top-dog stop if you just look at the picks to the cabinet....but...it's really crazy.....the change-guy....he picked this cabinet? I guess he adheres to the saying of keep your friends close and your enemies closer.
OK, now the shocker...gas....the type that goes into your SUV is $1.69 here. And global warming...the people now in charge call it climate change. They needed to get the "change" thing in there. Guns and ammo are gone...can't find them at the local feed store.
I hope this helps...but it's just the tip of the iceberg.
Oh, forgot...your 401k has been taken over to bailout bank CEO's. Otherwise, all is cool.
Ren >>
So angry, the fact is they are working to prevent the total collapse and have been...
Most of us have not been in the loop, so a little more time is needed before the big picture is see in real dollars.
To get you up to speed in the currency market I offer this service.
1. the euro has failed, no surprise there.
2. the swiss frank had also tanked.
this is what im calling the relocation of the money.
yes its true, a redistribution of wealth is underway, you need not look any further for the next phase of the follow the money game.
I am anticipating a huge move in dollar yen. we are underway in the continued falure of the dollar to the yen, but this one in particular is do to the carry trade.
A reversal is in the mist. we could only hope to see continued weakness here until funds can be located into a currency account in which you will sell yens and buy dollars.
The bottom is very very close...
I dont have enough time to reflect on this FACT or go into detail of the other currency relocations just be prepared to jump in when the time is right. soon very soon...
I have found power in the mysteries of thought.
It is always a question of knowing and seeing, and not that of believing.
Our virtues, and our failings are inseparable, like force, and matter. When they separate, man is no more.
.
I found it meaningful because of the hammering gold has taken in the past 4 months, and now a sign of dollar topping, and gold apparently bottoming. The dollar can't deleverage it's way back to 121 again.
I can guarantee you that you do not want to know my possible target for the DOW. But I'll give a hint, it wont be making new highs any time soon.
Dow double topped in late fall 2007. Does anyone not believe the next all time high is probably 10-20 years away? Now it's just a matter of figuring out how low it's going to go. I can see the Dow bottoming at anything from 1000-6000. But I think a 2500-4500 number is more realistic. If I had to bet I'd place a roulette chip on 2800. It's just a number though. This is where Dow/gold ratio goes to 1.
roadrunner
<< <i>
<< <i>
<< <i>hi all, been away for awile.
I hope you all made loads of cash selling euros....
so what is new? >>
OK, OK, we'll have to get you up to speed. We have new leadership, Dear Leader, we like/have to say. You can't criticize....sensitive. The dollar has failed and so has gold and silver and you need to PM me for proper distribution of those worthless assets. Don't listen to anyone else. There is much paranoia going around... Not only do banks not trust each other neither do politicians...imagine.
Oh, and...I know you would think that Hillary won the top-dog stop if you just look at the picks to the cabinet....but...it's really crazy.....the change-guy....he picked this cabinet? I guess he adheres to the saying of keep your friends close and your enemies closer.
OK, now the shocker...gas....the type that goes into your SUV is $1.69 here. And global warming...the people now in charge call it climate change. They needed to get the "change" thing in there. Guns and ammo are gone...can't find them at the local feed store.
I hope this helps...but it's just the tip of the iceberg.
Oh, forgot...your 401k has been taken over to bailout bank CEO's. Otherwise, all is cool.
Ren >>
So angry, the fact is they are working to prevent the total collapse and have been...
Most of us have not been in the loop, so a little more time is needed before the big picture is see in real dollars.
>>>>
I am angry because our elected and appointed officials have destroyed our country. We have government schools brainwashing our children. We have elected officials that go rogue and not what the people want. We have a medical industry prescribing a prozac nation. We have fat-bodies that have no pride in themselves and/or the country. We have citizens and illegaos who bought McMansions on a McDonalds salary with no remorse or conscience. We have people who believe it is their right to live a "Paris" lifestyle on credit. We have uber-libs that have disdain for our fighting/freedom force. We have a media that incrementally perverses our society. We have illegals/criminals that have more rights than taxpaying citizens. We have the sexually challenged individuals who feel to attack Christians for everything no matter the relevance and no matter what the voter outcome. We have professors teaching revisionist history to shape young minds into self-loathing Americans. We don't need a little more time to get the big picture. The big picture is our Republic is on the verge of collapse...socially, economically and spiritually.
Hank has put more money at this bailout then all the World Wars and panics combined in this country's history. And the end effect will be socialism and hyper-inflation within this next presidential term. I don't blame BO yet...he is a mere cog in the cycle. I would not give him so much credit. This credit crisis is 20+ years in the making and our politicians and citizens have been looking the other way because of their own greed. And now we are between a rock and a hard place...bankruptcy or bailout. Deflate or Inflate. We know where this story ends because we have Bernake and Paulson at the helm.
Clock is ticking and save the tin foil comments.
Taps.
Ren
So dont discount the fact that these billions of dollars the government has put to work, are working to artificially inflate the dollar..
Just look at what has happened to dollar Canadian currency, the dollar has gone up exponentially to this currency..
Have you missed the boat?
I don't think so, THERE STILL IS TIME, but billions have been moved to swiss, British, and Australian BANKS DURING THE DOLLAR SLIDE.
For the most part the dollar is out of the woods...
It takes time to see this move, and how the control of gold silver, and oil has been used in the process, by your government.
They should have told us, but they didn't....
THE YEN WILL FOLLOW THE SAME TREND...
I have found power in the mysteries of thought.
It is always a question of knowing and seeing, and not that of believing.
Our virtues, and our failings are inseparable, like force, and matter. When they separate, man is no more.
.
Oh, and...I know you would think that Hillary won the top-dog stop if you just look at the picks to the cabinet....but...it's really crazy.....the change-guy....he picked this cabinet? I guess he adheres to the saying of keep your friends close and your enemies closer.
OK, now the shocker...gas....the type that goes into your SUV is $1.69 here. And global warming...the people now in charge call it climate change. They needed to get the "change" thing in there. Guns and ammo are gone...can't find them at the local feed store.
I hope this helps...but it's just the tip of the iceberg.
Oh, forgot...your 401k has been taken over to bailout bank CEO's. Otherwise, all is cool.
Ren
Great Post! I must have glossed over it before. Regular at $1.59 here now. Gotta check out the gun show today, see what's the buzz.
I knew it would happen.
<< <i>
<< <i>Ya know, if the US Automakers had any spine, they would declare bankruptcy immediately. Boot the unions and the overly fat pension plans.
Then they would set up corporate offices offshore, Caymans, Jamaica, whatever works best.
Then they renegotiate all their labor contracts, sans unions, and they can compete and beat the foreign automakers and they don't have to listen to the US Congress or deal with US taxes. If I were in their position, I'd be worried about what new taxes may come down the pike. Our new overlords don't like profit. >>
The problem with US auotomakers isn't unions. It is management that doesn't have any spine.
They also don't have scruples, common sense, or a hint of foresight but without balls they'd have
little or no use for these anyway.
What they do have is the willingness to collude with other auto companies for the purposes of
setting prices, costs, and even advertising. >>
the "serpent" IMHO is the UAW...Congress and automaker Board Members are to blame as well...executives, they are more "generals". I agree that any foresight went out the door decades ago..with Congress and the policies of the big 3.
IMHO BK is the only way that they will be able to survive....and survive means a radical change from what they are now. BK will kill the serpent and take the operations out of the hands of the Board of Directors....
Can you elaborate on your view that the USD is going to continue to remain bullish for quite some time? I don't think I've seen anyone else profess that view as strongly as you have. At what levels of the USD index are you expecting to see over the next couple of years? A complete recovery to the 2001 levels of .120 and then further gains? What previous time frame in history will this recovery most closely resemble?
roadrunner
article on gold from JPMorgan (long)
i'm going to read it after church....first things first
<< <i>thestig,
Can you elaborate on your view that the USD is going to continue to remain bullish for quite some time? I don't think I've seen anyone else profess that view as strongly as you have. At what levels of the USD index are you expecting to see over the next couple of years? A complete recovery to the 2001 levels of .120 and then further gains? What previous time frame in history will this recovery most closely resemble?
roadrunner >>
I'm waiting for a recovery against the yen..
It has not happened as of yet, but has against most other currency.
we can be bullish on dollar yen soon, but further weakness may take it to the .80 level. I don't think that will be the case, but short term it may be the blessing im waiting for. the reversal against yen will have to take place above the last recent high of 110.
The 110. to 120. level should be the first barriers to be broken. on this I'm hoping to see the move in only a few days to weeks to a month, but 140. in 2 years is conservative in my view.
Things can move fast in currency's as seen in the 3 month recovery of dollar to most other currency pairs.The only question is are dollars over bought now? Will the dollar slide against other currency's, but recover against the yen?
The follow the money game can be manipulated in this way.. In hopes of not being wrong, if the dollar moves higher to yen its possible it can be short lived short term, but then your talking about further manipulation, and that will not be a good thing. STOP LOSS triggers to protect you from such a thing...
Most will say the dollar will go lower to dollar yen, but how soon? Is there another 3 month manipulation underway now?
Can dollar recover to yen, and fall to the other major currency's? I think the later is true..
Another question I have is, can a dollar recover to the yen, and not slide to the Euro wile metal, and oil prices remain move higher?
Keep in mind the dollar has not recovered to the yen during metals, and oils slide over the past 3 months.
I have found power in the mysteries of thought.
It is always a question of knowing and seeing, and not that of believing.
Our virtues, and our failings are inseparable, like force, and matter. When they separate, man is no more.
.
It has not happened as of yet, but has against most other currency.
The yen carry trade unwindings have certainly helped the yen to show strength. It's a matter of when the unwinding finally ends in the carry trade and in the derivative contracts unwinding. Hard to say what is real with these major forces superimposed over the markets. Everything I've seen shows a double top in the dollar and a retreat back to the lower 80's due. At the same time oil and other commodities should bump back some. I guess it's hard for me to be bullish on bankrupt currencies. I won't be buying Icelandic Kroners anytime soon no matter how low they go. Considering the massive manipulations in all the markets since July, who can say what is real?
Do you have any links to good sources that explain this topic in more detail? Odd that in the 100's of articles I've read since the summer, I haven't seen one taking the above stance. And I do look at countra-commodity and stock views. If the dollar moves to .140 that would ensure a strong move back up in the S&P and Dow, probably to new highs. I don't see anyone discussing those possibilities. To me that seems extremely remote.
roadrunner
A thought-provoking article linking 1971 fiat, to rising interest rates through 1980-82, then generally falling interest rates ever since. The end result being a constant loss of labor that slowly chokes off the economy. In essence, low interest rates are the disease, not the cure, all stemming from leaving a gold-backed currency.
roadrunner
<< <i>"The yen carry trade unwindings have certainly helped the yen to show strength" -- I definitely agree with this statement, though it might be said that the unwinding is returning the yen to a more realistic valuation -- ie, the carry trade was depressing the yen. Whether the dollar strengthens against the yen will likely depend on (or correlate with) interest rate trends in the US; as long as interest rates remain as low as they are in the US, it is hard to see the dollar strengthening against the yen. >>
today we see the further weakness. they have been saying the U.S. may take interest rates even lower.
realistically a new all time low is nearing ...
so for the most part I agree with your outlook. near term..
A good entry point will be in the low .80 and is expected, if we get there.
risk will also be low if we get there anytime soon for a long dollar entry against the yen..
This in my opinion will mark a turning point. How time, lines up, or coincides with federal, and japans future interest rate cuts should give an idea of the time frame involved, and the next leg for the future of our dollar.
The Euro is on the move...
I have found power in the mysteries of thought.
It is always a question of knowing and seeing, and not that of believing.
Our virtues, and our failings are inseparable, like force, and matter. When they separate, man is no more.
.
black box economy
and maybe this will help turn the page
<< <i>Antal Fekete - fiat money and interest rates: destruction of the labor fund
A thought-provoking article linking 1971 fiat, to rising interest rates through 1980-82, then generally falling interest rates ever since. The end result being a constant loss of labor that slowly chokes off the economy. In essence, low interest rates are the disease, not the cure, all stemming from leaving a gold-backed currency.
roadrunner >>
Very interesting article, the problem is would the new administration listen?
This is a quote from the article you linked:
"Labor could be the savior of the country in forcing a return to constitutional money at the eleventh hour, by demanding that the Obama administration open the U.S. Mint to gold and silver. That measure would enable the brakes on the money-train. It would stabilize foreign exchange and interest rates and stop the shredding machine, now spinning out of control, from destroying capital. This would be labor’s finest hour: saving the United States from financial ruin and ignominy."
CONSTITUTIONAL MONEY being the key.
Here is a quote about what the new administration is quoted as saying about Hillary Clinton's appointment to Sec of State:
"Dreisdach said as long as Democrats control the Senate, the Obama transition team won't worry about this provision in the Constitution.
"The Obama team is well aware of it and they have dismissed it," Dreisdach said. "I find it hard to believe that a Democratic majority will take a different view.""
Article Link
Not very promising in my mind.
As predicted
This was very succinct to me because the reported capitalization of GM is around 8 billion right now and they are asking for 9. We could buy the whole operation for 8 billion. I think the rub here is that the fed doesn't want to get tagged with all the pension liabilities that it would have to accept with a buy out. The problem is that if they are allowed to go bankrupt then the US would probably get tagged with the pension liabilities anyway. This deal is bad if we do this and bad if we do that. Ever walk away from a car deal?
<< <i>This was predicted last year in this thread and now we get to see it's form. It will be an interesting choice between bailing out the banks, bailing out the automakers, or bailing out the states. I suspect the states will not fare as well as the banks, in some odd twist of fate and the automakers, imho, are burnt toast on a pointy stick...no soup for you. It is quite a presumption to assume that the federal government would be placed in a position to underwrite all the state enacted assistance programs. There are going to be some unfunded state programs and the most interesting thing will be what programs get cut from state funding. I have my thoughts on this but will spare you the grief.
As predicted >>
yup the sixth(?) largest economy's State government is outta, or will be outta money soon. there is a "one for one" plan on the table but no one wants one of the 1's, just the other 1.
a tripling of the vehicle licensing fee (to what it once was) will probably happen, beyond that?...some talk of raising the sales tax...
my day looks like it is all downhill from here till dawn.
Camelot
Not an up-lifting article, but I find only reasonable conclusions, a few of which we are already wrestling with.
roadrunner
What is the largest component of a good or service's cost? Labor or raw materials?
While I believe raw materials costs can be quite volatile, it is in fact rising labor costs that lead to sustained inflation. Afterall once you give someone a raise it is difficult to take it back. And as has been written here and beaten to death by politicians over the past few months, wages have not kept pace with rising materials costs, and this is partly why we have seen such a sudden downturn in the economy. People were subsidizing their incomes through the use of credit. When the credit dried up, the economy stopped.
Now to further my contention of deflation, what would happen if wages actually began to fall? Sounds crazy, right? Well, here are my 2 cents. I believe unions have kept wages at artificially high levels. And by wages I mean salary and benefits. Today unions cover more than 1 in 8 workers in this county from hotel services to nuclear power plant operators. The average weekly salary of a union employee is $863 per week vs. $663 per week for non-union. So union workers get paid 30% more for doing the same work. No we have the largest employers in this country going under due in large part to an overwhelming burden placed on them via unions. This is what I think is going to happen---the unions will all fail within 10 years. In times of economic prosperity as we have enjoyed for 2 generations it is the worker who carries the big stick, but when then economy fails that stick is passed to the employer. And the deeper the economy sinks, the bigger the stick becomes.
So, I see it nearly impossible for inflation to get any foothold and I offer these 2 headlines of evidence that wages will be falling.
1. AK Steel plans salaried workforce pay cut, other cost reduction measures
Co announces that in response to the recent unanticipated and major downturn in the economy, which has resulted in sharply lower demand for some of the company's products, it announces that it is implementing a salaried employee cost reduction program. Among the elements in the program are plans to implement an indefinite 5% pay reduction for salaried employees on Jan 1, 2009. The pay reduction will affect all salaried employees, including the company's CEO and all executive officers. The company said it plans to implement other salaried workforce cost reductions, including freezing the defined benefit plan for salaried employees and replacing it with a defined contribution retirement benefit, and offering temporary incentives for voluntary retirements. The temporary retirement incentive program will end on Feb 6, 2009. The company said it could not rule out the need for involuntary salaried job reductions if the pay reduction and voluntary retirements do not produce adequate cost savings.
2. YRC Worldwide Teamsters Employees to vote on contract modifications; proposal includes 10% wage reduction and ownership stake
Co announces that its Yellow Transportation, Roadway, Holland and New Penn business units have asked their union employees represented by the International Brotherhood of Teamsters to modify the company's current labor agreements. While working on a longer-term solution to this issue, YRCW is seeking immediate cost savings through proposed changes for the remainder of the contract including: 10% reduction in all wages paid, inclusive of scheduled increases; Suspension of Cost of Living Adjustments.
The UAW also announced that it would seek to reduce benefits.
Do not read this as my being negative on gold, I am merely saying that if gold does indeed go higher, it will not be due to inflationary pressures. Remember, all this money that is being printed is not really going into the money supply. If it was actively being lent out that would be another story, but this printed money is just going to the banks so your savings account statement doesnt give you a big surprise. This newly created money will never see the public, JMHO.
Knowledge is the enemy of fear