<< <i>This board is 90% pessimistic and that may be a signal to start investing in solid companies. When everybody thinks the sky is falling --it's time to buy.
The remaining 10% are truly worried. >>
I would change that to 90% are realistic on this board, jmo. If you want to use the pessimistic gauge look at general stock boards or investment advisors ratio of bull vs. bear or the USA Today and magazine headlines.
It is probably time for a population migration in this country. If INTC were to open a fabrication plant in North Dakota, people would come. Or maybe the move to Detroit.
Oh No Dave not Detroit,
The Motor City experienced 418 cases of murder and non-negligent manslaughter in 2006. That's 47.3 murders per every 100,000 residents.
Detroit is lost and when GM goes down the tubes it is going to be the center for all new Mad Max Movies.
Note that Senator Dodd is leading the charge to get a bill together for the Treasury to loan the FDIC another $500 BILL longer term and an immediate $100 BILL. It's a lock.
This taken off the JSMineset site today. JS notes that the BIS changed the derivatives total from $1,144 TRILLION (1.144 QUADRILLION) to about $700 TRILLION not more than a few months ago claiming that a new "value to maturity" model was more accurate. In any case whether we blow up the world 10X or 20X doesn't make that much difference. I think the real reason for the change was that if people saw a number like $1.1 QUADRILLION, they'd flip. So out it went and in went a new black box model.
SANTA MONICA, Calif. (Marke$ Watch) -- There's a $700 trillion elephant in the room and it's time we found out how much it really weighs on the economy.
Derivative contracts total about three-quarters of a quadrillion dollars in "notional" amounts, according to the Bank for International Settlements. These contracts are tallied in notional values because no one really can say how much they are worth. But valuing them correctly is exactly what we should be doing because these comprise the viral disease that has infected the financial markets and the economies of the world.
Try as we might to salvage the residential real estate market, it's at best worth $23 trillion in the U.S. We're struggling to save the stock market, but that's valued at less than $15 trillion. And we hope to keep the entire U.S. economy from collapsing, yet gross domestic product stands at $14.2 trillion.
Compare any of these to the derivatives market and you can easily see that we are just closing the windows as a tsunami crashes to shore. The total value of all the stock markets in the world amounts to less than $50 trillion, according to the World Federation of Exchanges.
To be sure, the derivatives market is international. But much of the trouble we're in began with contracts "derived" from the values associated with U.S. residential real estate market. These contracts were engineered based on the various assumptions tied to those values.
Few know what derivatives are worth. I spoke with one derivatives trader who manages billions of dollars and she said she couldn't even value her portfolio because "no one knows anymore who is on the other side of the trade." Derivatives pricing, simply put, is determined by what someone else is willing to pay for the contract. The value is based on an artificial scenario that "X" will be worth "Y" if "Z" happens. Strip away the fantasy, however, and the reality of the situation is akin to a game of musical chairs -- without any chairs. So now the music has finally stopped. That's why stabilizing the housing market will do little to take the sting out of the snapback we are going through on Wall Street. Once people's mortgages were sold off to secondary buyers, and then all sorts of crazy types of derivative securities were devised based on those, and those securities were in turn traded on down the line, there is now little if any relevance to the real estate values on which they were pegged.
We need to identify and determine the real value of derivatives before we give banks and institutions a pass-go with more tax dollars. Otherwise, homeowners will suffer as banks patch up the holes left in their balance sheets by the derivatives gone poof; new credit won't be extended until the raff of the old credit is put behind. It isn't the housing market devaluation, or the sub-prime mortgage market defaults that have us in real trouble. Those are nice fakes to sway attention away from the place where greed truly flourished -- trading phony instruments to the tune of $700 trillion. Let's figure how to get out from under that. Then maybe the capital will begin to flow again through the markets. Right now, this elephant isn't just in the room, it's sitting on us.
Thomas M. Kostigen
The problems with real estate and sub-prime, global warming and cap and trade, etc. as big as they are.....are diversions to keep us all from looking at the $700 TRILL elephant. With the $10 TRILL already dumped down the corporate banking hole, we could have paid off all the bad mortgages and started clean. Obviously the problem runs far deeper than just real estate.
What if all the worlds central bankers said to all those corporations, hedge funds, banks, ect that are holding the derivatives and to each party, "Cancel them. They no longer exist. Now get on with your business."? Of course there will be losses, but there are losses now anyway. If each party and counterparty rips up the contracts, what is the harm?
<< <i>It is probably time for a population migration in this country. If INTC were to open a fabrication plant in North Dakota, people would come. Or maybe the move to Detroit.
Oh No Dave not Detroit,
The Motor City experienced 418 cases of murder and non-negligent manslaughter in 2006. That's 47.3 murders per every 100,000 residents.
Detroit is lost and when GM goes down the tubes it is going to be the center for all new Mad Max Movies. >>
It wouldnt be lost if it residents had something to look forward to. Move in some real industry and watch what would happen. I see TREMENDOUS possibility with the right group of minds and money. Unfortunately, everyone has already written it off. Thats a shame.
"What if all the worlds central bankers said to all those corporations, hedge funds, banks, ect that are holding the derivatives and to each party, "Cancel them. "
See Dave even the Nobel Guys are reading your posts!!!!!
March 61/2 (Bloomberg) -- Myron Scholes, the Nobel prize- winning economist who helped invent a model for pricing options, said regulators need to “blow up or burn” over-the-counter derivative trading markets to help solve the financial crisis.
The markets have stopped functioning and are failing to provide pricing signals, Scholes, 67, said today at a panel discussion at New York University’s Stern School of Business. Participants need a way to exit transactions and get a “fresh start,” he said.
The “solution is really to blow up or burn the OTC market, the CDSs and swaps and structured products, and let us start over,” he said, referring to credit-default swaps and other complex securities that are traded off exchanges. “One way to do that, through the auspices of regulators or the banking commissioners, is to try to close all contracts at mid-market prices.”
Cohodk, if the solution were as easy as canceling all the OTC derivative contracts then I would think someone as well versed in these as Sinclair is would have suggested that as a reasonable alternative along the way. He never once has stated this on his website as a possible outcome. A couple of years back he started saying the "derivative geeks" have killed the financial system. It was then just a matter of marking time until it happened. I've seen a couple of other analysts or bloggers mention the cancellation method. The only one this would hurt would be the party being paid off, who was on the winning side of the derivative's bet. For every TRILLION being paid off in the derivative's rat hole someone out there is walking away with that profit and burying it. No doubt many of those AIG counterparties are foreign nations, leading foreign companies, etc. Something tells me that those guys (Russia, China, Japan, India, Germany, etc.) aren't gonna be happy with giving up their winning bets. How long would it take to unstring the millions upon millions of daisy chain derivative's contracts? Doesn't each of those have to be examined individually to see whether it should be saved or sunk? Doesn't it matter that JPM may be the biggest loser in such a scheme with they being the FED's major bank cartel buddy? Goldman Sachs is no doubt a winner on many derivative bets since they originated many of them and then shorted the crap out of them in 2007-2008 to force them into failure. Great guys! The current and former administration (starting with the Sect. of Treasury) is loaded with ex-Goldman Sachs guys. I think they are ensuring this process goes on as long as possible so that they can recover as much cash from this scheme as humanly possible before the govt finally does decide to clear the books and start fresh.
In the end, if we decide tomorrow to cancel all OTC derivatives, that will commence a complete major banking failure with JPM, Citi, GS, WF, and others going right down the tubes. Start completely over. The currency, precious metals, and stock markets would go absolutely bananas. The $100 BILL in JPM gold derivatives that has been helping to keep gold supressed would go poof.....what do you think gold would do? I suspect people would clean out the stores instantly of anything usefull and hoard any sort of conceivable harder asset, fiat would likely be hoarded too but with no real backing I'd be looking to spend it on stuff I need while I can. But with all your bank accounts frozen, good luck to that if you don't have some at home. Metals would skyrocket of course. The govt would have had to set up a plan to take over the role of the FED. The FED can't exist in the new system. There are huge ramifications overseas if we oust the power behind them. While this is the quickest and surest way to get rid of the baggage, all I see for outcomes are riots, martial law, market shutdowns, international trade at a standstill....basically complete chaos for quite some time. That's why I think these guys have been trying to lever down the system since August of 2007...while stashing all the cash and metals they can in the interim. If you can find a peaceful and orderly way of accomplishing the waving of the magic wand on the derivatives, please expound. It may be the only way out in the end. But the longer we wait there will be fewer pieces of the pie left to pass around.
There are many otc derivatives that are serving a sound purpose in the financial world. Dissolving all of them certainly will leave plenty of collateral damage. Companies, cities, states, etc all have derivatives to help insure them from rapid changes in interest rates, and other outside factors. Even though we can conclude that a lot of this "insurance" is now bogus, the emperor will now be seen by everyone to have no insurance/clothes. And goign forward, no one will be able to offer any new insurance for quite some time, except for govt "insurances" based on printing more fiat.
In short, TPTB behind the FED, behind the major banks, behind the Bilderbergs, behind the Council on Foreign Relation, etc probably have a lot of winning bets they want paid off. And our govt and regulatory bodies are chock full of their minions who are there to oversee the transfer of $$. There is also the possibility that the powers behind the major banks want to influence tighter control over the entire banking and financial sectors. This seems to have been the trend ever since 1913 and even moreso over the past 15 years...consolidate and increase their power over the world's economy. They succeeded. In the US, the Banks were the economy. John P. Morgan was said to have been responsible for some of the major financial panics during his life time. I have no doubts. A little bit of credit contraction or withdrawing money out of the financial system does create panics. Then old JP could then come in to "save the day" (as in 1896 and 1907) but at the cost of being awarded more govt issued control/influence. That mindset no doubt still exists today, probably more than ever. And the battle wages on for control of the world's money and financial system. To think that the current problems are not part of a bigger plan seems unlikely imo. Bankers (and esp. those that own banks) create the boom and bust cycles. They do it to make money at all times. Slow positive growth rates don't work for them as it takes too much time to confiscate wealth. We need a whole new system with currency anchored to something concrete. I suspect gold, oil, or some mix of tangible assets will play a big role. Unbridled fiat and the bankers that control it just can't continue.
The average house price decline in NH is a mere 20% with some areas actually holding steady as well as gaining (Lebanon/Hanover area). Houses are starting to sell in NH as I just bought one and talked to a few real estate agents who have a feel for things over the last two months. So when you say the northeast.. you really do need to be more specific. Some states are doing quite well during this time frame.
No one said houses weren't selling. They always sell, but it can take longer and prices may have to be adjusted down. Some sellers are more desperate than others and will price down today to 2010 levels in order to sell. That's occuring in all of the northeast. All the houses on the market today could be sold tomorrow if the prices were lowered to what buyers wanted to pay in the future. My point was that inventory is indeed growing and average prices ARE falling. Let me know when total NH inventory levels are falling off and median home prices start rising. I'm glad you found the right home at the right price from the right seller. For every one like you that found the right seller who priced to market there are 9 other sellers refusing to do so. And one by one they will capitulate until they sell. For every ideal and growing community "gaining" in value, there will be multiple communties falling off. That ebb and flow occurs in all markets. During the boom phase there were areas of my state with falling home prices (ie decaying communities).
I have first hand knowledge of my market in CT. Prices are down about 20% from the peak, but we're not done yet by any means as inventories are growing and foreclosures gaining. I have relatives in RI and MASS. Same conditions. 77% of the population in the northeast is in Mass, CT, and RI. But certainly the outer reaches of VT, NH, and Maine are probably less affected by the recent drop since they probably saw less original boom. My brother was a private RE agent in Mass. and had to close his business in late 2008 due to not enough potential customers. When he's back in RE will be when homes are bottoming out.
As far as I know foreclosures are counted as "sales" in many RE stats, so don't swear by that figure. Calfornia was showing rising home sales a year or so ago mainly due to rising home foreclosures. No doubt RE agents milked that stat to the end to capture more buyers.
there hasn't been any positive changes here in California in the RE market.
prices in some areas (the black holes) are affected by being overbuilt, sub-prime buyers and an availabiity of cheap "relative" land in several counties, like farm land sold to developers.
We are seeing a lot about the unemployment rate in the news. I think it is now being shown to be what, around 8.2% or so. And then we hear about what the unemployment rate was during the Great Depression, seems to be around the 25% range or so. The inference in these comparisons seem to be that we are no where near what the times were like during the Great Depression. So we shouldn't be worried, right? After all, we are not in a depression because unemployment is nowhere close to what it was in the thirties, right?
However, I suspect they are comparing apples to...... grapes or something. Correct me if I'm wrong, but isn't the number now used for the unemployment rate derived from the number of individuals who NEWLY apply for unemployment benefits?? And does not include those who have already been unemployed for some time, and does not include those who have just given up looking for work? That is what I seem to recall when I've any info on it.
If that is true, then how in the world can the 8.2 percent today, be compared to the 25% rate in the thirties?? There were no unemployment benefits in the thirties, so that parameter certainly was not used to calculate the unemployment rate. More likely, the 25% was probably an estimate of the TOTAL number of unemployed individuals, including the newly unemployed, those that have already been unemployed for some time, and also those who have given up even looking for work.
My point is this...... If the same parameters were used to calculate todays unemployment rate as was used in the thirties, I suspect we would be MUCH closer to the 25% that was rate in the thirties, if not equal to it?
Perhaps the method of calculating unemployment was changed in more recent times to make the numbers not look so bad..... just like we know how they have monkeyed around with the inflation rate calculation.
After all, we can't let people go around thinking we might be in a depression now, could we?!
tincup is correct, the unemployment figures coming out of Washington are as believable as any other figure they provide (CPI, etc) totally distorted for political reasons.
As far as cancelling derivatives, yes GS and the other scum in charge want to get as much money and control as they can from us, but in addition, a lot of the benficiary of these is to offset losses already incurred. For example, AIG was counterparty to huge numbers of CDOs containing mortgages that will never be paid back. If they have a derivative contract on a 100 million CDO that covers default of the principal then the insurance company, pension fund etc that owns the CDO would lose huge if the derivative was "cancelled." Right now the derivative (insurance) just keeps them even, they are not waiting to post any huge gain. The money went to the homeowner with the HELOC who has already spent the money on the goods from China.
Under Clinton (ie Robert Rubin, Lawrence Summer, etc) a whole range of stats were massaged for the public morale of the sheeple, including unemployment. If you go to my link below for "Stats" (www.shadowstats.com) you can get the numbers in the original versions of CPI, unemployment, etc. The numbers are updated each month.
John Williams unemployment number is well into the teens now. And if you use a more comparable number of "underemployment," we would be at the 19-20% level right now. Underemployment counts those who have given up after a year of looking, those who took part time or lower paying jobs in the interim, etc. This is far more comparable to the 1930's version of unemployment than the massaged version we have today. Williams also tracks M3 since the FED no longer deemed it "useful" because it included things like repos which were just starting to go ballistic in 2006. Williams CPI number using the 1980 version shows a very positive CPI as opposed to the BLS's "deflation proving" negative CPI.
What if all the worlds central bankers said to all those corporations, hedge funds, banks, ect that are holding the derivatives and to each party, "Cancel them. They no longer exist. Now get on with your business."? Of course there will be losses, but there are losses now anyway. If each party and counterparty rips up the contracts, what is the harm? >>
This would work if applied to only bucket shop CDS's. It was nothing but gambling, anyways. In the case of first parties, the contracts could be redone with forbearance and securitized. Would it stop the defaults? No, but it could/would slow them to be manageable over time.
How long would it take to slowly remove those swaps? 5 yrs? 10 yrs? Never? It is only about $700 to $1144 TRILLION depending on which BIS reference method you use. The bottom line is that each of the banks and more corporations that dabbled in these knows that the other guy is probably just as insolvent as they are. So you're going to invest with one of these firms knowing that either months or years down the road those worthless swaps could take them out...along with your stake? There are better ways to risk one's money for a safe and fair return. How about companies that actually produce a tangible product that can be physically used?
The major financial players know better than to send good money after bad by investing further with their competitors. In fact each one of them is laughingly putting out "downgrades" on the other to gain a market advantage where possible.
The derivative's mess at $100 TRILLION was already unmanageable. Now that it has been increased 7X to 11X that amount, it is beyond unmanageable.
Does anyone have a broadly estimated breakdown, by type of contract, of the much quoted 700 + trillion swap figure? I believe a fairly high proportion are rather plain vanilla fixed/variable swaps. These are not terribly toxic things. Clearly unwinding this mess is tricky, but it is certainly doable.
The only data I've seen over time from the Bank of International Settlements (keeper of the derivative's data) is that over 50% of them were interest rate swaps. On paper that sounds like a simple concept. It may be.
Clive Maund had an interesting article today that also suggested the only alternative to the current mess was to cancel all the contracts. This would explain the requested need for secrecy and no transparency while GS and others take out as much as they can before such a thing occurs. Maund also sees the total damage as beyond manageable if we continue to try and unlayer the mess. The good effect is all those companies that overvalued their worthless chain of derivatives becoming solvent. The other side of that are all those firms on the winning side of the bet now receiving nothing for any gains they were assuming. It would be a shame though to see JPM for example to receive no type of penalty for having created a $65 TRILLION mountain of interest rate swaps all on their own. With that, they steered interest rates for a decade to exactly where they wanted them to go...not where a "free" market would have chosen. But, they were "fictitious" to begin with, just paper, no different than their $100 BILLION in gold derivatives. What wasn't fictitious was the ability to help move markets on pseudo- positions while using absurd leverage all at the expense of you guessed it.....J6P.
Maund's analysis of current copper, oil, and S&P trends is a good read too. Contrarian Cliff Droke sees the only thing between a sharp overall rally in stocks is breaking the negative sentiment that is well beyond anything seen in years. Everything else is lined up. Will PM's be completely tossed aside during such a relief rally?
Roadrunner, I'll have to think about your comments. Currently I am still thinking voiding the contracts will have much less dire consequence than you predict. It could lead to higher commodities prices though as the world economies would gain traction and inflation might actually have a chance.
Tincup, we are nowhere near the unemployemnt levels today as in the 30's. Just look down your street. Are 1 of every 4 households without work?
The economy today is quite a party compared to 1932-33. The gross domestic product dropped 45% from 1929 to 1933. A similiar decline in GDP from 2007 levels would take us to 1996 levels. So far we are at about 2005 levels. We would need to shed 15 million jobs from 2007 levels to reach 1996 levels, but we would need to shed about 40 million jobs to reach 25% unemployment. I think the popular number is that about 4.5 million jobs have been lost during this "recession".
Maund's analysis of current copper, oil, and S&P trends is a good read too. Contrarian Cliff Droke sees the only thing between a sharp overall rally in stocks is breaking the negative sentiment that is well beyond anything seen in years. Everything else is lined up. Will PM's be completely tossed aside during such a relief rally?
roadrunner >>
the optionspresented : massive BK or "super bailout".
the leaning via the charts and conclusions are for super bailout, which would make PM's less favorable. Yet the Administartion would lean towards a further breakdown and chaos, what better way to get "control"?
If some of the comments made this a.m. by Bernanke and the S.E.C. are followed thru on, today will be the turning point in the markets.
Specifically, the revisiting of the Mark-to-Market accounting rule which will free up nearly a trillion dollars of capital and the reinstatement of the uptick rule to stop Bear Raids dead. Also, Big Ben mentioned off-handedly that the facilities are in place to drain liquidity (pull paper money from circulation) should the boat load of paper that''s put out there becomes a problem (read-inflation will not be a problem).
<< <i>That is great news. So, are you ready to be the first to sell all your PMs and go 'all in'to the market? >>
Yup...
But if they (the powers that be) don't act decisively, I'll be out and as fast as I'm in. (I did make a couple of stock buys this a.m. after listening to Bernanke).
Specifically, the revisiting of the Mark-to-Market accounting rule which will free up nearly a trillion dollars of capital and the reinstatement of the uptick rule to stop Bear Raids dead. Also, Big Ben mentioned off-handedly that the facilities are in place to drain liquidity (pull paper money from circulation) should the boat load of paper that''s put out there becomes a problem (read-inflation will not be a problem).
When has Bernanke made a correct call or prediction since he's been in office? Please list one....just one. Didn't he and Paulson both agree that sub-prime had been contained over a year ago? Do you think those 2 guys actually believed that crap that they were peddling to the public? Not a chance. Bottom line is that Bernanke speaks the soothing words that politicians and the public want to hear. And he delivers it...thought not as effectively as Greenspan or Paulson did. I don't feel the smart money in the market pays any attention to BB or TG other than to gauge which direction the sheeple will move in....then to go counter it.
The FED has never drained liquidity pumped into the markets. What makes you think they will do that down the road? They didn't do this from 1997-2001 when things got "frothy." And they didn't do it from 2004-2006 when things also got out of hand. How will they pull out TRILLIONs in liquidity? Many of the ways they pumped liquidity in are essentially irreversible. The words sound good on paper, but there is no credibility behind them. Ben is quoting the party line. Dodd and Frank have been tossing the uptick rule around and there is a bill now before the house finance committee for arguments. It could be months before that bill makes it to the senate for a final vote. By that time I think the Downtick Boyz will have pummeled the market to where they wanted it. The raids would still continue, just not as rapidly as they did in the past. What about naked short selling? That's probably an even bigger problem. The SEC or CTFC has not enforced it.
Not maintaining marked to market accounting basically turns everything back to fraud. There's no other name for it. So if fraud is what it takes to start a recovery, it's fraud we'll get. So who will be the first to place their IRA/401K money into a formerly insolvent bank, now made "solvent" by reburying the near-worthless derivatives a foot deeper underground?
how can liquidity be taken out, unless you entice it to go somewhere never to be seen again??? ie higher interest rates, and asset appreciation? stock market? not quite yet
what else? and are any of these NOT inflationary? ....(i don't think so) . i was confused by Helicopter Ben again today.
Volcker (ollie ollie oxen free) will try once it gets going but the economy is a night and day difference for the early 80's as well as and even more so than FDR
The only one who ever successfully "drained liquidity" was Volcker. He did this by raising interest rates into the teens. Now imagine the national debt if the T-Bills are paying 8% and think about the foreclosure rate when Mortgages go to 12%.
Sorry, this isn't going to happen, it's just more talk.
Some minor inconvenient terms in the GLD prospectus. And why all the upfront talk about fraud, theft, loss, etc? Almost as if it is expected.
The Trust's gold may be subject to loss, damage, theft or restriction on access. There is a risk that part or all of the Trust's gold could be lost, damaged or stolen. Access to the Trust's gold could also be restricted by natural events (such as an earthquake) or human actions (such as a terrorist attack). Any of these events may adversely affect the operations of the Trust and, consequently, an investment in the Shares.
The Trust may not have adequate sources of recovery if its gold is lost, damaged, stolen or destroyed and recovery may be limited, even in the event of fraud, to the market value of the gold at the time the fraud is discovered. Shareholders' recourse against the Trust, the Trustee and the Sponsor, under New York law, the Custodian, under English law, and any subcustodians under the law governing their custody operations is limited. The Trust will not insure its gold. The Custodian will maintain insurance with regard to its business on such terms and conditions as it considers appropriate. The Trust will not be a beneficiary of any such insurance and does not have the ability to dictate the existence, nature or amount of coverage. Therefore, Shareholders cannot be assured that the Custodian will maintain adequate insurance or any insurance with respect to the gold held by the Custodian on behalf of the Trust. In addition, the Custodian and the Trustee will not require any direct or indirect subcustodians to be insured or bonded with respect to their custodial activities or in respect of the gold held by them on behalf of the Trust. Consequently, a loss may be suffered with respect to the Trust's gold which is not covered by insurance and for which no person is liable in damages.
<< <i>The Trust may not have adequate sources of recovery if its gold is lost, damaged, stolen (WTF??) or destroyed and recovery may be limited, even in the event of fraud, to the market value of the gold at the time the fraud is discovered....Consequently, a loss may be suffered with respect to the Trust's gold which is not covered by insurance and for which no person is liable in damages.
roadrunner >>
Where do I sign up?
Edited to say that the emphasis is mine.
Mark Piersall Random Collector www.marksmedals.com
Comments from the Swiss National Bank as summarized by Briefing.com.........
Excerpts from the SNB announcement: The economic situation has deteriorated sharply since last December, and there is a risk of negative inflation over the next three years. Decisive action is thus called for, to forcefully relax monetary conditions. Against this background, the Swiss National Bank (SNB) is making another interest rate cut and acting to prevent any further appreciation of the Swiss franc against the euro. To this end, it will increase liquidity substantially by engaging in additional repo operations, buying Swiss franc bonds issued by private sector borrowers and purchasing foreign currency on the foreign exchange markets. The SNB is lowering the target range for the three-month Libor by 25 basis points, narrowing it to 0--0.75%, with immediate effect. It will use all means at its disposal to gradually bring the Libor down to the lower end of the new target range, i.e. to approximately 0.25%... Average annual inflation will amount to -0.5% in 2009. With the measures decided today, the SNB is forecasting average annual inflation for the following two years of virtually zero... SNB is now forecasting a contraction in GDP of between 2.5% and 3% for this year... The SNB lowered the Libor target range decisively by 225 basis points over the course of the fourth quarter of last year... The value of the Swiss franc has increased substantially since the beginning of the financial crisis in August 2007. This currency development has gained momentum since the National Bank's last assessment in December. Under the present circumstances, this represents an inappropriate tightening of monetary conditions. In view of this development, the SNB has decided to purchase foreign currency on the foreign exchange market, to prevent any further appreciation of the Swiss franc against the euro... Since the beginning of 2008, the SNB has been conducting a qualitative survey with twenty banks which make up the bulk of the domestic loan market. The survey carried out in January 2009 shows that some banks have tightened their lending conditions slightly. Moreover, a growing number of banks are expecting to do so in the near future.... Inflation will continue to fall and will enter negative territory in the course of 2009. This is due to the prices of imported goods and services, in particular oil.
<< <i>Comments from the Swiss National Bank as summarized by Briefing.com.........
Excerpts from the SNB announcement: The economic situation has deteriorated sharply since last December, and there is a risk of negative inflation over the next three years. Decisive action is thus called for, to forcefully relax monetary conditions. Against this background, the Swiss National Bank (SNB) is making another interest rate cut and acting to prevent any further appreciation of the Swiss franc against the euro. To this end, it will increase liquidity substantially by engaging in additional repo operations, buying Swiss franc bonds issued by private sector borrowers and purchasing foreign currency on the foreign exchange markets. The SNB is lowering the target range for the three-month Libor by 25 basis points, narrowing it to 0--0.75%, with immediate effect. It will use all means at its disposal to gradually bring the Libor down to the lower end of the new target range, i.e. to approximately 0.25%... Average annual inflation will amount to -0.5% in 2009. With the measures decided today, the SNB is forecasting average annual inflation for the following two years of virtually zero... SNB is now forecasting a contraction in GDP of between 2.5% and 3% for this year... The SNB lowered the Libor target range decisively by 225 basis points over the course of the fourth quarter of last year... The value of the Swiss franc has increased substantially since the beginning of the financial crisis in August 2007. This currency development has gained momentum since the National Bank's last assessment in December. Under the present circumstances, this represents an inappropriate tightening of monetary conditions. In view of this development, the SNB has decided to purchase foreign currency on the foreign exchange market, to prevent any further appreciation of the Swiss franc against the euro... Since the beginning of 2008, the SNB has been conducting a qualitative survey with twenty banks which make up the bulk of the domestic loan market. The survey carried out in January 2009 shows that some banks have tightened their lending conditions slightly. Moreover, a growing number of banks are expecting to do so in the near future.... Inflation will continue to fall and will enter negative territory in the course of 2009. This is due to the prices of imported goods and services, in particular oil. >>
just don't mention that to the Eastern Europeans.
is this a move to strengthen their (Swiss) currency?
The Swiss are trying to knock their currency lower. They want a weak Swiss franc. There are a million Polish mortgage holders who will welcome this news as they have been crushed by the TREMENDOUS collapse of the zloty especially against the Swiss franc. They are trying to create some inflation by "increasing liquidity substantially".
The strength in gold today was probably in response to this news.
One question, WHY weren't camera's allowed in the court room? We were forced to endure the entire oj simpson trial, whoodeedoo. Here's the biggest scam in history and he is quietly taken away?
The Trust may not have adequate sources of recovery if its gold is lost, damaged, stolen (WTF??) or destroyed and recovery may be limited, even in the event of fraud, to the market value of the gold at the time the fraud is discovered....Consequently, a loss may be suffered with respect to the Trust's gold which is not covered by insurance and for which no person is liable in damages.
Cnitas, I was thinking the same thing. Stolen? Now that's a comforting thought about the security of the whole arrangement. Or fraud-For heavens sake! Gold? What gold?
Final analysis - great trading vehicle, just don't get caught napping.
WHY weren't camera's allowed in the court room? We were forced to endure the entire oj simpson trial, whoodeedoo. Here's the biggest scam in history and he is quietly taken away?
Good point about the cameras. What about the plea bargain? BS!!
They did a plea bargain so that the government wouldn't be forced to display the SEC's gross negligence. The wife walks away with $70 MIL because the gov't didn't want to go through the discovery process, and the money - is safe & sound in Switzerland, or Bermuda, or Lichtenstein. I wonder how long Madoff's life sentence will last?
Q: Are You Printing Money? Bernanke: Not Literally
First post on this fantastic thread. Just thought I would say something about Bernie Madoff sentence. The mistake old Bernie made was in ripping off the rich. If he had been stealing from the poor, he would be getting a taxpayer-funded bonus right now.
Well I guess Mr. Buffett has made loans to the wrong folks, how could this happen?
Should have kept his Silver and stayed away from those wierd pieces of paper with 15% interest?
March 12 (Bloomberg) -- Billionaire Warren Buffett’s Berkshire Hathaway Inc. had its top-level AAA credit rating cut by Fitch Ratings, which cited concern about the potential for losses on the insurer’s equity and derivatives holdings.
March 13 (Bloomberg) -- China, the U.S. government’s largest creditor, is “worried” about its holdings of Treasuries and wants assurances that the investment is safe, Premier Wen Jiabao said.
Please let me assure him for you. Do not worry Mr. Jiabao you will get every cent of principle and interest on every note. We here in the U.S. are in the process of building a new printing press that only prints $100,000 bills, and we will print you all you can send to China on the largest ship you have.
Morgan Stanely says $40 on the -500 and says we go "down 25% from here." They call 560 before 825 at the end of the year. My 425 prediction 6 months ago wasn't that far off. I thought it would be the end of this month....maybe off by a couple of months. Wait til the "credit card burden" is revealed. I don't think that is completely factored in yet.
<< <i>March 13 (Bloomberg) -- China, the U.S. government’s largest creditor, is “worried” about its holdings of Treasuries and wants assurances that the investment is safe, Premier Wen Jiabao said.
Please let me assure him for you. Do not worry Mr. Jiabao you will get every cent of principle and interest on every note. We here in the U.S. are in the process of building a new printing press that only prints $100,000 bills, and we will print you all you can send to China on the largest ship you have. >>
Amen to that.
The only sure thing to come out of all of this is that China (and all the others who loaned us money to feed our boom) will get screwed as soon as the printing presses inevitably start smokin'.
Comments
<< <i>
<< <i>This board is 90% pessimistic and that may be a signal to start investing in solid companies. When everybody thinks the sky is falling --it's time to buy.
The remaining 10% are truly worried. >>
I would change that to 90% are realistic on this board, jmo. If you want to use the pessimistic gauge look at general stock boards or investment advisors ratio of bull vs. bear or the USA Today and magazine headlines.
Oh No Dave not Detroit,
The Motor City experienced 418 cases of murder and non-negligent manslaughter in 2006. That's 47.3 murders per every 100,000 residents.
Detroit is lost and when GM goes down the tubes it is going to be the center for all new Mad Max Movies.
roadrunner
is the only way, to get the
unemployment rate down.
Camelot
SANTA MONICA, Calif. (Marke$ Watch) -- There's a $700 trillion elephant in the room and it's time we found out how much it really weighs on the economy.
Derivative contracts total about three-quarters of a quadrillion dollars in "notional" amounts, according to the Bank for International Settlements. These contracts are tallied in notional values because no one really can say how much they are worth. But valuing them correctly is exactly what we should be doing because these comprise the viral disease that has infected the financial markets and the economies of the world.
Try as we might to salvage the residential real estate market, it's at best worth $23 trillion in the U.S. We're struggling to save the stock market, but that's valued at less than $15 trillion. And we hope to keep the entire U.S. economy from collapsing, yet gross domestic product stands at $14.2 trillion.
Compare any of these to the derivatives market and you can easily see that we are just closing the windows as a tsunami crashes to shore. The total value of all the stock markets in the world amounts to less than $50 trillion, according to the World Federation of Exchanges.
To be sure, the derivatives market is international. But much of the trouble we're in began with contracts "derived" from the values associated with U.S. residential real estate market. These contracts were engineered based on the various assumptions tied to those values.
Few know what derivatives are worth. I spoke with one derivatives trader who manages billions of dollars and she said she couldn't even value her portfolio because "no one knows anymore who is on the other side of the trade." Derivatives pricing, simply put, is determined by what someone else is willing to pay for the contract. The value is based on an artificial scenario that "X" will be worth "Y" if "Z" happens. Strip away the fantasy, however, and the reality of the situation is akin to a game of musical chairs -- without any chairs. So now the music has finally stopped. That's why stabilizing the housing market will do little to take the sting out of the snapback we are going through on Wall Street. Once people's mortgages were sold off to secondary buyers, and then all sorts of crazy types of derivative securities were devised based on those, and those securities were in turn traded on down the line, there is now little if any relevance to the real estate values on which they were pegged.
We need to identify and determine the real value of derivatives before we give banks and institutions a pass-go with more tax dollars. Otherwise, homeowners will suffer as banks patch up the holes left in their balance sheets by the derivatives gone poof; new credit won't be extended until the raff of the old credit is put behind.
It isn't the housing market devaluation, or the sub-prime mortgage market defaults that have us in real trouble. Those are nice fakes to sway attention away from the place where greed truly flourished -- trading phony instruments to the tune of $700 trillion. Let's figure how to get out from under that. Then maybe the capital will begin to flow again through the markets. Right now, this elephant isn't just in the room, it's sitting on us.
Thomas M. Kostigen
The problems with real estate and sub-prime, global warming and cap and trade, etc. as big as they are.....are diversions to keep us all from looking at the $700 TRILL elephant. With the $10 TRILL already dumped down the corporate banking hole, we could have paid off all the bad mortgages and started clean. Obviously the problem runs far deeper than just real estate.
roadrunner
What if all the worlds central bankers said to all those corporations, hedge funds, banks, ect that are holding the derivatives and to each party, "Cancel them. They no longer exist. Now get on with your business."? Of course there will be losses, but there are losses now anyway. If each party and counterparty rips up the contracts, what is the harm?
Knowledge is the enemy of fear
<< <i>It is probably time for a population migration in this country. If INTC were to open a fabrication plant in North Dakota, people would come. Or maybe the move to Detroit.
Oh No Dave not Detroit,
The Motor City experienced 418 cases of murder and non-negligent manslaughter in 2006. That's 47.3 murders per every 100,000 residents.
Detroit is lost and when GM goes down the tubes it is going to be the center for all new Mad Max Movies. >>
It wouldnt be lost if it residents had something to look forward to. Move in some real industry and watch what would happen. I see TREMENDOUS possibility with the right group of minds and money. Unfortunately, everyone has already written it off. Thats a shame.
Knowledge is the enemy of fear
"What if all the worlds central bankers said to all those corporations, hedge funds, banks, ect that are holding the derivatives and to each party, "Cancel them. "
See Dave even the Nobel Guys are reading your posts!!!!!
March 61/2 (Bloomberg) -- Myron Scholes, the Nobel prize- winning economist who helped invent a model for pricing options, said regulators need to “blow up or burn” over-the-counter derivative trading markets to help solve the financial crisis.
The markets have stopped functioning and are failing to provide pricing signals, Scholes, 67, said today at a panel discussion at New York University’s Stern School of Business. Participants need a way to exit transactions and get a “fresh start,” he said.
The “solution is really to blow up or burn the OTC market, the CDSs and swaps and structured products, and let us start over,” he said, referring to credit-default swaps and other complex securities that are traded off exchanges. “One way to do that, through the auspices of regulators or the banking commissioners, is to try to close all contracts at mid-market prices.”
In the end, if we decide tomorrow to cancel all OTC derivatives, that will commence a complete major banking failure with JPM, Citi, GS, WF, and others going right down the tubes. Start completely over. The currency, precious metals, and stock markets would go absolutely bananas. The $100 BILL in JPM gold derivatives that has been helping to keep gold supressed would go poof.....what do you think gold would do? I suspect people would clean out the stores instantly of anything usefull and hoard any sort of conceivable harder asset, fiat would likely be hoarded too but with no real backing I'd be looking to spend it on stuff I need while I can. But with all your bank accounts frozen, good luck to that if you don't have some at home. Metals would skyrocket of course. The govt would have had to set up a plan to take over the role of the FED. The FED can't exist in the new system. There are huge ramifications overseas if we oust the power behind them. While this is the quickest and surest way to get rid of the baggage, all I see for outcomes are riots, martial law, market shutdowns, international trade at a standstill....basically complete chaos for quite some time. That's why I think these guys have been trying to lever down the system since August of 2007...while stashing all the cash and metals they can in the interim. If you can find a peaceful and orderly way of accomplishing the waving of the magic wand on the derivatives, please expound. It may be the only way out in the end. But the longer we wait there will be fewer pieces of the pie left to pass around.
There are many otc derivatives that are serving a sound purpose in the financial world. Dissolving all of them certainly will leave plenty of collateral damage. Companies, cities, states, etc all have derivatives to help insure them from rapid changes in interest rates, and other outside factors. Even though we can conclude that a lot of this "insurance" is now bogus, the emperor will now be seen by everyone to have no insurance/clothes. And goign forward, no one will be able to offer any new insurance for quite some time, except for govt "insurances" based on printing more fiat.
In short, TPTB behind the FED, behind the major banks, behind the Bilderbergs, behind the Council on Foreign Relation, etc probably have a lot of winning bets they want paid off. And our govt and regulatory bodies are chock full of their minions who are there to oversee the transfer of $$. There is also the possibility that the powers behind the major banks want to influence tighter control over the entire banking and financial sectors. This seems to have been the trend ever since 1913 and even moreso over the past 15 years...consolidate and increase their power over the world's economy. They succeeded. In the US, the Banks were the economy. John P. Morgan was said to have been responsible for some of the major financial panics during his life time. I have no doubts. A little bit of credit contraction or withdrawing money out of the financial system does create panics. Then old JP could then come in to "save the day" (as in 1896 and 1907) but at the cost of being awarded more govt issued control/influence. That mindset no doubt still exists today, probably more than ever. And the battle wages on for control of the world's money and financial system. To think that the current problems are not part of a bigger plan seems unlikely imo. Bankers (and esp. those that own banks) create the boom and bust cycles. They do it to make money at all times. Slow positive growth rates don't work for them as it takes too much time to confiscate wealth. We need a whole new system with currency anchored to something concrete. I suspect gold, oil, or some mix of tangible assets will play a big role. Unbridled fiat and the bankers that control it just can't continue.
roadrunner
No one said houses weren't selling. They always sell, but it can take longer and prices may have to be adjusted down. Some sellers are more desperate than others and will price down today to 2010 levels in order to sell. That's occuring in all of the northeast. All the houses on the market today could be sold tomorrow if the prices were lowered to what buyers wanted to pay in the future. My point was that inventory is indeed growing and average prices ARE falling. Let me know when total NH inventory levels are falling off and median home prices start rising. I'm glad you found the right home at the right price from the right seller. For every one like you that found the right seller who priced to market there are 9 other sellers refusing to do so. And one by one they will capitulate until they sell. For every ideal and growing community "gaining" in value, there will be multiple communties falling off. That ebb and flow occurs in all markets. During the boom phase there were areas of my state with falling home prices (ie decaying communities).
I have first hand knowledge of my market in CT. Prices are down about 20% from the peak, but we're not done yet by any means as inventories are growing and foreclosures gaining. I have relatives in RI and MASS. Same conditions. 77% of the population in the northeast is in Mass, CT, and RI. But certainly the outer reaches of VT, NH, and Maine are probably less affected by the recent drop since they probably saw less original boom. My brother was a private RE agent in Mass. and had to close his business in late 2008 due to not enough potential customers. When he's back in RE will be when homes are bottoming out.
As far as I know foreclosures are counted as "sales" in many RE stats, so don't swear by that figure. Calfornia was showing rising home sales a year or so ago mainly due to rising home foreclosures. No doubt RE agents milked that stat to the end to capture more buyers.
roadrunner
prices in some areas (the black holes) are affected by being overbuilt, sub-prime buyers and an availabiity of cheap "relative" land in several counties, like farm land sold to developers.
water is an issue, and will be for the future.
However, I suspect they are comparing apples to...... grapes or something. Correct me if I'm wrong, but isn't the number now used for the unemployment rate derived from the number of individuals who NEWLY apply for unemployment benefits?? And does not include those who have already been unemployed for some time, and does not include those who have just given up looking for work? That is what I seem to recall when I've any info on it.
If that is true, then how in the world can the 8.2 percent today, be compared to the 25% rate in the thirties?? There were no unemployment benefits in the thirties, so that parameter certainly was not used to calculate the unemployment rate. More likely, the 25% was probably an estimate of the TOTAL number of unemployed individuals, including the newly unemployed, those that have already been unemployed for some time, and also those who have given up even looking for work.
My point is this...... If the same parameters were used to calculate todays unemployment rate as was used in the thirties, I suspect we would be MUCH closer to the 25% that was rate in the thirties, if not equal to it?
Perhaps the method of calculating unemployment was changed in more recent times to make the numbers not look so bad..... just like we know how they have monkeyed around with the inflation rate calculation.
After all, we can't let people go around thinking we might be in a depression now, could we?!
As far as cancelling derivatives, yes GS and the other scum in charge want to get as much money and control as they can from us, but in addition, a lot of the benficiary of these is to offset losses already incurred. For example, AIG was counterparty to huge numbers of CDOs containing mortgages that will never be paid back. If they have a derivative contract on a 100 million CDO that covers default of the principal then the insurance company, pension fund etc that owns the CDO would lose huge if the derivative was "cancelled." Right now the derivative (insurance) just keeps them even, they are not waiting to post any huge gain. The money went to the homeowner with the HELOC who has already spent the money on the goods from China.
Under Clinton (ie Robert Rubin, Lawrence Summer, etc) a whole range of stats were massaged for the public morale of the sheeple, including unemployment. If you go to my link below for "Stats" (www.shadowstats.com) you can get the numbers in the original versions of CPI, unemployment, etc. The numbers are updated each month.
John Williams unemployment number is well into the teens now. And if you use a more comparable number of "underemployment," we would be at the 19-20% level right now. Underemployment counts those who have given up after a year of looking, those who took part time or lower paying jobs in the interim, etc. This is far more comparable to the 1930's version of unemployment than the massaged version we have today. Williams also tracks M3 since the FED no longer deemed it "useful" because it included things like repos which were just starting to go ballistic in 2006. Williams CPI number using the 1980 version shows a very positive CPI as opposed to the BLS's "deflation proving" negative CPI.
roadrunner
Who are we REALLY bailing out?
<< <i>Roadrunner,
What if all the worlds central bankers said to all those corporations, hedge funds, banks, ect that are holding the derivatives and to each party, "Cancel them. They no longer exist. Now get on with your business."? Of course there will be losses, but there are losses now anyway. If each party and counterparty rips up the contracts, what is the harm? >>
This would work if applied to only bucket shop CDS's. It was nothing but gambling, anyways. In the case of first parties, the contracts could be redone with forbearance and securitized. Would it stop the defaults? No, but it could/would slow them to be manageable over time.
The major financial players know better than to send good money after bad by investing further with their competitors. In fact each one of them is laughingly putting out "downgrades" on the other to gain a market advantage where possible.
The derivative's mess at $100 TRILLION was already unmanageable. Now that it has been increased 7X to 11X that amount, it is beyond unmanageable.
roadrunner
Clive Maund had an interesting article today that also suggested the only alternative to the current mess was to cancel all the contracts. This would explain the requested need for secrecy and no transparency while GS and others take out as much as they can before such a thing occurs. Maund also sees the total damage as beyond manageable if we continue to try and unlayer the mess. The good effect is all those companies that overvalued their worthless chain of derivatives becoming solvent. The other side of that are all those firms on the winning side of the bet now receiving nothing for any gains they were assuming. It would be a shame though to see JPM for example to receive no type of penalty for having created a $65 TRILLION mountain of interest rate swaps all on their own. With that, they steered interest rates for a decade to exactly where they wanted them to go...not where a "free" market would have chosen. But, they were "fictitious" to begin with, just paper, no different than their $100 BILLION in gold derivatives. What wasn't fictitious was the ability to help move markets on pseudo- positions while using absurd leverage all at the expense of you guessed it.....J6P.
Clive Maund
Maund's analysis of current copper, oil, and S&P trends is a good read too. Contrarian Cliff Droke sees the only thing between a sharp overall rally in stocks is breaking the negative sentiment that is well beyond anything seen in years. Everything else is lined up. Will PM's be completely tossed aside during such a relief rally?
roadrunner
Tincup, we are nowhere near the unemployemnt levels today as in the 30's. Just look down your street. Are 1 of every 4 households without work?
The economy today is quite a party compared to 1932-33. The gross domestic product dropped 45% from 1929 to 1933. A similiar decline in GDP from 2007 levels would take us to 1996 levels. So far we are at about 2005 levels. We would need to shed 15 million jobs from 2007 levels to reach 1996 levels, but we would need to shed about 40 million jobs to reach 25% unemployment. I think the popular number is that about 4.5 million jobs have been lost during this "recession".
Knowledge is the enemy of fear
<< <i>
Maund's analysis of current copper, oil, and S&P trends is a good read too. Contrarian Cliff Droke sees the only thing between a sharp overall rally in stocks is breaking the negative sentiment that is well beyond anything seen in years. Everything else is lined up. Will PM's be completely tossed aside during such a relief rally?
roadrunner >>
the optionspresented : massive BK or "super bailout".
the leaning via the charts and conclusions are for super bailout, which would make PM's less favorable. Yet the Administartion would lean towards a further breakdown and chaos, what better way to get "control"?
i like the analysis, not the conclusion/solution
Specifically, the revisiting of the Mark-to-Market accounting rule which will free up nearly a trillion dollars of capital and the reinstatement of the uptick rule to stop Bear Raids dead. Also, Big Ben mentioned off-handedly that the facilities are in place to drain liquidity (pull paper money from circulation) should the boat load of paper that''s put out there becomes a problem (read-inflation will not be a problem).
Random Collector
www.marksmedals.com
For beating the drum incessantly for months on the uptick rule and mark to market.
<< <i>That is great news. So, are you ready to be the first to sell all your PMs and go 'all in'to the market? >>
Yup...
But if they (the powers that be) don't act decisively, I'll be out and as fast as I'm in. (I did make a couple of stock buys this a.m. after listening to Bernanke).
When has Bernanke made a correct call or prediction since he's been in office? Please list one....just one. Didn't he and Paulson both agree that sub-prime had been contained over a year ago? Do you think those 2 guys actually believed that crap that they were peddling to the public? Not a chance. Bottom line is that Bernanke speaks the soothing words that politicians and the public want to hear. And he delivers it...thought not as effectively as Greenspan or Paulson did. I don't feel the smart money in the market pays any attention to BB or TG other than to gauge which direction the sheeple will move in....then to go counter it.
The FED has never drained liquidity pumped into the markets. What makes you think they will do that down the road? They didn't do this from 1997-2001 when things got "frothy." And they didn't do it from 2004-2006 when things also got out of hand. How will they pull out TRILLIONs in liquidity? Many of the ways they pumped liquidity in are essentially irreversible. The words sound good on paper, but there is no credibility behind them. Ben is quoting the party line. Dodd and Frank have been tossing the uptick rule around and there is a bill now before the house finance committee for arguments. It could be months before that bill makes it to the senate for a final vote. By that time I think the Downtick Boyz will have pummeled the market to where they wanted it. The raids would still continue, just not as rapidly as they did in the past. What about naked short selling? That's probably an even bigger problem. The SEC or CTFC has not enforced it.
Not maintaining marked to market accounting basically turns everything back to fraud. There's no other name for it. So if fraud is what it takes to start a recovery, it's fraud we'll get. So who will be the first to place their IRA/401K money into a formerly insolvent bank, now made "solvent" by reburying the near-worthless derivatives a foot deeper underground?
roadrunner
how can liquidity be taken out, unless you entice it to go somewhere never to be seen again??? ie higher interest rates, and asset appreciation? stock market? not quite yet
what else? and are any of these NOT inflationary? ....(i don't think so) . i was confused by Helicopter Ben again today.
Volcker (ollie ollie oxen free) will try once it gets going but the economy is a night and day difference for the early 80's as well as and even more so than FDR
Knowledge is the enemy of fear
Sorry, this isn't going to happen, it's just more talk.
The Trust's gold may be subject to loss, damage, theft or restriction on access. There is a risk that part or all of the Trust's gold could be lost, damaged or stolen. Access to the Trust's gold could also be restricted by natural events (such as an earthquake) or human actions (such as a terrorist attack). Any of these events may adversely affect the operations of the Trust and, consequently, an investment in the Shares.
The Trust may not have adequate sources of recovery if its gold is lost, damaged, stolen or destroyed and recovery may be limited, even in the event of fraud, to the market value of the gold at the time the fraud is discovered. Shareholders' recourse against the Trust, the Trustee and the Sponsor, under New York law, the Custodian, under English law, and any subcustodians under the law governing their custody operations is limited. The Trust will not insure its gold. The Custodian will maintain insurance with regard to its business on such terms and conditions as it considers appropriate. The Trust will not be a beneficiary of any such insurance and does not have the ability to dictate the existence, nature or amount of coverage. Therefore, Shareholders cannot be assured that the Custodian will maintain adequate insurance or any insurance with respect to the gold held by the Custodian on behalf of the Trust. In addition, the Custodian and the Trustee will not require any direct or indirect subcustodians to be insured or bonded with respect to their custodial activities or in respect of the gold held by them on behalf of the Trust. Consequently, a loss may be suffered with respect to the Trust's gold which is not covered by insurance and for which no person is liable in damages.
roadrunner
<< <i>The Trust may not have adequate sources of recovery if its gold is lost, damaged, stolen (WTF??) or destroyed and recovery may be limited, even in the event of fraud, to the market value of the gold at the time the fraud is discovered....Consequently, a loss may be suffered with respect to the Trust's gold which is not covered by insurance and for which no person is liable in damages.
roadrunner >>
Where do I sign up?
Edited to say that the emphasis is mine.
Random Collector
www.marksmedals.com
Excerpts from the SNB announcement: The economic situation has deteriorated sharply since last December, and there is a risk of negative inflation over the next three years. Decisive action is thus called for, to forcefully relax monetary conditions. Against this background, the Swiss National Bank (SNB) is making another interest rate cut and acting to prevent any further appreciation of the Swiss franc against the euro. To this end, it will increase liquidity substantially by engaging in additional repo operations, buying Swiss franc bonds issued by private sector borrowers and purchasing foreign currency on the foreign exchange markets. The SNB is lowering the target range for the three-month Libor by 25 basis points, narrowing it to 0--0.75%, with immediate effect. It will use all means at its disposal to gradually bring the Libor down to the lower end of the new target range, i.e. to approximately 0.25%... Average annual inflation will amount to -0.5% in 2009. With the measures decided today, the SNB is forecasting average annual inflation for the following two years of virtually zero... SNB is now forecasting a contraction in GDP of between 2.5% and 3% for this year... The SNB lowered the Libor target range decisively by 225 basis points over the course of the fourth quarter of last year... The value of the Swiss franc has increased substantially since the beginning of the financial crisis in August 2007. This currency development has gained momentum since the National Bank's last assessment in December. Under the present circumstances, this represents an inappropriate tightening of monetary conditions. In view of this development, the SNB has decided to purchase foreign currency on the foreign exchange market, to prevent any further appreciation of the Swiss franc against the euro... Since the beginning of 2008, the SNB has been conducting a qualitative survey with twenty banks which make up the bulk of the domestic loan market. The survey carried out in January 2009 shows that some banks have tightened their lending conditions slightly. Moreover, a growing number of banks are expecting to do so in the near future.... Inflation will continue to fall and will enter negative territory in the course of 2009. This is due to the prices of imported goods and services, in particular oil.
Knowledge is the enemy of fear
<< <i>Comments from the Swiss National Bank as summarized by Briefing.com.........
Excerpts from the SNB announcement: The economic situation has deteriorated sharply since last December, and there is a risk of negative inflation over the next three years. Decisive action is thus called for, to forcefully relax monetary conditions. Against this background, the Swiss National Bank (SNB) is making another interest rate cut and acting to prevent any further appreciation of the Swiss franc against the euro. To this end, it will increase liquidity substantially by engaging in additional repo operations, buying Swiss franc bonds issued by private sector borrowers and purchasing foreign currency on the foreign exchange markets. The SNB is lowering the target range for the three-month Libor by 25 basis points, narrowing it to 0--0.75%, with immediate effect. It will use all means at its disposal to gradually bring the Libor down to the lower end of the new target range, i.e. to approximately 0.25%... Average annual inflation will amount to -0.5% in 2009. With the measures decided today, the SNB is forecasting average annual inflation for the following two years of virtually zero... SNB is now forecasting a contraction in GDP of between 2.5% and 3% for this year... The SNB lowered the Libor target range decisively by 225 basis points over the course of the fourth quarter of last year... The value of the Swiss franc has increased substantially since the beginning of the financial crisis in August 2007. This currency development has gained momentum since the National Bank's last assessment in December. Under the present circumstances, this represents an inappropriate tightening of monetary conditions. In view of this development, the SNB has decided to purchase foreign currency on the foreign exchange market, to prevent any further appreciation of the Swiss franc against the euro... Since the beginning of 2008, the SNB has been conducting a qualitative survey with twenty banks which make up the bulk of the domestic loan market. The survey carried out in January 2009 shows that some banks have tightened their lending conditions slightly. Moreover, a growing number of banks are expecting to do so in the near future.... Inflation will continue to fall and will enter negative territory in the course of 2009. This is due to the prices of imported goods and services, in particular oil. >>
just don't mention that to the Eastern Europeans.
is this a move to strengthen their (Swiss) currency?
The strength in gold today was probably in response to this news.
Knowledge is the enemy of fear
Madoff Goes Straight To Jail
Madoff goes to jail
The allocution of bernie madoff
The stock trader wannabe king madoff's allocution
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Cnitas, I was thinking the same thing. Stolen? Now that's a comforting thought about the security of the whole arrangement. Or fraud-For heavens sake! Gold? What gold?
Final analysis - great trading vehicle, just don't get caught napping.
WHY weren't camera's allowed in the court room? We were forced to endure the entire oj simpson trial, whoodeedoo. Here's the biggest scam in history and he is quietly taken away?
Good point about the cameras. What about the plea bargain? BS!!
They did a plea bargain so that the government wouldn't be forced to display the SEC's gross negligence. The wife walks away with $70 MIL because the gov't didn't want to go through the discovery process, and the money - is safe & sound in Switzerland, or Bermuda, or Lichtenstein. I wonder how long Madoff's life sentence will last?
I knew it would happen.
Re cameras: No cameras in Federal cases.
Knowledge is the enemy of fear
<< <i>Re prospectus: Lawyers need to account for all possibilities regardless of improbability.
<< <i>
Yeah, particularly when you are not carrying insurance on said goods.
Random Collector
www.marksmedals.com
Welcome Pennyholic
Well I guess Mr. Buffett has made loans to the wrong folks, how could this happen?
Should have kept his Silver and stayed away from those wierd pieces of paper with 15% interest?
March 12 (Bloomberg) -- Billionaire Warren Buffett’s Berkshire Hathaway Inc. had its top-level AAA credit rating cut by Fitch Ratings, which cited concern about the potential for losses on the insurer’s equity and derivatives holdings.
Please let me assure him for you.
Do not worry Mr. Jiabao you will get every cent of principle and interest on every note. We here in the U.S. are in the process of building a new printing press that only prints $100,000 bills, and we will print you all you can send to China on the largest ship you have.
"The economy is not as bad as it seems?"
Who said this last month and the month befoe?
"....the economy is a catastrophe."
....you're right, sir....may I have another....
Judge Napolitano-Dr Ron Paul-Peter Schiff on the fed etc
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>March 13 (Bloomberg) -- China, the U.S. government’s largest creditor, is “worried” about its holdings of Treasuries and wants assurances that the investment is safe, Premier Wen Jiabao said.
Please let me assure him for you.
Do not worry Mr. Jiabao you will get every cent of principle and interest on every note. We here in the U.S. are in the process of building a new printing press that only prints $100,000 bills, and we will print you all you can send to China on the largest ship you have. >>
Amen to that.
The only sure thing to come out of all of this is that China (and all the others who loaned us money to feed our boom) will get screwed as soon as the printing presses inevitably start smokin'.
Here's a warning parable for coin collectors...
Rogers Interview
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870