Imminent and severe market correction

[nunthewiser]

look totaaly agree on his great hindsight calls BUT you guys missing the point of the actual post ......... the point i was trying to get across by reposting this clowns article was , people forget the actual further ramifications of these debt ridden collapsing companies ....... it dont just dissapear , anyways ....think of the article what you will and pick out all the meaningless stuff but i figured it may help the odd person intrested in where the buck stops

 

[Kauri]

WSJ and FT on Leeming and Fred+Fannie...
Cheers
..........Kauri

 

[Paladin]

I posted this in 'Gold price - where is it heading' ( https://www.aussiestockforums.com/forums/showthread.php?t=2366&page=248 ) but figure it may be relevant here.

Here's one extra reason why I think the USD will soften: the fact that the US Exchange Stabilization Fund has recently been selling Euros like mad and buying dollars - which looks like a case of trying to keep the greenback high (IMO).

Take a peek at: http://siliconinvestor.advfn.com/readmsg.aspx?msgid=24833658

I can't quite reconcile the exact figures quoted there myself, but the raw data is available at:

http://www.treas.gov/press/international-reserve-position.html

(The link in the article quoted is broken)

If you look at the reserve position for 15/08, you'll notice that the treasury held 9,567,000,000 Euro securities. Look back at the 6th of June and you'll see that they held 16,192,000,000. That's a difference of 6.6 billion dollars.

Something seems to be afoot.

In short, I'm not reading much that gives me confidence in the US economy.

 

[dhukka]

Buffet was just on CNBC. Another great quote from the Oracle which was really a new version of an older quote:

I think I said one time that you only find out who's been swimming naked when the tide goes out, well we've found out that Wall Street has been kind of nudist beach.

 

[davo8]

It's almost as though he feels like he has to out do himself everytime he writes something by coming up with and even gloomier outlook.

Actually I think the decline of the American Empire probably started a few decades earlier, a bit of overstatement to pin the beginning on the current crisis. That said, I agree with most of what he said although I think his moment in the sun may have to his head.

I've been reading him for a while. He actually pulled back a bit in March, but his message now is consistent and I simply can't find anyone prepared to find fault in his analysis. He has mountains of data, and it all points the same way. The losses have already happened, and it's a matter of when and where the tsunami hits, not if.

Read Steve Keen (Aus), Mish, Karl Denninger, Jim Kunstler, Ilargi and you'll get an even gloomier picture. And they all quote Nourini.

The USA is on a death march. Only the timetable and final destination are still in doubt.

 

[explod]

Yes as above, just the timing now. My take remains as during or soon after the forthcoming Pres., election in Novemeber.

And from Jim Sinclair's site this morning:-

Dear Friends,

Part of my attempt to serve is to be barraged with every opinion from every chat site and blog that presents arguments against gold.

The most popular one now starts off sounding reasonable. It states that crude will trade down between $110 and $85, making inflationary expectations fall and as a result the trade deficit will decline making the dollar rise and therefore commodities fall. This will raise consumer expectations that will then increase spending, making the dollar rise.

The following is missing:

Deflation is assumed here to mean the falling cost of living. Deflation is the failure of debt. That looks toward the OTC derivative meltdown and the ongoing collapses occurring now in financial entities that require liquidity increases through rescues that use public money. Increased liquidity results in an increased cost of living regardless of economic conditions. That is an economic axiom.
The assumption many have that Gold is not a currency speaks to their eyesight and poor memory. It stares you in the face every day if you look.
The US is the MAJOR manufacturer and exporter of OTC derivatives. Should any side of the specific performance contract fail, the failure potential of the counter party is extremely high. That is quite dollar negative.
There is a desire worldwide for central bank diversification out of the US dollar, which is unlikely to change.
Central banks have already indicated they will cease buying US agencies, which is TIC negative and therefore dollar negative.
There is no consideration of an explosion in the Federal Budget deficit that will eclipse any improvement in the US Trade deficit that is always looked at in comparison to TIC. It is certain to drop faster that the trade deficit drops, therefore making the Trade Deficit drop meaningless.
This coming and present crisis is from a lockup of the credit system that is emerging from the meltdown of OTC derivatives. Consumers hold too much debt and are on the ropes. You would first need one hell of a recovery in housing to reinstate home equity and a major unlock of the credit market before consumers see any light at the end of their bankruptcy tunnel. Consumers being gleeful in this crisis at any point are simply NOT GOING TO HAPPEN.
Consumers picking up the dollar is an interesting view because internal consumer glee means nothing to foreign exchange except as it impacts expectations of a US recovery in the middle of what the writer says will be the Great Greater Depression. That scenario defies logic.
In the same argument the writer says the US economy slows, so where does the gleeful consumer fit in? The answer to that question is they don’t
The writer feels the Trade Balance stands alone and will, by contraction, move the dollar. The trade deficit, whether or not covered by the TIC report, is what the Trade Balance is all about.
This argument has, along with the totally non-existent yet still popular “Synthetic Dollar Short,” many of you angry with me. That is ok and deserved, as you are as good as your last call, but the arguments you now base that on are totally wrong in both instances.
The Bush Administration will do what they did the last time the "D" word was used as recorded below. That was totally dollar negative long term. Should Obama win, his administration would invent social approaches to money and business that the Bush and Roosevelt administration never heard of. These approaches will without any doubt be long-term dollar negative.

 

[Bushman]

This thread is starting to sound like hysterical back slapping on the Titanic. 'We spotted the iceberg first, we spotted the iceberg first. We are all doomed but at least we spotted the iceberg first.' Classic.

As for Gottleibsen and his nine passengers, I flew to Sydney and Brisbane last week and the plane was full. So if you follow his logic, that means you should all invest in Qantas and Virgin Blue. Call your brokers now.

 

[explod]

This thread is starting to sound like hysterical back slapping on the Titanic. 'We spotted the iceberg first, we spotted the iceberg first. We are all doomed but at least we spotted the iceberg first.' Classic.

As for Gottleibsen and his nine passengers, I flew to Sydney and Brisbane last week and the plane was full. So if you follow his logic, that means you should all invest in Qantas and Virgin Blue. Call your brokers now.

Not so, there is time to avoid the iceberg and most of us following this thread have.

Having a fair idea of what is taking place provides opportunity and optimism.

 

[Kauri]

There is talk among the investment community that we are on the brink of a larger wave of US dollar short-covering and USD-favourable repatriation flows. Analysts say that the real money funds in the US have piled huge amounts of investor money into Asia over the past four years and have only just begun to pare back. The heavy selling of the KRW over the past six months has forced the Bank of Korea to intervene at various levels. The KRW selling is accelerating now with the USD/KRW breaking up to 1085 this morning. Analysts and central banks in the region are concerned that this could be the start of the next phase of a larger pull out of Asian assets by US investors amid fears that the slowing growth in the OECD will have a severe impact on Asia where inflation is running too hot for anyone"s comfort.
Analysts say that the broad US dollar buying in Asia today might have been sparked by the New Zealand Trade data, but the concerns over heavy USD repatriation flows out of Asia is probably adding the most fuel to the USD rally.

Cheers
............Kauri

 

[Bushman]

Not so, there is time to avoid the iceberg and most of us following this thread have.

Having a fair idea of what is taking place provides opportunity and optimism.

Optimism? That is the issue with interpreting the written word but I would not describe the underlying theme of this thread as being optimistic. And yes I have been following this thread for over a year and yes I did not have a margin loan or used my house as an ATM so good for me.

But it is depression this and depression that. You will have very real threat of unemployment in a depression so the fact that you did not margin into ANZ will be meaningless. But the risks have been pointed out ad naseum by now so whatever I have to say about the current 'crisis' is meaningless too.

Everyone seems to forget that the world recovered from its depression last time around. I mean it took fascism eating itself to do so but we did it. We will all be better investors due to this credit maelstrom or at the very least regulation will be in place to avoid the excesses. After all the Fannie and Freddie model, spawned from the last depression, has worked well for 80 odd years which is a pretty good policy if you ask me. Now it needs to be re-jigged for the next generaion. Big deal.

You should all be celebrating the demise of Bear Stearns and hopefully Lehmann Bros and a few pissant regional banks too as this will mean your kids will have a better future. Take some pain, redefine the model and move on. Humans are self interested after all. There will be another up in the asset cycle.

I am a lot more optimistic today compared to 12 months ago; and it means we no longer have to hear about the 'War on Terror'!! Remember that abstract media construct?

 

[Kauri]

some more porridge for the bears

Cheers
..........Kauri

 

[Sean K]

Hooly dooly.

Not sure if Yu Yongding is worth listening to or not, but the bears would love him.

China goes the big squeeze

David Hirst
August 30, 2008

A high-ranking Chinese economist has put his nation's cards on the table in the global financial poker game by effectively telling the US to fix Freddie and Fannie … or else.

"A failure of US mortgage finance companies Fannie Mae and Freddie Mac could be a catastrophe for the global financial system", Yu Yongding, a former adviser to China's central bank, says.

"If the US government allows Fannie and Freddie to fail and international investors are not compensated adequately, the consequences will be catastrophic," Yu said in e-mailed answers to Bloomberg. "If it is not the end of the world, it is the end of the current international financial system."

 

[Captain Haddock]

"If the US government allows Fannie and Freddie to fail and international investors are not compensated adequately, the consequences will be catastrophic," Yu said in e-mailed answers to Bloomberg. "If it is not the end of the world, it is the end of the current international financial system."

hold me!

 

[CanOz]

Hooly dooly.

Not sure if Yu Yongding is worth listening to or not, but the bears would love him.

China goes the big squeeze

David Hirst
August 30, 2008

A high-ranking Chinese economist has put his nation's cards on the table in the global financial poker game by effectively telling the US to fix Freddie and Fannie … or else.

"A failure of US mortgage finance companies Fannie Mae and Freddie Mac could be a catastrophe for the global financial system", Yu Yongding, a former adviser to China's central bank, says.

"If the US government allows Fannie and Freddie to fail and international investors are not compensated adequately, the consequences will be catastrophic," Yu said in e-mailed answers to Bloomberg. "If it is not the end of the world, it is the end of the current international financial system."

Goodness me, you'd think they had a stake in it?

Cheers,


CanOz

 

[wayneL]

#### me!!!!!!!!!!

In a stunning reversal of policy, Nu Liebour decides to be honest with us....

Stow away all loose luggage and assume crash positions:

 

[dhukka]

Darling probably had little choice to come clean with figures like these;

Retailers suffer worst month in quarter of a century

Retailers delivered their worst performance for nearly a quarter of a century last month and there is little sign of relief for them any time soon.


Some 60 per cent of UK retailers said that sales in the first half of August were lower than a year ago, while just 13 per cent said they had increased, the CBI Distributive Trades Survey revealed.

The CBI data reinforces a widely held view among retailers that it could be 2010 before consumers, who are squealing from soaring food prices, utility bills and motoring costs, return to the high street with the vigour of previous years. The survey is also the latest to contrast sharply with the Office of National Statistics' retail sales data, which showed a 0.8 per cent rise in July and have recently drawn gasps of disbelief from retailers.

The CBI said the resulting rounded balance of minus 46 per cent of retailers posting falling sales was the worst since the survey began 25 years ago, although the business organisation said it had tweaked its answering practices over those years.

 

[wayneL]

Darling probably had little choice to come clean with figures like these;

Could be a Brutus-esque political maneuver as well.

It will be McBeans on toast after that revelation. LOL

 

[dhukka]

This is starting to be a regular event on Friday after the market closes in the US.

Another US Bank Failure

Integrity Bank, Alpharetta, Georgia, with $1.1 billion in total assets and $974.0 million in total deposits as of June 30, 2008, was closed today by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation was named receiver.

The FDIC Board of Directors today approved the assumption of all the deposits of Integrity Bank by Regions Bank, Birmingham, Alabama. All depositors of Integrity Bank, including those with deposits in excess of the FDIC's insurance limits, will automatically become depositors of Regions Bank for the full amount of their deposits, and they will continue to have uninterrupted access to their deposits. Depositors will continue to be insured with Regions Bank so there is no need for customers to change their banking relationship to retain their deposit insurance.

The failed bank's five offices will reopen Tuesday, September 2nd, as branches of Regions Bank. However, for the time being, customers of both banks should use their existing branches until Regions Bank can fully integrate the deposit records of Integrity Bank.

Is there a trend developing here?

 

[davo8]

This is starting to be a regular event on Friday after the market closes in the US. Is there a trend developing here?

Of course. There are hundreds to go. It's become quite part of my Saturday entertainment, checking for failed banks.

I'm waiting for the big one. It won't be Fannie/Freddie. That warning from the Chinese was about as strong as it gets. Lehman? WaMu? Wachovia?

Like I've been saying, October is a good month for stockmarkets.

 

[explod]

It won't be Fannie/Freddie. That warning from the Chinese was about as strong as it gets. Lehman? WaMu? Wachovia?

You gota be jokin, fred and fan are gone there just still tryin to keep it a secret.

China is a producer and the US were the buyer, but chin just realised the money is worth nothin cause all they do is buy candies and a good time with no down payment of hard labor. And they are also trying ti keep it a secret till they work out a way to recover or lump it somewhere else.

Davo, look around the world news in a bit more depth and get real.