Is THIS the big one?

[gfresh]

Mit: I think you are confusing the Federal reserve with the Treasury. The fed is a private organisation that lends money to primary dealers (the investment banks), and sets monetary policy for the economy.

The Treasury is the financial branch of the US Government. Government and the US congress is the ultimate regulator of any financial Corporations.

The unfortunate thing is that senators, and governors have many ties to the large companies themselves, and of course with them constantly whispering in the ears of Government members, there is very little incentive for them to get tough or investigate. It's only when there is a major crisis, billions get burned, and the public cries out for it, further regulation is attempted. Then of course by the time of the next crisis many years on, governments have changed, and people have forgotten why they can be so important.

The abolishment of the glass-steagall act is a prime example why we are facing this now. Created after the great depression, and abolished in 1999, it may have prevented much of the current situation from being so dire.

 

[Gspot]

Where are the people spruicking the fundamentals in our two rising nations of India and China? I feel there will be a long period of insecurity and plenty of dead cat bounces to keep the keen and savvy happy with quick flipping of stock. People will be looking for good news soon and I feel there will be a stampede to the first commodities that show some good reports.

cheers,

Maybe China and Russia will see Australian resources as a better place to invest, rather than Wall st.
Enviromental problems, declining oil and Chindia population will mean energy sector will bounce back quicker than what some are suggesting.
Not to mention some good little gold producers, going along their merry way.
Hoping I'm right.

 

[Santoro]

Ok do you mean physical gold or shares of some kind ? and if the former, how ?

ZAUWBA.....gold warrants 100 units equals 1 oz held at the Perth Mint....have a look at the Perth Mint website.......it shoud explain it...you can buy physical or this way you don't need to store it securely etc

 

[pepperoni]

It took until 1957 for the share market to return to 1930 levels and every 60 years there is a depression.
Now how do I buy Gold shares?
From Money Managers.
negative real interest rates are bearish for the dollar. And when you hold dollars, you're losing out to inflation.

Period.

I haven't even begun to tell you the real nightmares for the U.S. dollar. I haven't even touched upon the $50 trillion in contingent liabilities in Social Security, Medicare, government pensions, money the FDIC will need, and more.

And there is no way, no how that any of these debts, liabilities, potential losses will ever be covered without a massive, ongoing devaluation of the U.S. dollar.

So why would you NOT want to own gold in this environment?


Gold is the only true form of money.
Gold is the only true form of money there is. It is no one else's liability. It has no board of directors manipulating its value. It has preserved its purchasing power for over 5,000 years of civilization. It has outperformed every paper currency on the planet.

Given all of the above, and more, I am now officially putting out an emergency buy signal in gold.

”” If you don't own any gold, I urge you to buy some now.

”” If you do own gold, I suggest you buy more, immediately!

The precious yellow metal ”” your vehicle to survive financially in the years ahead ”” recently fell back to major support at the $735 level.

It has since rallied back to $785. I believe the pullback I've been warning you about is now over.

But even if I'm wrong, and by some crazy fluke, the price of gold falls back to major long-term support at the $600 level, it would not be that big a deal.

Because I know that paper dollars are NOT where I want my money.
I

Hmmm ..... with all the loan defaults there will be some measure of reduction of money supply ... cash may very well be fine IMO.

Might explain why the US dollar is suddenly so strong? Arguably doing better than gold.

A$ is even better given it still gives 7.8% at call with a big 4 bank!

And at least there is no risk of 20% falls overnight.

 

[wayneL]

 

[BradK]

Great post Wayne - ready to get the engine fired up to pick up me house?

 

[Trembling Hand]

^^^^^

That's a good one.

 

[Glen48]

From Patrick.net




The worst is yet to come
'No market for old men,' TCW investment strategist warns in gloomy forecast
By Jonathan Burton, MarketWatch
Last update: 4:07 p.m. EDT Sept. 18, 2008
Comments: 384
SAN FRANCISCO (MarketWatch) -- An influential investment strategist has a dire forecast for U.S. stocks, credit markets and the continued independence of some of the nation's top financial institutions.
Jeffrey Gundlach, chief investment officer at Los Angeles-based mutual-fund company TCW Group Inc., told clients on a conference call late Wednesday that the crisis in credit and housing may not abate for several years and is actually getting worse.

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In the deteriorating climate he sees unfolding, Gundlach said, the Standard & Poor's 500 Index (SPX:
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SPX 1,206.51, +50.12, +4.3%) could fall another 30%, giant Citigroup (C:
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C, , ) could become an "AIG-sized debacle," Morgan Stanley (MS:
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WB, , ) won't be able to stand alone, default rates on even prime mortgages could soar, and European banks' woes are just beginning.
"This is no market for old men," said Gundlach, who also manages TCW's flagship Total Return Bond Fund (TGLMX:
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TGLMX, , ) . "This is no market for old-school thinking."
Gundlach based his assessment on a belief that housing prices still face several more years of decline, a protracted slump, he said, not seen since the Great Depression. Moreover, Gundlach said it's possible that home prices could be sluggish until 2022.
"If it's like the Depression experience -- and it sure is shaping up that way -- it could take several years. Maybe we won't see a bottom in home prices until 2014," he said.
Write-offs could top $1 trillion
As a forecaster, Gundlach didn't just climb aboard the gloom-and-doom wagon. He was early to spot the cracks that subprime loans were making in the financial system, and among the first to warn that an era of easy money would come to a bad end.
"The subprime market is a total unmitigated disaster and it's going to get worse," Gundlach told money managers and financial advisers at an investment conference in June 2007. See full story.
And Gundlach has put his shareholders' money where his mouth is, shunning derivatives and counterparty risk in his bond fund portfolio.
That defensive posture should offer protection in the continuing credit storm that Gundlach foresees. In this bleak scenario, an unprecedented -- and growing -- number of home foreclosures, along with mortgage loans that are under water as soon as they're originated and a glaring lack of buyers for even modestly risky assets keeps the financial system under enormous stress.
Expect loan default rates to rise, Gundlach said, not just in the subprime market, but among the top-drawer prime borrowers as well. The prime default rate could approach 10% from a current 2% before the carnage is over, he said.
"The current environment is maybe a little worse that what was experienced in the Depression in terms of the housing market," Gundlach said.
More troubles ahead
Accordingly, financial institutions may suffer write-offs that could surpass $1 trillion before conditions improve, he said. As of late August, credit losses and writedowns at the world's 100-largest banks and brokerages topped $506 billion, he noted.
Among the casualties, Gundlach said, could be Citigroup. The company earlier this week made public a memo to employees from CEO Vikram Pandit highlighting Citigroup's balance sheet strength and solid cash position.
Gundlach disagreed with that assessment. He said Citigroup has balance sheet problems that he likened to that of insurer American International Group, which the U.S. bailed out this week.
"I would give a very meaningful probability to the biggest, next AIG-size debacle being Citigroup," the strategist said.
"I would definitely not be a buyer of Citigroup stock," Gundlach said.
"If I were going to buy financial market stocks," he added, "I would be a buyer of Wells Fargo (WFC:
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BAC, , ) ."
Other financial giants also won't escape the crisis unscathed, Gundlach said. "I don't see how Wachovia can make it as a stand alone," he said. He expressed the same sentiment about Morgan Stanley.
Indeed, late Wednesday the New York Times reported that Morgan Stanley was exploring a merger with Wachovia or another bank. See full story.
Europe's financial giants are in similar or even worse shape than their U.S. counterparts, Gundlach said, with "substantial exposures to assets which U.S. banks are now getting taken to the woodshed over. I would rate all European banks as not a buy."
The breakdown will take a further toll on U.S. stocks, Gundlach added. The S&P 500 will tumble below 800, he said, about 35% below its 1156 close on Wednesday.
Said Gundlach: "None of us have ever seen this, and it's no market for old men, but risk aversion is the order of the day." End of Story
Jonathan Burton is an as

sistant personal finance editor for MarketWatch, based in San FranciscoT

 

[BentRod]

LOL Wayne.

Great post