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post #31 of 71 (permalink) Old 12-11-2007, 01:17 PM
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I guess more buying opportunities ahead
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post #32 of 71 (permalink) Old 12-11-2007, 01:27 PM
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Folks are simply reading the projections from kids like FreddieMac and WaMu and Citi and none of them are showing an upside for the next bunch of quarters. This thing is starting to grind to a halt and everyone knows that there is not a whole bunch the FED can do about it at this point. They waited too Fn long to wake up.
Not sure about that

Their job can't fix it -

All they can do is soften the landing
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post #33 of 71 (permalink) Old 12-11-2007, 01:42 PM
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Not sure about that

Their job can't fix it -

All they can do is soften the landing
That is correct. But I think a lot of folks think that it can be softened enough that the landing will be inconsequential and I think this one might be a bit harder than even that. If the FED had done their job back in early 2006 this might have been easier to deal with.

There was a strange article out of Europe last week that really summarized the position of the economy and what got it where it is. I disagree with its solutions but its data is very correct. I am going to try and find it. It is long but worth a read for a Euro perspective from an old US economist that most will call a quack. Crazy yes but interesting in their perspective - and dead on in their historical documentation of the problem.

McBear,
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Being smart is knowing the difference, in a sticky situation between a well delivered anecdote and a well delivered antidote - bear.
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post #34 of 71 (permalink) Old 12-11-2007, 01:53 PM
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^^^

IMHO - the Fed should have had to do nothing -

I think further oversight on freshly invented "securities" that are basically impossible to audit should be canned

BW last week or two had an article on the same thing happening now with medical bills for the uninsured

package 'em up & sell 'em

That type of crap has to stop -

nex thing you know there will be CDO's on cow manure
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post #35 of 71 (permalink) Old 12-11-2007, 01:56 PM
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Here is the missive from Dr. LaRouche, YES, wife of Lyndon. And NO we don't need another Bretton Woods. And YES, the numbers are accurate, I checked [sorry].

______________________________________
Meltdown of World Financial System
Is Fully Under Way

by Helga Zepp-LaRouche

What is playing out these days on the international financial markets, is unprecedented. Even if ordinary citizens don't yet understand it. the bankers and financiers are finding themselves in a state of shock. The collapse, which began in July with the U.S. mortgage crisis, and in August led into an international credit crunch, is proceeding inexorably and encompassing all sections of the world financial and economic system. The global financial system has "frozen up," and even though the financial institutions have not admitted it, in reality all the beautiful "creative financial instruments" which Alan Greenspan established, and which provided the foundation for "the greatest casino-economy of all times," have evaporated.

We find ourselves in an advanced phase of the greatest collapse in the history of financial markets. There is still the possibility of escaping the most horrific consequences of this systemic crisis—provided that governments are ready immediately to replace the totally bankrupt system of globalization with a new financial architecture: a New Bretton Woods system in the tradition of Franklin D. Roosevelt.

Look back a short time ago: On July 25, the American economic scientist Lyndon LaRouche declared at a webcast in Washington: "The global financial system has already collapsed—what we are now witnessing are only the effects, which are now coming gradually to light." And, in contradiction to the various ignoramuses and specialists in denial, who speak of "small rearrangements and adjustments" of a few small hedge funds, the developments of the past four and a half months have fully vindicated LaRouche.

The dollar has gone into a nosedive, which has been broken, at best for a few days, by interest rate cuts, only to then collapse further. The infusion of more than $750 billion in liquidity by the central banks, and the interest rate cuts, primarily by the Fed, which the other central banks were then compelled to follow, have led to a dangerous hyperinflationary process, which has included, first and foremost, agricultural products, energy, and raw materials prices.

After the longest possible deception maneuvers about their own losses, the banks, bit by bit, have admitted what they could no longer cover up. Only very hesitantly, the big investment banks began to write off billions in debt. Citigroup, for example, wrote off at first $6.5 billion, and then yet another $11 billion. Citigroup alone had $34 trillion in outstanding derivatives contracts, which could detonate the worldwide derivatives markets of an estimated $750 trillion, and with it, the whole world financial system....

<more>

Alan Greenspan

If there is a person who bears more guilt for this mega-disaster than any one else, it is Alan Greenspan, the former head of the Fed. We have him to thank for the fact that we have all these wonderful "financial innovations," which his successor, Bernanke doesn't understand. When Greenspan took office in 1987, he responded to the then ongoing crash, which was comparable to the Black Friday of 1929, by establishing, bit by bit, all these "creative financial instruments," whose very complexity underlies the problem. To this category belong derivatives, credit-derivatives, the CDOs, the SIVs, the MBSs, and the ABCPs, but also the hedge funds, the investment companies, the special-purpose entities, the conduits, investment vehicles, etc. Thus was the lie spread, that all these instruments "spread the risk on many shoulders," and therefore minimize it—a milk-maid's accounting....

Naturally, as long as the huge bubble of convoluted financial instruments was growing, as long as everyone in the casino-economy was participating in making super-profits, the profiteers could keep up the illusion that they had discovered the "perpetual motion machine." That 80&#37; of the world's population was becoming ever poorer, yes—that was an inconvenient small side-effect, that could be ignored.

The only problem is that the bubble has to keep growing. At the moment there's a break in the market, as in this case of the American subprime mortgage market, the bubble comes to a point of collapse, in which the leverage reverses, which actually threatens what bankers call a "cluster-risk." When in March of 2000, the bubble of the IT market, the so-called "dot-com bubble," collapsed, and about $16 trillion in capital disappeared, Greenspan lowered the interest rates in order to save many of his banker-friends. Thus, he not only created a yet bigger bubble, but, with the subprime market, created such a high-risk business, that its ephemeral nature must be obvious to any thinking human being.

Now, a long while later, it has dawned on several economists, that a total systemic collapse has begun, and that the blue-chip mortgage market, the real estate market, have been affected by the MBS and CDO market, so that massive collapses in consumption and production are imminent, and that it could come to a run on the banks and other financial institutions....

In the face of growing panic among the Wall Street bankers, the White House has recently leaked that the Administration will not fail to provide liquidity in an emergency. The problem is only: This is exactly what the Reichsbank did in 1923, and in November 1923 it ended, because the price rises had reached the absurd. On Nov. 15, 1923, 1 kilogram of rye bread cost 5.145 billion Reichsmarks. As a result of the hyperinflation, first everyone was a millionaire, and then people's savings disappeared. Today the problem is not limited to one country, as then, but spreads through the entire world....

<more>
__________________________________

These are two excerpts from the article. Read the whole thing for more detail. Again, I disagree with the fixed currency conclusions of another Bretton Woods but the details that took them to the point of drawing conclusions is accurate.

Meltdown of World Financial System Is Fully Under Way



.

McBear,
Kentucky

Being smart is knowing the difference, in a sticky situation between a well delivered anecdote and a well delivered antidote - bear.

Last edited by mcbear; 12-11-2007 at 02:00 PM.
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post #36 of 71 (permalink) Old 12-11-2007, 02:00 PM
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^^^

IMHO - the Fed should have had to do nothing -

I think further oversight on freshly invented "securities" that are basically impossible to audit should be canned

BW last week or two had an article on the same thing happening now with medical bills for the uninsured

package 'em up & sell 'em

That type of crap has to stop -

nex thing you know there will be CDO's on cow manure
You are right that in the BIG PICTURE the FED should have done nothing and let the Financial Sector tank BUT, the ramifications to the national and world economies would have been far worse than the current meltdown. At least now there is going to be some sense of order to the landing, no matter how hard it is.

As for the various invented securities, just look at the article above.

McBear,
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post #37 of 71 (permalink) Old 12-11-2007, 02:09 PM
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Looks like I am going to be up late tonight. SSEC is not looking like it is going to play well. They are 4X for the last two years but down almost 15&#37; in the past 60 days. A bunch of their stuff is coming due at the end of the month and they are looking at pulling the Yuan away from the Dollar a bit. Time to find another playground.

Maybe I can get more sleep if I stay in my own hemisphere this time.

McBear,
Kentucky

Being smart is knowing the difference, in a sticky situation between a well delivered anecdote and a well delivered antidote - bear.
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post #38 of 71 (permalink) Old 12-11-2007, 02:11 PM
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haha 1/4 point taken out and the Dow tanked by almost 300 points. Let's wait for the jitter bugs to panic and sell some more; cheap stocks ahead captain!
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post #39 of 71 (permalink) Old 12-11-2007, 02:23 PM
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^^^^^

stick with ones that have real export product & real money in the bank !
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post #40 of 71 (permalink) Old 12-11-2007, 02:29 PM
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^^^^^

stick with ones that have real export product & real money in the bank !
cool, can you cite some examples? That is if we still have any local manufacturers left to look at their portfolio
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