Archive for November, 2008

Weekly Commentary December 1 through 5

Sunday, November 30th, 2008

Last week we told you that Obama stopped the Stock Market free fall. Can you believe that the Market put 1300 points back on? And they say that the Market is not controlled. HaHaHa. I just feel sorry for the investors who pulled their funds out of their IRA’s, 401k’s, and sold their stocks. How many times has the Market done this to individual investors? (more…)

Bust-outs and the Paulson mob

Sunday, November 23rd, 2008

An interesting piece here. Indeed far too much is being run as a criminal enterprise. Catherine Austin Fitts at solari.com has flatly stated the reason that the bailout isn’t handed directly to distressed mortgage holders is because the many completely bogus mortgages couldn’t be paid on. Her time at HUD gave her a grim insight into these shenanigans which have been going on for decades, but have merely increased in size and brazenness.

“I describe a bustout at my 30 July 2008 post, http://skepticaltexascpa.blogspot.com/2008/07/london-banker-on-covered-bonds_30.html.

Bankruptcy fraud is a federal crime, 18 USC 152. Sometimes prosecuted, if small and the “perps” are not politically well connected. “The Beaux Art Dresses Inc., was a domestic corporation organized in December, 1920. … In August, 1922, the corporation entered into an agreement with a discount company by the terms of which it assigned its accounts receivable to that company for advances of money. … Within seven weeks before the failure, it purchased merchandise amounting to $47,000 a large part of which purchases were made in the three weeks before the failure. … At bankruptcy it had liabilities of $67,435.25 and assets of $1,064.14″, Beaux Art Dresses v. US, 9 F2d 531, 532 (2nd Cir., 1925). “A decrease of value–more than one-half in two months, after the purchase of new merchandise–under the circumstances disclosed in this record are not to be believed”, 534. Ah, for “old time bustouts”, when the “mob” did them for profit. They were modest, typically involving $2-$10 million in creditor losses in 2008 $ and easily understood as they used companies which dealt in tangible objects which “disappeared” in the middle of the night. The proof: circumstantial, unexplained asset losses. I estimate $67,000 1922$ is about $2.5 million today, peanuts, 3.7% of Lloyd Blankfein’s 2007 bonus, not worth looking at.”  (more…)

New Bretton Woods

Saturday, November 22nd, 2008

Found this at dailyreckoning.com. When we look too “late on the chain” for causes of problems, we never get a solution, only further obfuscations.

A NEW BRETTON WOODS VS. THE OLD BRETTON WOODS
by Nathan Lewis

In 1944, the world leaders that gathered in New Hampshire decided on a system based on gold. This was no innovation, as monetary systems for the past few centuries had also been based on gold. In the Bretton Woods system, the dollar was pegged to gold at $35/oz., and other currencies were pegged to the dollar. Currencies didn’t float in those days. Floating, manipulated currencies were considered an abomination. Exchange rates remained fixed. This stable, gold-linked system formed the foundation for a wonderful worldwide expansion of wealth in the 1950s and 1960s – even among the war’s losers, Germany and Japan.  (more…)

Weekly Commentary November 24 thru 28

Saturday, November 22nd, 2008

Did Obama save the Stock Market? Last week the Market was down, and down, and down. Going into the last hour of Friday, the Market was down nearly 1000 points for the week. But here comes Mr. Clean to save the day…Obama nominates New York Fed Governor Tim Geithner to be Treasury Secretary. And the Market rose 500 points. (more…)

Central banking for Dummies

Thursday, November 20th, 2008

Full story here. I love the power of simplicity. The below narrative should be read to children in school so that they may see these dolts for the social parasites that they are.

“Imagine a large building full of about 50 people in a remote area, not accessible to other human beings.

Each person would need to have his basic needs – food, clothing, shelter and so forth, met. In doing so, each person would have to develop skills to go about earning his livelihood to support his needs. But it would be nonsensical for every person to develop each skill that is needed to survive. What would happen in reality is that each person would develop a few key skills and use these as his source of living; for example one person may specialize in growing crops and rearing animals, whist another may specialize in plumbing and carpentry.  (more…)

Weekly Commentary November 17 thru 21

Saturday, November 15th, 2008

The grinch has really stolen Christmas this year. The October retail sales report could not have been worse, -2.8% overall, with automobiles at -5.5%. October is the last retail report before Christmas, and this is not a good start. This is the 4th straight month that U.S. retail sales have plunged. “Consumer spending will almost certainly decline in the coming quarters and could be a harbinger of real trouble this holiday season,” said Anika Khan, who is an economist for Wachovia. The last time retail sales fell 4 months was 1974. (more…)

Paulson panics as UK, Germany find own solutions

Friday, November 14th, 2008

Full story here. From William Engdahl.

 

Americaâ??s de facto Finance Czar, US Treasury Secretary Henry Paulson has reached for the panic button and made a dramatic 180-degree reversal of his financial bailout plan passed only days before. On September 23 in testimony before the US Congress, Paulson, former CEO of the politically influential Wall Street investment firm, Goldman Sachs, declared his adamant opposition to the idea of the US Government taking equity stakes in troubled major banks in order to provide them capital and stabilize the frozen interbank trading market. On October 13, that opposition to â??nationalizationâ?? collapsed. What happened to cause that sudden reverse is what interests us here. It shows the utter lack of coherency in the US financial elites over how to deal with their home-grown securitization of risk fiasco.   (more…)

$2 trillion black hole

Thursday, November 13th, 2008

Full story here. It’s probably closer to $5 trillion total. Roubini says it might be $7 trillion by the time it’s done.

“Purge your mind for a moment about everything you’ve heard and read in the last decade about investing on Wall Street and think about the following business model:

You take your hard earned retirement savings to a Wall Street firm and they tell you that as long as you “stay invested for the long haul” you can expect double digit annual returns.  You never really know what your money is invested in because itâ??s pooled with other investors and comes with incomprehensible but legal looking prospectuses.  The heads of these Wall Street firms have been taking massive payouts for themselves, ranging from $160 million to $1 billion per CEO over a number of years.  As long as new money keeps flooding in from newfangled accounts called 401(k)s, Roth IRAs, 529 plans for education savings, and hedge funds (each carrying ever greater restrictions for withdrawing your money and ever greater opacity) everything appears fine on the surface.  And then, suddenly, you learn that many of these Wall Street firms don’t have any assets that anybody wants to buy.  Because these firms are both managing your money as well as having their own shares constitute a large percentage of your pooled investments, your funds begin to plummet as confidence drains from the scheme.  (more…)

Unpacking the 401(k) confiscation rumor

Wednesday, November 12th, 2008

Full story here.

“DR readers might have been alarmed to read Dan Amoss’ warning in yesterday’s edition that, “Some in Congress are floating a proposal to steal your 401(k), sell the proceeds, and invest in ‘government-guaranteed’ retirement accounts.”  Alarming especially to folks reading about it for the first time.  So let’s go into a little more depth.  (more…)

These ARE unprecedented times

Tuesday, November 11th, 2008

Full story here.

Here is a great blog entry by Chuck from Rebel Traders:

It is getting very difficult to find new words to describe what has been unfolding in our nations economy over the past year. Each day brings more news about declining corporate earnings, economic conditions deteriorating, and a falling consumer confidence of record levels.   (more…)