OMG. Dear Professor, what is a “systemic financial meltdown” in every day terms.

I was FIRST!!!

I like your analysis, but i wish you would look at the global financial picture with a thought that governments are not to be taken for granted, ie the currency is something that cannot be controlled. I would love if you ran the numbers on the foreign held treasury debt and the global depression’s affect on that net wealth, and perhaps the inflation of the dollar. Perhaps you are mistaking the deflation of equities with the inflation of real goods?

banks don’t lend (what remains of them)Corporate America lays off until it looks like the 30sNo stock marketthen you get strikes and rioting by the laborer against the capitalist because of the anger built up for bailing the capitalist out and for the blame of ruining America and then finally mobbings and marauding gangs. Yes it will get that far.

tequila …tequile trap..tequila… TEQUILA..TRAP…..candy…candy….more more more.TEQUILA!!!http://www.youtube.com/watch?v=eNdEu9s5qUU

Amar, give your head a shake. 40K in 2013, 80K in 2016. It’s over. Emerging markets are disappearing.

For newly-created money, conventional economics upholds the doctrine of the time value of money whereas binary economics, noticing that money is created out of nothing by the banking system, denies the time value doctrine. Consequently, binary economics rejects conventional financial savings doctrine (that there must be financial savings prior to investment) – no financial saving is necessary if money can be created out of nothing. Indeed, what matters is whether the newly-created money is interest-free, whether it can be repaid, whether there is effective collateral and whether it goes towards the development and spreading of various forms of productive (and the associated consuming) capacity.http://www.binaryeconomics.net/

Emerging markets have been driven by the same forces that drove U.S. markets to their high a year ago – excessive liquidity and low interest rates. Just as the levered hedge funds poured money into your market, they are now deleveraging and removing their money in droves. Economies are tumbling. To whom will India sell there products? This is not a short term phenomenon, the whole world of investing is being permanently changed. Sorry.

Professor, I have 2 remarks:”another rapid round of policy rate cuts”Why subsist on a path that leads to nowhere.”an agreement between lender and creditor countries … and debtor countries … to maintain an orderly financing of deficits …”This is the first time I hear you taking into consideration the “how to finance all this” question. It is also the first time I hear you talking about a “global depression”.Roubini, you are one of the best forensic and forecasting economists out there. But I find many of your recommendation difficulty implementable in the real world (usually for political reasons), and nobody can blame you for that, as this is not your job, you are already making titanic contribution revealing the real problems.So the question is, do you think/consider, a leadership change is necessary in order to bring any real solution to current problems?

Since the rule book has been thrown out, it doesn’t make sense to continue to try and prop up the old system. Eliminate all counter party obligations immediately. Let each financial institution reconcile its own problems internally and supply, as NR has described, let the govt step in with any liquidity required. Seems like this is already implicit, however the market doesn’t appear to either trust or understand.

Unbelievable, just unbelievable

Unfortunately we have no FDR to calm nerves and show leadership. At least for the large price of a depression the neo-con bible thumping, gated community incompetents who professed small government, deregulation and unilateral action will get their due in history. You can’t blame this on your predecessors.What a mess. We are still a nation of incredible resources but they must be channeled to long term success, savings and investment.The US Federal Government was once envied for its ability to get the job done. Look what has happened in the last 20 years. Disgraceful. VOTE ALL INCUMBENTS OUT. THEY ARE ALL CULPABLE.

Right, Yankee. Good luck to all. We all will need it.

“At this point severe damage is done and one cannot rule out a systemic collapse and a global depression. It will take a *significant change in leadership of economic policy” and very radical, coordinated policy actions among all advanced and emerging market economies to avoid this economic and financial disaster.” Emphasis mine.@ RoubiniAnd,”… a significant change in leadership [of economic policy ... ]” this, I say unto you, will not be permitted to happen – well, not at least for the best health of the World’s peoples in general; it is now about individual Nations, their politicians, their Bankers, their corporateers and the blessed bureaucrats first – ‘women and children last’.The Federal Reserve as permitted under that Paulson Bill just passed allows the FedRes to become the sole socio-economic Authority in the World. Note the IMF and World Bank and IBS already moving to joining the FedRes (this is my reading of the noise emanating from these inner sanctums..) ?With respect Professor, and I admire your efforts, we are now in a pervasively saturated environment of Ultra-moral hazard chaos (crasse opportunism), a priori:), now.A news radio announcement just stated that the Australian Minister of Finance is currently in the USA inspecting the ‘new floor of the New York Stock Exchange’ – I almost wet my pants laughing…Ho hum

I have already decided to do that, based on the “stimulus” package on the federal level and the tax increases on the state level. Bob Barr 08!

Ditched for a special, long fast money segment until 7pm et

Jewish celebration.

Dylan Radigan and Maria Bartiromo bravely kept their positive rap going, alternating from looking at the Dow plummeting and engaging in useless patter to looking anywhere for something positive to say. They heroically invoked the IBM data as if it could counter a 600 point drop in the Dow. Finally Maria cheerfully inquired:”It’s 4 P.M. Do you know where your money is?” Meanwhile in London, Michelle Caruso Cabrera pointed to a ship going under a draw bridge, telling the viewers that it is a sign of good luck. Margaret Brennan, in a somber voice, told the viewers that S&P downgraded General Motors then gave the viewers a beautiful toothy smile. Fellini could not have written a more schizophrenic script.

We can’t invade from Canada. All our troops are in Afghanistan, slowly but surely being butchered.

Was the draw bridge up or down?

candy.

At least you didn’t say “first.”

Well from what I know from the Argentina/Uruguay 2002 crisis:1) banks are closed for a few days to 2 weeks2) credit cards don’t work3) cash is king4) condo goes for a song if you have any cash5) people buy houses or condo with all the family coming together to a bank with large clothes full of pockets laden with us$ bills. Closing a sale means going in a small room at the bank and counting, then a bank clerk check if the bills are counterfeit or not and then the seller stuffs it in his safety box.3) if you were in argentina, while you are sleeping your us money in your us account is converted without your authorisation to pesos to a peso account by a new law/order of the government, and then a peso devaluation is immediately ordered and you’ve just lost 40% of your account. Those who believed in the “currency board” of 1 us$=1 peso equivalence lost. Those who didn’t trust the currency board system and prefered to keep all the money in us$ in a us$ account in an Argentina bank lost just as well. Those mistrustful hopeless “nutcases” who kept their money in us$ in miami had an uneventful sleep. As would say Andy Grove: only the paranoids survive.4) jobs are assigned on a “who you know” basis and salary are reduced to a subsistence level5) if you are unlucky and work in some poorer department government, you will not be paid for months (Rocha, Uruguay) but you will want to show up anyway because of fear you would be fired and because of the hope that one day they will restart to pay you and you figure it would be better to still be an employee when that time arrive to receive some money.

all good bear markets need a ‘puke moment’. the question is if this is the one…

Equity Markets: DOWNCommodities : DOWNLong G. Bonds : DOWNCorp. Bonds : DOWNShort G. Bonds: UPGOLD & SILVER : UPHowever, the increase in the last two is quite limited. So the question is where all the money went.Can I put two postulates and ask whether they make sense? The level of delevering and hedged position unwinding is so fast and furious that huge amount of debt-laundered equity and money are disappearing with the corresponding (normal) zero-sum game rule. This is why the some of the money going out of equities are not appearing anywhere else.

Gold and Silver are manipulated markets. They should be considerably higher. Rumor has it that two banks have short positions that could bring down the entire COMEX.

Just in: A number of helicopters spotted at the Federal Reserve.Correction: Rumor of helicopters was incorrect. It was a flock of black swans landing.

Mark Shuttleworth is a Sudafrican venture capitalist and founder of the Ubuntu Linux distribution. He is an extremely sharp guy, but certainly not a macroeconomics of finance one. His latest blog is very good:

It’s a solvency problem, not a liquidity problemThe term “credit crunch” is very misleading for the current crisis. It suggests that the problem is merely one of confidence, that calm will return if liquidity is introduced to the system.My view, though, is that the real issue is one of solvency. This is the systemic bankruptcy of 2008….I’m nervous.The big question I’m asking is which sidelines don’t have landmines? My team and I are fortunate to have stepped out of many markets before the current flood of fear. We stepped right into a few problems, but in large part dodged the cannonballs. So far so good. But what does it mean to have cash in the bank, when banks themselves are failing? What does it mean to hold dollars, when the dollar is being debased in a way that would feel familiar to the Reserve Bank of Zimbabwe? These are very dangerous times, and nobody should think otherwise.

http://www.markshuttleworth.com/archives/220

Dear ProfessorYour forecasts have been first rate, but are your current solutions are radical or adequate?”another rapid round of policy rate cuts of the order of at least 150 basis points on average globally”Surely the time is past when rate cuts had any effect”- a temporary blanket guarantee of all deposits while a triage between insolvent financial institutions that need to be shut down and distressed but solvent institutions that need to be partially nationalized with injections of public capital is made;”A: Big creditors will force institutions into bankruptcy to get government refundsB: it will get too expensiveC: how easy is it to distinguish the insolvent from the illiquid at the moment?”- a rapid reduction of the debt burden of insolvent households”How exactly?”- massive and unlimited provision of liquidity to solvent financial institutions;”It aint working. Solvent institutions turn out not to be. Money pumped in does not come out again. There are not unlimited funds”- public provision of credit to the solvent parts of the corporate sector to avoid a short-term debt refinancing crisis for solvent but illiquid corporations and small businesses;”YES!! – basically government taking over the core financial functions”- a massive direct government fiscal stimulus packages that includes public works, infrastructure spending, unemployment benefits, tax rebates to lower income households and provision of grants to strapped and crunched state and local government;”YES again! Much better use of capital”- a rapid resolution of the banking problems via triage, public recapitalization of financial institutions and reduction of the debt burden of distressed households and borrowers;”you said this above already”- an agreement between lender and creditor countries running current account surpluses and borrowing and debtor countries running current account deficits to maintain an orderly financing of deficits and a recycling of the surpluses of creditors to avoid a disorderly adjustment of such imbalances.”This is the biggie. Can nations co-operate? Its not looking good so far (eg Iceland). We need a US President with real vision and leadership qualities. Not guys who lamely voted for the bailout and dont seem to want to discuss the real issues.

Dr. Roubini says:”This disconnect between more and more aggressive policy actions and easings and greater and greater strains in financial market is scary….When in markets that are clearly way oversold even the most radical policy actions don’t provide rallies or relief to market participants you know that you are one step away from a market crack and a systemic financial sector and corporate sector collapse. A vicious circle of deleveraging, asset collapses, margin calls, cascading falls in asset prices well below falling fundamentals and panic is now underway.”___This sums it all up. All of this government scrambling to shore things up at this late date may well be to no avail.SWK

- a rapid reduction of the debt burden of insolvent households preceded by a temporary freeze on all foreclosures;HA HA! SO YOU’VE FINALLY–FINALLY, AFTER TWO SOLID YEARS–ADOPTED MY POLICY OF STOPPING HOUSING EVICTIONS.BUT NO NO! NOT QUITE!! WHAT ABOUT THE RENTERS? WHAT ABOUT THOSE IN PUBLIC HOUSING?SORRY NOURIEL, YOU’RE NOT THERE YET! I WANT YOU TO COME OUT IN FAVOR OF A1. INDIVIDUALLY ENFORCEABLE2. PERMANENT3. COMPLETE4. ABSOLUTEBAN ON HOUSING EVICTIONS. HOW LONG WILL IT TAKE YOU TO REALIZE THAT ONLY A BAN ON HOUSING EVICTIONS WILL INCREASE ECONOMIC ACTIVITY? NOTHING–NOTHING–OTHER THAN THIS MEASURE WILL INCREASE ECONOMIC ACTIVITY.BY THE WAY, FOLKS, THIS BAN ON HOUSING EVICTIONS IS THE FIRST ACTION IN ENFORCING THE HOUSING PROVISION OF THE NEW BILL OF RIGHTS. WHAT NOURIEL DOESN’T TELL YOU IS THAT WHAT IS HAPPENING NOW IS THAT WE ARE IN TRANSITION, FROM THE ‘SCRUTINY’ REGIME OF WEST COAST HOTEL V. PARRISH (1937), TO THE ‘MAINTENANCE’ REGIME I DISCUSS IN MY BOOK: JOHN RYSKAMP, THE EMINENT DOMAIN REVOLT (NEW YORK: ALGORA, 2006).THIS CHANGE, BY THE WAY, HAS BEEN COMING FOR SOME TIME. ABOUT EVERY SEVENTY YEARS, THE UNITED STATES CHANGES CONSTITUTIONAL REGIMES. FOR HISTORICAL BACKGROUND, READ THE EXCELLENT, ONLINE ESSAY ‘HISTORICIZING JUDICIAL SCRUTINY’ BY PROF. G. EDWARD WHITE OF THE UNIVERSITY OF VIRGINIA LAW SCHOOL.FOR THOSE TRAINED IN THE LAW, LET ME SAY THAT, IN SCRUTINY REGIME TERMS, WHAT IS ABOUT TO HAPPEN IS THAT HOUSING IS GOING FROM MINIMUM SCRUTINY (LINDSEY V. NORMET) TO STRICT SCRUTINY. YOU WILL REALIZE BY THAT STATEMENT THAT I AM TALKING ABOUT–AND FOR THAT MATTER, CARRYING OUT–A CONSTITUTIONAL REVOLUTION. IF YOU ARE NOT A LAWYER, I STRONGLY SUGGEST YOU GET A LAWYER TO EXPLAIN THIS STATEMENT TO YOU. YOU WILL NEVER–NEVER–UNDERSTAND WHAT IS GOING ON IF YOU DON’T DO THAT.LET’S TAKE A LOOK AT WHY NOURIEL’S OTHER PROPOSAL INVOLVE, NOT AN ANDVANCE IN INDIVIDUAL RIGHTS, BUT RATHER, ‘ROUBINI’S CONTRADICTION.’NOURIEL HIMSELF IS FAMOUS AS THE ONE WHO SAID THAT NOW NOTHING CAN BE VALUED. AND YET HE PROPOSES ALL SORTS OF INTERVENTION BASED ON THE IDEA THAT SOMETHING CAN BE VALUED. OF COURSE, MARK TO MARKETING ITSELF DRIVES AWAY INVESTORS–THAT’S TO ONE SIDE. BUT ON WHAT IS THIS BANK RECAPITALIZATION BASED? WHAT ‘SOLVENT’ INSTITUTIONS IS HE TALKING ABOUT? THERE ARE NONE, BECAUSE NOTHING CAN BE VALUED.WHAT HAS HAPPENED IS THAT HE HAS MADE THE MISTAKE OF STEPPING OUT OF ECONOMICS AND INTO POLITICS. BIG MISTAKE ON HIS PART, BECAUSE HE KNOWS NOTHING ABOUT THE LAW, NOTHING ABOUT THE STRUCTURE THAT HAS LEFT SOME GROUPS FAVORED AND OTHER GROUPS DISFAVORED. WHY FAVOR HIS FINANCIAL INSTITUTION GROUPS?I FIND IT EXTREMELY SUSPICIOUS THAT IT TOOK HIM SO LONG TO ADVOCATE A FREEZE ON ‘ALL’ HOME FORECLOSURES–IT LOOKS TACKED ON, AS IF IT’S AN AFTERTHOUGHT. HE GIVES PRIORITY TO FINANCIAL INSTITUTIONS, BECAUSE THAT IS HIS BACKGROUND. THAT SPEAKS ILL OF HIS UNDERSTANDING OF THE ROLE OF THE ECONOMY IN THE LARGER SOCIETY.HE’S GOT IT BACKWARDS. FIRST YOU ATTEND TO INDIVIDUALLY ENFORCEABLE RIGHTS. THEN, AND ONLY THEN, OTHER ASPECTS OF THE SOCIETY HARMONIZE THEMSELVES WITH THOSE RIGHTS. DO IT ANY OTHER WAY, AND ITS SIMPLY AN ERROR CRYING OUT FOR CORRECTION.SO GET SMART: ADVOCATE A BAN ON HOUSING EVICTIONS. IT’S GOING TO OCCUR ANYWAY. DON’T INCREASE UNNECESSARY SUFFERING BY RESISTING IT.When in markets that are clearly way oversold even the most radical policy actions don’t provide rallies or relief to market participants you know that you are one step away from a market crack and a systemic financial sector and corporate sector collapse. A vicious circle of deleveraging, asset collapses, margin calls, cascading falls in asset prices well below falling fundamentals and panic is now underway.

I hope this post by NR will be considered a historical document one day.NR for Nobel prize in Peace!

Quit yelling…turn off the caps, please.SWK

Quit yelling…turn off the caps, please.SWK

In these turbulent times, it is nice that some things don’t change. You are my rock, Ryskamp.

I have been a lurker (and sometimes poster) on this blog for several years and felt somewhat prepared with the information that was given to me here. I was out of the market completely in January including all my 401k… and even with the penalty, I look like a genius now. I am just frustrated more of my family didn’t listen to my advice.Even with all the information I’ve read, the speed is still astounding. It is like an expodential decay model. Just amazing…everyday I watch in disbelief as TPTB try to hold on with more and more intervention, with less and less affect.Time to bear down and hold on.

ALL CAPS ARE TYRANNY.

Thanks for letting me know, Alessandro. I’ve seen some of his posts, but I’ve only been following this blog for about a year now. Still, I’m not sure caps is a very distinctive “mark” — our jewish contributor Ben “THE RUSSIANS ARE COMING” does the same thing. Even Peter’s “Ho Hum” gets a little tedious, but it doesn’t really dominate the rest of his posts like the use of all caps does.SWK

I’m not sure. I was too busy looking at Michelle’s assets.

Japan is in trouble – tune in to CNBC.com for live coverage

On The Money?SWK

Banks – Yen approaching 98 to dollar – Nikkei down 10% and still some banks not trading – circuit breakers in

But Buffet is a private agent and the other way around is public: uncle Sam in person !

You’ll get martial law before any of that.

Um, let’s forget about the world and just clean up our own house. Haven’t we had enough of social and financial engineering yet?

Amen!

CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!CIRCUIT BREAKER!!!!!

Game Over?Who loses?Come on, let’s play a vengeance game.

But not her face!

IMO, the financiers’ “crisis” is bigger than they let on: bigger than they can handle.They’re in a hole and there isn’t enough value to bail them out, even if they only bail out their friends. And as it so happens, their friends are the ones deepest in debt. The rest of the world’s sliding in with them. Iceland is on the edge of total bankruptcy. One after the other, they’re going down. The reason is, Goldman Sachs and their friends were into all these guys. Goldman is wrapped up in all these trillions and trillions of fiat money schemes: that’s how they made their 70 percent.Now they’re struggling, going down, trying to pull everyone in the hole with them.The economy, IMO, is not that bad. It’s in recession, yes. The Fed’s real estate bubble turned back, turned down and kicked the economy down. It would get going again if the people didn’t have these gambling financials tied around their necks, dragging down their 401(k)s and equities, destroying jobs. Otherwise, most people aren’t that badly off.The problem is, the bankers are going broke. They gambled and lost. Now, they’re trying to pull us down with them. People, IMO, aren’t of the mind to do this. People are of the mind to let them sink.The financiers are in charge. But, bad news. The Democrats are staging hearings to describe how bad it all is: to get votes. Mainly, they’re bringing these Wall Street guys in front of them, finding how much money they took, how much they were paid, how many AIG $440,000 bailout parties they had… Things like that. The Dems are saying, we’ve got to have a little oversight to keep these guys from giving all the money to their friends (the Dems have friends, too): we want to know where this money’s going. The public’s getting in on it, getting riled.Now, here’s the question. How much do we need these guys? Do you need a shady brother-in-law who borrows from you every time he sees you and then tells you you’ve got to pay up because he’s suddenly rolling deep in bottomless debt? Why would you want to sell your house and put your family on the street to help him?You wouldn’t. Cut him off. Stop giving him money. It’s the only way to help an alcoholic.JJ

And if you dig a little deeper, you will find that the real problem underlying all of this is the avenue of humans, these wicked unnatural beings, to the face of earth.Yet another sign of a crashing system … we have been warned of the doomsday false prophets … so far we have 2.

Not the Wall Street CEOs as they sail away on the mega yachts.

I wish. At the rate this market is melting, maybe 2 weeks. I am also somewhat surprised to see the speed of the meltdown but then again, with the bad policies of Paulson and Bernanke, subconsciously I was expecting it.By not addressing the issues that matter, those 2 bozos have put the whole system at risk and may bring down global markets and the USA. We are experiencing paradigm shift at particle accelerator speeds. There is just no way to stop it now.

Gold currently $US915 — what gives?http://www.kitco.com/market/

Yeah, two months may be a bit optimistic for 20 bottles of scotch in THIS environment.I can’t blame the Treasury Secretary and Chairman of the Fed for “putting the whole system at risk.” That was accomplished over a number of years by myriad persons and events. They were late to recognize the depth and breadth of the problem, and the measures they have taken to try to stop the deterioration of the financial system and the economy have proved ineffective, but I’m not sure anyone else in their positions could have achieved a better result. As one poster suggested several days ago, we may simply be looking at a long-term natural economic cycle that no government intervention could effectively halt.SWK

Or burn.SWK

The NY Times is now reporting that Uncle Sam is considering taking direct equity stakes in banks via cash infusions, on top of the $700M commitment it has already made to bail out the bimbos of Wall Street.Can anyone tell me where-oh-where is all this money coming from when the govt is already running a large deficit on its ordinary operations? The sale of T-bills? Printing money? And all this on top of all the other obligations coming due to the most useless generation in American history — the baby boomers.Well, the chickens have come home to roost after three decades of speculation on Wall Street, London, etc, one bust after another, the Latin American debt crisis of the 1970s followed by the S&L crisis and 1987 crash and the Asian currency crisis and the Long-Term Capital Management Crisis and the dot-com collapse and on and on it goes. All the smart MBAs from Ivy League schools, car salesmen with pedigrees, getting rich off hundreds of billions of dollars in institutional money washing ashore lower Manhattan in search of a place to call home. Poor babies. Well, they all walked away rich, but, “quelle dommage,” they won’t be able to afford the fifth vacation home in Monaco now. Cheer up, son, by the time you grow up this will all have been tidied up and you can go to work on Wall Street and get the fifth vacation home for us. The speculation will begin anew one day, perhaps sooner than you think. You can bank on it!

Bank of England Short-term rates and LIBORIt seems that there is unanimous agreement that the short-term credit markets being locked-up and non-functioning is the first priority problem in the economy that needs to be solved, and soon.In the U.S. those rates are determined by short-term Fed rates (1.5%) and the London-based LIBOR rate. LIBOR in London is influenced partly by Bank of England’s current short-term rate (4.5%). With Bank of England’s higher short-term rate, this is creating a substantial spread between short-term rates in the U.S. and LIBOR determined commercial credit and municipal rates in the U.S. This disparity, measured by TED Spread, is causing short-term credit to be too expensive in the U.S. and locking up credit markets. Furthermore, the extremely low Fed fund rate in the U.S. appears to be having counterintuitive unintended consequences for depositors and lenders.There should be closer coordination between U.S. and English short-term rates, probably meaning that BOE rates need to come down more. This would need to be done within a few days. If this does not happen, the Fed needs to coordinate a new standard of commercial short-term interest rate to replace LIBOR in the U.S. with a rate that brings down artificially high commercial lending rates in the markets so as to unlock those markets.

Let me guess. You cannot even see the incongruence in this logic? Hfffffffffff. Ok; once again if you will; who is it who makes the laws?

Credit Default Scams. By the way, the Hedge funds are pretty much all insolvent. The CDS naked short scam that inflated their books with phony paper profits will never pay off. They have no cash on hand, so everyones rushing to the exits. There is no out.

Late this afternoon CNBC reported that AIG needed more billions, after at least two injections. For me, this was a sign that AIG is going down.

Really tired of these PPT SOB’s. Found an interesting read that Bob wrote today. Quite illuminating on what is going on at the COMEX these days. This is not the only place I have heard this same observation as of late.http://news.goldseek.com/InternationalForecaster/1223566953.php

So you are here to say that any action enacted by Congress and signed by the President is Constitutional?That, sir, is ludicrous.Stop trying to obfuscate the truth.To the best of my knowledge, the federal reserve act was never contested and brought before the Supreme Court. I am sure that if it would have been that it would have been declared to violate the Constitution.Perhaps sir, you would like to bring it before the Supreme Court. Oh, sorry, I forgot, you are part of the problem. An attorney that is a CFR member.

I am watching CNBC on the Credit Crisis, because everyother channel has the election banality and I catcha question that is directed by a viewer to Dylan Ratigan.The view was asking Dylan if he knew anything about the lehman settlement auction of Credit Default Swaps amounting to 400 billiom dollars. Dylan Ratigan looked perplexed and Melissa Lee made reference to tommorow morning, but they did not know much. Is this some kind of an Act? Could he really not know?

any hope of co-ordinated rate cut before market open?

Guest, I too second that motion, I too am sick and tired of SWF’s misleading and twisted statements on this blog. Anyone who has researched how the Fed act was passed in 1913, knows the sad truth of probably THE most sinister crime ever perpetrated on the American people in the entire US history of its existence, except for maybe what is going on today with the Bailout(s) that the American people almost unanimously were against, and our gross misrepresentation in Congress.

Deer in the headlights! LOL! These clowns are clueless paid shills,..what else is new? You think they are honest non-biased market reporters?

Desperate times call for heroic measures.There is no perfect solution, try and spread the losses, slow asset deflation.Asset deflation is the major danger, don’t worry about inflation for now.Protect asset values, moratorium on evictions, rate resets, renegotiate mortgage terms etc.States must back debt if private collateral fails.What is the use of having a debt free state if the domestic economy fails.Why keep a dog and bark yourself?Put the money in at the bottom, cut taxes for the middle and low incomes, raise pensions etc, more “rebates”, increase minimum wage, keep real economy liquid without increasing (private) debt levels.Do a deal with equity holders (give them bonds or something) and temporarily nationalize banks, do not let any more fail for the moment.No more vindictive desertions.Keep rates low, but don’t lend for speculation (try “responsible” banking).Punish uncommitted “smart money”, tax, regulate flows of “non commercial” money.Undermine commodity speculation and exchange rate, interest rate arbitraging.Engage in international, coordinated exchange/interest rate setting.Wild exchange rate fluctuation is killing international trade.Unwind wealth concentration.Lay off the demoralizing and manipulative peak oil, climate change crap, it affects confidence and therefore decision making.Ditto for confidence destroying “security” measures.Don’t postpone elections.Exercise restraint, don’t take advantage of the situation.Those who would emerge unscathed, at the cost of the community are shortsighted.Don’t be paralysed by ideological dogma, it must be obvious by now that what passes for the “free” market isn’t perfect.It’s only money, we still have each other.Read RYSKAMP!

there’s physical warsthere’s financial warsthere’s information wars

Great explanation of the effect of Brit rates on LIBOR and the results. thanks for the explanation

You lose me on the no recession call.From my perspective, in the long run we will only increase our dept, and the present flight to safety (USD) will be over. It’s the dollar that I am unsure of, and believe the value of said dollar is dependant on the rest of the world’s ability to continue to choke on it. Especially China.hlowe

What is significance of Oct 23? Please explain thank you.

With interest rates below the rate of inflation, we actually have negative real interest rates right now for those privileged enough to borrow from the Fed. So, you intuition is actually a reality for some. That still doesn’t mean that the banks are willing to pass on this “boon” to the rest of us.PKB

@Paco:They don’t want to hear. Don’t bother.

Them, or us.

WaMu trades get unwound.

Wamu auction

Look, the U.S. engaged in massive deficit spending during WWII, and the national debt peaked at 128 percent of GNP in 1946. U.S. GDP (we don’t use GNP any more) last year was a little shy of $14 trillion. The current U.S. national debt (as of 30 September 2008) was $10 trillion, or about 71 percent of GDP.The problem is, we now need to engage in some Keynesian fiscal stimulus in the form of rebuilding public infrastructure to help the economy, but to do so could cause the national debt to surpass the 1946 percentage peak. Not good.SWK

Hey–please lay off SWK. I don’t always agree with him, but he is unfailingly polite, usually amusing, and he makes some very good points. United we stand, divided we — well, you know.

Hyperinflation around the corner? Yes or No?In NR’s interview on 9/25(?) he said that his massive fiscal stimulation of the system would NOT be inflationary in the long run since the govt. could retract the cash infusion just like it injected it. Hence, no hyperinflation. He was not advocating a monetary package which he said would be inflationary.My question as a newbie economy watcher is “how realistic is this?” Isn’t it very likely that a massive multi-trillion $ injection will eventually be engrained into the system and it will be impossible to suck this cash back up? Americans spoil very easily – ever try to take back a gift? I get nasty looks from friends when I ask for books back that I loaned them months earlier. Any thoughts?

I must say, you are a dedicated hyperbolist…and a paranoid one at that.SWK

Thank you, Average Jane, you’re always so gracious. A little secret: I don’t always necessarily agree with what I say, either! SWK

Sounds like that would be quite bad. From Bob Chapman:”AIG could potentially take down the entire European banking sector due to swaps it had insured on European banks. To say that this is a huge problem would be the understatement of the century.”http://www.theinternationalforecaster.com/International_Forecaster_Weekly/Massive_Gains_Wiped_Out_in_Markets_Despite_Everyone_Being_Warned

I agree. I enjoy reading SWK.

Thank you.SWK

I would vote for any incumbent who voted against the bailout package, especially if they voted against it twice (even though, unbeknownst to them and to us, the second version turned out to be better than expected, apparently.)That’s what I said at the time of the debates and blog discussions about the bailout, and I would stay consistent with that.

IMO, the crash in the price of oil can give us a quick end to the war on terrorism.All of the countries that are the breeding grounds for terrorism, much of it govt. supported, will be in deep doodoo as oil prices collapse. Think Iran, Saudi Arabia (indirect support), Venezuela, and even Russia (arming & training Iran.) Their flimsy governmental systems have adjusted quickly to $100 oil, and any drop below that causes them immediate and serious pain. Their ruling parties could collapse quickly when they stop dishing out free dollars to their supporters.Most of these places depend on oil revenue for up to 80% of their income. Cut the price back down below $100 (now closing in on $80) and they will be too busy putting out the flames of civil war and chaos within their own borders to worry about exporting terror to the 1st world. Not only that, but because most of those governments are infants to the developed world, they will quickly become begging dependants of the support from the West. I read that once oil goes below $90 even Russia could implode and redirect their jets and cruisers back from the Carribean.Bottom line. If our next president puts this together he can use this time of turmoil to best advantage and threaten to take down any place that still directly or indirectly supports terror and forces the U.S. to stay in the Middle East to fight.

Yes, that is what I meant, the word “the State” refers to everybody and nobody. But if you are referring to the administration, then you can always wish, if you are pretending that the ones that got us here would take those drastic solutions against their own interests and reveal their incompetence.About the “off” parts. What peak oil and climate change has anything to do with all of this. What does “protect asset values” mean? Some states cannot back their own debt, let alone private debt…This is not an attack of any sort. Because I feel the climate is a bit charged tonight.

Has anyone heard any technical levels in the DOW and S&P ? I was thinking roughly 8,000 ish in Dow and next major long term 6,500 ? Just an amateur taking a pencil across bottoms of multi-year chart back to the 80s.

YANKEE GO HOME

Frankly speaking, I doubt he will be able to fund any war.

I’m gunna buy me a gun!

Again: In this historic crisis, it’s useful to gauge valuation histories. In the not-read-enough parts of Irrational Exuberance, Shiller provide just this. Here’s some plots from Wiki’s P/E article:Real S&P P/E, 1871-2006P/E as a predictor of 20-year returnsReal S&P price, earnings, dividendsA couple observations:1. Based on Shiller’s data, the S&P’s real P/E was around 25 in 2006. Based on this plot of historic data, that suggests zero real returns out until 2026, if the next twenty years are anything like the previous 136.2. If real P/E’s drop to around 10 like they were throughout the 70s and into the early 80s recession, that means that the S&P would drop to 10/25*1300 = 520 (!), and that’s assuming that real earnings hold at 2006 levels, a big if in a nasty recession. Oh, and that would be a DJIA of about 10/25*11500 = 4600.Not a prediction, but just some simple arithmetic from Shiller’s historical data. Does anyone know what these numbers were at the 2007 market peak? Any Dow 7000 bottom callers or technical analysts who’d like to take a whack at this?Shiller’s quotes from Irrational Exuberance (2005):

The stock market has not come down to historical levels: the price-earnings ratio as I define it in this book is still, at this writing [2005], in the mid-20s, far higher than the historical average. … People still place too much confidence in the markets and have too strong a belief that paying attention to the gyrations in their investments will someday make them rich, and so they do not make conservative preparations for possible bad outcomes.Long-term investors—investors who commit their money to an investment for ten full years—did do well when prices were low relative to earnings at the beginning of the ten years. Long-term investors would be well advised, individually, to lower their exposure to the stock market when it is high, as it has been recently, and get into the market when it is low.

A couple of weeks ago I warned that the market was showing signs that resembled the pre-1987 crash. The issue wasn’t just technicals. There was an underlying logic.This week one of the financial commentators picked up on exactly the same thinking. See Doug Wakefield’s comments at this link. And note the title … “Times Up”.http://www.bestmindsinc.com/documents/TimesUp.pdfNote especially his chart for $INDU (the Dow) that’s about halfway down the item. Mr Wakefield concluded also that there was a risk of a real imminent market crash.That is what we are experiencing right now.A major market crash is unfolding on Wall Street.There is no reason to think that we’ve hit bottom yet – and no firm guess as to where that bottom is located.What’s different about the on-going crash is that it’s a mutli-day event. Not just a “Black Monday”, because as I already explained we saw that at the beginning of this week. We’re really seeing something that looks like a “Black October” event and may stretch over a whole week (this week), or even longer.Let’s look at where we are:1) Fannie and Freddie are dead2) Bear and Lehman have gone belly up.2) Much of the US banking and financial system is being nationalized – or essentially backed by the Fed.3) The auto companies (Ford and GM) are rapidly nosediving into imminent bankruptcy4) The country of Iceland has gone bankrupt, and all its banks are likely to default.What does this mean????It means that the CDS market is almost certain to implode now.They just cannot stop it at this point.There are too many potential bankruptcies and defaults in the system.THAT is why the market is now plunging.The shadow banking system is imploding, and it’s happening so fast that they cannot stop it.It is reasonable to predict that emergency actions will be taken very soon by the PPT.This could involve closure of the US market, and other markets, for a period of time.It could involve some dispruptions in the system of banking.I did remind people to put away some emergency cash and food.If you haven’t already done so – it’s a good idea!If you can still get gold … do it.PeteCA

As Henry Hazllitt phrased it, “There is no safe hedge against inflation except stopping it.”Frankly, I don’t see how you can retract a cash infusion? Where does it go once it’s injected? Are these just temporary “injections” of tax money that will be paid back, with interest? I don’t believe it. If so, why put the foxes in charge of hen house oversight? I mean, we’re talking Hank Paulson and Greenberg here.Hazlitt says, “It is not even possible to halt an inflation, once embarked upon, at some preconceived point, or when prices have achieved a previously agreed upon level; for both political and economic forces will have got out of hand… The political pressure groups that have benefited from the inflation will insist upon its continuance.”Look at AIG? Paulson never shuts the door to Congress without saying, “I’ll be back.” How many times in the past have there been billions for the bankers and debts for the people, for their bad investments in Brazil, in Mexico, in Argentina, in the US… and indirectly through the IMF and World Bank? What does the rest of the world get in return? Hardship.Maybe someone else less suspicious than I has a better “explanation,” Friendship One.

I THINK PRINCE ALWALEED EXPOSED HIMSELF DURING ORGIES WITH WAMU AND LEH.

PeteCA,Please refrain from making such posts after 9pm.On a more serious note, remember you said that when stocks rally on a no news day, it might be an indication of market manipulation or insider dealings. Today, the market was stable with low volatility (relatively speaking) – I guessed because of the short ban was ended – up until the last hour. Should that also be read as a sign something was broken, but we don’t know it yet, or was it just due to last minute stress?

Pete, is there any chance that if the US markets are closed for a period of time, that small investors might panic regarding their investments in that there is such distrust of insiders and of manipulation behind closed doors? Perhaps if they are closed, a window will be open where you can get to your investments if you wish. Else might there not be another disaster when markets open? With recent actions by the SEC and the PPT, there seems little hope of fairness. I guess it’s a choice between possible meltdown of your holdings or being trampled by the big players when markets re-open.

Let me be frank. I’ve never seen anything like this. No-one has. I’ve seen hard recessions … and this is not one. There’s more going on here, and more rapidly, than anything I’ve seen before. At the start of the week I speculated that they would take emergency action by Fri. Guess what – they already did the coordinated central bank rate cut in the middle of the week. I can’t predict what they will do next – but be sure that Mr. Paulson probably has some sort of check list that he will go down if he thinks there is a possible global meltdown. If they do close the markets – thats it. No-one gets to make any moves. Certainly not any small investors, and probably no mutual funds or hedge funds either. There’s nothing to stop you walking into a gold dealer, or going to a bank and transferring money. But as far as the markets are concerned … you can’t rule out anything that these guys could do behind the scenes. They’ve already shown a determination to preserve the power structure on Wall St, so don’t be surprised if they do that. But there will be no temporary window of access. Do what you can when the market opens tomorrow. Be aware that if it gets REALLY crazy out there, your transactions may not be processed on a same-day basis. But, I just can’t say. Things might go a little more smoothly. Japan is down by over 800 points right now. So it’s fair to expect another significant drop. But it’s anyone’s guess really.PeteCA

@Nouriel”And in a world where there is a glut and excess capacity of goods while aggregate demand is falling soon enough we will start to worry about deflation”This is the system called Capitalism. People need this “glut of goods” but they can’t have them because there’s too much. There is abundance for them and debt peonage for the people who do the work.Capitalism is failing because of its inherent contradiction. The system was not deregulated. It was regulated, as it always is, so these monsters can feed on the blood and bones of people here and around the world. These boom-and-bust cycles will continue until we finally finish them off.As Malcolm X said: “When the plantation is burning, you pray for a strong wind; When the Master is sick, you hope that he dies.”

In four months, I think oil will be down around $50 since demand will have crashed. Iran depends on oil revenue for 80% of its income. Their country will implode as they won’t be able to afford supporting external insurgencies in Lebanon, Iraq, or Hamastan. They will go back to sewing fine and exquisite Persian rugs and their new, less power-hungry, leaders will be begging the Israelis to loan them some of their economists to help get their government running again – remember the Shah? BTW, NR is an Iranian Jew. Result: no war will be necessary. Even Hezbollah will go through withdrawal symptoms as its hot-blooded terrorists go cold-turkey without their Iranian candymen.Just like when the Red Sea engulfed the Egyptians, the quick sands in the Middle East will swallow up the sword-worshippers once Americans stop driving.

I want to hear. Thanks Paco. The more details the better.We know that they can do whatever the f*** they want. I just want to hear all of the delicious permutations!! Gracias!

If you take it on a percentage basis, the DOW could have daily 5%-10% drops for infinity.

Artichoke:What do you mean its not for his lack of trying?He has never, as far I have seen, explained in plain understandable terms what is meant by the “scrutiny regime” and the “maintenance regime.” Nor has he related the significance of these concepts to the issues discussed on this blog, beyond the fact that it has something to do with a ban on housing evictions. He just keeps yelling at us to “buy the book” and “consult a lawyer.”But fine, I am downloading the article he suggests, and I will try to decipher what he is saying.http://law.bepress.com/cgi/viewcontent.cgi?article=1055&context=uvalwpsBy the way, what’s your understanding of the substance of what he is saying?

“Moody’s says may cut Morgan Stanley, Goldman ratings”why dont cut USA rating??

By the way, here is Ryskamp trolling about the New York Times a few days ago:”In scrutiny regime terms, we are moving rapidly toward raising the level of scrutiny for housing from minimum scrutiny (Lindsey v. Normet) to strict scrutiny. Does this change anything? Ask any lawyer, judge or constitutional law professor. They will tell you that this changes everything.”http://economix.blogs.nytimes.com/2008/09/26/gdp-figures-revised-downward/Artichoke: please explain to us what you take to be the substance of the argument.

I just read this online book review on HISTORY AND THE CONSTITUTION: COLLECTED ESSAYS by G. Edward White.http://www.bsos.umd.edu/gvpt/lpbr/subpages/reviews/white0607.htmThis book includes the chapter on “Historicizing Judicial Scrutiny.”Nowhere in this review is there a clear statement about the core arguments presented by Prof. White. There is however a lot of talk about how smart and “preeminent” Prof. White is.I don’t think the reviewer actually understood the book.

All European mkts down 10%Japan down 10%India down 10%The CREDIT DENIAL Theory persists!!!!!

Seems as though the second domino to fail and fall after the US Dollar is declared worthless as well as the declaration of a default on all treasury securities (bills, notes, bonds, both inflation linked and conventional securities) will be Japan (the largest lender to the USA), then The United Kingdom (the second largest lender to the USA the last time I checked), then the last time I checked it was the Caymond Islands & Luxembourg next, and then China as fifth place! Those will be the order of all the dominos failing and falling as the USA fails miserably! I wonder… Will there be a humanitarian effort for the USA after a total default of treasury securities and the dollar?? Resembling Animal Control? Will there be total chaos (or I mean more of it), more violent crime, more armed criminal action, more rape and murder?? Once there is no government somtimes I wonder if society would be more peaceful and pleasant or if society would misbehave!? Any thoughs? Anyone? Anyone?? I see panic like the 1857 panic, many bank failures, bank runs, and the perception that the currency is not worth very much. Remember, we can always barter.

This overlooks balance. WHERE does the money come from, who loans the US this money to engage in infrastructural work? And when everyone is, or is in the process of contracting?As I’ve mentioned elsewhere, this is like getting a loan to remodel one’s home while one forgoes paying on one’s other debts. Compounded is that fact that loans really aren’t available.Boiled down to its base argument what we find is that we are enslaving future generations with “slaving on the railway.” It’s forcing these future generations to use precious energy on a lot of infrastructure that won’t be viable for them! For me it’s no big deal as I have no children, but for those who have children you should really think this through!

i work in a bank in and i tell you my friend/co-workers are either idiots or in dreamland,some of these guys are still busy securing deals/projects,OMG is this how NEO feels??? i just wanna scream WTF is wrong with you guys!!!I know they read the news, but theyre like NUMB!!!”i heard Japanese index fell by 10% today”, “yeah i heard about that too, whats wrong?”"maybe that credit crunch situation in US” “yeah..”"ok, i need to finish my paperwork,” “yup,me too”:Oi feel like strangling them

It is doubtful that the American election will be held in November; martial law will probably be declared by that time, and no election will take place.See: http://www.alternet.org/rights/101958/thousands_of_troops_are_deployed_on_u.s._streets_ready_to_carry_out_%22crowd_control%22/

I’ve not read one sentiment on this blog saying buy for short term counter trend rally.This may indicate an opportunity for going long for counter trend rally over the next 8 to 10 days.Elliot wave analysis says were in a third wave of a third wave down.This is the most vicious setup for market sentiment.But,a fourth wave counter trend rally should occur during the completion of this sentiment displayed here.Than,a resumption of a fifth wave down.

The crash of the USSR in the late 80′s is a great model to compare to our current US meltdown. We have a collapse gap.USSR-One party: Communism, Manufacturing Economy, State Owned Housing (with multiple generations under one roof), Traditions of: Home Cooked Meals, Recycling and Reusing everything (appliances, machines). A Coleman stove would become a family heirloom. And saving any Ruble you were lucky enough to earn.US: The Capitalist Party and the OTHER Capitalist Party, Service Economy, Private Housing (and sorry Grandma, it’s time to take you back to the nursing home), No one cooks; 5-6 meals a week eaten out (or waddles their way into the grocery store.), Throw Away Society (the coffee maker’s broke, let’s buy a new one Hon.), and teenagers with Mastercards before they have even worked a lick.How ready are we? The US Dollar will be worthless. A bartering system will emerge. A Survival of the fittest will be enforced through a new police/mafia/criminal union. (and the one who said their aren’t enough troops has forgotten about all the state controlled police/fire) Anyone who can’t compete can enjoy starvation.And how naive is the man who thinks we should pass more laws? We hate lawyers. We hate politicians. We put a black cloak on both of these figures, call him a judge and suddenly the lawyer/politician is worshiped? Have you ever been involved in litigation in this country? The only justice we offer is available for purchase. Sound familiar? Go ask any of the three million people we have locked up. One thing they all have in common: Poor! These crooks didn’t follow any written law. Just the oldest law: greed.(and now another classic: fear).Be afraid of the man in the Topsiders, wearing a Polo, talking on a cell phone and sipping on a Starbucks! I’ve always feared him more that any immigrant I’ve worked with.(And these criminals want us to fear immigrants…ha) Thanks for opening my eyes to that Tom Russell. “Whose Gonna Build Your Wall?” Vote? Please. Shoot, don’t vote! Two parties with the same bosses: corporations. One’s flavor is tech, the other’s is oil. They are just opposite sides of the same coin. Have you already forgotten the 2000 and 2004 elections!Don’t take a “terrorist attack”, pre election off the table. War has always been a profitable racket for this country’s economy. Remember the recession of 1991 and its ‘Gulf’ solution.The good news is in the kind of thinking Hooligan is doing. There are more of us than there are of them. Something is breaking and will fall apart completely before we can put it back together.. A sustainable collapse in the market economy will finally force people to seek the truth. We stand together and rebuild with the greatest minds fueling our labor. We will revert back to manufacturing and saving.Economics 101: Sell more goods and cut expenses. (Wars)Mother Teresa said we could use another Great Depression because it makes people realize how much they need each other.So if you are interested, study some history. (Particularly of the Economic Collapses) It always repeats itself.Have fun lighting those candles and keep your passports ready.

At this juncture what is a and/or the prudent man to do?

wow. this is really happening. I am in Houston – left Credit Suisse 2 yrs ago because I sensed the direction. wow, this is really happening.Won’t stay here long term though, Mexico will collaspe BIG TIME soon – cantarell.People down here are buying land, tractors and GUNS but none of that will matter when 20 million starving folks show up.I came to Houston to watch the collaspe – but can’t really believe it is happening. wow

western civilization was preserved by a bunch of monks and intellectuals who sought refuge on an island off ireland. The first king who knew how to read was Charlemagne – thats right – from the fall of the Roman until Charlemagne – 0the dark ages

are you insane? what a fantasy, are you a ZIONEST? sounds like a real sick fab=ntasy to meso sorry .. and … after a few more million Iraquis and Palesu=tinians are killed – sweet dreams mr maniac

“and in a world that’s gone insane they say I’m mad?”

me layman so mine is layman view. the real side of these of events – Real and hard assets like factories, plants & machinery, computers and the networks etc etc are there intact. Also real working capacity of the hands and brains of the earning members of the households are intact. Also the real capacity to consume “Roti, Kapda aur Makan” of the population are still there.Only thing which is in trouble is the ability of the society to mix al those real components in a healthy way and keep those running.Situation is like that the dinning table full of foods containing dishes and also surrounded by people having suffient appetite to consume those. But they were given spoons of length which can feed at the opposite end of the table but not himself. Till now everybody is trying to feed himself with his spoon

YES this is what should be talked about before everything else. We all could have looked at it and made tv to talk about it. If we spent more time on this then we did wuth fighting the bailout we could maybe have found a solution. But in the end all of us just follow what tv tells us to do

The food doesn’t magically appear. There’s only so much farmland (and so many wild animals).Most of that food has been generated through the use of fossil fuels, and it’s the decline of fossil fuels that we’re now starting to fully feel. Markets have run on oil, oil has lubed the gears. The gears are now starting to seize up as oil runs low.You’ve got one part right, and that’s that we have to step up to the plate, we’ve got to realize that WE have to work for ourselves: we’ve got to replace machines if we are to survive. We here have the luxury of intellectualizing, but most of the world’s population doesn’t (2/3rd of which lives on $3/day or less).We mustn’t fool ourselves that if we just take over the existing machinery that we can make it all work. The machinery is failing, it will NOT be able to sustain us…

that will come in due course in the form of higher interest rates

it’s different this time

My friends, a few weeks ago, Germany’s finance minister stood before parliament to proclaim the death of the world financial order.”The US will lose its status as the superpower of the world financial system. This world will become multi-polar with the emergence of stronger, better capitalised centres in Asia and Europe”That’s what Peer Steinbruck said and he was spot on. The global markets right now isnt just a recession…its not even just the biggest recession in decades.What we are witnessing is nothing less than a massive realignment of global economic power. Economic and financial power is shifting eastwards faster than almost anyone could have imagined and its causing huge disruption in the finacial markets. We are about to see the biggest transfer wealth in history. By 2010 the Western economies will be in irreverisble decline. The Oil-rich Arab countries and Asian industrial powerhouses will move to the centre of the global economic universe.By 2010 Oil production by Non-OPEC countries will be in decline and this is terrifying for oil-dependent Western countries. It leaves OPEC in total power and Western leaders know this. Soemthing even more frightening is happening and mainstream media has kept quiet about the coming financial tsunami.On September 18th the Gulf Co-operation Council took the first steps towards setting up a common Gulf currency. They have been talking about this for some time. A few weeks ago GCC finance ministers approved a draft agreement on the general structure of the monetary union. They are now discussing the location of a central bank. Bit like the eurozone. A final agreement is meant to be signed the end of this year. The target date for the new Gulf currency could be around 2010. This will have an enormous impact on the world economy. The reason??You can bet the Gulf countries are going to price their oil in their own common currency. THE NAIL IN THE DOLLAR’S COFFIN. The almighty dollar receives a huge ammount of support from being the standard currency for international trade. Oil is prices in dollars, bought and sold. Consider the impact on the dollar when when those countries say they don’t want to be paid in dollars anymore? It looks like the dollar will have its legs kicked out from under it in the next couple of years.The great money merry go round has broken down. One of the clearest signs of that shift of power are the buy-outs and strategic investments that the Arabs and Asians have been making in Western assets recently. Nomura has snapped up Lehmans for $2.00 (yes just two dollars!) The Gulf state of Qatar is the biggest shareholder in Sainsbury’s and Barclays. Citigroup had to go to the Arabs and Asians to keep operating, the list goes on and on. All that money drains out of the West and undermines the economy. This trend has been gathering speed for a long time. But the smart chaps in Washington, Wall Street, London were able to ignore it for a long time. The reason? because a lot of that money made its way back to Western countries through the all powerful financial industry that has just collapsed.The US & UK governments whine about how the “global credit crunch” is at the heart of the problem but that is a flat lie. There isn’t a global credit crunch, this is just a Western problem. The Gulf is awash with capital. The banks are still lending in Asia. What about HSBC?? Their economies are growing and their profits are rising.When the dust settles and unless the West comes up with an answer… there will be a NEW EASTERN ECONOMIC ORDER.

Just now on CNBC 6am NYT (by the way at CNBC.com they offer a 7 day free trial for CNBCplus live streaming) the suggestion was finanicals are tanking not because of the shorts but money going to cash, gold etc. Bill Fleckenstein who has been short the market for months has cashed out for safety reasons.

Prey tell, why Houston? e.g. alternatives such as Malibu, Aspen, Jackson Hole, Naples FL, Canada, Bermuda, a desert island somewhere

thank you for that Paco. It is useful as it gives a good picture of what could happen in the U.S.Of course I wonder what currency would be good to have in U.S. if the USD loses its value? Perhaps Euros, considering that it can be difficult to buy e.g. food with gold.

Overnight Libor way down 5.09 to 2.463 month Libor 4.75 to 4.81

Thank you Sir for sharing your views with us. Yours and Prof. Roubini’s blog and comments gave me more insight into the financial system than I got from any other sources during all the 35 years that I spent this small planet so far. Thank you.

Libor has just gone up !!!! we are all doomed

and what would the a-c’s middle name be?

Just make sure that they have opted in to the insurance program as that program is not mandatory.

OK.. I have reached the point where I seriously doubt the central banks’ and governments’ understanding of the problem. Its like they never took economics. THEY SHOULD READ THIS.DELEVERAGE REDUCES MONEY SUPPLYREDUCTION IN MONEY SUPPLY IMPLIES LEVERAGED ASSETS MUST DECLINE IN VALUEIt is the second point that matters most. This is why there is credit crunch in the wholesale banking system. There is just not enough USD out there to support the asset base at its current price. We need a write off of assets to fit the current M3, or inflate M1 to historical M3. The former would need nationalisation as banks would be insolvent, but this is not necessarily a bad thing. The government takes over the aseets at a heavily discounted level, in exchange for direct equity stakes. Futhermore, all vested parties other than depositors should take debt equity swaps at different levels (depending on their seniority) to re-capitalise the banks after the deleveraging. In exchange for this, the banks should get warrants to participate in upside by the distressed assets if they recover. This should, logically, put them in a position to lend in a new regulated environment. To ensure the public doesn’t panic, the state will guarantee ALL DEPOSITS for 2years. In order to prevent abuse, new regulations should be tighter. ALL LENDING MUST BE BACKED BY CAPITAL. Glass-Stegall should be reinstated to prevent the deadly mix of investment banking and commercial banking to combine again. This should halt the M3 destruction. And here, MONETARY POLICY can actually work, because now the banks have the capital to lend and restart the velocity of money.There is one alternative solution to this. However, it is a short sighted one which will lead, in all likelihood, to world war 3. That is to start the printing presses and print USD. This will lead to WEIMAR/ZIMBABWE styled hyperinflation and ultimately will lead to global conflict.THIS IS A USD PROBLEM. No amount of action from the ECB, BOE, BOJ or other central banks can solve the problem. This action needs to be taken by the US and the US only. The other central banks can support the program bu working with the US Administration to reduce USD based assets in their respective banking systems. BUT ULTIMATELY, THE US MUST TAKE THE LEAD.Lets hope we get to the right solution. Otherwise, we are heading towards a very dangerous and ultimately disastrous future.

In order to know what really happened last Friday you need the text of the legislation — as opposed to remarks by legislators in the Congressional Record that can be revised and extended (translation: changed). Roubini cited Moran and Frank in the House and Krugman cited Dodd in the Senate. Krugman writes better than he speaks — see the blather on a recent Bill Maher show.I thought one of the options that Paulson had was an investment in a bank in exchange for garbage aka troubled assets as opposed to an investment in a bank in exchange for let’s pretend these debits and credits in a computer constitute money. It would have been nice if our leaders had read the legislation and took some time to think before voting. Paulson did not save his competitor Lehman and the cost today in credit default swap insurance may be $350 to $400 billion.What makes anyone think Paulson or Bernanke or anyone can save the financial system from sinking?

I inadvertently posted this on the London Banker site so I also post it here – as it appears contextually compliant..”According to the most recent data, released June 30, 2008 by the Office of the Comptroller of the Currency, the three largest American bank holding companies, JP Morgan Chase, Bank of America and Citicorp, had current outstanding derivatives contracts, totaling $179.4 trillion dollars. The three banks combined have total assets of just under $5.6 trillion!As of Dec. 31, 2007, according to the Bank for International Settlements, the total over-the-counter and exchange-traded derivatives totaled more than $675 trillion. However, these “authoritative” figures are, according to Executive Intelligence Review analyst John Hoefle, grossly understated. The true figures, Hoefle estimated, are well-above a quadrillion dollars. “@ http://larouchepac.com/news/2008/10/09/derivatives-hyperinflationary-bomb-crushing-international-fi.htmlH'mmm, why don’t I disagree with Mr. LaRouche here?Ho hum

In at least one prior post, I quoted Mark Twain, who reminded us that”It is probably not best that we should all think alike.”A wise man, Twain.Thanks, AfA. You’re right, the conversations here wouldn’t be interesting at all if everyone already held the same views (well, perhaps they’d be interesting to Republicans!). Moreover, adversarial argument (and by that, I don’t mean being abrasive and nasty) is the basis adopted by our judicial system for sorting out the truth.In my experience, Americans sometimes can be a lot more conformist and less tolerant of other views that all of our touted constitutional freedoms would suggest. I’ve found that Western Europeans, by contrast, sometimes tend to be more inclinded than Americans to accept that others may have very different points of view about politics, religion, economics, and so forth, and they ordinarily do not to allow those differences to interfere unduly with civil discourse or a spirit of friendship. I always try to be respectful of others who are respectful of me, but I’m perfectly willing to take off the gloves when confronted with ill-mannered insult-mongers.SWK

Personally, I don’t think this Lehman settlement is not a big deal for anyone other than monolines, since CDS tradres post maintenance margin on large moves. Provided the settlement price is around yesterday’s mark there should not be big dislocations. It’s big for monoline since they (generally) didn’t have to maintain margin….but if you are interested, here is the schedule.Lehman CDS auction timeline9:00 Accounts submit physical settlement requests9:45 Dealers enter inside markets and physical settlement requests10:30 Inside mid-market and open interest published13:00 Deadline to enter limit orders14:00 Final auction price (clearing price to clear open interest) and trades published

Does anybody know who the major credit swap sellers are?

What help from the East? First, it’s clear that the hypothesis that other economies could effectively de-couple from the United States is false. Second, the G7 economies account for 75% of the world’s economy, so how much help can emerging economies provide when their main market for consumption — us — is dead? Gee whiz, the State of California has a GDP twice the size of India. I just don’t see that your concerns are merited.SWK

Gold not doing much — currently $907

Make sure you have enough oil in your lamp for the journeyMatthew 25:1-10Parable of Ten Virgins1 “Then the kingdom of heaven will be comparable to ten virgins, who took their lamps and went out to meet the bridegroom.2 “Five of them were foolish, and five were prudent.3 “For when the foolish took their lamps, they took no oil with them,4 but the prudent took oil in flasks along with their lamps.5 “Now while the bridegroom was delaying, they all got drowsy and began to sleep.6 “But at midnight there was a shout, ‘Behold, the bridegroom! Come out to meet him.’7 “Then all those virgins rose and trimmed their lamps.8 “The foolish said to the prudent, ‘Give us some of your oil, for our lamps are going out.’9 “But the prudent answered, ‘No, there will not be enough for us and you too; go instead to the dealers and buy some for yourselves.’10 “And while they were going away to make the purchase, the bridegroom came, and those who were ready went in with him to the wedding feast; and the door was shut.

Our second amendment has resulted in a country where there is just about 1 firearm per person. Admittedly, many people own more than one, and some own none. We are a country that is not governable by force.

I have been wondering for a while if the destruction of the $65 trillion derivatives market effectively reduces the money supply, by wiping out so much of the fractional reserve multiplied dollars. Does that make sense?If the money supply is actually decreasing, then are the gold bugs and inflation hawks all wrong? I see articles stating that the Fed is not increasing the money supply with all these capital injections. Very confusing to non-economists like me.

Brilliant! ,” man the weapons…”

Brilliant!if $ = zero, then gold = zeroexcept in India, China, Mideast, Russia, Germany…USA would be LOST w/o $$$$$ and would collapse like Zimbabwe———funny, but Jim Rogers omits gold in telling people where he’s investing

Here’s a reality check for you- no one put a gun to the heads of the West to buy oil from the Arabs or (cheaper) products from Asia.I sense more xenophobia here- “Arab and Asian” countries, “new Masters.” There will be NO new world order. There will be no controlling countries/continents from afar.I feel that you’re applying the past to the future, and, like the general fighting the last battle, you’re getting it wrong. It’s one big game reset in which the new game will be nothing like the old.

I got a call from the hotel Honors program asking which vacation plan I would prefer- I said “aren’t you paying attention to what is going on in the world???” The reply- “well that’s why we’re calling, because during a recession people need to get a break from it all” She said this while laughing.She won’t have a job soon, and she won’t be laughing.

A fart in a hurricane? more like a hurricane of a fart.We have all been pooped on with immense force.

451 BPS…

It’s one big game reset in which the new game will be nothing like the old.

That is what I think as well.

Wow. That Kool Aid must be tasty.Believe the lies. They want you to continue to contribute because they need your money. Don’t worry. They will lose it for you if don’t pay attention.

Yes, this is pretty clear. And consider that many Western countries are home to peoples who are accustomed to having more people in a given household (primarily due to the fact that non-Western countries have historically been poorer).But keeping these dynamics in view are essential. Unfortunately most decision-makers miss such important (real) details.Just think, all those folks living in gated communities will end up opening the gates up and taking in boarders!

Tlhanks, Pete. Very thought provoking.

flight to cash to cover positions – and bury in yard

Gold will be the next asset for Average Joe to lose money on

John Ryskamp got it right. I just read a business week article that explains in layman’s term preemption. It is indeed a legal approach the Bush no regulation folks used to prevent states who knew of predatory lending and other shenanigans from stopping the run-away train. Since most of us are not lawyers on this site it was easy to not fully comprehend what he has been talking about.Here is the quote from the Business Week story (concerned two Attorney Generals from Iowa and North Carolina who sought to stop the madness)…One cause, though, has been largely overlooked: the stifling of prescient state enforcers and legislators who tried to contain the greed and foolishness. They were thwarted in many cases by Washington officials hostile to regulation and a financial industry adept at exploiting this ideology.The Bush Administration and many banks clung to what is known as “preemption.” It is a legal doctrine that can be invoked in court and at the rulemaking table to assert that, when federal and state authority over business conflict, the feds prevail — EVEN IF IT MEANS LITTLE OR NO REGULATION. CAPS TURNED ON DELIBERATELY.”Fundamental Disagreement”"There is no question that preemption was a significant contributor to the subprime meltdown,” says Kathleen E. Keest, a former assistant attorney general in Iowa who now works for the Center for Responsible Lending, a nonprofit in Durham, N.C. “It pushed aside state laws and state law enforcement that would have sent the message that there were still standards in place, and it was a big part of the message to the industry that it could regulate itself without rules.”I also now see why he was/is so adamant that we should stop foreclosures.

Dow down by over 500 points in first few minutes of trading on Friday (Oct 10′th).This market is GONE.Major crash underway.Expect emergency actions to drop short selling and close markets.It’s probably going to happen.PeteCA

Yep. You got it right.WOW!!! This is really happening.PeteCA

It could be coming a LOT sooner than anyone thinks.And if it does – kiss the prices of US bonds and treasuries goodbye.PeteCA

shorts going to cover today, not wanting to be in market over the weekend

There will be huge debates about how this thing developed. One aspect that will get a LOT of discussion … was the decision to first ban short selling, then to drop the ban. I thought the original ban was ridiculous. It was! But once they enacted it, and then took it off, it opened the floodgates to some serious short selling by the hedge funds. This just happened to come at the very worst time. I don’t blame the funds. But their actions did accelerate a process of financial decay, possibly contributing to the market crash.PeteCA

Looks like huge fluctations on the Dow.Probably desperate actions by the PPT to stop the selling – big injections of cash into the futures markets.I doubt it will stop the enormous flight to safety.I still think they’re likely to close the market if continued selling is going on.PeteCA

Also Yahoo was completely crazy. One thing I noticed is that the previous close price they report is not yesterday’s but two days ago. This is why > 1000 points losses were reported. I think

I can only tell you that something similar happened on Yahoo finance (-900 to -220 in seconds). The insanity on the markets is too much for those online gadgets.

The end of the world is coming and I’ve nothing appropriate to wear….

Amending that comment. Looks like the Dow opened several hundreds of points down – due to futures markets. Probably the PPT tried to stop that immediate downfall with a big injection of cash. There will be continued volatility today – anyone who’s a fan of market manipulation can watch today’s market with fascination. Most normal investors wil still head for safety, IMHO.PeteCA

It’s a market for the tricksters today. It’s Friday. There’s no sign whatsoever where the markets are headed today. It’s big blocks moving one way or another. It’s going to be a ride, IMO.

But you’re right about one thing. Updates from Google really DON’T make a lot of sense when the Dow is crashing PeteCA

Well, I’m just a bit skeptical. You could be right, but I haven’t seen enough evidence yet to convince me that this is inevitable or even likely.Thanks for expanding on your point. Very interesting perspective.SWK

Nice

This is what a massive reversal looked like in October 1987Close Friday October 16 — 2,246Open Monday October 19 — 2,164 — Intraday low 1,677 — intraday high 2,164 — Close 1,738Open Tuesday October 20 — 1,738 — Intraday low 1,616 — intraday high 2,067 — Close 1,841

Lehman auction – initial results 9.75 on the dollar — that’s 9.75 cents

You have been sold a bridge, sir. Remember, it took stocks almost 30 YEARS to recover from 1929. However, for the sake of everyone who bought into (was forced into) the scam I hope you are right and I am wrong.

3month TED = 451 bps. 3month LIBOR-OIS spread (much better indicator) = 362 bps.

The infrastructure will still be in place after a crash, i.e., food production, factories, know-how, etc. The question is: Will we allow this system and setup to continue? Will we allow the same parasitic class to organize society in their interests, or will we take a new road where the means of production and distribution are socialized for the benefit of everyone?The people who live off of us like to say this is the best of all possible worlds. Let’s see what America looks like when it is no longer able to plunder the wealth and resources of the people of the world.

correction 3mth Libor 4.82

OUCH! Not much happiness there. This thing ain’t nearly over.I wonder how many investors are willing to cover their short positions, when we’ve got these kinds of conditions still existing?PeteCA

or not

Another ouch!Was I wrong … is this really going to be a “fair” pricing?Or is this just the best they could do to fudge the assets?PeteCA

One of the geniuses on CNBC just made this important point – we can’t have too many more 700 point down days because we’d be at zero — Thanks for that Melissa Francis of CNBC -

The PPT will not let the S&P hit 666! That would betaboo!

sounds like it would be evil as well

Well … just how comfortable do you feel about the idea of letting the world’s political leaders re-write the rules of global finance? It seems a bit like putting the Girl Scouts in charge of the brain surgery unit at your local hospital. But I wouldn’t be surprised if they do shut down the global markets today.PeteCA

He even say not to sell specific stocks (not hos own Mediaset, strangely), because all is well.

Politicians have done far more damage already so what is there to stop them to close the markets if that move can serve to their benefit?

Lehman Swap Auction Initial Results Show Payout of 90.25 Centshttp://www.bloomberg.com/apps/news?pid=20601087&sid=aiMj9KoKg_CM&refer=home

Miss in on holiday, supposedly away from computer and markets.TPTB have lost control. The stock market is not critical right now, can crash how it wants to.Credit market is what counts. And it’s frozen solid. That is the problem for them.

My two cents worth …1) What tipped uns into this crash was that the major indexes (Dow, S&P) broke through the bottom of the trading channel that they were in. That provided a strong signal that it wasn’t just a bear market – something worse was happening.2) Selling was aggravated when hedge funds started placing short positions again (ban on short selling was lifted), and when large funds panicked because very long-term trading indicators were violated.3) No-one knows a bottom. Sometimes closing markets tends to halt the momentum of downwards selling. But in this case … the next morning when we wake up – we’ve still got a credit crisis on our hands. Temporary fixes are not doing the job. No-one knows where the resolution goes on this.PeteCA

Lehman bidding- ouch….http://www.creditfixings.com/information/affiliations/fixings/auctions/current/lehbro-res.shtml

As a woman, I find Hitchens’s insult neither clever nor even a legitimate analogy. To blame Hank Paulson for being raised a Christian Scientist is unfair. We do not know if he actively practices that religion, which is far from being a cult. The press would not dare blame the crisis we see today on the “cults” of Judaism or Catholicism or Mormonism, so why bash the Scientists, who are, as far as I can tell, almost uniformly positive, intelligent, rational thinkers (for the record, I was raised a Catholic and am now a member of no church). In denigrating Mrs. Eddy, a profound metaphysician who argued against “sheer superstition and incantation” in all of her writings, Mr. Hitchens reveals his fundamental ignorance about the nature of her overarching assertion of the unreality of physical matter. Even Einstein greatly admired Mrs. Eddy’s achievement in spite of his revulsion that a woman could have conceived it, stating that what she had accomplished would not be fully appreciated or understood for at least another hundred years.

based on the levels i am looking for in the stocks not to be named in the DOW and where they have reached so far, i do not think this is over. maybe the market will be closed for a couple of days next week – if it closed for the entire week, i will file bankruptcy out of principle… i think 8,000 is going to go in the DOW, the long term trend line was missed in 2002 and 2003, NOT this time – we will hit 6,500 ish with a one day exclamation point 1,000+ day and then the dust may settle for a while…it was really neat to see markets on a 5 or 6 put 3 dollars wide this morning ! it was really fun when my trading app was slow sending orders in… if you are toying around with this stuff LIMIT orders folks… if you are in cash and would like to get long stuff at some point, pick the absolute cheapest levels around where you think things could go and place limit orders to buy the stock there. if this is obvious sorry – this is the equiavalent of the wild wild west. if you are really clever and want to “play” you can sell calls against the stock you buy. with the VIX at 74 ! (Mommy, i want my bottle. Great Great Grandmother of the 87 and 29 crashes.) the calls should have a lot of premium in them which you get to SELL and collect against your stock. you do have risk of the stock going down more against you, but the premium on the sale of the call offsets your downside. upside on the stock you buy is limited up to the strike price you sell the call at. this is AFTER the down 1,000+ point day in the DOW if it actually happens…in the event 8,000 is the level for now, some cash has been taken off the table for good. now does anyone else see the DIRECT parallels between investing and gambling? oh gee, look our entire system is based on a bet that prices always go up ? new system anyone ?

Our lack of understanding of global economy interdependence, explain how far this financial crisis has gone.At this point of no return ,it is important to keep clear what the priorities are.At the same time, it is also important to make the distinction between what it is necessary, and what it is sufficient. Probably its is necessary to support banks at full extent.It is necessary full scale global coordination.It is necessary to design emergency Keynesian style programs, for critical months ahead .However those actions will no be sufficient, unless a clear leadership emerge to cope with the implementation and effective comunications of these actions to global markets.Too many variables at hand, make higher the probability of failure, therefore emerging economies should be considered once the first order actions are under full implementations.-

Too many people have been calling for a bottom all week. My fear is we have a long way down to go. This is not a normal “bear market.” This is a historic, systematic collapse in confidence in the global financial system. We’ll see the fruits of fractional reserve banking and fiat currency on a global scale, and it will not be pretty. The bubble will pop, and let’s hope we can rebuild with sound banking and a stable money system based on supply and demand rather than government decree.The Truth Shall Set You Free – Extreme Volatility

Not even gambling is a correct analogy. Rigged gambling maybe. Government issues fiat currency (not gold based), government steps in when markets “correct”, government bans short selling when badly effected companies complain, government reimburses losses for selected players, government takes over ownership of some players when they lose. The casino might even have to close for awhile (see comments of Italian President this morning). Would YOU play in that casino?

well said thanks for clearing it up even more for me…

it is said that MS is another Lehman…

There must be some inflation of the debt — I didn’t say hyper inflation. Otherwise the debt burden, contracted in nominal terms during a time of a bubble, is too much for Americans. American policy should not ignore the interests of American people who must not be left with overly burdensome foreign debt.

The geniuses at Ford Motor not only borrowed $23+ billion last year but also wanted a big piece of the US Government’s offer of the $25 billion “auto retooling” fund. Bye, bye Ford. And GM fervently says it is not considering bancrupcy. Hmmm what do their banks say? What is their current share price vs book value? Remember folks – something is only worth what someone is willing to pay for it. That was the principal behind “mark to market”. Of course some folks would rather value an asset based on what they think it is worth. Oh really?

It means Economic collapse ! when it happens prepare for riots then martial law

Nobody.

That’s silver digits, you mean…

because it lasted for a nano second — Consider that the initial plunge may have been engineered so as to create a (false) bottom. The PPT is working overtime and getting creative — The talking heads are doing everything they can to talk this market up point out every two minutes that we are well of our lows and probably had capitulation. Total and complete manipulation — but the market will eventually get it right

It will be interesting to know if, in the fine print of a CDS “contract”, there is a requirement for the buyer of the CDS “insurance coverage” to delivery the Lehman bond to to the seller of the coverage. I understand that there were something like $400 billion Lehman CDS contracts outstanding. How many Lehman bonds were there outstanding?

How true! Should have invested in their business or paid real dividends.

Speaking of the dollar some weekend readingAN INFLECTION POINT IN THE DEBT SUPERCYCLE

So let’s have some discussion of what I call “Roubini’s contradiction.” The idea that nothing can be valued, and yet he wants to recapitalize banks based on the idea that something can be valued. Are we simply substituting a fiat mark to market for a fiat currency. Isn’t this simply a command economy?And if command, then fine. But whose commands? And on what basis?The problem again is that the bourgeosie has only a very primitive understanding of rights, and their part of their ideology is to keep rights (to keep any inquiry) away.It may surprise your readers, but there is only a very primitive understanding of what in fact property is, in American law. You would think that it is very elaborately developed, but it isn’t.The reason is that with so much authority granted to the political system in the scrutiny regime, the other side of the coin is that1. individuals have very few rights so they cannot press factual inquiries in court;2. laws are written such that many facts are simply not admissible in court.It just shows that we have reached the end of the line with regard to our current power structure. Nobody likes to think that the stock market will go to 0, but that is exactly what will happen. No one likes to think that unemployment will rise above 50%, but that is exactly what will happen.Then you will have a revolution, a lot of misery, and guess what the survivors will do:ban housing evictions.Gee, can’t we get there now, without the misery? Guess not. Look at the ignorant self-satisifed neanderthals who post on this site!!

Relatively speaking, we lose. The people who win are the ones who have been frugal, saving money a lot, and working very hard (for low wages). The people who lose are the ones who have been spending what they don’t really have, consuming more resources than they deserve, and getting paid too much. The adjustment is very painful.PeteCA

Sorry. I don’t buy that. Back in ’29 the various manipulations were rampant, and I am sure there are much more sophisicated machinations going on now. There seems to be little talk of program trading (I haven’t heard of any “circuit breakers” cutting in lately). Why not? What is the aggregate amount of corp. buy back going on? Why not? Nobody is discussing the current rate of mutual fund redemptions. Why not?

Ha! try being a mortgage broker right now!

This is the correct URL:AN INFLECTION POINT IN THE DEBT SUPERCYCLE

I’ve read some of these ignorant posts about “Gee can’t understand Ryskamp. Don’t want to think, don’t want to read, don’t want to learn anything new, don’t want to use my brain. What’s it all mean?”You would think that when a thoroughgoing technomaniac like Roubini comes out with a demand that “all”–repeat, “all”–home foreclosures be banned, these same readers would think, “Gee, even though I am a lazy ignorant bourgeois slob, it might actually benefit me to learn about the New Bill of Rights and to learn about the ban on housing evictions, since that seems to be the way things are going.”You know, it might actually benefit these same readers to actually live in the present and deal with the facts.Just a suggestion.By the way, I only use caps when I am responding to a comment and am putting that comment in my post. It’s to distinguish my reply from the comment.What’s the problem with it, anyway? The Romans did it.

1:27 p.m.[MS] Morgan Stanley back near session lows, off 37% at $7.87

hedge funds deleveraging – selling down the commodity complex to raise cash.

thanks. however, looking to buy 100 shares for example and SELL the options to collect premium… i hope to never buy an option again for the rest of my life…

Do you really think 290 million americans have the ability to go buy gold and how would that relate to purchasing food and gas, even is if thier are shortages… gold is down and not moving… and will not move anyhwere until all markets crash totally…

Vix at 73 dow down 500 — doesn’t feel like we had a capitualtion earier, unless this market is capable of multiple capitualations

John Ryskamp:Less berating, more explanation required.Try form your statements into logical sequences.I was trying last night to get through the dense legal arguments of Prof White. But both his analysis, and your analysis, are completely lacking in any “social actors”. That’s likely because you are trained, of self-trained, in the law. But for other social scientists, some kind of dicussion of the actions and motivations of actual people, or groups of people, or institutions, as social actors, is usually considered a good idea at some point.I take it that the “scrutiny regime” is based upon ever denser and more complex readings of constitutional law, which is done by comparing cases with.. previous rulings? (Not sure). This is as opposed to an understanding and interpretations of the rights individuals *should* have in a just society (the “maintenance regime”). Eventually the scrutiny regime collapses under its own weight of circular legal interpretations.Is that correct?You mention that the US changes constitutional ‘regimes’ every 70 years. That seems like an odd way of putting it. Why 70? Who changes it? Why? What brings an end to that power structure? Political-economic crisis? Caused by….lawyers and legal scholars who develop circular readings of the constitutional regime? Not clear.Which social actors have organised to overthrow and replace these rights regimes in the past?I see insufficient connection between your discussion of the inevitable replacement of the current constitutional rights regime, and the current situation with the economic spiral.By the way, many on the left disagree that a rights based regime is the most radical way forward. Put simply, in a rights based regime, the more wealth, and assets, property, that you have, the more rights are allocated to you.Who granted this authority to the political system.

Professor Roubini,I wonder what are the risks and opportunities for creditor countries such as China. Would they just see large part of their reserve diminish and experience severe contraction, or they can gain their political and economic standing by helping west countries?

Rallying back again, dow just cut its losses in half! Only down 290 now. Going green before th eclose gauranteed!

Being “jewish” is sort of meaningless.1) does it mean being a Israel citizen?2) does it mean having 1 or 2 Israel citizen as parent?3) does it mean some sort of having statistically clustered genes to a group even though the similarity to the cluster “average” for any individual after a few generation can be indeed very weak except for some possible more visible phenotypes? irrespective if this group now lives or is citizen of Japan, Iran, France or the USA?4) does it mean anyone who loudly proclaim he is a “jew” sort of almost unconsciously wishful some reaction from others5) does it mean to be the descendent of someone who was mistreated or killed by nazis? Does that include anybody mistreated or killed by nazis or for that matter does it include anybody mistreated or killed in any war including non-nazi germans bombed or civil-japaneese nuked by the Usa?6) does it means someone who profess adherence to the jewish religion?7) does it means someone of is an israeli citizen who think the jewish religion is a stupid and potentially very dangerous superstition?8) what does it mean?If you answer this, then you should have solved your problem.For example, I am from a catholic family, yet I am not in any way shape or form a “catholic”.

Has it been mentioned here already that Roubini, on this momentous day, is on Bloomberg’s front screen video picks?

The 690 point (8%) drop in the first seven minutes to 7,882 and subsequent rebound, had PPT written all over it. The final 90 minutes will tell the tale – one poster suggested short covering will drive prices higher in the final 45 minutes. I doubt too many will enter the weekend long.The market tested 8,000 just before 2pm hitting 7,980. Who knows what the “real” support level is. I suspect we won’t find out till Monday. But if we break 7,900 we will free fall into the close.

Americans are in DEBTThey will cash in, not buy stocks.Expect DOW to reach 5000 before end of the month and a continued deflation for a year or two

I think you hit the nail on the head.Many seasoned traders are screaming for a local bottom based on abysmal market internal (VXO 101+ and VIX 75+ anyone??). But stock market is just a secondary character right now.The credit market collapse is center stage. Until that one bottoms stocks will be out in the cold.

Gold at 846 — here’s your chance

Double bottom now in…going green!!

Sort of sounds like Deflation to me, at least in the immediate future.

rallying fast and furious once again!

I think you’ll need to wait until Monday for that answer

I think the IMF should institute a fund where every reserve holder around the world (central banks, SWFs, private equity funds etc) can participate.With the resources that are collected, the fund should take care of the following 4 tasks suggested by Prof. Roubini:- massive and unlimited provision of liquidity to solvent financial institutions;- public provision of credit to the solvent parts of the corporate sector to avoid a short-term debt refinancing crisis for solvent but illiquid corporations and small businesses;- a rapid resolution of the banking problems via triage, public recapitalization of financial institutions and reduction of the debt burden of distressed households and borrowers;- an agreement between lender and creditor countries running current account surpluses and borrowing and debtor countries running current account deficits to maintain an orderly financing of deficits and a recycling of the surpluses of creditors to avoid a disorderly adjustment of such imbalances.Every participant receives a stake in the fund which is proportional to the amount invested.This would allow:1) Transparency through self-selection: it would become immediaty clear which institutions are potentially solvent (the ones knocking at the door of the fund) and which ones are not2) Involvment of emerging countries in the recapitalization process3) Impartiality: the IMF, and not national governments, decides who is eligible and who is not4) Coordinated effort that would restablish confidence within financial markets

And statements like this are destroying the blog. CUT IT OUT!!!!!!!!!!!!!!!!!

I’ve only been reading this blog for the last 6 months or so but don’t you think you’d get your point across better if you weren’t so condescending? Most people here are pretty informed and interested in learning more….just my 2 cents

excellent point – I think you have called it right – the question is timing – Dollar Yen / SF might be best indicators – Euro and Pound are a mess. With all the central bank shenanigans currencies are disrupted right now.One thing that might be keeping the equity markets from tanking is the faint hope of a G8 banking agreement this weekend.

3:03 p.m.[FNM] Fannie Mae to stop collecting on mortgage-backed securities

At least until OpEx.

you mean DA PPT

GOING GREEN!!!

Why do you guys cheer when the markets is going 500 pts down and when is going up everything is manipulated by the PPT?

Because currently ALL indicators point to a falling market – so explain why it almost always rallies several hundred points at 3pm?

Could someone please explain me what this means?SAN FRANCISCO (MarketWatch) — Fannie Mae said Friday it will stop collecting the principal and interest payments on loans from institutions servicing its mortgage-backed securities in a bid to free up additional liquidity for these institutions. The move comes in line with the Federal Deposit Insurance Corporation’s new policy which effectively safeguards these principal and interest payments.

THERE SHE BLOWS!!!!!GREEN ACROSS THE BOARD!

Well, now the G7 will pull out ALL the stops this weekend and we will be up 2000 points on Monday!

Its Down 6000 pts since the 14000….

I would agree that there is no reason to evict a paying tenant from a rental home where the owner is defaulting. I would also think that a rational foreclosing bank should be willing to give the former owner a lease. The property can be sold with a lease and the property won’t get trashed while vacant.As a small landlord (14 unit apt house) I have benefited from the housing crisis – rents are up in SF Bay area since former home owners have to find apartments.

Kudos to the poster who called for a rally of hundreds of points -

This is a pattern that can be observed most days. No skill required.

Welcome to the new order – 1000 point daily swings

quick, get the ppt back on the job – they left too soon…

40 million shares for sale at closing…. unbelievable.. going red… oops just went red

How’d you like to be the press trying to cover this market? lol

It’s down! No wait! It’s up! No, it’s down! Ahhhhh!!! Just make the voices stop!!!!

Is this what a stock market will look like in a hyperinflationary environment?

Well … pretty interesting conclusion to trading today.The Dow still closed down by 120 points.A strong rally was expected at the end of the day due to short covering .It materialized at 3:30 pm – right on time.But amazingly, the peak from the short-cover rally was sold off againin the last few minutes of trading.As Yoda used to say on Star Wars:”The future … unclear it is”.Since Congress signed the “rescue bill” we must be down at least 2,000 points on the Dow. Anyone think they’ve got the message yet?PeteCA

No, it will go up nominally, but not in real terms

Brave New World (Hellasious)October 9, 2008 — The US government announced that it may take ownership stakes in banks in order to promote lending. What exactly are they going to do, call out the Guard to round up the good citizens, frog march them to the bank and force them to take out overdrafts at the point of a gun? How incredibly, unfathomably short-sighted… Can’t these people see past their noses? (No, in fact they cannot).Rule one of finance (amongst many such number ones): never let them see you sweat. And the entire US banking/finance/government establishment is sweating so much that it is drowning the whole world in their worry.Take Mr. Bernanke, for example: he’s expanding the Fed’s actions on a daily basis – to no avail. He has entirely misdiagnosed what is happening as a severe, but transient crisis of confidence that can be overcome by piling on more and more government debt. In fact, however, we are at the starting point of a deeper, wider and radical transformation of the global economy, one that will ultimately lead us away from the faux riches of Permagrowth and towards a more sustainable future.Finance as practised in the last 30 or so years has no place in this brave new world. There is no room – or any need whatsoever – for chop-and-shop LBO strippers, asset pumpers, market operators, derivatives designers, financial engineers… No, this gallery of rogues has seen the end of their days. Instead, relationship finance will fast make a comeback, if only because the manufacture and placement of unprovenanced securities to faceless “investors” is no longer possible. From now on real investors – the only ones still left standing – will ask for every detail and reason behind their potential investments.And the market knows… The collective wisdom of millions acting in their self-interest has ground market prices of old-style financial companies into dust. That’s no coincidence and no “crisis”, either. It’s the most obvious sign that the Pony Express is no more… And like all major turning points there will be plenty of opportunity for those with foresight, once the dust settles;http://suddendebt.blogspot.com/

And turns out President Bush is more effective crying, “Wolf,” than giving the “everything’s okay” signal. Regarding this morning’s pep talk: Of thirteen Bush speeches to calm the equity markets during the current crisis, after seven of them the market averages continued to move lower.

Pete, you or some other thoughtful blogger posted the link to Krugman’s “Can Deflation Be Prevented?” (his reaction to The Economist article on deflation threats).I think I understand what he is saying — that “a large part of the world will start to look like Japan” and “will face deflationary pressures that cannot be offset simply by increasing the money supply” — and his concern at the paradoxical approach of fighting deflation by promising inflation.But other than by policy fiat and artificial asset propping up, what forces are at work right now to suppress a tighter inflationary Fed policy? In other words, why hasn’t Bernanke been forced to RAISE short-term interest rates instead of cutting them?I’m in favor or Volcker style tightening, why shouldn’t I be?I’m new to this and probably naive, but I’d appreciate your and others responses.Best,Hattie

I was searching for the G7 website but came up with this only. — this is the statement from September 22, 2008 which is cause for great hope that they will get this resolved…and if that doesn’t happen we can look forward to the G20 meeting on Sunday…. (should have shorted) G7 / G8 Website September 22, 2008_______________________________Statement by G7 Finance Ministers and Central Bank Governors on Global Financial Market TurmoilSeptember 22, 2008The G7 held a conference call today to discuss global financial markets. We reaffirm our strong and shared commitment to protect the integrity of the international financial system and facilitate liquid, smooth functioning markets, which are essential for supporting the health of the world economy.We strongly welcome the extraordinary actions taken by the United States to enhance the stability of financial markets and address credit concerns, especially through its plan to implement a program to remove illiquid assets that are destabilizing financial institutions. We also strongly welcome the measures taken by other G7 countries. Major central banks have been coordinating to address liquidity pressures in funding markets, which has been critical in addressing disruptions in global financial markets. Several regulators have taken decisive actions to combat market manipulation and stabilize financial markets, including a temporary ban on short selling of financial stocks.We recognize the importance of making regulation more effective and bringing investors back into a liquid and stable marketplace. We remain committed to full and rapid implementation of the Financial Stability Forum (FSF) recommendations to enhance the resilience of the global financial system for the longer term. We look forward to the FSF report this fall on progress made in strengthening prudential supervision and regulation, improving firms’ risk management practices, enhancing disclosure and transparency, and strengthening accounting frameworks.We pledge to enhance international cooperation to address the ongoing challenges in the global economy and world markets and maintain heightened close cooperation between Finance Ministries, Central Banks and regulators. We are ready to take whatever actions may be necessary, individually and collectively, to ensure the stability of the international financial system.http://www.g8.utoronto.ca/finance/fm080922.htm

kilgores on (2008-10-09 22:31:17)”I must say, you are a dedicated hyperbolist…and a paranoid one at that.”I must say, Mr. Kilgores, having more than a few personal friends, some of them former lovers, who were among others assassins for USMC, US Army Special Forces, Executive Outcomes, Blackwater, NSA, MI6, IRA, FFL, and the Mujahadeen; and secondly having spent over a year in an African prison cell, the only white face among at least 40 others of the darker green variety, all of them with murder records; all of whom were petrified of me (a pacifist in for contempt in facie curiae, for calling the prosecutor a stupid black ka**ir bitch)… and who has worked personally (as in their private home, living with their family) for two family members of the Committee of 300; your accusations of ‘paranoia’ are hilarious…Take a look at these financial wizards around the world’s paranoia Mr. Kilgores, and they ain’t ever spent one day in a Club Fed prison, with Big Black Bubba wanting his little weenie lubricated… And they are panicking like a bunch of chickens who just got their heads chopped off…FOR WHAT??? Pieces of paper worth ZERO!!!!!They are slowly painfully waking up (well hopefully for their sakes a few of them are) up to the illusion that they have bet their entire lives on, that is nothing more fancy than a children’s Alison in Wonderland financial existential fairytale, about the Seven Little Dwarves who take a bunch of paper and stick a few fancy little masonic stamps on it, and then call it ‘money’ something of intrinsic value, and like koolaid they drink the Reverend Seven Dwarves Jone’s Coolaid….And whose a little paranoid now??? You think the fella’s on the New York Slavery Exchange are confident in their little financial Wizard of Oz Cinderella fairyland financial story???? Or they being a bit PARANOID????As for hyperbolist…. THAT’S HILARIOUS…Spend a couple of days with some of my assassin friends, and hear some of their stories… and you will realize what I have been saying has been THE OPPOSITE OF HYPERBOLE…. it has been a massive UNDERSTATEMENT…But as Voltaire said, ‘It is difficult to free fools from the chains they revere’..From **1995**; With *1776*PS: Do you play RRRINT-POKER?

Please define “pharisee investment banking.”

You’re a cunning linguist but hardly a master debater.

PROTOCOL OF ELDERS OF ZIONhttp://www.youtube.com/watch?v=7XrRyqses5U&feature=relate

Talking about Share Value:In the running of a publically listed corporation the share value first and dividend second are the most important factors and the major focus of the whole executive, and Board members, a priori. So it is natural that compensation is pegged in this manner.In main, executives of these companies are not selected for any particular skills sets but for their pedigree and social network in all regulatory, banking and political arena; ‘Old School Boy’ sort of stuff.Running a private company is completely different.I believe to blame “greed” is an emotional error, in hind sight, as it is just an expression of ‘possibility’ that is, ‘I can because I can’ and therefore why not? We humans should push the edge as that is what makes living worthwhile and if not, we are just “Waiting to Die”.No, the fundamental errors are far simpler than this question and are:1. A total non-comprehension of “economics” and an establishment of a Priesthood of dogma attending to all things socio-economics, that ignore the fundamentals of life through established Physics (science if you will).2. The adoption of faith-based solutions for the building of socio-economic structure, and3. The election of faith-based “leadership”4. The belief that it is wrong to question everything, including Authority and the promotion of that belief at “leadership” levels.5. The belief that all men are clones (for want of a better expression).6. The insistence that this ‘static’ system of control must be imposed on the ‘dynamic’ socio-economic system while ignoring the Laws of Physics and always propping the whole thing up as it continually collapses; in other words, failing to be “adaptive”.Apologies for being repetitive.Ho hum

I just read that the Lehman auction when well. The 8 billion that will be due is very manageable.DOES THIS NOT SEEM LIKE THE CRISIS IS OVER ?That maybe this is what will free up the banks ?

Guest (2008-10-10 16:09:14)”You’re a cunning linguist but hardly a master debater.”Plausibly because I consider master debating beyond boring…. One of my former radical honesty guru’s said, if a man can’t ‘get it’, by saying whatever you have to say in blunt GI language, try a sexual analogy… If he still can’t…. he’s got the mind of a prole…In that context… ‘Master debating’ is like choosing to put your weenie in an emotional and psychological stinking dead corpse; radical honesty communion communication is like spending time practicing hours of playful emotional, psychological, sexual, spiritual multiple-orgasm sex…, where the simple soft touch of a feather, or a drop of ice, or similar, can result in one of many petit noir’s…

Breaking NewsG7 says current situation calls for urgent, exceptional action; agrees to take all necessary steps to unfreeze credit, money markets 6:09pm EDThttp://www.reuters.com/

prepare for disappointment Bloomberg

But when are the settlements due?I guess that is the real question

G7 Finance Ministers and Central Bank GovernorsPlan of ActionOctober 10, 2008, Washington DCThe G7 agrees today that the current situation calls for urgent and exceptional action. We commit to continue working together to stabilize financial markets and restore the flow of credit, to support global economic growth. We agree to:Take decisive action and use all available tools to support systemically important financial institutions and prevent their failure.Take all necessary steps to unfreeze credit and money markets and ensure that banks and other financial institutions have broad access to liquidity and funding.Ensure that our banks and other major financial intermediaries, as needed, can raise capital from public as well as private sources, in sufficient amounts to re-establish confidence and permit them to continue lending to households and businesses.Ensure that our respective national deposit insurance and guarantee programs are robust and consistent so that our retail depositors will continue to have confidence in the safety of their deposits.Take action, where appropriate, to restart the secondary markets for mortgages and other securitized assets. Accurate valuation and transparent disclosure of assets and consistent implementation of high quality accounting standards are necessary.The actions should be taken in ways that protect taxpayers and avoid potentially damaging effects on other countries. We will use macroeconomic policy tools as necessary and appropriate. We strongly support the IMF’s critical role in assisting countries affected by this turmoil. We will accelerate full implementation of the Financial Stability Forum recommendations and we are committed to the pressing need for reform of the financial system. We will strengthen further our cooperation and work with others to accomplish this plan.http://www.g7.utoronto.ca/finance/fm081010.htm

But if you offer a subsidy for “childrens wooden arrows” maybe we can work something out.

are’nt the banks and govts already doing this?

Weak, but what else did we expect. Nation-states are acting for their own interests. Those placing their hope in this group or global cooperation will, I think, be disappointed.

It says nothing and in that it says everything. Monday will be another interesting day — Where can you buy gold on the weekend:

the announcement is nothing new – just that the US govt will begin implementing the bailout package directive of buying assets or buying stock in financial institutions

The sound of a balloon deflating while wet?It’s what you get from “leadership” for your dollar.Ho hum

US confirms it will take equity position in certain US banks. — dilution?? — Paulson needed to save this announecment just in case the G7 dithered. Paulson states it would be naive to think a coordinated banking back stop could be accomplished.Nationalizing certainly did wonders for the UK markets.After hours market activity for the banks pre and post the announcment – very very slight movement to the upside once announcement made.Wells from 28.30 to 28.75Citi from 14.42 to 14.50BAC from 21.04 to 21.45etc etc

PeterJB (2008-10-10 18:08:37)Your answers to remote REAL TIME ACCESS TO PRETTY MUCH EVERY SINGLE BANK AND MULTINATIONAL CORPORATION’S ALLEGED ‘SECURE’ DATA, by following the following…. (PS: HUMINT & SIGINT cognitive awareness required)1. PRAVDA: PPPINT: “The Financial/Economic 911 of 2008 was pre-planned”, Pravda2. PTECH / PROMIS SOFTWARE: All those financial wizard on the Cannon Fodder Slavery Exchange, may be very surprised to find out about Promis Software:PROMIS SOFTWARE4/4/05: Clarifications Regarding Ptech Software1/27/05: THE FAA KNEW! But Were They Set Up? – by Michael Kane- A newly released 9/11 Commission document reveals that between April and September 10, 2001, FAA leaders recieved some 52 warnings about the al Qaeda threat to US aviation. But now the story’s spin is pointing straight in the wrong direction.1/27/05: PTECH, 9/11, and USA-SAUDI TERROR PART II – PROMIS Connections to Cheney Control of 9/11 Attacks Confirmed – by Michael Kane- The FAA & Ptech- Debriefed by Secret Service – looking for a PROMIS- Muslim Brotherhood, Christian Cultists, and Nazis1/20/05: PTECH, 9/11, and USA-SAUDI TERROR, Part IPROMIS Connections to Cheney Control of 9/11 Attacks Confirmed. by Jamey Hecht, with research assistance by Michael Kane and editorial comment by Michael C. Ruppert.Wall St. whistleblower Indira Singh tells an insider’s story of corruption in the very highest places. Software of incredible power has been funded by confirmed Saudi terrorists and installed on systems in the FAA — and NORAD, and the FBI, and the White House, and the Navy, and the House of Representatives, and on and on. Its roots are in PROMIS, and its applications range from 9/11 to TIA to a chilling new brand of warfare that may soon be used to cripple Iran.3/3/02: Post 9-11 Microbiologist Fatalities Now as High as 14.New and Ominous Connections to DynCorp and Promis Software Connections Emerging. A Career In Microbiology Can Be Harmful To Your Health (Revised – updated)12/18/03: THE BACKGROUND IS OILA global oil crisis that cannot be postponed or evaded is upon us. Geologist Dale Allen Pfeiffer explains — in layman’s terms a context for recent events that makes the inexcusable actions of the Bush administration understandable. Some groups will do anything to avoid letting go of power, including killing millions of people. Who’s next?11/19/01: Osama bin Laden is likely in possession of software that can compromise the U.S. military, intelligence and financial systems.As established by court records and congressional hearings the government stole the software eighteen years ago. – [UPDATED, NOV. 19]10/26/01: Promis Software (Expanded Story)- bin Laden Inside DoJ and the FBI Computer Systems? – Connections to Threats Received By Air Force One – Britain Germany In The Lurch – Legal Crisis for the U.S. Government Which Stole The Software in the First Place – Money Laundering Investigations Compromised – An Inside Look at What Promis Can Do And Why There Is Reason to Worry.9/30/01: PROMIS Software History by Mike RuppertAnd Finally…PROJECT ICC-CAVIAR PROMISE JUSTICE….

Exactly! Crisis = OpportunityI bought the market near the close today, buying high-yielding dividend paying stocks. SO MUCH MONEY sitting on the sidelines just waiting to get back in the market. Something has to come from all these meetings this weekend, otherwise it’s CHECKMATE FOR THE ENTIRE GLOBAL COMMUNITY. I really wish someone would suggest a solution to all the counterparty CDS risk which is what is dragging this market down. I suggest a TEAR-UP session that parties can agree upon, noting that contract law exists but can be diverted if parties agree not to exercise their rights based upon the potential COLLAPSE OF THE GLOBAL FINANCIAL SYSTEM. Why isn’t anyone proposing this alternative? Don’t people know that the counterparties do not have the capital to withstand huge losses to which they are exposed? To me, CDS counterparty risk IS the primary reason we are in this mess. Hedge funds insure 32% of the 60 Trillion dollar CDS market. Do you think maybe, just maybe we should find a viable solution in order to save the world from collapse?