Wednesday, April 29, 2009

Wise Words From The Past

"If the American people ever allow private banks to control the issue of their currency, first by inflation then by deflation, the banks and the corporations will grow up around them, will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
Thomas Jefferson

Thank you Jesse

Why Congress Won't Investigate Wall Street

Cloud Cuckoo's land

Save a total meltdown, it is clear that we should not expect any changes in the financial world for the coming 10 years.

Wall street is eager to find the next bubble to inflate. Congress will assist Wall street with looking the other way as they are too deeply involved with each other.

The amount of money Wall street paid to buy favours of Congress is US$ 5 Billion. No chance for independent and critical thinkers .

There is one loner called Ron Paul (R), but he is being looked at as a nut by both politicians and media.

Is the American middle class calling for changes? No, the middle class is heavily invested in the financial system and is hardly about to organize for its overthrow.

People who have lost half the value of their 401(k) plans want to regain it by having the economy rebound, not by seizing the assets of ExxonMobil Corp.

People who have lost a home want to rebuild their credit and buy another one, not liberate the property of the wealthy.

Where are we now? We are now in Cloud Cuckoo's land. If you look to the right you won't see anything on the left....

Why Congress Won't Investigate Wall Street

Republicans and Democrats would find themselves in the hot seat.

Wall street Journal ; Thomas Frank

The famous Pecora Commission of 1933 and 1934 was one of the most successful congressional investigations of all time, an instance when oversight worked exactly as it should. The subject was the massively corrupt investment practices of the 1920s. In the course of its investigation, the Senate Banking Committee, which brought on as its counsel a former New York assistant district attorney named Ferdinand Pecora, heard testimony from the lords of finance that cemented public suspicion of Wall Street. Along the way, the investigations formed the rationale for the Glass-Steagall Act, the Securities Exchange Act, and other financial regulations of the Roosevelt era.

A new round of regulation is clearly in order these days, and a Pecora-style investigation seems like a good way to jolt the Obama administration into action. After all, the financial revelations of today bear a striking resemblance to those of 1933. In his own account of his investigation, Pecora described bond issues that were almost certainly worthless, but which 1920s bankers sold to uncomprehending investors anyway. He told of the bonuses which the bankers thereby won for themselves. He also told of the lucrative gifts banks gave to lawmakers from both political parties. And then he told of the banking industry's indignation at being made to account for itself. It regarded the outraged public, in Pecora's shorthand, as a "howling mob."

The idea of a new Pecora investigation is catching on, particularly, but not exclusively, on the left.

It's probably not going to happen, though, in the comprehensive way that it should. The reason is that understanding our problems, this time around, would require our political leaders to examine themselves.

The crisis today is not solely one of bank misbehavior. This is also about the failure of the regulators -- the Wall Street policemen who dozed peacefully as the crime of the century went off beneath the window.

We have all heard the official explanation for this failure, that "the structure of our regulatory system is unnecessarily complex and fragmented," in the soothing words of Treasury Secretary Tim Geithner. But no proper Pecora would be satisfied with such piffle. The system was not only complex, it was compromised and corrupted and thoroughly rotten even in the spots where its mandate was simple.

After all, we have for decades been on a national crusade to slash red tape and stifle regulators. Over the years, federal agencies have been defunded, their workers have grown dispirited, their managers, drawn in many cases from antiregulatory organizations, have seemed to care far more about industry than the public.

Consider in this connection the 2003 photograph, rapidly becoming an icon of the Bush years, in which James Gilleran, then the director of the Office of Thrift Supervision (it regulates savings and loan associations) can be seen in the company of several jolly bank industry lobbyists, holding a chainsaw to a pile of rule books. The picture not only tells us more about our current fix than would a thousand pages about overlapping jurisdictions; it also reminds us why we may never solve the problem of regulatory failure. To do so, we would have to examine the apparent subversion of the regulatory system by the last administration. And that topic is supposedly off limits, since going there would open the door to endless partisan feuding.

But it's not only Republicans who would feel the sting of embarrassment. Launching Pecora II would automatically raise this question: Whatever happened to the reforms put in place after the first go-round?

Now a different picture comes to mind. It's Bill Clinton in November of 1999, surrounded by legislators of both parties, giving a shout-out to his brilliant Treasury Secretary Larry Summers, and signing the measure that overturned Glass-Steagall's separation of investment from commercial banking. Mr. Clinton is confident about what he is doing. He knows the lessons of history, he talks glibly about "the new information-age global economy" that was the idol of deep thinkers everywhere in those days. "[T]he Glass-Steagall law is no longer appropriate to the economy in which we live," he says. "It worked pretty well for the industrial economy, which was highly organized, much more centralized, and much more nationalized than the one in which we operate today. But the world is very different."

It turns out the world hadn't changed much after all. But the Democratic Party sure had. And while today's chastened Democrats might be ready to reregulate the banks, they are no more willing to scrutinize the bad ideas of the Clinton years than Republicans are the bad ideas of the Bush years.

"We may now need to be reminded what Wall Street was like before Uncle Sam stationed a policeman at its corner," Pecora wrote in 1939, "lest, in time to come, some attempt be made to abolish that post."

Well, the time did come. The attempt was made. And we could use that reminder today.

Tuesday, April 28, 2009

Monday, April 27, 2009

Run To Gold

Are we living in a real world or a fantasy world?

The answer can be found in these pics, which say more than a thousand words.


Sunday, April 26, 2009

Housing Bubble Smackdown: Bigger Crash Ahead. Huge "Shadow Inventory"

Approximately 600.000 properties have been foreclosed but not put on the market. Foreclosures are a major factor driving home prices down. There is nothing Obama can do about this. The government will probably try to Zombify the housing market also. Perhaps through a national moratorium. But the point is: you have to confront the problem: today or tomorrow. You just have to. The denial is enormous.
Moral of the story: House prices in the US still have a long way to go down.

Mike Whitney, April 21st, 2009

Due to the lifting of the foreclosure moratorium at the end of March, the downward slide in housing prices is gaining speed. The moratorium was initiated in January to give Obama's anti-foreclosure program---which is a combination of mortgage modifications and refinancing---a chance to succeed. The goal of the plan was to keep up to 9 million struggling homeowners in their homes, but it's clear now that the program will fall well-short of its objective.

In March, housing prices accelerated on the downside indicating bigger adjustments dead-ahead. Trend-lines are steeper now than ever before--nearly perpendicular. Housing prices are not falling, they're crashing and crashing hard. Now that the foreclosure moratorium has ended, Notices of Default (NOD) have spiked to an all-time high. These Notices will turn into foreclosures in 4 to 5 months time creating another cascade of foreclosures. Market analysts predict there will be 5 MILLION MORE FORECLOSURES BETWEEN NOW AND 2011. It's a disaster bigger than Katrina. Soaring unemployment and rising foreclosures ensure that hundreds of banks and financial institutions will be forced into bankruptcy. 40 percent of delinquent homeowners have already vacated their homes. There's nothing Obama can do to make them stay. Worse still, only 30 percent of foreclosures have been relisted for sale suggesting more hanky-panky at the banks. Where have the houses gone? Have they simply vanished?


Here's a excerpt from the SF Gate explaining the mystery:

"Lenders nationwide are sitting on hundreds of thousands of foreclosed homes that they have not resold or listed for sale, according to numerous data sources. And foreclosures, which banks unload at fire-sale prices, are a major factor driving home values down.

"We believe there are in the neighborhood of 600,000 properties nationwide that banks have repossessed but not put on the market," said Rick Sharga, vice president of RealtyTrac, which compiles nationwide statistics on foreclosures. "California probably represents 80,000 of those homes. It could be disastrous if the banks suddenly flooded the market with those distressed properties. You'd have further depreciation and carnage."

In a recent study, RealtyTrac compared its database of bank-repossessed homes to MLS listings of for-sale homes in four states, including California. It found a significant disparity - only 30 percent of the foreclosures were listed for sale in the Multiple Listing Service. The remainder is known in the industry as "shadow inventory." ("Banks aren't Selling Many Foreclosed Homes" SF Gate)

If regulators were deployed to the banks that are keeping foreclosed homes off the market, they would probably find that the banks are actually servicing the mortgages on a monthly basis to conceal the extent of their losses. They'd also find that the banks are trying to keep housing prices artificially high to avoid heftier losses that would put them out of business. One thing is certain, 600,000 "disappeared" homes means that housing prices have a lot farther to fall and that an even larger segment of the banking system is underwater.

Here is more on the story from Mr. Mortgage "California Foreclosures About to Soar...Again"

"Are you ready to see the future? Ten’s of thousands of foreclosures are only 1-5 months away from hitting that will take total foreclosure counts back to all-time highs. This will flood an already beaten-bloody real estate market with even more supply just in time for the Spring/Summer home selling season...Foreclosure start (NOD) and Trustee Sale (NTS) notices are going out at levels not seen since mid 2008. Once an NTS goes out, the property is taken to the courthouse and auctioned within 21-45 days....The bottom line is that there is a massive wave of actual foreclosures that will hit beginning in April that can’t be stopped without a national moratorium."

JP Morgan Chase, Wells Fargo and Fannie Mae have all stepped up their foreclosure activity in recent weeks. Delinquencies have skyrocketed foreshadowing more price-slashing into the foreseeable future. According to the Wall Street Journal:

"Ronald Temple, co-director of research at Lazard Asset Management, expects home prices to fall 22% to 27% from their January levels. More than 2.1 million homes will be lost this year because borrowers can't meet their loan payments, up from about 1.7 million in 2008." (Ruth Simon, "The housing crisis is about to take center stage once again" Wall Street Journal)

Another 20 percent carved off the aggregate value of US housing means another $4 trillion loss to homeowners. That means smaller retirement savings, less discretionary spending, and lower living standards. The next leg down in housing will be excruciating; every sector will feel the pain. Obama's $75 billion mortgage rescue plan is a mere pittance; it won't reduce the principle on mortgages and it won't stop the bleeding. Policymakers have decided they've done enough and are refusing to help. They don't see the tsunami looming in front of them plain as day. The housing market is going under and it's going to drag a good part of the broader economy along with it. Stocks, too.

Mike Whitney is a frequent contributor to Global Research. Global Research Articles by Mike Whitney

Creating a Zombie Economy

Proof again:
  • that a government should stay away from interfering in an economy,
  • that the US government is in absolute denial on what it happening,
  • that it is more interested in protecting the status quo as they have been bought by Wall street
  • that it is creating a Zombie economy of which the recovery will take at least 10 years.
But what do you expect: it did cost Wall street 5 Billion US$ to buy Congress. Consider this article!

And Today It Is Payday!!

Here They Come To Save The Day

Peter Schiff, EuroPacific Capital

With much fanfare this week, Congress and the Administration began a series of actions designed to protect over-leveraged consumers from the high fees imposed by credit card lenders. As with most other initiatives devised by government, this policy will create a host of unintended consequences that will undermine the benefit the program hopes to create.

Anyone who carries a credit card knows that billing practices have become much more aggressive, punitive, and seemingly arbitrary over recent years. Sadly, these fees have become one of the only means the companies can use to compensate for the increasing defaults on their unsecured loans.

By mandating that the credit card companies lower their fees, the government will severely hinder their tenuous profitability. In order to avoid bankruptcy, the companies will have to deny credit to marginal borrowers, which would reverse the "easy access" policies that have defined the industry over the last generation. The resulting contraction in consumer credit will run contrary to current Administration efforts to keep Americans spending. The horns of this dilemma are completely missed in Washington.

In better times, when companies could make money from interest charged on a high-performing loan book, companies could perhaps compete on better customer service and transparency. Unfortunately, desperate times have called for desperate measures. And rather than seek to break their reliance on credit through harsh reductions in spending, many Americans have waded into the snake pit despite the costs.

Among other things, Congress objects to credit card issuers raising interest rates and cutting back on lines of credit for those borrowers deemed at heightened risk of default. One practice, called "universal default", in which card issuers take into account a cardholder's total liabilities, not just what is owed on a single card, has drawn particular Congressional fire. In this system, delinquency on one account will often affect rates charged on all accounts, even those where the borrower is still current.

Also under scrutiny is the very concept of lenders raising rates on existing balances to reflect heightened risks, despite the fact that their ability to do so is spelled out in advance. The concept is similar to adjustable rate mortgages, where borrowers initially get lower rates but face the possibility of higher rates should circumstances change. Without the ability to raise rates, lenders will have no choice but to charge much higher rates from the start.

The bottom line is that credit card lending is a very risky business. The debts are unsecured and the probability of default is high, meaning big losses should borrowers choose not to pay. In addition, should a borrower file for bankruptcy, credit card debt is often the first to be discharged. Given the risks, interest rates need to be very high to keep lenders in business.

One way to keep a lid on rates for those who do pay is for lenders to weed out those most likely to default. This can be accomplished through higher rates. Not only does this discourage riskier borrowers from taking on more debt, but it gives lenders a bigger cushion to absorb losses. However, by interfering with card issuers' attempts to better price risk and limit losses, the government will reduce credit availability.

The securitization process, infamously associated with mortgage debt, has also been utilized extensively with credit card debt and has greatly spurred the growth of consumer credit. As a result of securitization, lenders were able to immediately offload their loans to Wall Street, which repackaged and sold them to investors around the world. In this way, credit card issuers became more concerned with loan volume and less concerned with loan risk. However, now that huge losses in credit card-backed bonds have reduced investor demand (despite recent multi-billion dollar Fed purchases), card issuers need to hold loans on their own books. Greater prudence is resulting.

Ironically, this is the one potential silver lining to this cloud. By making credit card lending even riskier, this bill will actually make it harder for consumers to get credit. Since excess consumer credit is part of the problem, restricting that credit is part of the solution. However, while I approve of the ends, it is certainly not justified by the means.

It would be preferable to simply allow markets to function. Higher losses among credit card lenders and higher rates for credit card users would greatly diminish both the availability and desirability of consumer credit. Fear of losses and the absence of a secondary market to unload risk would force lenders to more judiciously extend credit. Simultaneously, higher rates would reduce the appeal of credit card debt, causing fewer Americans to partake.

These mechanisms would begin the painful process of weaning the nation from its addiction to credit. Ironically, this is what President Obama has said is necessary.

Of course, there is also a good chance that this silver lining will prove a mirage. When the banks attempt to restrict credit as a result of their business concerns, the government will most likely funnel more taxpayer "bailout" money to banks to entice them to keep lending. In typical government fashion, rather than letting market forces work, our government will force bad decisions on companies and then subsidize resulting losses. Isn't this starting to sound familiar?

Peter D. Schiff, President/Chief Global Strategist, Euro Pacific Capital, Inc.

South African Election (Final Update)

Vote tally for the national ballot paper, as of 13h09 April 25 2009

Current national results
Votes Percentage
A PARTY 2,847 0.02%
ACDP 142,658 0.81%
ANC 11,650,748 65.90%
APC 35,867 0.20%
AL JAMAH 25,947 0.15%
AFD 5,178 0.03%
AZAPO 38,245 0.22%
CDA 11,638 0.07%
COPE 1,311,027 7.42%
DA 2,945,829 16.66%
GKSA 8,271 0.05%
ID 162,915 0.92%
IFP 804,260 4.55%
KISS 5,440 0.03%
MF 43,474 0.25%
MDP 29,747 0.17%
NADECO 10,830 0.06%
NVP 9,296 0.05%
PAC 48,530 0.27%
PAM 5,426 0.03%
SADECO 6,035 0.03%
UCDP 66,086 0.37%
UDM 149,680 0.85%
UIF 8,872 0.05%
FF+ 146,796 0.83%
WF 5,087 0.03%
Total 17,680,729 100.00%
Registered voters 23,181,997
Total votes counted 17,919,966
% turnout 77.3%

Saturday, April 25, 2009

Anglo Bankings Off The Freeway Heading for a Donkey Track

Looks misty to me!

News Kontent

The banking system is broken. Repeat it after me, the banking system is broken. Australian Banks will one day have to deal with falling housing prices, bad commercial real estate loans, high unemployment, credit card blowups and a loss of guaranteed funding via the Federal government.

Obviously these news attempts are offered to sooth the herd. We’ve got some news for Timmy. That bag of tricks and sleight of hand promulgated by our government, its lackies, minions, and the Goldman Sachs crowd, is in the open and on the table. Not only are the Sheeple getting the drift but we envision pitchforks and torches after our current Tea Parties. No wonder the Defense Department is training 80,000 troops to protect against domestic insurrection this summer.

Other signs of trauma related to these messes were provided yesterday by Mr. Ken Lewis, the CEO at Bank of America. This morning’s Wall Street Journal is splashed on page one with photos of Lewis, Hank Paulson and Chopper Ben Bernanke. This latest story is not a pretty one as Liz Rappaport (the WSJ writer) sez ‘ol Hank told Kenny to shut-up about undisclosed troubles at Merrill during BOA’s Merrill Lynch acquisition. It seems Hank forbid Mr. Lewis to disclose Merrill’s woes while the international financial system was drain diving. Now, Mr. Lewis is between a rock and hard place.

CNBC reported today that Mr. Lewis was instructed to do some things by Paulson that fly in the face of SEC Rules in an effort to keep the lid on the Merrill transaction. Lewis, it appears to us, violated these rules as instructed but is now wide-open to Merrill and BOA shareholder criticism. We noticed too, that Hank Paulson was quick to pin the blame (the government’s gag order to Lewis) on Chopper Ben, so he himself is not caught-up in this mess. What a circus!

As it turns out relative to these massive acquisitions, Lewis got stuck with two huge, stinking piles of dung; one was Merrill and it’s previous good name overloaded with derivatives. And, the second big mistake was his purchase of Countrywide Financial proving to be a worse turkey than several Enron’s combined. Now, we suspect Mr. Lewis loses his job for following Paulson’s orders.

Next, it appears judicial vultures have arrived and perched in rows on the fence at Wall & Broad. Perhaps Mr. Lewis is steering toward an early and unexpected retirement. But, his proposed beach and golf time might revert to something unkind if New York’s Attorney General has something to say about these things. And, this AG is looking with new interest and a magnifying glass as lots of this naughty stuff apparently happened in the Big Apple on New York AG Andrew Cuomo’s turf.

The United States Of Goldman Sachs, Inc.

Some how, some way, despite their reptilian attempts to smother and hide these scams, the light of day is getting much brighter-much faster. Paulson and Timmy along with Benny have conspired to reflate Goldman’s balance sheet tossing nearly, or over $200 Billion of taxpayer cash to AIG. Of course it’s not AIG that’s getting healed. Its Goldman getting most of the AIG funneled billions in derivative pay-offs leaving some other scraps for a few others. We saw an email from Germany yesterday indicating a majority of the top twenty banks were toast and that Goldman in particular was 1,000% underwater on derivatives versus capital. The original information source on this was Turner Radio but the delivery man remains unnamed. Is this just internet gossip? We doubt it.

Ya gotta wonder how many other fiscal tragedies were residing in this global derivatives debacle and were made whole by similar actions. We would suggest less than five major banks and their associated cohorts were the strongest beneficiaries from this honey pot of taxpayer benevolence.

When you have your key soldiers (Goldman) in every important economic, banking, and government controlling position in the western hemisphere, you not only own Wall Street but you own the US Government’s mint keys and all related media. The next big question is; how many more bad loans and debts are out there in the economic mist? We think only 10-15% has surfaced so far. Even if our estimate is mostly wrong, capitalization of the bigger banks is a goner. These banks are technically bankrupt right now. How bad does it get? We cannot tell and neither can anyone else.

Friday, April 24, 2009

A FBI Interrogator Speaks Out Against Torture

New York Times

Ali Soufan, April 22nd, 2009

FOR seven years I have remained silent about the false claims magnifying the effectiveness of the so-called enhanced interrogation techniques like waterboarding.

I have spoken only in closed government hearings, as these matters were classified.

But the release last week of four Justice Department memos on interrogations allows me to shed light on the story, and on some of the lessons to be learned.

One of the most striking parts of the memos is the false premises on which they are based. The first, dated August 2002, grants authorization to use harsh interrogation techniques on a high-ranking terrorist, Abu Zubaydah, on the grounds that previous methods hadn’t been working. The next three memos cite the successes of those methods as a justification for their continued use.

It is inaccurate, however, to say that Abu Zubaydah had been uncooperative.

Along with another F.B.I. agent, and with several C.I.A. officers present, I questioned him from March to June 2002, before the harsh techniques were introduced later in August. Under traditional interrogation methods, he provided us with important actionable intelligence.

We discovered, for example, that Khalid Shaikh Mohammed was the mastermind of the 9/11 attacks. Abu Zubaydah also told us about Jose Padilla, the so-called dirty bomber.

This experience fit what I had found throughout my counterterrorism career: traditional interrogation techniques are successful in identifying operatives, uncovering plots and saving lives.

There was no actionable intelligence gained from using enhanced interrogation techniques on Abu Zubaydah that wasn’t, or couldn’t have been, gained from regular tactics.

In addition, I saw that using these alternative methods on other terrorists backfired on more than a few occasions — all of which are still classified. The short sightedness behind the use of these techniques ignored the unreliability of the methods, the nature of the threat, the mentality and modus operandi of the terrorists, and due process.

Defenders of these techniques have claimed that they got Abu Zubaydah to give up information leading to the capture of Ramzi bin al-Shibh, a top aide to Khalid Shaikh Mohammed, and Mr. Padilla.

This is false.

The information that led to Mr. Shibh’s capture came primarily from a different terrorist operative who was interviewed using traditional methods. As for Mr. Padilla, the dates just don’t add up: the harsh techniques were approved in the memo of August 2002, Mr. Padilla had been arrested that May.

One of the worst consequences of the use of these harsh techniques was that it reintroduced the so-called Chinese wall between the C.I.A. and F.B.I., similar to the communications obstacles that prevented us from working together to stop the 9/11 attacks.

Because the bureau would not employ these problematic techniques, our agents who knew the most about the terrorists could have no part in the investigation. An F.B.I. colleague of mine who knew more about Khalid Shaikh Mohammed than anyone in the government was not allowed to speak to him.

It was the right decision to release these memos, as we need the truth to come out. This should not be a partisan matter, because it is in our national security interest to regain our position as the world’s foremost defenders of human rights. Just as important, releasing these memos enables us to begin the tricky process of finally bringing these terrorists to justice.

The debate after the release of these memos has centered on whether C.I.A. officials should be prosecuted for their role in harsh interrogation techniques. That would be a mistake. Almost all the agency officials I worked with on these issues were good people who felt as I did about the use of enhanced techniques: it is un-American, ineffective and harmful to our national security.

Fortunately for me, after I objected to the enhanced techniques, the message came through from Pat D’Amuro, an F.B.I. assistant director, that “we don’t do that,” and I was pulled out of the interrogations by the F.B.I. director, Robert Mueller (this was documented in the report released last year by the Justice Department’s inspector general).

My C.I.A. colleagues who balked at the techniques, on the other hand, were instructed to continue. (It’s worth noting that when reading between the lines of the newly released memos, it seems clear that it was contractors, not C.I.A. officers, who requested the use of these techniques.)

As we move forward, it’s important to not allow the torture issue to harm the reputation, and thus the effectiveness, of the C.I.A.

The agency is essential to our national security. We must ensure that the mistakes behind the use of these techniques are never repeated.

We’re making a good start: President Obama has limited interrogation techniques to the guidelines set in the Army Field Manual, and Leon Panetta, the C.I.A. director, says he has banned the use of contractors and secret overseas prisons for terrorism suspects (the so-called black sites). Just as important, we need to ensure that no new mistakes are made in the process of moving forward — a real danger right now.

Ali Soufan was an F.B.I. supervisory special agent from 1997 to 2005.

South african Election Results (Update 6)

Vote tally for the national ballot paper, as of 9:26 am April 24 2009

Current national results
Votes Percentage
AP 2,073 0.02%
ACDP 98,772 0.77%
ANC 8,634,630 66.97%
APC 28,478 0.22%
AL JAMAH 11,562 0.09%
AFD 3,915 0.03%
AZAPO 29,091 0.23%
CDA 7,642 0.06%
COPE 987,680 7.66%
DA 2,030,398 15.75%
GKSA 6,298 0.05%
ID 117,425 0.91%
IFP 516,239 4.00%
KISS 3,525 0.03%
MFF 18,197 0.14%
MDP 23,185 0.18%
NADECO 8,127 0.06%
NVP 7,478 0.06%
PAC 36,830 0.29%
PAM 4,359 0.03%
SADC 4,521 0.04%
UCDP 56,701 0.44%
UDM 123,807 0.96%
UIF 6,752 0.05%
FF+ 122,132 0.95%
WF 3,389 0.03%
Total 12,893,206 100.00%
Registered voters 23,181,997
Total votes counted 13,073,951
% Counted 56.4%

Thursday, April 23, 2009


Clusterfuck Nation by Jim Kunstler


People of good intentions and progressive predilection are scratching their heads wondering just how President Barack Obama managed to turn himself into George W. Bush Lite with sugar-on-top just twelve weeks after that fateful walk down the US Capitol's east stairway to the waiting helicopter.

I'm hardly the first observer to note that Mr. Obama's actions in the face of an epochal finance fiasco and economic collapse are a mere extension of the pre-January-20 policies, carried out by much the same cast of characters.

The assumption up until now was something about the reassuring value of continuity -- if we could just prop up an ailing set of banks for a little while, the US public could resume a revolving credit way-of-life within an economy dedicated to building more suburban houses and selling all the needed accessories from supersized "family" cars to cappuccino machines.

This would keep everyone employed at the jobs they were qualified for -- finish carpenters, realtors, pool installers, mortgage brokers, advertising account executives, Williams-Sonoma product demonstrators, showroom sales agents, doctors of liposuction, and so on.

This was a dumb strategy for such a supposedly bright group of people surrounding Mr. Obama.

That old economy was dead on arrival January 20th. Even the kindest physicians don't put corpses on life support. This particular corpse has been placed in the world's cushiest intensive care unit, with transfusions running about a trillion dollars a month -- not to mention hefty bonuses for the attending nurses.

Instead, a fast and furious wake might have been held, with the corpse of the old economy laid out on a granite countertop for all to toast and bid farewell. President Obama might have led this exercise with some aplomb -- even while directing his new justice department warriors to round up a host of suspects in the old economy's suspicious death.

What it comes down to, apparently, is a leadership elite across all sectors -- politics, business, academia, media -- that is incapable of processing the truth, and then conveying it to the broad American public.

Alas, this also appears to be a common theme in history, with a commonly tragic outcome, which is that elites get ruthlessly dumped and replaced by new elites, often composed of zealots, maniacs, nincompoops, and others generally ill-disposed to the able management of complex affairs.

It's called the "circulation of elites," and in times of crisis it tends to take on a kind of downward spiraling flavor, with each gang of discredited leaders tossed out for a progressively worse one until a kind of exhaustion is reached -- whereupon the archetypal man-on-a-white-horse arrives on the scene.

Mr. Obama looked to be the man-on-a-white-horse -- on the exhaustion of Reagan-Bush Jesus-Republicanism -- but he's coming off more like Philippe Égalité (Louis Philippe Joseph d'Orléans, duc d'Orléans) in 1793, with perhaps Newt Gingrich waiting offstage to become Robespierre in 2012 -- and some obscure US Army captain now toiling in Kirkuk slated to become the American Napoleon of 2015.

As you've surely heard a thousand times now, history doesn't repeat itself but it rhymes.

The enormities of Wall Street today are a little like those of the French Ancien Régime at Versailles.

If America encounters the sort of disruptions of food and energy supplies that are brewing on the horizon, and unemployment keeps arcing up its current trajectory, civil uproars could easily follow.

Readers think I joke about the Hamptons going up in flames. But the antics of the bankers, hedge funders, the CEOs, the Madoffs, and even the P. Diddy's of our time, are liable to attract murderous attention as the public mood moves from sour to wrathful.

So, what people of good intention and progressive predilection want to know is how come Mr. Obama doesn't just lay out the truth, undertake the hard job of cutting the nation's losses, and get on with setting this society on a new course.

The truth is that we're comprehensively bankrupt, and no amount of shuffling certificates around will avail to alter that. The bad debt has to be "worked out" -- i.e. written off, subjected to liquidation of remaining assets and collateral, reorganized under the bankruptcy statutes, and put behind us. We have to work very hard to reconfigure the physical arrangement of life in the USA, moving away from the losses of our suburbs, reactivating our towns, downscaling our biggest cities, re-scaling our farms and food production, switching out our Happy Motoring system for public transit and walkable neighborhoods, rebuilding local networks of commerce, and figuring out a way to make a few things of value again.

What's happened instead is what I most feared: that our politicians would mount a massive campaign to sustain the unsustainable. That's what all the TARP and TARF and PPIT and bailouts are about.

It will all amount to an exercise in futility and could easily end up wrecking the USA in every sense of the term.

If Mr. Obama doesn't get with a better program, then we are going to face a Long Emergency as grueling as the French Revolution. One very plain and straightforward example at hand is the announcement last week of a plan to build a high speed rail network.

To be blunt about it, this is perfectly fucking stupid. It will require a whole new track network, because high speed trains can't run on the old rights of way with their less forgiving curve ratios and grades.

We would be so much better off simply fixing up and reactivating the normal-speed track system that is sitting out there rusting in the rain -- and save our more grandiose visions for a later time.

I don't like to be misunderstood. With the airlines in a business death spiral, and mass motoring doomed, we need a national passenger rail system desperately. But we already have one that used to be the envy of the world before we abandoned it. And we don't have either the time or the resources to build a new parallel network.

But grandiosity is just another way that we lie to ourselves about where we're at and what is really possible. Surely Mr. Obama knows that hope fades where the light of truth doesn't shine. He is a charming fellow. I don't especially want to see Newt Gingrich chop his head off.

Tuesday, April 21, 2009

The Failure of the Conventional Investment Universe

There are only a few bloggers out there seeing the imminent doom and gloom. Unfortunately I am one of them. The rest of the bloggers and the main stream media are applauding the messengers of green shoots and the emperor without clothes.

It is difficult to see a solution to the problems in the US. The Obama administration is too involved with Wall street to really fix things and kickstart the economy. "How to spin a positive story" will be part of their ongoing discussions.

Perhaps it is time for nuclear options, like a devaluation of the US$ with 30-50%. Or the creation of a new currency. The latter won't change anything; the former will.

What about initiating hyperinflation? Looks already like a done deal! Good for the US of A as debt will disappear quickly.
Bad for savers, but you know, they weren't part of the consumer herd anyway and therefore anti-patriotic, so why protect them?

Ever thought about initiating a war? That's a scary option. But this would deflect the attention quickly from economic hardship to a common enemy. The media would support this; they are "in the pocket" anyway. In front of me on the table I see a book called: "The Shock Doctrine" of Naomi Klein. In short: You just disaster-shock the hell out the population and afterward they will swallow every unpopular economic measure you present to them.

Whatever the Obama administration decides to do: gold will shoot to the moon.

There is not a lot of time left.

Gold Set for Huge Rally

Seeking Alpha
Peter Cooper; April 21st 2009

The gold price is poised to break through $1,000 an ounce this week and could reach $1,500 before a price consolidation. On Monday gold and silver closed higher while global stock markets fell as the five-week rally ended.

This is an important trend reversal and marks a shift by investors to safe haven assets in advance of another plunge in equity values.

The US dollar also strengthened across the board and bond prices rose. It is unusual to see both gold and the dollar rising together but again this normally signals an important trend reversal.

Money supply growth

The fundamental case for investment in precious metals has also become overpowering. Global bank bailout and stimulus packages have resulted in a huge increase in global money supply that has never had any effect except inflation in all history.

The gold supply by contrast is relatively fixed and production is actually falling. Supply is even tighter for silver – where stock levels are a hundredth of gold – and that is reason enough to expect the established pattern of silver outperforming gold will be repeated again.

As investors rotate their assets out of stocks and into alternative asset classes the best returns are therefore likely in precious metals, and such information tends to be self-fulfilling.

There are all sorts of minor trends supporting this basic trend, and like any true bull market there will be a compounding of supporting evidence: from a shortage of gold available for bank leasing to UK Prime Minister Gordon Brown’s call for IMF sales, often seen as a contrary indicator as his previous calls boosted gold prices.

Trend is your friend

However, in all investment markets it is the trend that is really your friend. The next dilemma will be how to best leverage the upside to the gold price.

This will start with a debate about silver as a better alternative. But then gold and silver stocks will come under the microscope, and the value of the bombed-out junior stocks brought into focus.

It can be little consolation that great days lie ahead for gold for this signals the failure of the conventional investment universe, and that means further horrors ahead for currencies, stocks, bonds and real estate.

Monday, April 20, 2009

STOP Mandelson!

The Western governments of this world:
  1. have been interfering with their economies for decades
  2. have proven to be useless in stimulating or steering new ventures
  3. do interfere by setting the wrong interest rates via their Central Banks
  4. do interfere in free trade via import & export duties
  5. were asleep at the wheel while bankers were plundering
  6. do take away from us in order to give it back to us again
  7. do have only a political incentive to do the right thing, not an economical
We need LESS, not more government interference, because government interference suffocates the individual.

In any economy, the scarcest, most critical resources must be the most protected. The problem comes when we as a society disagree about what that scarcest resource really is and what role the government must play in protecting it.

Many people instinctively believe that the economy is way too important to leave to individuals. They believe that the government should play an active role in planning and controlling the economy, as well as protecting workers and consumers.

I believe that the scarce resource is individual entrepreneurial talent and that too many rules, regulations, required permissions and licenses, restrictions on ability to hire or fire workers and other government interference suffocates the scarce resource.

A dynamic economy requires faith in individuals. Rather than trying to protect existing businesses and jobs, government should simply prepare the playing field, protect individual property rights and then stay out of the way.

But it is hard for government to have that kind of faith in individual entrepreneurs. Governments seem to feel the need to be activist -- picking and nurturing the industries they think will or should win, preventing job losses from existing businesses to emerging technologies and competitors. Governments especially feel this way if the competitors are foreign.

Even the desire to protect consumers can smother great ideas.......

I believe the role of government should be to protect those of us who are out there in the cold entrepreneurial wilderness with just one match and a little bit of dry kindling. The courage to be out there and the willingness to take the chance are truly the scarce resources that a dynamic economy requires. Suffocating what may appear to be ideas and technologies that pose a threat to current industries or jobs will only lead to economic stagnation.

It's not up to an activist government to fix the problems or pick the winning technologies on its own. Rather, the government should step back, keep the playing field level and allow courageous individuals to strike their entrepreneurial matches.

Credit to: Deseret News (Salt Lake City) , Dec 9, 2007 by Hal Heaton

Labour's industrial revolution

Market forces must make way for interventionism, says Mandelson

By Andrew Grice, Political Editor The Independent

Monday, 20 April 2009

New Labour will today abandon 12 years of support for market forces by unveiling an interventionist strategy under which the Government will subsidise the growth industries of the future.

In an interview with The Independent, Lord Mandelson said the drive could create hundreds of thousands of jobs in hi-tech and low-carbon industries over the next 10 years, to compensate for the smaller financial services sector that will emerge from the current recession.

The new strategy marks a reversal of the Government's free-market approach since Labour won power in 1997, as ministers follow the bailout of Britain's ailing banks by intervening in other key areas of industry.

The Business Secretary said: "If markets fail or don't work efficiently, government has a role to play – as we saw in the financial markets." He insisted: "The Government's job is not to substitute for markets or displace the private sector. We are not into bailing out the past, but removing the barriers to investing in the future."

His "strategic plan" will be a central part of a "going for growth" Budget to be announced by Alistair Darling on Wednesday.


Sunday, April 19, 2009

F.B.I. and States Vastly Expand DNA Databases

And so, the land of the free became slowly the land of the oppressed.

But the people asked for it, protested and petitioned their leaders.

The reasons were DNA screening with birth to certify parenthood, exclusion in case of a crime committed or just voluntary.

The State knows this and is expanding on an incredible powerful weapon to control their population.

Slowly but surely, the land of the free will soon be no more.

But where are the brave?

F.B.I. and States Vastly Expand DNA Databases

New York Times, April 19,2009, Solomon Moore

Law enforcement
officials are vastly expanding their collection of DNA to include millions more people who have been arrested or detained but not yet convicted. The move, intended to help solve more crimes, is raising concerns about the privacy of petty offenders and people who are presumed innocent.

Until now, the federal government genetically tracked only convicts. But starting this month, the Federal Bureau of Investigation will join 15 states that collect DNA samples from those awaiting trial and will collect DNA from detained immigrants — the vanguard of a growing class of genetic registrants.

The F.B.I., with a DNA database of 6.7 million profiles, expects to accelerate its growth rate from 80,000 new entries a year to 1.2 million by 2012 — a 17-fold increase. F.B.I. officials say they expect DNA processing backlogs — which now stand at more than 500,000 cases — to increase.

Law enforcement officials say that expanding the DNA databanks to include legally innocent people will help solve more violent crimes. They point out that DNA has helped convict thousands of criminals and has exonerated more than 200 wrongfully convicted people.

But criminal justice experts cite Fourth Amendment privacy concerns and worry that the nation is becoming a genetic surveillance society.

“DNA databases were built initially to deal with violent sexual crimes and homicides — a very limited number of crimes,” said Harry Levine, a professor of sociology at City University of New York who studies policing trends. “Over time more and more crimes of decreasing severity have been added to the database. Cops and prosecutors like it because it gives everybody more information and creates a new suspect pool.”

Courts have generally upheld laws authorizing compulsory collection of DNA from convicts and ex-convicts under supervised release, on the grounds that criminal acts diminish privacy rights.

DNA extraction upon arrest potentially erodes that argument, a recent Congressional study found. “Courts have not fully considered legal implications of recent extensions of DNA-collection to people whom the government has arrested but not tried or convicted,” the report said.

Minors are required to provide DNA samples in 35 states upon conviction, and in some states upon arrest. Three juvenile suspects in November filed the only current constitutional challenge against taking DNA at the time of arrest. The judge temporarily stopped DNA collection from the three youths, and the case is continuing.

Sixteen states now take DNA from some who have been found guilty of misdemeanors. As more police agencies take DNA for a greater variety of lesser and suspected crimes, civil rights advocates say the government’s power is becoming too broadly applied. “What we object to — and what the Constitution prohibits — is the indiscriminate taking of DNA for things like writing an insufficient funds check, shoplifting, drug convictions,” said Michael Risher, a lawyer for the American Civil Liberties Union.

This year, California began taking DNA upon arrest and expects to nearly double the growth rate of its database, to 390,000 profiles a year from 200,000.

One of those was Brian Roberts, 29, who was awaiting trial for methamphetamine possession. Inside the Twin Towers Correctional Facility in Los Angeles last month, Mr. Roberts let a sheriff’s deputy swab the inside of his cheek.

Mr. Roberts’s DNA will be translated into a numerical sequence at the F.B.I.’s DNA database, the largest in the world.

The system will search for matches between Mr. Roberts’s DNA and other profiles every Monday, from now into the indeterminate future — until one day, perhaps decades hence, Mr. Roberts might leave a drop of blood or semen at some crime scene.

Law enforcement officials say that DNA extraction upon arrest is no different than fingerprinting at routine bookings and that states purge profiles after people are cleared of suspicion. In practice, defense lawyers say this is a laborious process that often involves a court order. (The F.B.I. says it has never received a request to purge a profile from its database.)

When DNA is taken in error, expunging a profile can be just as difficult. In Pennsylvania, Ellyn Sapper, a Philadelphia public defender, has spent weeks trying to expunge the profile taken erroneously of a 14-year-old boy guilty of assault and bicycle theft. “I’m going to have to get a judge’s order to make sure that all references to his DNA are gone,” she said.

The police say that the potential hazards of genetic surveillance are worth it because it solves crimes and because DNA is more accurate than other physical evidence. “I’ve watched women go from mug-book to mug-book looking for the man who raped her,” said Mitch Morrissey, the Denver district attorney and an advocate for more expansive DNA sampling. “It saves women’s lives.”

Mr. Morrissey pointed to Britain, which has fewer privacy protections than the United States and has been taking DNA upon arrest for years. It has a population of 61 million — and 4.5 million DNA profiles. “About 8 percent of the people commit about 70 percent of your crimes, so if you can get the majority of that community, you don’t have to do more than that,” he said.

In the United States, 8 percent of the population would be roughly 24 million people.

Britain may provide a window into America’s genetic surveillance future: As of March 2008, 857,000 people in the British database, or about one-fifth, have no current criminal record. In December, the European Court of Human Rights ruled that Britain violated international law by collecting DNA profiles from innocent people, including children as young as 10.

Critics are also disturbed by the demographics of DNA databases. Again Britain is instructive. According to a House of Commons report, 27 percent of black people and 42 percent of black males are genetically registered, compared with 6 percent of white people.

As in Britain, expanding genetic sampling in the United States could exacerbate racial disparities in the criminal justice system, according to Hank Greely, a Stanford University Law School professor who studies the intersection of genetics, policing and race. Mr. Greely estimated that African-Americans, who are about 12 percent of the national population, make up 40 percent of the DNA profiles in the federal database, reflective of their prison population. He also expects Latinos, who are about 13 percent of the population and committed 40 percent of last year’s federal offenses — nearly half of them immigration crimes — to dominate DNA databases.

Enforcement officials contend that DNA is blind to race. Federal profiles include little more information than the DNA sequence and the referring police agency. Subjects’ names are usually kept by investigators.
Rock Harmon, a former prosecutor for Alameda County, Calif., and an adviser to crime laboratories, said DNA demographics reflected the criminal population. Even if an innocent man’s DNA was included in a genetic database, he said, it would come to nothing without a crime scene sample to match it. “If you haven’t done anything wrong, you have nothing to fear,” he said.

Saturday, April 18, 2009

Israel Stands Ready To Bomb Iran's Nuclear Sites

Martin Armstrong............I can't believe it. This man predicted a major turning event in a paper called: Armstrong Economics: "The Coming Great Depression. Why Government Is Powerless" :
"....A year-end closing beneath this general level will signal that we could see the sharp decline to test the extremes support at 3,600-4,000 by as early as April 19th, 2009 going into May /June 2009. If we were to drop so quickly into those targets, this would be most likely the major low with a significant rally into at least April 16th, 2010.
The less volatile outcome would be a prolonged decline into the December 2009 target to about April 16th, 2010. A low at that late date would tend to project out for a high as early as June 2011 or into late 2012. Nevertheless, volatility appears to be very high. Those who were at the 1985 Economic conference in Princeton, may want to review those video tapes. The volatility we were looking at 20-30 years into the future is now. As 3 of the 5 major investment bankers failed, Merrill, Lehman and Bear, the liquidity has evaporated so the swings are going to be much more dramatic.
The major support is 3,600 on the now Industrials. During '09, the support area appears to be 6,600, 5,000, and 4,000-3,600. Clearly, resistance is shaping up at 9,700-9,800. It would take a monthly close back above the 12,400 level to signal new highs are likely. If we saw a complete collapse into a low by April 2009 or June 2009 reaching the 4,000 general area, this would be the major low with most likely a hyper-inflationary spiral developing thereafter. In that case, the now Jones Industrials could be back at even new highs as early as mid 2011 or going into late 2012..."
This could well be the "turning point".

Articles about this event in Moneyweek here and an old one from 2007 over here.

More informantion on Iranian nuclear sites here.

Israel stands ready to bomb Iran's nuclear sites

The Times,

Sheera Frenkel in Jeruzalem; April 18th 2009

The Israeli military is preparing itself to launch a massive aerial assault on Iran's nuclear facilities within days of being given the go-ahead by its new government.

Among the steps taken to ready Israeli forces for what would be a risky raid requiring pinpoint aerial strikes are the acquisition of three Airborne Warning and Control (AWAC) aircraft and regional missions to simulate the attack.

Two nationwide civil defence drills will help to prepare the public for the retaliation that Israel could face.

“Israel wants to know that if its forces were given the green light they could strike at Iran in a matter of days, even hours. They are making preparations on every level for this eventuality. The message to Iran is that the threat is not just words,” one senior defence official told The Times.

Officials believe that Israel could be required to hit more than a dozen targets, including moving convoys. The sites include Natanz, where thousands of centrifuges produce enriched uranium; Esfahan, where 250 tonnes of gas is stored in tunnels; and Arak, where a heavy water reactor produces plutonium.

The distance from Israel to at least one of the sites is more than 870 miles, a distance that the Israeli force practised covering in a training exercise last year that involved F15 and F16 jets, helicopters and refuelling tankers.

The possible Israeli strike on Iran has drawn comparisons to its attack on the Osirak nuclear facility near Baghdad in 1981. That strike, which destroyed the facility in under 100 seconds, was completed without Israeli losses and checked Iraqi ambitions for a nuclear weapons programme.

“We would not make the threat [against Iran] without the force to back it. There has been a recent move, a number of on-the-ground preparations, that indicate Israel's willingness to act,” said another official from Israel's intelligence community.

He added that it was unlikely that Israel would carry out the attack without receiving at least tacit approval from America, which has struck a more reconciliatory tone in dealing with Iran under its new administration.

An Israeli attack on Iran would entail flying over Jordanian and Iraqi airspace, where US forces have a strong presence.

Ephraim Kam, the deputy director of the Institute for National Security Studies, said it was unlikely that the Americans would approve an attack.

“The American defence establishment is unsure that the operation will be successful. And the results of the operation would only delay Iran's programme by two to four years,” he said.

A visit by President Obama to Israel in June is expected to coincide with the national elections in Iran — timing that would allow the US Administration to re-evaluate diplomatic resolutions with Iran before hearing the Israeli position.

“Many of the leaks or statements made by Israeli leaders and military commanders are meant for deterrence. The message is that if [the international community] is unable to solve the problem they need to take into account that we will solve it our way,” Mr Kam said.

Among recent preparations by the airforce was the Israeli attack of a weapons convoy in Sudan bound for militants in the Gaza Strip.

“Sudan was practice for the Israeli forces on a long-range attack,” Ronen Bergman, the author of The Secret War with Iran, said. “They wanted to see how they handled the transfer of information, hitting a moving target ... In that sense it was a rehearsal.”

Israel has made public its intention to hold the largest-ever nationwide drill next month.

Colonel Hilik Sofer told Haaretz, a daily Israeli newspaper, that the drill would “train for a reality in which during war missiles can fall on any part of the country without warning ... We want the citizens to understand that war can happen tomorrow morning”.

Israel will conduct an exercise with US forces to test the ability of Arrow, its US-funded missile defence system. The exercise would test whether the system could intercept missiles launched at Israel.

“Israel has made it clear that it will not tolerate the threat of a nuclear Iran. According to Israeli Intelligence they will have the bomb within two years ... Once they have a bomb it will be too late, and Israel will have no choice to strike — with or without America,” an official from the Israeli Defence Ministry said.

Friday, April 17, 2009

Anger In The US?

Expect a popular uprising only with a complete financial meltdown resulting in a major (80%+) disappearance of wealth. Even then, the media should back this anger. Taking in account that Wall street = The Media, there is more chance of Jezus coming back to earth this month than a popular uprising in the US.

They Don't Make Populism in the U.S. Like They Used To

Wall street Journal; Aril 17th 2009



America has an enormous middle class that is heavily invested in the financial system and is hardly about to organize for its overthrow


People who have lost half the value of their 401(k) plans, in other words, want to regain it by having the economy rebound, not by seizing the assets of ExxonMobil Corp. People who have lost a home want to rebuild their credit and buy another one, not liberate the property of the wealthy


The anti-corporate anger is being dismissed by some commentators who see it as an emotional reaction by people who don't understand how things really work. This was most evident during the controversy over the bonuses received by employees of American International Group Inc.


That criticism came from the right and left. Radio host Rush Limbaugh denounced the backlash against AIG.


The new populism may fade when the economic crisis does. Whether it coalesces before then into a more potent force, able to force broad policy changes, might depend on the depth and duration of the downturn..................

Treasury Department Issues Emergeny Recall of all US$

Treasury Department Issues Emergency Recall Of All US Dollars

Shocking, but luckily it is a Weekend Funny

Thursday, April 16, 2009

Gold and the Impending Market Meltdown

Gold bug

VANCOUVER, CANADA, BNW Business Newswire -

Author: Marc Davis
Posted: Thursday , 16 Apr 2009

Something wicked this way comes! So, be afraid. Be very afraid. (Unless you're a gold bug).

The recent rally in American and Canadian equity markets is soon to give way to a gut-wrenching collapse that will push equities to shocking new lows, with gold prices reacting by rallying to new highs.

After having correctly anticipated the timing and extent of the March 9th to April 3rd market rally, this is the latest dire warning from Heiko Seibel, a leading German stock market strategist.

The Director of Research for Munich-based CM-Equity AG now believes that the U.S. benchmark S&P 500 Index will dramatically drop to an ultimate low of around 450 points in late June or in July. The odds favour him being proven right - that is if his talent for correctly anticipating market moves continues.

"Within a few weeks, we will see the stock lows of our lifetimes," he nonchalantly declares.

Indeed, he was right on the money when he told BNW Business Newswire on March 2nd that the S&P 500 Index was about to reverse a pronounced downward trend. He suggested at the time that it would rally to a high of not much more than 850 points during April before it begins an orderly retreat that soon turns into a panic-stricken rout.

The S&P 500 closed at 856.56 on April 9th - the culmination of a very impressive five-week gain of 26% over its March 09th low. However, this rebound cannot gloss over the fact that the bellwether index's had lost 58% of its value by the time it ended its slide in early March. And now the S&P 500 is likely destined to trade in an uninspiring sideways pattern for the balance of the month, Seibel suggests.

Seibel believes that a growing sense of economic optimism shared by many U.S. investors and the Obama Administration, alike, is completely misplaced. He suggests that the rally during March and early April (with the Dow Jones Industrial Average closing at 8,018 points on April 3rd after enjoying the best four-week run since 1933) is merely a false dawn.

Soon enough investors will be seriously rattled yet again - this time by a devastating after-shock to October's global financial earthquake. One that will see the S&P 500 Index nose-dive up to 40% before it hits rock bottom at around the 450 points level. This bleak scenario contrasts starkly to the S&P's heady high of over 1,550 points in October of 2007.

A proponent of quantitative analysis, Seibel says this pending nightmarish sell-off will cause plenty of already shell-shocked investors to relinquish their remaining equity holdings. However, investors in gold bullion and gold-backed Exchange Traded Funds (ETFs) will likely be spared the widespread misery, Seibel believes.

"When there is a total loss in confidence in the stock market, then gold will rally. Gold bullion is historically an inverse proxy to the stock market. So, it's only logical that this will happen," he says.

"We should see a culmination of massive price weakness in stocks within weeks, which will cause gold to reverse its current trend to establish new highs beyond $1,000 early in the third quarter of this year - maybe even testing the $1,200 mark," he adds.

Interestingly, gold equities will not be immune to the market meltdown because investors will engage in "panic selling," to preserve whatever capital they have left, he predicts.

Meanwhile, the catalyst to the stock market's final capitulation during the coming months will be a combination of the collapse of more landmark U.S. companies, a renewed banking crisis, and other forms of "major economic upheaval," Seibel explains.

However, it is always darkest before dawn. And Seibel reasons that a gradual rebound in equities will finally assert itself during the last quarter of 2009 in anticipation of a spring economic revitalization. One that is already being germinated by massive government-backed infusions of money into the U.S. economy.

"History shows that economic recoveries typically get underway about six to nine months after the markets hit their ultimate lows. So a spring economic recovery appears very probable," he says.

"And gold stocks will lead the way during the market recovery as they're already ridiculously cheap and will get cheaper. But as gold prices begin to push higher, then gold producing companies will become attractive because they will offer investors leveraged exposure to these rising prices," he adds.

Published courtesy of B NW Business Newswire -

Jim Rogers on "Diversification"


"Diversification is something that stock brokers came up with to protect themselves, so they wouldn't get sued [for making bad investment choices for clients]. Henry Ford never diversified, Bill Gates didn't diversify. The way to get rich is to put your eggs in one basket, but watch that basket very carefully. And make sure you have the right basket.

You can go broke diversifying. Ask anyone who's diversified in the last three years. They've lost money. Nonprofessionals are always jumping around, thinking they have to do something. If they have a big success, they think they need another one right away. That's when hubris sets in at its worst. That's when people really should go to the beach. It happens to me too."


Celente Calls for "Revolution" as the Only Solution

Kingston NY -- Taxed to death, angry at government bailouts, outraged by Wall Street greed, and bitterly resentful of a system that rewards the undeserving rich, the American public is ready to revolt.

"The Tea Parties and Tax Protests sprouting across the nation, which we had predicted, are harbingers of revolution," said Gerald Celente, Director of The Trends Research Institute. "But they are not enough. Much stronger and directed action is required. Our call for 'Revolution' will galvanize the people, destroy the corrupt ruling systems, and produce a prosperous and more just nation."

The Revolution Celente proposes is unique in concept and bold in execution. It is about a lot more than just "taxation without representation."

"Nothing short of total repudiation of our entrenched systems can rescue America," said Celente. "We are under the control of a two-headed, one party political system. Wall Street controls our financial lives; the media manipulates our minds. These systems cannot be changed from within. There is no alternative. Without a revolution, these institutions will bankrupt the country, keep fighting failed wars, start new ones, and hold us in perpetual intellectual subjugation."

The country is restless, and ripe for radical reform. There is no doubt protests will proliferate and intensify. In response, the government will call out the troops and bring in the police. They will use the Patriot Act to silence, detain, harass, persecute and prosecute groups and individuals exercising their Constitutional rights.

But Celente's Revolution need not degenerate into violence or open warfare.

"Intellectual Revolution"

"I am calling for an 'Intellectual Revolution'. I ask American citizens to free their minds from the tyranny of 'Dumb Think.' This is a revolution about thinking - not manning the barricades. It's about brain power - not brute force."

For society to survive and grow, it must wake up and grow up. Americans must acknowledge what their opinions are based on, who they listen to ... and why.

What are America's prime information sources? CNN, "The most trusted name in news"? Fox, "Fair and balanced"?

CNBC, "First in Business Worldwide"? The New York Times, "All the news that's fit to print"?

Who do the people listen to? A closed circuit of familiar faces guaranteed to take predictable positions. Authorities on nothing, yet pronouncing upon everything; a cadre of media aristocrats, pretending they're the people's voice.

Bill O'Reilly, Steven Colbert, Rush Limbaugh, Keith Olbermann, Sean Hannity, Jon Stewart, Chris Matthews, Jim Cramer, Joe Scarborough, Anderson Cooper, Bill Maher.

TV tough guys, broadcast big mouths and Beltway blowhards have now been joined by featherweight comics throwing powder puff punches at sitting targets.

This new addition to the critical debate is celebrated by the world's leading financial newspaper:

Wall Street Riveted by Comedy Clash

Financial Times, 13 March 2009

"A showdown between a comedian who has become one of America's most challenging commentators and a news commentator known for his comedic antics has shown the brightest spotlight on the media's market coverage since the financial crisis began.

On Thursday night, two cable television celebrities squared off as Jon Stewart, host of The Daily Show ... on Comedy Central ... confronted Jim Cramer ... star of CNBC's Mad Money programme."

Without a hint of irony, FT bestows the title of highest American intellectual common denominator upon a clown. A pencil throwing, screaming, wryly grimacing professional comedian has become "... one of America's most challenging commentators"?

"Wall Street riveted by comedy clash"? "The brightest spotlight on the media's market coverage"?

With the world financial markets in collapse, this rivets Wall Street? Nearly two years into the worst financial crisis since the Great Depression, this shines as "the brightest spotlight"?

From Wall Street, comedy moves to the White House. President Obama made history using comic Jay Leno's Tonight Show as a platform to peddle his policies.

World shaping decisions are packaged in sound bites and pitched by the nation's Showman-in-Chief. There is no time or place for debate or discussion. It's all entertainment.

"The 'Intellectual Revolution' must be waged on the battlefield of the mind," said Celente. "Americans are doomed unless they kick the junk news habit, deprogram themselves from celebrity worship, refuse to blindly follow political leaders and question all ideological dogmas ... especially their own.

"For the revolution to succeed, people must repudiate the one-headed, two party system, and learn to think for themselves," said Celente.

While the corporate-owned mainstream media and the government still control the broad avenues of news and information, only willing and lazy minds need be held hostage to it. The Internet world is awash in data, facts, analyses and opinions (independent and mainstream) for all to access and assess.

Think for Yourself. The "Intellectual Revolution” has begun.

Trend Call-to-Action:

What can you do? Participating in an April 15th tax protest may be your cup of tea. Pester your politicians. Make your voice heard, your discontent felt and your solutions known. Band with others who share similar objectives and common goals.