[Cid_Yama]

<b>The greatest financial and economic meltdown in American history</b>

The combination of relentless refusal to allow regulatory oversight of the explosive new financial instruments from Credit Default Swaps to Mortgage Backed Securities and the myriad of similar exotic "risk-diffusing" financial innovations and the 1999 final repeal of the Glass-Steagall Act strictly separating securities dealing banks from commercial lending banks opened the way for what in June 2007 began as the second Great Depression in less than a century. It began what future historians will describe as the final demise of the United States as the dominant global financial power.

As hundreds of thousands of Americans over the coming months find their monthly mortgage payments dramatically reset according to their Adjustable Rate Mortgage terms, another $690 billion in home mortgage debt will become prime candidates for default. That in turn will lead to a snowball effect in terms of job losses, credit card defaults and another wave of securitization crisis in the huge market for securitized credit card debt. The remarkable thing about this crisis is that so much of the sinews of the entire American financial system were tied in to it. There has never been a crisis of this magnitude in American history.

At the end of February the Financial Times of London revealed that US banks had "quietly" borrowed $50 billion in funds from a special new Fed credit facility to ease their cash crisis. Losses at all the major banks from Citigroup to J.P.Morgan Chase to most other major US bank groups continued to mount as the economy sank deeper into a recession that clearly would turn in coming months into a genuine depression. No Presidential candidate had dared utter a serious word about their proposals to deal with what was becoming the greatest financial and economic meltdown in American history.

http://www.globalresearch.ca/index.php? ... a&aid=8158

[PenultimateManStanding]

Who in their right mind would even want to be president given what's coming. I think I'd rather be with W down on a ranch in Paraguay. I'd just have to put up with that horrible voice. I'm convinced that the ugly voice is why people detest him. How did a guy who sounds that bad ever get elected President?

[Prince]

$this->bbcode_second_pass_quote('PenultimateManStanding', 'H')ow did a guy who sounds that bad ever get elected President?

[Toscano]

GW got elected twice because the first time he ran against a moron with a home chemistry set who thinks he knows everything about the climate.

And the second time he ran against a traitor.

Not the best to choose from....

[jedinvest]

Toscano, I am almost afraid to ask you about the prospects of McCain against Obama! With that perspective, you will find a fatal flaw in any Democrat. Republicans, unfortunately, are free of most expectations of actually being fit for government because they just turn it over to the highest bidder.

[emersonbiggins]

Toscano gets a 4/10 from me.

[roccman]

$this->bbcode_second_pass_quote('Toscano', 'G')W got elected twice because the first time he ran against a moron with a home chemistry set who thinks he knows everything about the climate.

And the second time he ran against a traitor.

Not the best to choose from....

[vision-master]

$this->bbcode_second_pass_quote('Toscano', 'G')W got elected twice because the first time he ran against a moron with a home chemistry set who thinks he knows everything about the climate.

And the second time he ran against a traitor.

Not the best to choose from....

[gnm]

He wasn't elected he was "selected" by the supreme court as I recall...

-G

[Cid_Yama]

Just say it! This country is no longer a Democracy. The last two presidential elections were stolen and the American people did squat about it. The truth about freedom is you have to fight to preserve it to have it. The American people have now been fleeced as well as their children and grandchildren. Where were the defenders of freedom? Our food is being sold by Big Agriculture to the highest overseas bidder. Where are the defenders of freedom? When our children are starving, and dissenters have been rounded up, will there be defenders of freedom?

[Kristen]

They are saying the crisis will effect the real economy by september this year. Basically, the U.S. will be detached from the rest of the world. I imagine banks will be useless and public services will be shut down. The sand in the hourglass is thin. Imagine what people will do when they turn the turn on the faucet only to discover the tap has been shut off. I have a bad gut feeling that things will get out of control very quickly.

[Cid_Yama]

<b>America's grain stocks running short</b>

Global demand for grain and oilseeds is at record levels, causing the nation's grain stocks to reach critically low levels, according to Purdue University agricultural economist Chris Hurt.
With a weak U.S. dollar and global demand so high, <b>foreign buyers are outbidding domestic buyers for American grain</b>, Hurt said.

Hurt said the 2007 U.S. wheat crop is virtually sold out, while domestic soybean stocks soon will fall below a 20-day supply. Corn inventories are stronger, but with demand from export markets, the livestock industry and ethanol plants, supplies also could be just as scarce for the 2008 crop.

Increasing food costs will ignite the debate on food security this year, Hurt said.

"We'll have discussions about whether we should allow the foreign sector to buy our food," he said. "Is food a strategic item that we need to keep in our country?"

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Duh! Meaning someone with lots of money and power doesn't want to give up the greater profits they get from selling <b>our food</b> overseas. Big Agriculture comes to mind. Otherwise, what's to debate about?

[peaker_2005]

$this->bbcode_second_pass_quote('Cid_Yama', 'J')ust say it! This country is no longer a Democracy. The last two presidential elections were stolen and the American people did squat about it. The truth about freedom is you have to fight to preserve it to have it. The American people have now been fleeced as well as their children and grandchildren. Where were the defenders of freedom? Our food is being sold by Big Agriculture to the highest overseas bidder. Where are the defenders of freedom? When our children are starving, and dissenters have been rounded up, will there be defenders of freedom?

[Cid_Yama]

<b>Time to save your life savings</b>

So, what does it all mean?

It means there's going to be an unprecedented wave of bank closures in the US and that people who want to hold on to their life savings are going have to be extra vigilant as the situation continues to deteriorate. And it is deteriorating very quickly.

The pace of the economic contraction is breathtaking. This week's release of the Institute for Supply Management's Non-Manufacturing Index (ISM) was a shocker. It showed steep declines in all areas of the nation's service sector---including banks, travel companies, contractors, retail stores etc—The Business Activity Index, the New Orders Index, the Employment Index, and the Supplier Delivery Index have all contracted at a “historic” pace. Everyone took a hit.

“The numbers are so terrible, it's beyond belief,” said Scott Anderson, senior economist at Wells Fargo & Co.

http://www.smirkingchimp.com/thread/12708

[JeeBoomba]

$this->bbcode_second_pass_quote('Toscano', ' ')a moron with a home chemistry set who thinks he knows everything about the climate.

And the second time he ran against a traitor.

[Cid_Yama]

<b>Crunch Time on the Bread Line</b>

Where will you be in the line? In a column last week, I discussed the forthcoming risk of global famine. Now the evidence is piling on, and there is every reason to expect - at the very least - astronomical inflation in food prices within the next year. Most significantly, this problem is not confined to any one region of the world, and the ripple effect is mind-boggling. Keep in mind that the dollar is falling on the world exchanges, and the food you buy is subject to the fluctuations of the currency exchanges. Why? Well, simply because it may be more lucrative for global agricultural corporations to sell to the highest bidder – no matter where they may be.

In Northern Europe, there is a shortage due to weather, of the hops and barley crops. The shortages in wheat, compounded by barley and hops shortages, will cause soaring prices for beer, vodka and whiskey (the latter two, of course, can keep in storage, if they can stay stored). The more you think about it, the sooner you realize how corn and wheat shortages will affect the entire food chain – all the way from cocktails to dessert.

The Economist reports that this month, “Food prices also continued to rise. The price of wheat jumped by 25% in just one day after Kazakhstan, a big exporter [world’s 5th largest wheat exporter], moved to impose tariffs on grain leaving the country in an effort to curb inflation at home.” The Kazakhs were in the position to do this because the bigger exporters, the US being the largest, are running short.

This madness was planned, and courtesy of our agricultural giants, our automakers pushing unconscionably low-mileage “flex-fuel” E-85 cars, and an economic model that puts the potential for exporting domestically needed grain for greater profits from foreign sale, we will be paying twice as much at the grocery store a year from now. Twice as much.

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[gnm]

$this->bbcode_second_pass_quote('Kristen', 'I')magine what people will do when they turn the turn on the faucet only to discover the tap has been shut off. I have a bad gut feeling that things will get out of control very quickly.

[Cid_Yama]

<i>Typically when that happens I trudge down to the water house and switch the pump over to the reserve.</i>

Exactly! It's time to invest in personal infrastructure. Build a well. Install a heat pump. Install solar panels. The money you are no longer putting out every month is a guaranteed return on investment.

[Cid_Yama]

<b>US Titanic Sinks</b>

Oh my god. The investors holding these AAA, AA and A bonds were supposed to make a profit if it rose above 100. If it fell, their losses accumulated very rapidly. Losing is very dangerous in this derivative game! And they lost. Big time. The plunge was very rapid from the end of July till the end of October. Then, Bernanke stepped in first, with the usual magic wand waving of rate cuts. Then he went in for a massive injection of funds to stop this decline. Incidentally, the stock market's nightmare ride downwards had barely begun at this point! After all, it reached its all-time high [excluding inflation, of course] of 14,100 in early October, 2007.

So basically, we went from a record market to a complete melt down in less than three weeks. The fact that these funds started floating or rather, deflating rapidly in July when the DOW was at 12,000, is a sign to us that the fall here isn't due to commerce ending or even slowing down. Consumer spending was still forging ahead, after all. The only things that were different were all banking-related. The Basel II Accord rules were taking effect and the banks, who were pretending for the previous year to have great equities in their vaults had to suddenly expose all of this to the cruel light of day. They had to open the books. And all the 'off the books' accounts had to be put on the books. This was the doom that cast everything into the depths of despair!

The banks cannot give more loans if they have no reserves and if their existing equities are losers, they have to add reserves, not make more and more loans. They cannot make money totally out of thin air. They have to have a pay-back system somewhere. As well as some savings. Once they were forced to start telling the truth, the whole thing has been impossible. Look at those charts! The losses are staggering. All the AAAs, AA and A ABX CDOs are all moving towards the same place: zero.

The BBB papers are now at slightly higher than 10¢ to the dollar. But the others are barely better. All but the AAA papers are now below 30¢ to the dollar. They stabilized briefly from the Bernanke money injection day in mid-November and desperately clung to life until the second half of February. This is when all systems, the Stock Markets, the muni bond markets, the interbank lending markets, you name it, all have decisively turned downwards. The news that the Federal Government was going to hand out a bundle of goodies temporarily buoyed up the markets, the financiers, the bankers, but now that has faded. Even the Japanese are now accepting the idea that the $150 billion Xmas gift from Santa won't save the global economy.

So the ABX funds fell. I give them another month, maybe two, but probably less, to hit zero once and forever.

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