Making Unique Observations in a Very Cluttered World

Wednesday, 26 August 2009

Relief Rallies Are Never Made To Last

Reading - Relief Rallies Are Never Made To Last http://tinyurl.com/mdqp5g

In the relief rally much like the great depression long before, Big spike in NY state bankruptcies, healthcare reform will improve our quality of life, Government cannot create recovery and wealth, bureaucrats of the economy are working against the public, dollar rallies will be hailed as recovery, retail sales declining 21 percent at one place we know of, Madoff victims still battle for compensation,

Since March we have watched a stock market rally borne by low volume and short covering. The gains are reminiscent of the rallies of 1930 and 1932. What you are witnessing is a rally engineered by our government. If you watch the tape and you can read it you can see exactly what they are doing, and how they are doing it. Yes, it is legal under an Executive Order singed by President Ronald Reagan in the aftermath of the October 19th, 1997 collapse of the stock market. It was named the “Working Group on Financial Markets” and was to be used for such emergencies. Unfortunately, like many things in government, the mission of the “Plunge Protection Team” has been distorted. For over the last more than ten years it has been used to manipulate markets 24/7. Thus, what you are witnessing is a sucker rally, which has little hope of lasting.

What do you do with a market that has a trailing P/E of 24 times earnings? You stay as far away from it as possible.

Now that the stimulus has exhausted itself consumption is falling more rapidly, bills are being paid off and many have taken to saving again. If consumption cannot hold its own or increase during a large stimulus, when can it then? In other words how bad would the drop in GDP been if there had been no stimulus?

America is in a depression not a severe recession. If it were not, why would the Fed and our Treasury Department commit us for $23.7 trillion, and why would our entire financial industry have to be bailed out? Along with this fiat solution comes the political goals of corporatist fascism. Taken away have been the natural solution of growth within the private sector and the purging of excesses within the system. Those arguments are only heard on the Internet and talk radio. The people who our President wants to put on terrorist lists, or better yet has probably already put on terrorist lists, as you and me who speak up and demand our rights.

Our government for the past 20 years has been the most corrupt in American history. This is in your face corruption in banking, Wall Street, corporate America, in our congress and Senate and among our bureaucrats. Our legislation is written in secret by special interests and passed with very few even having read the legislation.

Then we have the change our President and his masters have planned for us. A health reform plan that rations healthcare, Health benefits and procedures will be made by bureaucrats. Everyone will carry a National Health Card ID that will contain your health records as well as federal access to very financial holdings. You will also get to subsidize union health plans and community organizer health plans, such as those of ACORN. Our new Government will be free of judicial review and price fixing. The government will set wages in the healthcare industry including those for doctors.

Insurance is mandatory and your employer will pay for it if he stays in business. Medicaid will be reduced as will services for the old and chronically ill. All doctors would be paid the same no matter what their specialty, training and experience. Hospital doctors will be penalized for what the government deems preventable re-admission. Government will prepare your taxes prior to death as they provide an approved list of end of life resources, to help guide you to your demise. If you do not take your own life government will arrange it for you. The list goes on and on. This is the same list used in Nazi Germany.

Government cannot create recovery and wealth. The insistence of the fed of massive injections of money and credit only eventually destroys wealth and capital. Such devices demand more taxes at a time when unemployment is rising, and tax revenues are falling; yet, debt is rising exponentially. We have a cadre of elitist banks, Wall Street firms, insurance companies and transnational corporations that will never be allowed to fail. Each time they use leverage and gamble and lose you will get to pay for it, on a never-ending basis. This is the heart of corporatist fascism. All those not in the elite Illuminist circle will eventually be gobbled up into giant transnational monopolies under world government.

Today’s modus operandi of the Treasury, the Fed, Congress, our President and the faceless bureaucrats from the Council on Foreign relations, Trilateral Commission and the Bilderberg Group is to debase our currency and other currencies as well and to increase unemployment, reduce income and stop capital formation. Whatever is left over will be confiscated from Americans, because the Illuminists believe that all your wealth belongs to them, because they allowed you to earn it. That is why they are chasing down all the offshore accounts. Once that is completed they will have a financial dossier first on Americans and then everyone in the world. Ultimately all countries will be currency blocked and then they will control all the world’s wealth. Of course, we now have to stop that. We’ll have to remove them from their pedestal. Egalitarianism caused 300,000 Illuminists to lose their heads in the late 1700s in France. History has a way of repeating itself.

The average person now pays about 40% in taxation, direct and indirect. If Health Care Reform and Cap & Trade are passed you can add another 40%. That is 80% Americans. This is exactly what the gang from the CFR has planned for you. That, of course, does not factor in inflation.

We are facing the worst depression in America’s history and perhaps in the last 500 years. Eventually due to higher taxes and less opportunities people will close up businesses and walk away from their jobs. These are the jobs that make the economy work.

How far away is collapse? We just do not know, but a good bet is within three years and perhaps a lot sooner. The trigger will probably be a collapsing dollar or a derivate collapse. Maybe it could be the passage of the HR 1270 to audit and investigate the Fed. When the public discovers what the Fed has been up to there will be thunder and lightning. Could it be that finally the public and professionals will demand front-running Goldman and 15 other Illuminist firms to return the money they have stolen? As you can see the media has buried the story. This gives you an idea of the shape of things to come. Get ready for hard times and protect your wealth in gold and silver related assets.

Many believe that global reflation and recovery chances are getting greater and that the American consumer is about to ride to the rescue. We do not know what US economy they are looking at, but it is not the same one we are. Unemployment continues to rise. Consumers are paying off debt and consumer buying continues to fall. What can they be missing here? The psychology of the public changed two years ago and it is still going in the same direction. Just because there is global reflation it doesn’t mean consumers will take the bait and buy. The Fed and many other central banks may be coordinating reflation but it doesn’t mean banks will lend and consumers will buy.

We hear a dollar rally will bring back American and world confidence. We just had a dollar rally to 89.5 and it evaporated. As we write it is 78.07 not only having great difficulty rallying back past 80, but government intervention had to save it last Friday as it tested the 77.50 area. At the same time budget deficits get larger and larger and the fed cannot print money and credit fast enough. Right now debt issuance is being secretly purchased by the Fed and all the central banks know it. These are not formulas for success, but for hyperinflation.

We ask over and over again how is it that the major policymakers and top economists at the BIS, Bank for International Settlements, the bankers bank, in Basel (Bale) Switzerland, said the US and world finance were headed for very serious trouble, but yet the BIS and the central banks rejected their admonitions? The reason is the bankers knew the US and world economies were being deliberately destroyed in order to force the world’s population to accept world government.

These economists and analysts have been proved correct but a power greater than the BIS was pulling the strings. Obviously having the biggest failure since 1930 doesn’t concern the BIS or its masters.

Fifty-five central banks own the BIS and every two months they journey to the Basel headquarters near the German border to discuss direction, drink the world’s best wines and to eat the best cuisine. Then there is the BIS’s privately owned country club and tennis accommodations. This is why the BIS is called the “Vatican of Finance.” All meetings are in secret and nothing is ever divulged. It is a stock cooperation and once was publicly traded until they forced sale of the shares owned by the public. Needless to say, they tried to screw the shareholders on the buyback.

The BIS pays no taxes and it’s members and employees enjoy extensive immunity. The BIS is totally a secret cabal of bankers. It manages 4% of the world’s currency reserves and 120 tons of gold. They set interest rates as well. What a sweet racket.

It should have been obvious to many economists that what Greenspan did during the 1990s creating the dot.com boom and then their real estate bubble that he was leading America toward financial trouble. The management of the BIS and those 55 central bankers had to know these were the wrong things to do, as the BIS professional staff was saying you are doing the wrong thing.

The BIS even published a report in 2003 warning buyers about collateralized debt obligations and the incestuous ratings of the rating services with Wall Street. The warnings were deliberately ignored. Since Ben Bernanke has taken over it’s been more of the same. Whatever they do it is over. We will have our deflationary depression and more war and the world public will stumble to their demise.

AMG data reports equity fund outflows were $1.1 billion for the week ended 8/19 versus inflows of $391 million the prior week.

July existing home sales were better, but this is the center of the home buying season, much Fed money has been poured into the economy including an $8,000 first time buyer tax credit. Single family homes sold fell 5,000 units, as Northeast condo sales rose.

The big problems are fewer and fewer qualified buyers and massive inventory, which grow every day, plus all the houses lenders haven’t even listed yet. First-time buyers and foreclosures, short sale buyers, the distressed investors, represent 61% of the estimated July sales. The $8,000 incentive is similar to the Cash for Clunkers. It just takes sales away from the future. The home selling season peaked this month. Then you have the foreclosure flippers, who if they cannot get a buyer have to rent the dwelling out. The problem is the rental market is loaded with inventory as well. The percentage of properties in foreclosure or delinquency has hit a high of 13.2% of all single-family mortgages. Making matters worse is that there has been a steady jump in foreclosures in prime mortgages and FHA insured mortgages most of which are the result of a resumption of subprime lending 1-1/2 years ago. The Fed trying to put a floor under the market will end up being a loser to be added to their long list of fascist policies.

continue reading- http://theinternationalforecaster.com/International_Forecaster_Weekly/Relief_Rallies_Are_Never_Made_To_Last

FDIC Sets Rules for Private Equity to Buy Shut Banks

Reading - FDIC Sets Rules for Private Equity to Buy Shut Banks http://bit.ly/DcF9Z

The Federal Deposit Insurance Corp. approved weakened rules for letting private-equity firms buy failed banks, aiming to widen a pool of potential acquirers for a growing roster of shuttered lenders.

The FDIC board, in a 4-1 vote today, lowered Tier 1 capital ratio requirements for private-equity buyers to 10 percent from the 15 percent proposed July 2. Investors will be required to maintain the 10 percent ratio for at least three years.

“The FDIC recognizes the need for additional capital in the banking system,” FDIC Chairman Sheila Bair said at the meeting in Washington. “We want to maximize investor interest in failed institutions.”

The regulator is seeking to lure non-bank investors including private-equity firms to bid on assets of collapsed banks as failures reach a 17-year high with 81 so far in 2009. The surge, which has drained the FDIC’s insurance fund by more than $21 billion, has forced the agency to enter loss-sharing arrangements and absorb other costs.

The FDIC has twice brokered deals with private-equity groups this year. In March, California-based IndyMac Federal Bank, split off from IndyMac Bancorp Inc., was sold to investors led by Steven Mnuchin, an ex-Goldman Sachs Group Inc. investment banker, and including buyout firm J.C. Flowers & Co. Florida’s BankUnited Financial Corp. was sold in May to firms including Blackstone Group and Wilbur Ross’s WL Ross & Co.

Today’s vote, which followed a public comment period on the July proposal, shows the FDIC was listening to critics who said the initial plan would drive away potential investors, Ross said in a Bloomberg Television interview.

‘Champagne-Cork Popper’

“The new proposal is better than the one they had before but it isn’t a champagne-cork popper,” Ross said.

The agency agreed to shelve a proposal that would have required investors that owned at least two banks to cover losses in the event of a failure. The rules scale back this provision, applying it only if a group of investors owns at least 80 percent of two or more banks.

Office of Thrift Supervision Acting Director John Bowman, the only FDIC board member to vote against new rules, said there isn’t sufficient evidence that the guidelines are needed.

“It is hard to know whether the requirements are justified,” Bowman said. “The scope of the policy statement is overly broad and imprecise.”

U.S. Senator Jack Reed, a Rhode Island Democrat who leads a Banking Committee panel overseeing the securities industry, wrote to Bair in May asking her to spell out rules for private- equity firms investing in banks.