Monday, October 6, 2008

Headlines in the Sand

It may not be the end of the world as we know it (TEOTWAWKI) yet, but a quick glance at headlines around the world is enough to make some think twice about not setting aside a little something, "Just in Case." Heres a quick rundown and just a sampling of what our fearless media is downright scared about, just the first business days after the President signs into law the Mother of All Bailouts (MOAB) and assures us the government has everything under control, and the shit, will not, in fact hit the fan. (SHTF)

Heres just a whiff of whats already in the air.

Panic engulfs global stock markets.  

Investors Expect Market Volatility As Global Credit Woes Persist 

Analysis: More Banks To Fail Next Year Despite Bailout 

Euro Crisis Deepens: Officials Vow To Save Banks 

Euro Unity Collapses: Every Country For Itself  

$700 Billion Printing Of Bailout Monopoly Money: Hedge Your Wealth  

Credit Chaos Next? The Mother Of All Bank Runs  

Fear Grips Stock Markets As Economies Tip Into Recession  

Asia Stocks, US Futures Drop As Europe Forced To Help Banks  

Yen Unbeatable As Credit Seizure Kills Carry Trade  

Panicked Global Markets Reel; Dow Slumps Below 10,000 ("There is all-out panic," said ING senior strategist Adrian van Tiggelen.") 

Veteran Wall Street Adviser Gives Advice For Surviving Crisis  

Fed Sees States, Companies As Next Crisis Points  

Hank Paulson Has One Month Left To Get Banks Lending Again  

London Plunges As Banks Pump Billions Into Markets  

Euro And Pound Dive As Banks Falter  

Iceland Sinking As Bank Rescues Evaporate (Trading in Icelandic Banks Halted)  

Savers Frozen Out As IceSave Website Collapses  

Asian, Euro Markets Dive On Fears Crisis Is Spreading 

The $55 trillion question. The article begins: "The financial crisis has put a spotlight on the obscure world of credit default swaps - which trade in a vast, unregulated market that most people haven't heard of and even fewer understand. Will this be the next disaster?"  A much bigger problem than mortgage loans could ever be. 

Prices Of 16 Basic Food Items Rocket In 3Q  

Hedge funds wilt in credit drought--Investor redemptions could cull herd of hedgies; 700 to 1,000 funds may disappear by year-end. (There are $3trillion US in Hedge Funds, none of which is insured, a spike in failures or a suspension of redemption could very well trigger a systemic or stock market crash)

Bolling: Nowhere To Run (" is not the time to take chances.) 

Tent Cities Rising Up Across America -- 'Hoarding' Is Out (The Mogambo Guru)  

LIBOR Mystifies Americans as Mayor Reads `Doomsday' (the London Interbank Offered Rate (LIBOR) rate spiked this week, tripling. The LIBOR is the benchmark rate at which banks loan money to other banks. The spikes illustrates the absolute peril that the credit collapse has created, and the unprecedented level of distrust between banks. 

More: LIBOR Soars, Commercial Paper Slumps As Credit Freeze Deepens Across The Globe (It will be interesting to see what this higher cost of inter-bank borrowing has as it trickles down to credit card interest rates and Adjustable Rate Mortgages (ARMs). It is conceivable that monthly ARM payments could double."The global credit market has just suffered the equivalent of a massive myocardial infraction.")

Bailout Fraud (From Russia: "This is a default crisis. Banks and large corporations are going to default. The banks know that. The public does not yet.")

Settlement Day Approaches For Derivatives  

Overnight Commercial Paper Rates Advance As Bailouts Spread Globally  

Financial Tsunami: The End of the World as we Knew it.

Fed Doubles Cash Sales To $900bn, Plans More Steps To Unlock Market 

Deflation Threats Mount As Commodities Tumble By Most In Half-Century  

Bush Predicts Restoring Confidence Will 'Take A While'  

Bailout Bill Will Do Nothing For The Real Economy  

Stock Market Investing Safety Over 5yr and 10yr?  

Meanwhile, in addition to the congressionally-funded TARP bailout, the Fed is pumping liquidity like there is no tomorrow, promising $900 billion in TAF lending: U.S. urges global action on credit crisis

And even the perennial bulls are sounding bearish: Jim Cramer: Time to get out of the stock market. Cramer has also declared this a worldwide crash

Lastly, it is quite indicative that spot gold jumped $35+ per ounce. That in itself is not too unusual, but this is happened at the same time that other commodities were dropping, and while the US dollar was gaining against the Euro and British Pound. Here, we can see that gold truly isthe island of safety in the economic maelstrom.

Germany takes hot seat as Europe falls into the abyss It begins with this ominous tone: "We face extreme danger. Unless there is immediate intervention on every front by all the major powers acting in concert, we risk a disintegration of global finance within days. Nobody will be spared, unless they own gold bars."

As of October 1st, journalist Glenn Beck reported brisk sales of guns and home gun vaults in the US. Given the recent economic news, I wouldn't doubt it. A reader of, which is where most of this was collected, recommended that we should take a look at Beck's analysis of what caused the liquidity crisis, in a letter to his family members: What happened?

Ive been paranoid about this situation for years just based on my rudimentary understanding of government economic interference and its effect on our current (corrupt) system, but even if you werent, all these headlines, coupled with our own government passing a bill mandating the assignment of 850 billion dollars of debt (more like 1.9 trillion, as i covered here, with a potential cost that is even greater, and not counting the billions of dollars the Fed is Lending out every single day in intra-bank loans, which serve as an inflationary tax, as well as increasing the ammount of debt the GOVMNT will seize and hold YOU liable for, when even more of these banks fail) to american Taxpayers with absolutely ZERO effect on overall market trading and in fact a huge drop in the Dow Jones Industrial Index today (see Can it Work?), would be enough to make you think about packing up and moving to and living in a cave in Idaho.

See you there. 

I hear they havent cancelled thanksgiving there, yet.

Tempus Fugit

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