10.31.07
Posted in Old Posts at 8:56 am by Administrator
by John Galt
To today is the day boys and girls. The Federal Reserve releases their decision on interest rates and as I speculated below, there really is no right decision they can make. Even a 25 basis point cut will obviously cause market disruption with the British Pound surging over $2.07 this morning. I will have a lot to say about this subject later on today, but watch the market reactions carefully. IF Goldman Sachs and other financials start to go up in price right after lunch but before the rate decision is announced, you know it will be favorable to their positions and the information has been leaked to them. Regardless of the decision, remember that the US Dollar is toast no matter what they do, even if they increase rates by some sort of miracle. With the economy and Christmas 07 already teetering on every word and action they take, I doubt seriously that this will happen. A much longer op-ed is forthcoming tonight….
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10.30.07
Posted in Old Posts at 10:45 pm by Administrator
This article VIN SUPRYNOWICZ: G.I. Joe was just a toy, wasn’t he? has me so angry, so furious, I can not even see straight. Glenn Beck covered this in his morning show and I thought “no way” and yup, it’s true. I guess the next thing we’ll see is a burkha on Santa.
DAMN I AM FURIOUS OVER THIS.
We are so screwed as a nation.
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Posted in Old Posts at 8:31 am by Administrator
By John Galt
October 30, 2007
The following is my first “prepetorial”; a word I concocted to try to introduce the idea of “prepping” along with one of my editorials. The events in italic are completely fictitious and hopefully will never happen….
As I was meeting with my client in the town of Port Charlotte, about 45 miles from my home, the air seemed unusually warm for this October morning. The meeting did not go well as my customer was in no mood to purchase anything as he said “let’s see how the news goes” and this meant another thin sales week for my company. It was not a surprise as orders were down by 75% after the U.S. took out several of the Iranian nuke sites a few days ago and oil spiked up to $142 per barrel.
As I started the company pick up truck up and headed north on U.S. Highway 41 the vehicle suddenly died and a huge flash of white light appeared to the north of me many, many miles away. Just as suddenly another white flash just to the northeast of where I was happened but it was much farther away, in the direction of Orlando. As I sunk in the seat of my truck, I realized what had just happened as I saw the mushroom cloud in the distance; we were at war and either Russia or China had elected to take out some of our cities. Foolishly I reached for my cell phone only to observe it was dead also. I attempted in vain to start the truck but it just clicked. I noticed some older vehicles started to turn around through the medians and observed people leaving their vehicles chasing after those cars yelling “help, help, don’t go” but I knew what was going on. I had a forty plus mile hike in front of me and I was not ready. After years of worrying about the worst case scenario, I packed only my coffee, some bottled water and a sandwich. Because I thought today would just be another day……
So there it is. Even us “survivalist” types fail to anticipate that we could have a bad day and this day would have been one of the worst ones in my life if it were real. Not only would the panic ensue in short order as anyone with a working vehicle would be assailed, it is safe to assume that anyone who looks like they might be carrying food or water might well be a target. Add in the fact that no one at that scene, not even the police, would have any idea what was happening and hundreds of cars would be stalled in place, the information and physical gridlock would lead to all types of panic and hysteria. You would have to deal with elderly people having heart attacks, policemen barking out orders and threatening those who did not obey and general if not total breakdown of order. While many deny this would happen, the reality of our brave new integrated circuit dependent world would set in immediately. And as this situation might sound far fetched, you must ask yourself “is it really?” We are sinking into a new phase of the long standing Cold War with Russia and China, but the citizenry is in complete denial. That fact should alarm any sane person, but a prepper should be doubly concerned. Your stash, your survivalist empire, will be the desire of everyone as the civilization deteriorates. This is not the time to ask “will this happen” but more so what will I do when it does occur. The United States may not engage in full nuclear exchanges with foreign powers but that real threat now exists as we are viewed the world over as a scourge in many corners. That should give each of us pause to think “have I figured out every contingency?” From my perspective, this is the time to create a daily “prep list” of actions to take each day. The most important item on that list is “situational awareness” and while the news can be overwhelming, this is the era for everyone to divorce the emotion from the reporting and focus on the subject matter. If you watch the events around you, factual and speculative as they may be reported, you might determine a pattern which could save you and your family’s life. The physical items you will need to get by are easy enough to determine and the items available are still attainable but that time is starting to run short. So begin today, with this set of simple rules:
Watch
Learn
Listen
Think
Act
I know it can be depressing to read the idea of Islamic terror killing thousands in your town or the possibility of a geopolitical event spiraling out of control. There are people who are well paid to be concerned about these issues but the question you must consider is “what if they lose control?”
This time, this era, this minute is the time to begin the consideration of that question.
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Posted in Old Posts at 1:23 am by Administrator
By John Galt
October 29, 2007
A long time ago, in a galaxy far, far away…….
Wrong story, but the theme song fits our current situation in more ways than one will ever know. This week that just ended on October 26th saw a tremendous fortune wagered that the Federal Reserve has to cut rates again this upcoming meeting. I find this discussion fascinating since in reality, the box that Greenspan built I still quite solid and has all of the governors trapped inside it (Can you imagine the smell by now!). The reality of the situation that is beginning to sink in is that the Federal Reserve must destroy the dollar to save the election, not the economy. In this editorial, I’m not going to take a super firm conviction on either side of the discussion as the unpredictability of where we are at in history is obvious. But for the sake of having a good time on the internet and for discussing the upcoming week’s economic events, this is the “pro” side of cutting rates deeply at this meeting presented below…..
1. There is no indication of an actual strengthening in domestic consumption when the numbers are dissected. The Fed realizes that the consumer credit numbers are increasing not with the purchase of goods and services that are arbitrary, but for basic needs such as medical, energy and worse, making the house and tax payments. The Fed should lower rates to ease the credit card rate increases flying into the system and enabling the shopper to participate in elective shopping decisions.
2. Jingle Bells, Jingle Bells….. That’s right gang, it’s less than 90 days to Christmas and the Grinches in Shanghai could care less if you buy lead coated widgets or poisoned dog food. Just send them the money! However, the Fed cares deeply because if the Chinese Communist manufactured garbage can not be resold through our retail system and the inventories sit, the risks of a minor recession going deeper will multiply instantly. If we can not keep the cash flow moving to Beijing, they have no reason to hold our worthless garbage paper. And what scares the banksters and D.C. liars club more than a summons to Congress is the idea of not just government paper being dumped, but the wholesale liquidation of all the MBS we hogjawled them into buying on the open market. So if the Chinese Communists only got 5 cents on the dollar for say, oh, some Florida BBB paper they got stuck with, what would that do to our boys from Bubblevisonland.
3. Adding on to the Christmas nightmare, if they don’t cut in October, there is no way they can cut again until December, far too late for the shopping season. They have to do it now or the Grinch passes the lumps of coal out. And if they don’t cut then have one of their famously rumored “emergency” meetings in November, that spells p-a-n-i-c and the world freaks out. No winners for the banksters, no way, no how.
4. The market expectations are somewhat over rated, but the tin ear on the Helicopter hears all of the whining, bitching and moaning. Bernanke knows he has to take some action and with 25 basis points already priced into the market, that might just be received as a deflating bowl like announcing to a 4 year old that Santa wasn’t real. The hedgies have priced 25 points into the market and made some rather bold gambles on 50 points. Should those gambles backfire, and they are unable to rake enough profits in the last one hour and forty-five minutes of trading to cover year end redemption requests, then that leaves selling things that matter; like S&P 500 stocks and bonds.
5. The final reason is the ongoing real estate crash. No, this cut will not help the average schmuck who is about to get reset into bankruptcy but it could help the arbitrage players who are raking in huge profits playing the currency markets. The banksters are hard pressed to make any large money in the safety of government securities so by using their brokerage divisions they are fulfilling their addiction to high yields by playing other unregulated and off the books markets. The derivatives markets for real estate might well be a disaster but other instruments are still in play and they need these yields to offset their losses and stop the bleeding. As long as the government lets them play Donkey Kong with your retirement, this game will continue. Of course as Jim Sinclair has so eloquently stated “this is it” and once the first gambler screams “no bid” on the wrong instrument the music stops and the banksters will be out of chairs.
So while there is a myriad of reasons to justify such a strong rate cut, I am sure that anyone can come up with hundreds more, both pro and con. Thus……
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Posted in Old Posts at 1:22 am by Administrator
By John Galt
October 29, 2007
This section could be written somewhat short and sweet. But the problem with short and sweet is that getting to the point is beyond any concept of reason or logic by anyone in the blogosphere, so why should I be any different? In this writer’s esteemed opinion the Fed must stop cutting rates here, even at the risk of destroying the equity markets in the short term to salvage the US Dollar. If there is no line in the sand, no demonstrated willingness to stop the decline and devastation of our currency, then the long term results will make the Carter Economic Miracle look worse than the short lived idea of “Drunken Ice Follies”. Sadly, the currency is viewed as a tool to promote and pay back debt and the debasement of our national symbol of trust and faith, that one symbol the world still held in high regard, is fast approaching the point of no return.
In numerous other editorials, I have ranted, raved, screamed, bitched, moaned, freaked out, smitten and sworn at the government and the central banksters for failing to resolve the national debt situation and valuation of our beloved greenback. Unfortunately my voice is but one in the wilderness of garble, usually drowned out by a million “booyahs” as those souls open their mutual fund statements to see the joyous two percent increase for the month, even though the destruction of the dollar often dilutes those increases five fold. Once the U.S. Dollar Index, so popularly quoted everywhere including Bubblevision I and II now, declines below the magic number of 72, there is no point of return or any idea as to what it will take to put it all back together again. The perception that we can grow our way out of any currency crisis is so naïve, so ill-informed and so disrespectful of the growing geopolitical and economic power of the remainder of the world that it is shameful. The world is beginning to realize that they have supported a drunken sailor for twenty years plus now and that we need to either sober up or just go away for a while. The world economy and political powers are trying to push for the latter so their own self interests are not destroyed and they are allowed to grow unhindered by our foolishness.
Thus why we can not cut rates and must learn to endure some major economic pain as the excesses are wrung out. It is sad that the powers that be are not willing to endure the political pain while the party is wound down and the consequences of such usually lead to a crash, not a nasty hangover. I hope that the Fed does the right thing and surprise everyone by not cutting and actually defending the dollar. The consequences of cutting rates could lead to a massive decoupling by other nations from their dollar peg and a sudden, uncontrollable inflationary spike which would last in excess of twenty four months. Such an inflationary spike would be so destructive to the retirees of this nation that there is no action the Fed could take to neither preserve their investments nor guarantee anyone’s ability to purchase basic staples without the implementation of price controls. That prospect should terrify everyone except those who have prepared for the worst case scenario.
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10.26.07
Posted in Old Posts at 8:56 am by Administrator
This Friday night I was planning on covering 10 stories the MSM will never cover. But due to current events spiraling a wee bit out of control and with what I expect to be a violent day on the US equity markets and commodity markets I will be focusing on the day’s current stories to prepare everyone for the weekend. I do see some potentially wild events in the markets today as well as a blow up in the Middle East.
For what it’s worth, I would top my gas tanks off today if I were you…..
To listen to the Q-Files you can do so as follows:
1. 7.465 Mhz from 7-8 pm (1900-2000) EDT
2. Streaming via www.wwcr.com (stream 1)
3. Streaming via www.stevequayle.com
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10.24.07
Posted in Old Posts at 9:41 pm by Administrator
By John Galt
October 24, 2007
1 percent. One out of one hundred. Ten out of one thousand. A miserably low number which neither indicates sway or influence on our economy unless it’s the billionaires making acquisitions, or in this case, a nightmare that is being propagated on the public with stories of fictitious origin and wishful thinking. The general public has used their NEA endorsed education to be so dumbed down, so mentally incapacitated to think on their own that they believe the Dow Jones Industrial Average is the measure of the economy. However applying the statistical logic of baseball to finance is not only unwise, it’s the route of the greater fool theory which the banksters are bound and determined to keep the sheeple married to and the greatest wealth extraction in history well underway.
So why is 1% so bloody important you ask? That’s the exact number of Adjustable Rate Mortgages that have been refinanced into fixed rate mortgages since the Real Estate Implosion of ’07 began. The advertisements by the various shysters and those God awful DiTech ads which permeate the media like leeches which suck your blood in a tropical pond of water should have been your first clue it’s going to get worse. But the 1% who managed somehow to qualify only indicates that this problem is getting exponentially worse, not better. The banksters, as illustrated with the “let’s tell a little lie and see what happens” financial reporting method employed by Merrill Lynch today, are freaking out. There is not just a little panic in the back rooms and squash courts that would be easy to get rid of via layoffs and the Rent-A-Congresscritter program. This is the kind of historical panic which causes entire financial systems to collapse because the “full faith and credit” has become recognized as an atheistic faith with all the trappings of what happens when you try to marry your computer and it laughs at you when you try to have a serious religious discussion with it (that’s Baker Act time down here in Florida; break out the straight jackets).
With only one percent of these ARM’s being refinanced, you can see the disaster on the horizon. The banksters are trying desperately to postpone the day of reckoning because if they dumped all their bad news in one quarter at one time, the markets, not just the equity but all markets would crash resoundingly. Thus the lack of ability to re-qualify all of these people who took out such intelligent loans such as ARMS-Option which have resulted in negative amortization, stated income and my favorite, the no-docs with 2/28 or 3/27 teasers are just watching and doing what they do best: waiting for a government bailout. The banksters, terrified at becoming the largest landowners in history since British royalty in Medieval times, are also waiting for a government bailout. Sadly, I have some bad news for them; the U.S. government is waiting on a bailout also. If the Chinese Communists and OPEC elect not to bail our economy out, the implications are easy to figure out. At this time there is no indication that they are going to buy any more of our garbage paper from Wall Street, so the panic is only being bottled up and waiting to be uncorked on the first major investment bankster going into default. In the mean time, the average investor has nothing to worry about. Unless their pension fund, 401K, IRA, or other investments are structured to include the pain from the garbage paper. You see the banksters, besides being evil, are not stupid. They figured out that no matter the leverage, no matter the risk, if they spread it out to everyone be it a local government, a Mom and Pop local bank or your Mutual Fund the Federal Reserve would never let it all fail because it would wipe out our economy and the retirement of almost one hundred million suckers, er, investors.
Well, one percent suddenly becomes the most important number when put into those terms. And with our currency declining over 1% almost every few weeks, it won’t take long to find a safe, secure bottom which will stabilize our markets and give everyone a sigh of relief. So look forward to the good news several months or maybe a year plus from now. Ignore the phony government reports and statistics. Wink and nod when you hear about fraud on Wall Street or Main Street when it impacts your investments. Just remember, the sun will come up and the markets will finally stabilize.
Because everything is stable when it trades at “zero”.
Got Gold or Silver?
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10.21.07
Posted in Old Posts at 12:51 pm by Administrator
For all my readers, pay STRICT attention to the markets tonight. The Turkish-Kurdish situation is heating up, the oil markets will be sensitive to the announcement from Turkey this afternoon (after 1300 EDT) and it would appear that the PKK wants to have a Turkish invasion of Iraq and soon. This will cause a major dislocation in many markets and that should be reflected in the futures when they open Sunday afternoon.
I’ll have more to add on this later, but there are some other major bankster problems which could be aggravated by sudden movements in the futures and overseas instability. This will be another one of those “most interesting” evenings, needless to say.
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10.20.07
Posted in Old Posts at 1:04 am by Administrator
I’m going to leave this rant short and sweet as it’s been a long three week period for moi and wow, what a nightmare. The economy in Florida is basically in total collapse. Not only do I sell now, but I get to make collection calls and they are increasing in number and dollar amount. When you start seeing the subcontractors bugging out, that’s a sign we are heading into Phase 2 of our typical Florida housing crash. That means we have 24-36 months to go. So what did the events of the markets today, and this week for that matter, plus the geopolitical storm mean?
First, the stock markets are lagging indicators right now. The refusal to put the garbage on their books out for everyone to see and let the markets decide means that the game of hide and seek must continue. The execs have to keep the illusion up through Thanksgiving to get their Christmas bonuses, but I don’t see it happening. There is a very good chance that next week, we could witness a major negative market event. I fear that the total collapse of the ABX and other commercial paper markets will cause another freeze up in the exchanges and will destroy the international credit system with us shipping the garbage out and the rest of the world repatriating dollars back in exchange. Now they are not participating and this weeks TIC report indicates to me that without the hedgies (Pirates of the Caribbean) and the U.K. (who has to participate because their banking system is married to ours) we would have witnessed a massive monetization of our debt. Instead, we are witnessing a back door acquisition by the Fed, using their laundry facilities in the Caymans. A lot will depend on the idiocy to be uttered at the end of the G7 meetings and if they call for a new currency structure (my guess) is uttered, then Sunday night could be an Asian tsunami of dollar liquidation. Keep in mind that when I say dollar liquidation, I’m not just talking the currency folks; I mean ALL dollar denominated assets including our equities and treasury garbage. The number to watch is 76.85 on the USD Index and 1485 on the S&P 500 cash index. If we violate those with volume on Monday, then we could see a rather dark day, that day. There is no chance the ChiComs or Fed can bail this puppy out and there may not be a desire to and instead scare everyone by painting the swan.
Next, the wild cards of Israel, Turkey, Russia, China and Pakistan will play prominently. We are well within our window of concern about moves being made against us or our allies. Any violence or change in dramatic strategic positions by the big boys, then not only could we see our financial markets touched off, we could see a play by our enemies inside the U.S. and overseas.
Pay attention, alert and prepared. Please.
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10.16.07
Posted in Old Posts at 1:57 am by Administrator
Wow! These are some eye-opening numbers….
Submitted: $20.5 billion in Treasuries, $17.45 billion in Agency notes, $39.1 billion in MBS
Accepted: $118 million in Treasuries, $8.448 billion in Agency notes, $6.184 billion in MBS
Someone is hurting BADLY out there gang…..
http://www.newyorkfed.org/markets/omo/dmm/temp.cfm
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