Terminus of orbis terrarum ut nos teneo is
Just a heads up gang:
AIG
Citi
Lebanon
Oil
Inflation
Food
IF that doesn’t keep your mind occupied, trust me, the markets and big money will be paying attention. Don’t go into your summer slumber yet. More this weekend….
SELL ALL YOUR PRECIOUS
METALS NOW!
(So my friends and I can hoard them at a cheaper price)
May 5, 2008
I mean it. Sell every holding you have. Mail your coins to me. Mail your silver bars to me. Heck, gold, platinum, palladium, I won’t cry. Liquidate all of your holdings now, please.
So I can look back and laugh at those of you who do not understand the difference between “real money” or insurance, and those who follow the sheeple bleating herd that goes “Baaaa, Baaaa, Baaabooyah!” To say that yours truly has not enjoyed the circus like atmosphere created by low volume rallies in the equity markets coinciding with the futures in the commodities getting a much needed major correction, would be an understatement. Yet there are people who are swayed by panics in all directions so human nature being what it is, I would not expect anything less. So why am I telling you to SELL ALL YOUR PRECIOUS METALS NOW!?!???
Because my friends and I want to buy them during this correction at much lower prices.
That’s right, I’m one of those evil, anti-PC, anti-“Can’t we all get along,” anti-“please hug the trees for freedom,” Y2K survivalist-get-me-a-missile-silo-to-live-in, anti-CNBC, bitter gun totin’ Bible clinging capitalist pigs. And as our society accelerates towards the inevitable correction for paper excess in a fiat fantasy land I want to hold as much real money as I can get my insurance grubbing little paws on. That’s right boys and girls, I am a (gasp) “HOARDER!!!!!!!!!”
I know, that shocks all of my readers and listeners, but it shouldn’t. I believe that in the times we are about to embark on , that would be the bottom of the second inning of this absolute decimation of a fiat currency right about now, and the implications not just for capital markets but for American society as a whole are terrifying at best, horrific when thought about. As most of my readers and listeners “get it” this next section is to address those that ask “get what?” Because what we are about to witness will keep your head spinning for decades, and your wallets either super fat or super thin, depending on your desire to accept what is ahead or if you like the government issued FEMA Visa card or the wheelbarrow currency of the day issued to your family.
An Un-BEARingly Stearn Hint
As anyone can see(well, maybe not a bubblevisionista) on March 16, 2008 gold took a rather drastic turn to the upside, topping $1030 in overnight trading in Asia. This was obviously due to the crisis where the American banksters on Wall Street decided to devour one of their own with the full faith and backing of the American taxpayer. The trashing, allegedly deliberate and obviously overt, of Bear Stearns was designed to send the Godfather like message of an “offer they couldn’t refuse” and how our capitalist system has devolved into a Mafia like movie event with Jamie Dimon playing the role Al Pacino lusts for. While the great con was being perpetuated on America and the world that Benron and the Boys were doing a great thing by bailing out the bankster system and preventing a complete meltdown, what few seem to want to acknowledge or accept is that they people who initiated the problem all profited from it. The SEC will never investigate what happened, nor will CONgress, nor will the FBI. It’s like Don Corleone who always had all those judges, Senators and law enforcement officers in his back pocket except this group of thugs has the financial “press” (it’s hard to type that one with a straight face) as part of their collection also. So with all that background noise, those of you may be asking, so what does this have to do with the ever increasing price of tea in China or gold for that matter? Everything. What it indicated was the ultimate vote in the confidence of the American financial system. Which was “none” to “very little” depending on what corner of the world you were in or if you were a broker hiding under your bed on Wall Street that night. Gold did not skyrocket because it suddenly became the fashionable investment of the day. Google’s stock wasn’t purchased and hidden in back yards or safes. Microsoft stock issues and options were not purchased as a “hedge” against further instability. Goldman Sach’s corporate bond issues were not the “hot commodity” that night either. That’s right, it was gold and other precious metals. Real money which is the ultimate backstop or insurance against a systemic or societal collapse. Yet so few remember that month, that evening, nor the impact that day on the world. We came close, once again to a meltdown. And this one was self-inflicted; what happens when the “Black Swan” flies in and creates the validation of the law of unintended consequences being implemented upon unsuspecting traders? That’s right, there’s not enough gold nor limits upon it to stop the price from shooting up. And that’s where the “insurance” issue comes into my thinking.
It’s an amazing sight to watch this entire story unfold. In the movies a Godfather or crime family head (the ‘don’) issues an edict and the family snaps to into action. With the crime family running our central banking system, it’s little wonder we don’t see guys in nice Italian suits kneecapping taxpayers to steal their retirements to cover their blundering decisions. Wait a minute; they are kneecapping the schmucks; with an aluminum baseball bat called “inflation” which few understand nor desire to learn about. Alas, this is not a lesson on macroeconomics, but of insurance, safety and a desire to put a little bit away for a rainy, er, hurricane type day.
Last week the leading crime family met, the Federal Reserve, and elected to lower the Fed Funds target rate to 2%. Big whoop. The statement paid lip service to all of the usual suspects, inflation, gas prices, politicians, green ducks in a pond and the economy that they endorse providing fraudulent data to investors to provide cover for their operation. In reality, Don Bernanke and the boys are ready, willing and able to continue to flood the system with as much cash as necessary to keep the perception that things are in control alive and well. Who cares if 80 year olds have to eat Alpo dog food, at least they are eating so let’s destroy the dollar and get this meeting over with because the Hamptons are calling and summer is here. Of course this chart of the dollar tells the tail and if you’ll note, we still have yet to touch, kiss, hug or get a whiff of the 200 day moving average:
Keeping that in mind, you now begin to realize that the sell off in gold would be just as easy to manipulate and create as the market can be controlled quite easily by any one of the New York families like Morgan or Sachs. Because that chart should indicate gold priced at almost double it’s current levels. But with the organized crime family running our banking system it’s just a matter of selling enough futures or buying enough puts on GLD to trigger computerized sell programs. And since the average American sheeple only pays attention to what the mainstream media or Bubblevision tells them about prices, they have no clue as to the reality or depths of the crisis we are still in. That all being said (did I rant enough for ya?) I sincerely hope that you plan to sell me and my friends all of your precious metals. We don’t want futures. We don’t want paper. We don’t want promises. We want the real deal. The metals you can have and hold as opposed to the paper promises. Why is that so important and what’s the difference? Glad you’re asking….
Mafia Insurance Policy
With all of the stories since February of 2007, the fraud, the deceit, the bald face lies presented to the American public (you know, like 0.0% CPI in February), wouldn’t it seem prudent to maybe, just maybe put a little insurance out there to protect your assets, your family and your future? Think about it. If you lived in a crime infested neighborhood like the USA, you have three realistic options:
Since most of us do not have option 3 as a realistic possibility, I highly advise option number 2. You see, we have to pay our taxes, that’s one of the realities of life we have to deal with. And those taxes are And those taxes are further penalized via inflation by the banksters, aka. “the syndicate,” who have elected to gamble at the casino with your money, your nation and your future and they rolled snake eyes over and over again. Here we, the public, sit exposed to not just a historic collapse of an economic system, but the potential collapse of our nation, planned or unplanned, all in our life time. Wouldn’t you want a little peace of mind and insurance against that? But all you hear on Bubblevision is the “relic” argument against precious metals because their time frame is minutes, not years, and yours needs to be for the long term also. You need insurance against these Mafia like clowns who are gambling with your children’s future. I will not go into another rant to teach you that in times of trouble, people flock to precious metals, gold primarily, to hedge against the destruction of a fiat currency. If the economic matters which triggered the crisis in Bear Stearns and the entire world credit market regime was truly “contained” would it not be logical to assume that the traditional safe haven investment of gold would be well back into the five hundred dollar price range where it traded when this latest move began two years ago? Look at the chart below and think; who knew what was coming and what hedge did they pile into?
Now you get the idea. A lot of the smart money knew what was going to happen. Heck, I’m just average schmuck money and I figured it out. Then again, I felt that since the year 2000, something was wrong and the speculative bubble in the dot.cons would create the nightmare we are living through now. I never imagined that those investments eight years ago would give my family long term security should this fiasco continue. And as the prices decline to what I deem are intermediate and short term levels of tolerance, I will buy again. And again. And again. Since we are kissing the 200 day moving average on gold all those screaming “sold to you” please form a line to the left.
I’m buying and it’s that “again” time.
Because this time, when the black limo pulls up and the two nasty looking guys come to kneecap me, I want to have a golden shield to protect my family and I from the inflation loaded baseball bat and the idiots behind it.
And if you’re wondering, Greenspan is the real ‘Don Corleone’ should we be casting the movie parts. Bernanke is Fredo.
God help us all.
Today’s headlines about the renewed optimism on Wall Street brought back some memories….
From the AP today (May 1, 2008)….
NEW YORK (AP) — Wall Street has enjoyed a big rally, with investors sending the Dow Jones industrials up nearly 190 points in response to a stronger dollar and falling energy prices.
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And from yesteryear….
Editor Marcus A. Rose of The Business Week: “Business will be good in 1930 for the lean, hard firms. It will not be good for the fat, soft outfits.”
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And back to today’s NY Times….
Main Street may be struggling, but Wall Street is on a bit of a roll.
Despite a drumbeat of bad economic news, the stock market is up — almost 11 percent in the last few weeks. Junk bonds, those risky corporate I.O.U.’s, are rallying. The value of financial shares, bank loans, tricky credit derivatives — up, up, up.
Many on Wall Street, the epicenter of the credit mess, seem to think that the worst is over. For the first time in months, analysts and executives sound upbeat again. Many of them see a broad, sustained recovery in both the economy and the financial markets coming in the second half of this year, a prediction some market strategists call hopeful at best.
For now, policy makers are echoing the mood on Wall Street. Treasury Secretary Henry M. Paulson Jr. said in an interview with Bloomberg Television on Thursday that “we are closer to the end of this problem than we are to the beginning.”
A report from the Bank of England, meantime, concluded that mortgage securities, which have been at the heart of the financial troubles, probably have fallen too far. The central bank said prices of such securities should “improve gradually in the coming months.”
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And from yesteryear again…..
Editor Ralph C. Busby of India Rubber & Tire Review: “Distributors everywhere in looking to 1930 have legitimate reason to be conservatively optimistic.”
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And back to the present from Michigan Live today…
The state economy could stabilize and begin producing jobs in the next two years, but that’s only if the state legislature addresses the newly enacted Michigan Business Tax and if domestic automotive manufacturers stay on the course to sustainability.
That’s the message from a panel of local Plante & Moran experts when the accounting firm released the results of its survey on middle market companies in the Midwest.
What the survey revealed is a high amount of optimism among those who responded to the survey - 344 respondents in all, with 145 located in Michigan. Half were CEOs, 25 percent are CFOs, and the rest are a mix of COOs, vice presidents and directors and company owners.
With 67 percent reporting optimism, that’s a gain from two years ago, when 56 percent reported they were optimistic or very optimistic, said Susan Telang, Plante & Moran partner.
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And one more from 1930……
Editor A. C. Saunders of Furniture Manufacturer: “. . . the business, valley will not be deep and will be crossed during the first quarter of 1930.”
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OH what the heck, let’s pick on the real estate fans and builders who know no downturns…from Globe St.com today…..
Last updated: May 1, 2008 12:50pm
Land: Now’s the Time to Go Back to Market
By Mark Cooney
Land has normally been the key to gauging whether the current economy is still in a trough or taking an upward climb toward normalcy. Well, if the past two months are an indication, land is back in play and the months ahead should bode well for all other commercial sectors.
We are finding a significant increase in owners wanting to list their acreage. More flexibility regarding valuations and lower interest rates are making it easier for additional players to obtain financing for new acquisitions.
There remains a large number of single-family lots and homes yet to be absorbed surrounding Tampa Bay. However, the entitlement process for some tracts takes months, if not years, and now is the time for owners to put their acreage back in play.
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And back to the future, 1930…..
Editor Peter A. Stone of American Contractor: “During the year 1930 the volume of building construction work materializing will be greater than in 1929. . . .”
And my favorite quote from the TIME magazine article, Dole or Revolution on Monday, April 14, 1930…..
Meanwhile Secretary of Labor James John Davis, than whom none has been more officially cheery in the present labor crisis, explained himself in the April issue of the Financial Diary: “I’m no believer in empty optimism. At the same time one doesn’t improve the condition of a sick man by constantly telling him how ill he is. On the contrary we do our best to fill him with courage and confidence. . . . Business is staging a record recovery.”
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Need I say more? It’s beginning to sound like an echo in here. A somewhat historical echo……stand by as the next shoes hit this fall.
During last week’s show, I got a confidential email from one of my listeners discussing a letter the family received from the Teamster’s pension plan. At this listener’s request I mentioned it briefly on the air with few details to preserve confidentiality. Today, that news is no longer secret. Both of these stories are from www.tdu.org (Teamster’s for a Democratic Union) and were issued today regarding these letters.
May 1, 2008: The New England Teamsters and Trucking Industry Pension Fund has put members on notice that the fund will be in critical status (the “Red Zone”) when its funding classification is officially certified later this year.
The fund also announced strict new rules that will make it tougher for local unions in contract negotiations.
The new rules are part of the fund’s Rehabilitation Plan—a plan required by the Pension Protection Act for improving its funding within a 10-year period.
The New England Fund has until Dec. 29 to officially certify its status under the Pension Protection Act—and a year after that to formally adopt a Rehabilitation Plan. But in a March 27 notice to members, the fund announced it is taking action now.
No Cuts—For Now
The good news is no pension cuts are being implemented—at least for now. Instead of reducing benefits, the fund is focusing on increasing revenue by requiring all new contracts that are negotiated to include a 10 percent increase in hourly pension contributions each year.
The 10 percent rule applies to all contracts negotiated after March 4. If a local union is unable to bargain a 10 percent annual increase in pension contributions, then Teamsters covered under the contract will suffer pension cuts.
The 10 percent Maintenance of Benefits (MOB) requirement is the highest in the Teamsters. It doubles the five percent MOB that the New England Fund implemented in 2005. The Central States Fund requires an eight percent increase in pension contributions each year.
The new requirement is so steep that the recently completed UPS and Freight contracts don’t meet the 10 percent standard—despite record pension contribution increases of 65 cents a year.
The New England Fund took this into account and allows any new contracts that include increases of 65¢ an hour over and above a current pension rate of $5.26 an hour to meet the new requirements.
Challenges in Bargaining
The new rules will create serious challenges for Teamsters in contract talks.
Healthcare costs are on the rise, and fuel prices are skyrocketing. At the bargaining table, we will face the triple challenge of negotiating record pension contributions, higher health and welfare contributions and wage increases to keep up with the rising cost of living.
All this, in the context of a recession.
Teamsters in New England need to get ready for tough bargaining and be prepared to get involved in contract campaigns if we’re going to protect our pensions and healthcare and win the wage increases we need to keep up with the cost of living.
And from the “Central” region…
May 1, 2008: Hundreds of thousands of working Teamsters and retirees received a startling letter from the Central States Pension Fund in early April saying that the fund is in critical status.
That’s also called the Red Zone. The notice is written in legalese and discusses a potential reduction in benefits.
Given the history of benefit cuts in Central States, it’s no wonder that thousands of Teamsters are calling the fund, their local unions, and Teamsters for a Democratic Union (TDU) for info.
Even UPS Teamsters, who exited the fund at the beginning of the year, got the letter because their retirement after age 65 will in part come from Central States.
The letter—or funding certification notice—was required by the Pension Protection Act, and the wording about “possible benefit reductions” was required by the law. But the Fund could have done a better job of explaining it so that so many Teamsters didn’t assume the worst.
No New Cuts
The good news is that Central States Teamsters and retirees will not face any new benefit cuts.
Those cuts were made four years ago. As a result, the fund has lowered its future benefit obligations. The cuts have driven the average retirement age up from 59 to 61. The fund has increased future income by requiring all new Teamster contracts to increase employer pension contributions by at least eight percent a year.
These measures mean more money will be coming in and less flowing out, so the fund’s balance sheet is expected to improve in the coming years, moving gradually toward being fully funded.
Small Pension Increases
Pension benefits will actually increase over the next several years—even with the fund in the Red Zone. That’s because the amount of retirement benefits that Teamsters earn each year (called “pension accrual”) is tied to employer contributions, which go up each year.
By August 2012, a freight Teamster will accrue nearly $200 a month in pension for a year of work.
Unfortunately being in the Red Zone means that this is the only pension improvement on the horizon in the Central States.
The April letter explains that if a company busts the union, or refuses to sign a contract with the eight percent increases, then cuts will be made in the affected members early-retirement (25- and 30-and-out) benefits.
Our union needs do whatever it takes to ensure that doesn’t happen to any Teamster. Most Central States Teamsters are already under contracts that include the eight percent pension contribution improvement.
The Long Run
No letter from the fund or anyone else can guarantee our pension fund will be secure for decades to come. Our only guarantee is a strong Teamsters Union and labor movement that can stand up to corporations who try to weaken or cut our pensions.
That’s what TDU stands for. We work to inform and unite Teamsters to defend and strengthen our benefit funds.
That’s why we opposed the International Union allowing UPS to buy their way out of the Central States Fund. In that case, corporate greed got its way, and our union leaders didn’t even put up a fight.
Elsewhere, TDU members have successfully mobilized Teamsters to defeat benefit cuts and win improvements.
We need to build our pension fund on the strongest and broadest base. We intend to make that happen.
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Needless to say, should anyone have any misconception, this is the beginning, not the end. The American people area about to discover that a “recession” does have an impact on their futures. The real discovery that the baby boomers are about to make is that when banksters run wild the investments they rate as “AAA” safe are in fact CCC- deadly and often will break some hearts and retirement dreams as the pension plan administrators thought they were investing in safe, sane instruments only to find out, like the taxpayer, they’ve been conned.
Yes, the news tonight just broke 10 minutes ago and I would call it a nuke. But only the people who are in the know realize the pain this will spread. Just as I was getting ready to write another long treatise on the swirling sensation we’re all feeling (no sense clutching or scratching the porcelain bowl is pretty slippery) and where we’ll be when we are deposited into a new sewer system. Then this story breaks on Reuters at 1948 EDT:
Wed Apr 30, 2008 7:48pm EDT
NEW YORK, April 30 (Reuters) - U.S. bond insurers, including MBIA Inc (MBI.N: Quote, Profile, Research) and Ambac Financial Group (ABK.N: Quote, Profile, Research), will likely need to make new interest payments for structured deals backed by residential mortgage debt, as more homeowners default on their mortgages, Citigroup analysts said on Wednesday.
This could place an even greater strain on the companies’ cash flows at a time when they are already grappling to sustain capital levels adequate for their top ratings, the analysts said in a report.
The bottom line? The sentence where it says “as more homeowners default” which of course is a given since the judicial system in Florida can not even keep up with the pace of foreclosure filings and word is (an unconfirmed rumor for now) that there are rumblings that creditors are fed up with the flippers are going to file bankruptcy against them to get some assets back. So this is about to take a seriously ugly turn gang with property tax payments way behind down here which means they are defaulting on that in California, Arizona and everywhere else the bubble is imploding at a record pace. So just when you thought the word “monoline” has departed our vocabulary, stay tuned. This story indicates we are about to witness Phase II where not only do we have Alt-A and Option Arm defaults accelerating; it means now the governments are going to start filing liens against properties to get their back taxes back.
I wonder what the U.S. will look like when 20% of all the real estate is owned by the Federal Reserve, various municipalities and the big banksters.
Never mind. I wrote about that already. It’s going to look like Pottersville.
