Meltdown

[ezodisy]

Full fib @ 61.8, baby!

didn't quite get there, had something of an asthma attack after passing through 50. Still, not bad, volume not bad either. Closed Dow long at 8700 and Nikkei at 8500. Will join in the thanksgiving holiday tomorrow. I did grow up there after all.

For clarity: there is no rally yet. Bank holiday weeks are sometimes deceptive and against the grain. Next week will be revealing, even decisive for the holiday period. I think we'll see a corrective near-term wave and then continue on what is already something of a suspect intermediate rally. The Dow however is hitting a RSI resistance trendline and testing the one-time support of the broken triangle which now serves as resistance as well, so this is all speculative until proven. Gold by the way has strong resistance at the 830-850 range as well as 61.8 fib resistance from the October high. It fell from there today and is at 813 now, and could be back at 730 next week, even down to 600 by end of year.

[ezodisy]

http://ftalphaville.ft.com/blog/2008/11/26/18738/the-vision-thing/

Harvard Economic Society during the Great Depression.

"The Harvard Economic society, it will be recalled, had come up to the summer of the crash with a valuable reputation for pessimism. This position it abandoned during the summer when the stock market kept on rising and business seemed strong. On November 2, after the crash, the Society concluded that "the present recession, both for stocks and business, is not the precursor of business depression." On November 10 it made its notable estimate that "a serious depression like that of 1920-21 is outside the range of probability." It repeated this judgement on November 23 and on December 21 gave its forecast for the new year: "A depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall." On January 18, 1930, the Society said, "There are indications that the severest phase of the recession is over"; on March 1, that "manufacturing activity is now - to judge from past periods of contraction - definitely on the road to recovery", on March 22, "The outlook continues to be favorable"; on April 19, that "by May or June the spring recovery forecast in our letters of last December and November should be clearly apparent"; on May 17, that business "will turn for the better this month or next, recover vigorously in the third quarter and end the year at levels substantially above normal"; on May 24 it was suggested that conditions "continue to justify" the forecasts of May 17; on June 21, that "despite existing irregularities" there would soon be an improvement; on June 28 it stated that "irregular and conflicting movements of business should soon give way to sustained recovery"; on July 19 it pointed out that "untoward elements have operated to delay recovery but the evidence nonetheless points to substantial improvement"; and on August 30, 1930, the Society stated that "the present depression has about spent its force." Thereafter the Society became less hopeful. On November 15, 1930, it said: "We are now near the end of the declining phase of the depression." A year later, on October 31, 1931, it said: "Stabilization at [present] depression levels is clearly possible." Even these last forecasts were wildly optimistic. Somewhat later, its reputation for infallibility rather dimmed, the Society was dissolved."

[ezodisy]

Peter Schiff is a hot commodity (pun intended) on mainstream media.  Here he is one month ago (I apologize if this was already posted).

Peter Schiff: "The Dollar is going to fall through the floor"

Thanks for that. I agree with most of Schiff's views but am in two minds about gold. In the medium and long term I think we'll see his 2 or 3000 prediction. Short term I think it'll fall, maybe to 600, maybe more, next year could be the big turning point and if it hits those low numbers then I am in like flynn. Same with oil. Jim Rogers is making a big case for soft commodities, for agriculture, and medium term this should come good too. The commodity bubble is on the way -- we haven't even started yet.

[ezodisy]

Happy Thanksgiving - and US taxpayers get stuffed stuffing

[Mozart]

I think the markets are going up yet again tomorrow, just a prediction but the dow will get to 9000.

[ezodisy]

That would be a big rise. Any reason for thinking that? What with Big-Mac-indigestion going on today, I'm not so sure they'll be up for it. Things are always shit slow when the US shuts down

[ezodisy]

Roubini was interviewed on Bloomberg for half an hour this morning. He's another one who called this correctly back in 2006. His points were:

House prices to fall 40%

Russian ruble to fall another 10 - 20%

Commodities to decline short-term, another 20% off oil

Dollar to lose its status as the world's reserve currency

ECB lagging, more aggressive moves required. He singled out Germany in particular for being too stubborn

No recovery before 2010/11

[Valentino]

ECB? European Central Bank?

[BachQ]

I believe this is what you're referring to ? ....

Roubini was interviewed on Bloomberg for half an hour this morning. He's another one who called this correctly back in 2006. His points were:

House prices to fall 40%

Russian ruble to fall another 10 - 20%

Commodities to decline short-term, another 20% off oil

Dollar to lose its status as the world's reserve currency

ECB lagging, more aggressive moves required. He singled out Germany in particular for being too stubborn

No recovery before 2010/11

Roubini, Print baby, Print

Pt. 1  http://www.youtube.com/watch?v=G0gmx9wW-no

Pt. 2  http://www.youtube.com/watch?v=pHZRkbW5JyE

[BachQ]

ECB? European Central Bank?

Yes

[BachQ]

Happy Thanksgiving - and US taxpayers get stuffed stuffing

LOL

But they neglected to include a picture of TARP:



Pile of sh!t

[ezodisy]

I believe this is what you're referring to ? ....

Roubini, Print baby, Print

Pt. 1  http://www.youtube.com/watch?v=G0gmx9wW-no

Pt. 2  http://www.youtube.com/watch?v=pHZRkbW5JyE

That's it. Man they are fast putting it up!

That tarp picture is too funny

[BachQ]

lol!

Yeah, uh huh  Well he's going to pat himself on the back if the retest of the broken trendline holds today and we rally. Then we'll get days and weeks and maybe months of "the bailouts are working". Right. What's he going to say when it all unravels early next year and new lows get hit?

http://ftalphaville.ft.com/blog/2008/11/25/18702/bailout-maths/

Bloomberg has rejigged its estimated total of potential US support to the markets to around $8,500bn from $7,700bn, reflecting the most recent Fed proposals to save the world.

A ginormous sum, by any measure, and one which Barry Ritholtz has helpfully put into perspective.

By Ritholtz's estimate, the total actual cost of the various bailout programs (including Citi, but not including today's announcements) exceeds $4,600bn dollars, making it the "largest outlay in American history."

So large, that according to inflation adjusted numbers provided by Jim Bianco of Bianco Research, "the bailout has cost more than all of these big budget government expenditures – combined":

• Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
• Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
• Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
• S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
• Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
• The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
• Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
• Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
• NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion

TOTAL: $3.92 trillion ($3,920bn)

Further, he notes:

The only single American event in history that even comes close to matching the cost of the credit crisis is World War II: Original Cost: $288 billion, Inflation Adjusted Cost: $3.6 trillion

Ritholtz estimates that by the end of 2010, the final bill may scale up to as much as $10,000bn.

Graphically:

[ezodisy]

I think the markets are going up yet again tomorrow, just a prediction but the dow will get to 9000.

Dow stopped at the 61.8 target I was talking about on Tuesday - 8800. It will need to find support around here if it wants to rally onwards. Interestingly the 161.8 fib extension of this fall from 9600 is at c.11,000, the figure that I predicted a couple weeks ago. I definitely see it getting there if we're going to have a genuine bear market rally. The 200ma is descending around that area too.

[drogulus]

    Could someone answer these questions for me?

    What's the size of the current national debt?

    What percentage of the ~$4.6 trill. bailout represents new indebtedness? (that is, not just moving numbers from one box to another or purchasing assets)

     

[Mozart]

Dow stopped at the 61.8 target I was talking about on Tuesday - 8800. It will need to find support around here if it wants to rally onwards. Interestingly the 161.8 fib extension of this fall from 9600 is at c.11,000, the figure that I predicted a couple weeks ago. I definitely see it getting there if we're going to have a genuine bear market rally. The 200ma is descending around that area too.

I wasn't aware that Friday was a half day!

[ezodisy]

    Could someone answer these questions for me?

    What's the size of the current national debt?

    What percentage of the ~$4.6 trill. bailout represents new indebtedness? (that is, not just moving numbers from one box to another or purchasing assets)

     

the little devil face makes me think that you know the answers already. So why not just say them and make a point? It might do us all some good to get a semblance of optimism in here.

[BachQ]

I agree.  We need some optimism! (see below!) 

It might do us all some good to get a semblance of optimism in here.

America's Coming Financial Vortex: 6 predictions for 2009-2012

1. You will see an inflationary depression that will be evident by 2010.
2. Unemployment in the private sector will soar into double-digits by 2010.
3. More state and municipal governments will be federal bailout candidates.
4. Commodities will be in the next leg of their long-term bull market starting in 2009.
5. We will see oil hit $200 as Peak oil becomes obvious to all during 2009-2012.
6. International conflicts over natural resources will hit the headlines during 2009-12.

Current economic conditions and political outcomes have laid the groundwork for more events that we should be prepared for. All of these events combine to create a "Financial Vortex" that will hit us in the coming years.

First of all, be aware of what current conditions will help lay the groundwork for this financial vortex. They are:

1. America's debt load. The U.S. government has now $12 trillion in debt. Consumers and businesses are drowning in debt. America's gross domestic product (GDP) is about $13 trillion yet its total debt is over $44 trillion.

2. Derivatives. Derivatives are complicated, arcane and risky securities that now total about $500 trillion. That makes this market ten times greater than the dollar value of the world economy which is just under $50 trillion.

3. Unfunded Liabilities. The current future tally of the unfunded liabilities of Social Security, Medicare and Medicaid is nearly $99 trillion.

4. Growth of government. The expansion of the government's involvement in the economy is (and will be) massive. Taxes, regulations, controls, spending, etc. at all levels of government (both domestic and international) will be problematic by an order of magnitude that the private sector will not be able to tolerate.

So much good news!

[BachQ]

It might do us all some good to get a semblance of optimism in here.

UK Telegraph --Recession: When the money goes, so does the toxic wife ... "As the recession worsens, a lot of rich men are finding their gold-digging wives are taking to their heels."

*** Lawyers and financial advisers have reported a 50 per cent increase in the number of divorce inquiries since the financial markets collapsed in September.  A recent survey conducted by community website makefriendsonline revealed that a third of 10,000 respondents believe that financial hardship will cause a relationship to fail, while matrimonial law specialists Mishcon de Reya have reported up to 300 per cent more inquiries.  *** As the joke doing the rounds among City men goes: "This credit crunch is worse than a divorce. I've lost half my net worth and I still have a wife."

[BachQ]

Gordon Brown's Downfall video    

http://www.youtube.com/watch?v=jbgwR1pA1k0