Meltdown

[BachQ]

Gov. Arnold Schwarzenegger State of the State address (15 Jan 2009)

(part 1)  http://uk.youtube.com/v/Qv-MD_KLQ2k

"California, the 8th largest economy in the world, faces insolvency within weeks ... [and] is in a state of emergency."

(part 2) http://uk.youtube.com/v/FCWnqtwgojk

[Lethevich]

He...he...he...

"Elect a movie star as governer, it'll be fun!"

[ezodisy]

I think we are about to witness Sterling's revenge 

And about time too. The pound never dies.

The weekly cable (GBP/USD) chart shows that the 5 and 10 day simple moving averages are trying to cross up for the first time since the cross down and subsequent plummet in August. Also the weekly candle is trying to form a dragonfly doji, and there's been positive divergence on the daily for quite a while now. This could very likely result in a rally of several thousand pips, back to the 170s (currently just under 150). Witness what happened to EUR/USD when the MAs crossed up a few weeks ago (second chart).

[ezodisy]

Bank of America Posts First Loss in 17 Years After U.S. Bailout

[BAC] Bank of America Q4 net loss $1.79B

[BAC] BofA: Merrill Lynch Q4 loss was $15.31B, or $9.62 a share

[BAC] Merrill wrote down $1.92B on loans, $1.13B on real estate

[BAC] Merrill losses include $2.31 goodwill charge

[BAC] Merrill losses included $3.22B monoline write-down

----------------------------------------------------


C] Citi reaches agreement with Treasury, Fed on loss sharing

[C] Citi to split global bank from brokerage, asset mgmt unit

[C] Citi loss sharing program covers $301B of assets

[C] Citi Q4 loss $1.72 vs $1.99 loss

[C] Citi to reorganize into two operating units

[C] Citi took $5.3B value adjustment for derivatives

[C] Citi took $7.8B of revenue marks in securities, banking

[C] Citigroup Q4 loss from continuing ops. $12.14B

[C] Citigroup Q4 net loss $8.29B

[Lethevich]

Irish bank set to be nationalised

They're still falling like ninepins :3

[BachQ]

Question:  Given a huge national debt and dwindling tax revenues, how can a country quickly and easily raise revenues without raising income taxes?

Answer #1: Legalize drugs, and tax & regulate drugs as appropriate.  Reduce state prison population by 20% and federal prison population by 50% by legalizing drugs.

Answer #2: Raise gas tax

[BachQ]

9 Reasons to implement a Gas Tax:

                    1. Higher gas prices will prop up Detroit.
                    2. Higher gas prices will enhance national security.
                    3. Higher gases prices will help combat climate change.
                    4. Higher gas prices will help pay for needed road maintenance.
                    5. Automakers support increasing the gas tax.
                    6. Higher gas prices will help fight obesity.
                    7. Higher gas taxes will decrease congestion.
                    8. Higher gas taxes will make our roads safer.
                    9. Gas taxes need not be regressive.

[BachQ]

Financial Times: China surges past Germany to become the world's third largest economy.

[ezodisy]

So Lethe how's your investment in the banks going?

Barclays - 98p
RBS - 34.7p <---our government got in around 60p I think it was
Lloyds - 98.4p
HSBC - 535.75p

[ezodisy]

Question:  Given a huge national debt and dwindling tax revenues, how can a country quickly and easily raise revenues without raising income taxes?

Answer #1: Legalize drugs, and tax & regulate drugs as appropriate.  Reduce state prison population by 20% and federal prison population by 50% by legalizing drugs.

Answer #2: Raise gas tax

I don't drive in the UK and don't remember the figures but I think "gas" tax here is already ridiculously high, creating the highest petrol prices in Europe I think. People here aren't getting cheap petrol prices like our mates across the pond who certainly seem to have room to raise taxes on this quite a lot.

Can't imagine any drugs would be legalised there. Possibly downgraded, not legalised. Even less of a chance for prostitution, of course. Not that I advocate such things 

[Lethevich]

So Lethe how's your investment in the banks going?

Not paying very close attention atm. Rather than watch every small dip and rise (which is seemingly all that can happen right now in time, given the low starting point, unless an outright bankrupcy happens - which the gov't is unlikely to allow happen), I am hoping for a reasonable-odds gamble on the long-term). I'm sure that they've gone down slightly since, but it was something I was OK with before I bought. I will only start to get worried if they are at the same level in a years time

[ezodisy]

I will only start to get worried if they are at the same level in a years time

oh no chance of that. They will either be well up or nationalised 

[Sarastro]

Gov. Arnold Schwarzenegger State of the State address

Well ya, they promise to issue vouchers....that'll be FUN.

[ezodisy]

oh dear, someone forgot to tell Jim Rogers that the £ is indestructible

What are your thoughts on the British Pound?

Rogers: More doomed. It will disappear sooner. If it weren't for the North Sea, the British Pound would have already disappeared. It's more doomed. The UK has been exporting oil for 26 years; within the decade, the UK will be a net importer of oil again, and they have nothing else to sell to the world once the oil dries up.

I hope those boys in Oxford & Cambridge are thinking up ways for us to get out of this 'cause Westminster ain't helping

[BachQ]

well we can have a race between the UK screwing itself and the Euro(zone) imploding

http://www.ft.com/cms/s/0/9f80f414-e0da-11dd-b0e8-000077b07658.html?nclick_check=1

This week's Eurozone update:

ECB President Jean-Claude Trichet's vision of stable Eurozone economies may be unraveling as the gap between Germany's interest rate versus those of Spain, Italy, Greece and Portugal has ballooned to the widest in the Euro's history. "It will act as an additional braking mechanism on these economies," said Julian Callow, chief European economist at Barclays Capital in London. "For the ECB it makes it harder to determine the future evolution of the economy."

Spain's Finance Minister Pedro Solbes: Spain has spiraled into deepest recession in half a century, and is expected to contract by 1.6% in 2009.

France's 4th qtr GDP contracted by the most in 34 years, according to the Bank of France. 

Irish bank set to be nationalised They're still falling like ninepins :3

Ireland's credit default swap risk surged to a record high amid its nationalization of Anglo Irish Bank Corp., which stoked fears over escalating bank bailouts. Spain, Austria and Germany CDS's also set records.  The country of Ireland is deemed to be riskier than Tesco and Nestle. "At worst it's going to lead to fresh worries about how the Irish economy survives this crisis and how they can service their increasing debt burden," said Jim Reid, a credit strategist at Deutsche Bank.

[BachQ]

Brits "have nothing else to sell to the world once the oil dries up."

[Lethevich]

I think the UK is being mistaken for Saudi Arabia. An easy mistake to make, it happens all the time...
Awaits JdP...

[ezodisy]

Hey Dm, I've finally found someone who is more pessimistic than we are! lol

http://www.abbaswatchman.com/PAGE%208%20GRAPH%20OF%20THINGS%20TO%20COME.htm

The 50 year chart is a good one created back in the '90s. Apparently no more bull runs in our lifetime 

"You had better  start buying food and storing it fast"

lol!

[ezodisy]

Bob Carver's blog

TARP's First $350 Billion Has Gone Up in Smoke

While the Congress asks the Treasury Secretary and the Federal Reserve chief what the $350 Billion in bailout funds have been used for, they are mum on the subject. There's a good reason they're silent---the money has disappeared down a black hole of falling mortgage paper.

Meredith Whitney, the single analyst most responsible for exposing the Wall Street banks' Subprime Mortgage Ponzi Scheme that's at the heart of the current Greater Depression, revealed after the market closed Wednesday afternoon that the money the taxpayers had given Wall Street as part of the TARP bailout is now gone.

This revelation, which came after the market closed, came on top of devastating news indicating that the economy remains in freefall into the deepest depression in the country's history. This sent the market plunging from the opening bell. In the last days of the Bush Administration it's clear that they have made no progress whatsoever in dodging this historic catastophe which threatens to completely destroy our financial system. After decades of an expanding debt bubble, there is nothing that can be done to stop its inevitable deflation.

One bank is particular egregious. Citibank has lost as much taxpayer money as was lost in the Madoff Ponzi Scheme in just the last six months. These "blackhole banks" are doing exactly what we said they would do: implode and take our money with them. And, eventually, they are going to drag the country into insolvency and leave the US Dollar totally worthless.

[ezodisy]

Guardian (15 Jan 09 Reuters) - Societe Generale said on Thursday that the United States' economy looks likely to enter a depression and China's could implode.  "It is becoming clear that the Chinese economy is imploding and this raises the possibility of regime change. To prevent this, the authorities would likely devalue the yuan. A subsequent trade war could see a re-run of the Great Depression."

'We believe that the market is (now) set to quickly slide sharply towards our 500 target for the S&P," he said.'

most of the guys I talk to are targeting that area as well. I think it was Robert McHugh who put out a most bearish figure of 50 for the S&P. Yeah, 50. lol!