Note: If it's hard to see/read the briefing below, please click on this link and view the updated briefing in full-screen
Best regards
Randy
Showing posts with label Tier Three Assets. Show all posts
Showing posts with label Tier Three Assets. Show all posts
Wednesday, May 28, 2008
US Economic Outlook 2008-11+
All is not what it seems, and our US economic troubles are far from over!
Note: If it's hard to see/read the briefing below, please click on this link and view the updated briefing in full-screen
Best regards
Randy
Note: If it's hard to see/read the briefing below, please click on this link and view the updated briefing in full-screen
Best regards
Randy
Monday, May 26, 2008
More writedowns on the way?
Consumer Confidence and New home sales data will be released tomorrow (10:00 EST)... This data could make for a very interesting day, as consumer confidence is already at a 15 year low and new home sales (viewed as a leading indicator of the housing market) hit a 17 year low last month... I expect any lower indications tomorrow to possibly roil the financials once again.
Markets: Tough Days
US shares had their largest weekly fall in almost four months last week as investors rediscovered the real US economy and realised the credit crunch and housing slump had not somehow been vanquished by the rescue of Bear Stearns in March.
And that will be bad news for market sentiment here were a 1% fall has been tipped on the futures market.
Worryingly, the big drivers of Friday's 146 point fall on the Dow were the likes of Lehman Brothers, Morgan Stanley and Merrill Lynch; the big, troubled investment banks that had stabilised in the wake of the rescue of Bear Stearns by the US Federal Reserve. Goldman Sachs dropped for a ninth day in a row.
UBS warns of more losses
LONDON (MarketWatch) -- UBS on Monday warned that that it may have to record losses on non-U.S. real estate as it seeks nearly $16 billion from shareholders to repair a dented balance sheet.
UBS last week said it's going to sell $22 billion of subprime and Alt-A U.S. residential-mortgage-backed securities to BlackRock for $15 billion, with UBS providing the fund manager an $11.25 billion loan in the process.
But as the subprime troubles cool down, others have sprung up. UBS's exposure to auction-rate securities, used mostly in municipal financing, increased to 11 billion francs ($10.7 billion) from 6 billion francs during the first quarter.
UBS said its loss-making positions in real estate markets outside the U.S. "could increase," the Swiss bank said in the prospectus.
All told, UBS has taken about $19.2 billion in write-downs and losses to an $82.6 billion portfolio of securities tied mostly to the U.S. housing market.
UBS already has issued 13 billion francs of convertible notes to sovereign wealth funds in Singapore and a Middle Eastern country it hasn't named. It's now selling 16 billion francs of stock to existing shareholders at a 31% discount to Wednesday's close.
Shares of UBS, which on Tuesday will trade without subscription rights, dropped 5.8% in Swiss action and are down more than 60% over the past 12 months.
Writedown bug could bite Lehman
The brokerage firm's accounting is back under scrutiny.
Lehman Brothers has some explaining to do (My thought: The next Bear Stearns?).
Shares of the big brokerage firm have dropped 13% over the past three days amid renewed questions about the health of Lehman's balance sheet. The setback comes just over a month after finance chief Erin Callan led a public relations blitz that aimed to dispel worries about Lehman's financial standing following the collapse of rival Bear Stearns. Callan's efforts were aided by a surprisingly solid first quarter earnings report and a $4 billion preferred stock sale that was strongly oversubscribed.
But David Einhorn, the manager of the Greenlight Capital hedge fund, reopened the case against Lehman in a speech Wednesday. Einhorn, who along with any number of other value-oriented, long/short hedge fund managers is short Lehman, says the firm hasn't taken sufficient writedowns on its $6.5 billion collateralized debt obligation book to account for the sharp decline in the value of this sort of paper. Einhorn laid out his argument in a speech at the Ira Sohn Investment Research Conference.
A Lehman spokesman declined to comment, although the firm has made clear that it dismisses Einhorn's claims root and branch because of his short position.
But based on price-checks in the secondary market, Einhorn appears to have a good point. It seems highly unlikely that the $200 million in writedowns Lehman took in the first quarter - representing just 3% of the CDO portfolio's value - begins to account for the hit that this paper would take were it to come to market.
The CDOs Einhorn is scrutinizing include various asset-backed securities, primarily auto- and credit-card loans, with some small business and franchise loans. There is no mortgage-bond exposure in these CDOs, but that's not to say the bonds are pristine. About 25% of the portfolio, or $1.62 billion, is rated noninvestment grade, with ratings of BB-plus or below.
Not to put too fine a point on the matter, but merely finding a buyer for a $1.62 billion portfolio of sub-investment grade loan CDOs would be an achievement in this market. There is, in fact, an excellent chance that no buyers exist for these securities, given the apparent problems with the underlying collateral. Portfolio managers in contact with Lehman's own trading desks told Fortune that the firm appears to value such "scratch and dent" loans held by other firms at deeply discounted levels, with no guarantee that the Lehman desks would even bid on this paper themselves.
All that said, two dealers say a reasonable bid, could one be found, might be 10 cents on the dollar. That suggests Lehman could be looking at a writedown of more than $1 billion on this portion of its holdings alone.
To be fair to Lehman, the rest of the portfolio isn't nearly as problematic. Still, these CDOs - nearly $5 billion worth - could also be subject to discounts beyond the 3% Lehman seems to have decided on, and the discounts will only get deeper if the rating drops lower.
Of course, according to its 10-Q filing, at the end of the first quarter Lehman had $786 billion in total assets. So the decision of whether to write down a billion dollars or two could easily fall short of materiality. But it's nearly impossible to carry off an argument that the 3% haircut Lehman has taken so far on its $6.5 billion portfolio is remotely adequate. Were Lehman to seek a buyer for the entire portfolio at once, a bid of 50% of face-value might be generous. Whatever Einhorn's motivation, it appears clear that the firm's investors would do well to brace for at least one more round of asset writedowns.
Markets: Tough Days
US shares had their largest weekly fall in almost four months last week as investors rediscovered the real US economy and realised the credit crunch and housing slump had not somehow been vanquished by the rescue of Bear Stearns in March.
And that will be bad news for market sentiment here were a 1% fall has been tipped on the futures market.
Worryingly, the big drivers of Friday's 146 point fall on the Dow were the likes of Lehman Brothers, Morgan Stanley and Merrill Lynch; the big, troubled investment banks that had stabilised in the wake of the rescue of Bear Stearns by the US Federal Reserve. Goldman Sachs dropped for a ninth day in a row.
UBS warns of more losses
LONDON (MarketWatch) -- UBS on Monday warned that that it may have to record losses on non-U.S. real estate as it seeks nearly $16 billion from shareholders to repair a dented balance sheet.
UBS last week said it's going to sell $22 billion of subprime and Alt-A U.S. residential-mortgage-backed securities to BlackRock for $15 billion, with UBS providing the fund manager an $11.25 billion loan in the process.
But as the subprime troubles cool down, others have sprung up. UBS's exposure to auction-rate securities, used mostly in municipal financing, increased to 11 billion francs ($10.7 billion) from 6 billion francs during the first quarter.
UBS said its loss-making positions in real estate markets outside the U.S. "could increase," the Swiss bank said in the prospectus.
All told, UBS has taken about $19.2 billion in write-downs and losses to an $82.6 billion portfolio of securities tied mostly to the U.S. housing market.
UBS already has issued 13 billion francs of convertible notes to sovereign wealth funds in Singapore and a Middle Eastern country it hasn't named. It's now selling 16 billion francs of stock to existing shareholders at a 31% discount to Wednesday's close.
Shares of UBS, which on Tuesday will trade without subscription rights, dropped 5.8% in Swiss action and are down more than 60% over the past 12 months.
Writedown bug could bite Lehman
The brokerage firm's accounting is back under scrutiny.
Lehman Brothers has some explaining to do (My thought: The next Bear Stearns?).
Shares of the big brokerage firm have dropped 13% over the past three days amid renewed questions about the health of Lehman's balance sheet. The setback comes just over a month after finance chief Erin Callan led a public relations blitz that aimed to dispel worries about Lehman's financial standing following the collapse of rival Bear Stearns. Callan's efforts were aided by a surprisingly solid first quarter earnings report and a $4 billion preferred stock sale that was strongly oversubscribed.
But David Einhorn, the manager of the Greenlight Capital hedge fund, reopened the case against Lehman in a speech Wednesday. Einhorn, who along with any number of other value-oriented, long/short hedge fund managers is short Lehman, says the firm hasn't taken sufficient writedowns on its $6.5 billion collateralized debt obligation book to account for the sharp decline in the value of this sort of paper. Einhorn laid out his argument in a speech at the Ira Sohn Investment Research Conference.
A Lehman spokesman declined to comment, although the firm has made clear that it dismisses Einhorn's claims root and branch because of his short position.
But based on price-checks in the secondary market, Einhorn appears to have a good point. It seems highly unlikely that the $200 million in writedowns Lehman took in the first quarter - representing just 3% of the CDO portfolio's value - begins to account for the hit that this paper would take were it to come to market.
The CDOs Einhorn is scrutinizing include various asset-backed securities, primarily auto- and credit-card loans, with some small business and franchise loans. There is no mortgage-bond exposure in these CDOs, but that's not to say the bonds are pristine. About 25% of the portfolio, or $1.62 billion, is rated noninvestment grade, with ratings of BB-plus or below.
Not to put too fine a point on the matter, but merely finding a buyer for a $1.62 billion portfolio of sub-investment grade loan CDOs would be an achievement in this market. There is, in fact, an excellent chance that no buyers exist for these securities, given the apparent problems with the underlying collateral. Portfolio managers in contact with Lehman's own trading desks told Fortune that the firm appears to value such "scratch and dent" loans held by other firms at deeply discounted levels, with no guarantee that the Lehman desks would even bid on this paper themselves.
All that said, two dealers say a reasonable bid, could one be found, might be 10 cents on the dollar. That suggests Lehman could be looking at a writedown of more than $1 billion on this portion of its holdings alone.
To be fair to Lehman, the rest of the portfolio isn't nearly as problematic. Still, these CDOs - nearly $5 billion worth - could also be subject to discounts beyond the 3% Lehman seems to have decided on, and the discounts will only get deeper if the rating drops lower.
Of course, according to its 10-Q filing, at the end of the first quarter Lehman had $786 billion in total assets. So the decision of whether to write down a billion dollars or two could easily fall short of materiality. But it's nearly impossible to carry off an argument that the 3% haircut Lehman has taken so far on its $6.5 billion portfolio is remotely adequate. Were Lehman to seek a buyer for the entire portfolio at once, a bid of 50% of face-value might be generous. Whatever Einhorn's motivation, it appears clear that the firm's investors would do well to brace for at least one more round of asset writedowns.
Friday, March 21, 2008
Is the Credit Crunch Over?
The recent stock market & dollar rally, coupled with the massive commodity/metals sell-off, has led many to believe that the Fed & Plunge Protection Team (PPT) were able to sucessfully restore liquid credit markets and the turmoil is now over.
My Thoughts:
My Thoughts:
Aside from unprecedented/wide-scale PPT market manipulation, and a mere slowing of the credit implosion helped by new Fed lending apparatuses, nothing has been resolved. Homes are still foreclosing in record numbers, legislators are now calling for new regulations to prevent future “similar” banking/credit issues, lending standards are getting tighter, financial institutions still have no market (aside from the Fed monetization window) for their gargantuan off-balance sheet/tier-III toxic waste piles, and American consumers (trying to cope with huge inflation waves, combined with a collapsing wealth-effect brought about by falling home values and lack of available “new” credit) are starting to pull back on discretionary spending. Note: 70% of the US economy is consumer spending
Bottom line: Recent sentiment change created by Financial Wizard market manipulation is all smoke and mirrors – the PPT is trying to re-establish faith and trust in markets (and a currency) that are ready to implode.
What manipulation am I talking about?
Let’s look at the recent precious metals sell-off: Gold and Silver took their worst beating in years during the recent commodities smack-down. How in the world could these metals get crushed so badly when dealers are overwhelmed with orders and can’t get or keep enough products on their shelves?
Must see this link (and pictures below) to understand what I’m talking about: Silver Shortage: 19 dealers reported "Sold Out"
Bullion Direct
Kitco
Additionally, I received this message via email from APMX just yesterday:
Due to the OVERWHELMING demand for precious metals, our online ordering system has been unable to keep up with our customers’ needs. We have had to disable the APMEX ordering system to allow us ample time to upgrade our site to accommodate the increased demand. We apologize for this temporary problem. In the mean time, we will be accepting telephone orders for the following items only as we have them available:1 ounce Gold American Eagles1 ounce Gold Canadian Maple Leafs1 Ounce Gold Krugerrands100 oz Silver BarsMisc Generic .999 Fine Silver90% Coin SilverDuring this time, we will have a minimum order of $5,000. We regret we have had to make this drastic change to our ordering process and rest assured, we are working expeditiously to correct the problem. As soon as we have our new site up and running, we will notify you via e-mail when you can again place orders online.
High Demand for 2008 Silver Maple Leafs: The Royal Canadian Mint has found itself unable to fully meet the unprecedented demand for silver Maple Leaf coins with its current supply, and has temporarily suspended shipments. This situation is temporary until more of this fine bullion product can be struck and shipped. Because many of our customers want to purchase this product at today's prices, Northwest Territorial Mint will accept orders now for shipment when the product becomes available, which we expect will exceed 30 days. If the wait for product proves too lengthy, we reserve the right to substitute a similar silver product.
OK, if there is such a supply shortage, why did PM prices crash this last week?
It was a PPT manipulated paper smack-down (through engineered margin call selling of futures, options, etc – to fry the longs, destroy prices and signal an end to the commodity boom) that has changed none of the underlying precious metals supply/demand/inflation-hedge/flight-to safety fundamentals.
But it did provide a great buying opportunity – could be a very good time to back up the truck and load up w/physical…
Take a look at who is taking advantage of this smack-down:
Asia jewellers on buying spree as price sinks-- It probably won’t be too long before PM prices regain their footing..
Jewellers across Asia rushed to buy gold on Thursday after prices tumbled more than $100 an ounce since spiking to a record above $1,000 an ounce this week, pushing up premiums in key bullion trading centres. Gold fell more than 2 percent to hit a 1-month low of $920.30 an ounce as funds sold bullion after pushing up the price to a lifetime high of $1,030.80 on Monday.
Superb comment from a reader at a PM blog I routinely visit -- summarizes the situation perfectly: Somebody took advantage of a short trading week to slam PMs - on options expiration week (saving the shorts' shorts!) - and by the same token make a "double-top" appear out of the blue - to signal "an end to the commodities bull" and "an end to the bearish dollar" - based on NO REAL PHYSICAL TRADING - just "PAPER"...
With our manipulation discussion out of the way, what about the credit crisis being resolved?
Bloomberg Today:
Goldman, Lehman Rating Outlook Cut to Negative by S&P (Update3)
March 21 (Bloomberg) -- Goldman Sachs Group Inc., the biggest U.S. securities firm, and smaller rival Lehman Brothers Holdings Inc. had their credit-rating outlook cut to negative by Standard & Poor's, which said Wall Street banks' profits may fall as much as 30 percent in the coming year.
``Our current expectation is that net revenue could decline'' at least 20 percent for independent securities firms, S&P said in a statement today.
Or this one:
Big U.S. finance company faces credit crisis, and shares fall
The crisis in the credit markets is threatening to engulf one of the largest commercial finance companies in the United States.
The CIT Group, a century-old company that lends money to small businesses and midsize corporations, drew on $7.3 billion of emergency bank credit lines on Thursday, causing its shares and bonds to plummet.
CIT, whose businesses range from making student loans to financing purchases of airplanes and railroad cars, announced that it would try to sell some assets or businesses to raise cash and repay its debts. Analysts said the tightening credit squeeze could drive the entire company into the arms of a bidder.
The developments at CIT suggest that the credit troubles that felled Bear Stearns this week continue to spread, despite efforts by the Federal Reserve to encourage banks to lend to other financial companies.
Another:
Credit crisis puts vise grip on leveraged companies
There are 93 US companies at risk of defaulting on $53 billion in debts, a new report shows, marking a 50 percent jump since last June, when the credit crisis started. Many of these debt-laden companies were involved in giant leveraged buyouts.
Standard & Poor’s ‘‘weakest links’’ report is forecasting that 75 US companies will default on their debts in the next 12 months. Of the 93 companies at risk, more than half were involved in takeovers by big-name private equity firms, including Boston’s Thomas H. Lee Partners, Bain Capital, and J.W. Childs Associates.
The sectors worst hit are media and entertainment, and consumer and retail. Many of the names are familiar to consumers, like Uno Restaurant Holdings Corp., the Boston-based pizza restaurant group; Linens ‘n Things Inc., the home goods chain; and Univision Communications Inc., the Spanish-language television and radio company.
‘‘This is just the beginning,’’ said Diane Vazza, managing director and head of Global Fixed Income Research at Standard and Poor’s in New York. For companies struggling with debt payments, she said, ‘‘There’s no way in a slowing economy, potentially a recessionary economy, to grow out of that.’’
I could go on with additional links to illustrate the depths of this credit crisis, but I think you get the point—the recent smoke and mirrors caused by PPT market manipulation has solved nothing. Our banking system is still insolvent and the fed is pumping money into a bottomless pit.
BOTTOM LINE: A one or two day turn around for stocks and commodities means little.
NOTHING, absolutely nothing regarding underlying fundamentals has changed from last week, except the titanic has taken on a bit more water, and the captain is desperately trying to reassure us by saying -- "it's only a small leak and lifeboats (PM's) won't be needed."
Go ahead and trust the captain -- but at your own peril...
OK, my doom and gloom is out of the way -- how about some closing funnies?
Regards and happy easter to all!
Randy
Monday, November 12, 2007
Financial Wizard Manipulation
I have to give some credit to our Global Financial/Wall-Street Wizards. Today’s engineered price drop in commodities (Oil, Gold, Silver, etc) was pretty impressive, and the fact that it was executed on a thin trading holiday (Veterans Day) was no mere coincidence, as it provided them with a tremendous amount of leverage.
Don’t be alarmed though. This sell off, engineered by Central Banks to strengthen the dollar vs. nearly every currency except the Yen, is temporary in nature, and was done to (1) take some trade pressure off countries with strengthening currencies (2) restore some confidence back into the dollar, (3) reduce the nearly vertical ascent in gold/oil prices and (4) bring some green signals back into the ailing US equities market... They absolutely had to do this, because FASB 157 is to take effect on Thursday, Nov. 15. These new FASB provisions will make it much harder for banks to avoid “mark-to-market” pricing on their level-3 (off balance) securities, triggering much larger financial write-offs and potentially exploding into a new financial panic…
From Barrons: “ RBC Capital Markets interest-rate strategist T.J. Marta says that additional write-downs are coming and adds the U.S. banking sector is "embarking on its third major crisis since the 1920s." He adds: "Not only have the 'go-go' days of structured products come to an inglorious end -- at least temporarily -- but vast swaths of the financial system lie in ruins,"
The Financial Wizards understand that this is coming and they absolutely have to try to shore up investor confidence in the U.S. system beforehand… Today was a compelling, yet futile attempt at their manipulative ways.
So how did they engineer this?
As you all know by now, the Dollar has been bleeding badly and has been setting new record lows against almost every currency daily—except for the Yen. The Japanese for years have been trying to keep their currency artificially low to (1) enhance trade and (2) supply the global system with an endless spigot of cheap money. The Yen Carry Trade has evolved (Yen borrowed at .5% and leveraged at high multiples to invest in other areas) and has provided nearly free money for all who wish to blow big beautiful bubbles.
As previously stated, the Yen was practically the only currency NOT strengthening in direct relationship to the falling dollar. Therefore, in order to strengthen the dollar against the currencies it was falling against, make the Yen stronger… Voila! The dollar strengthens… Additionally, this Yen-Dollar manipulation was being rigged while concurrently having OPEC work to bring down Oil Prices.
With regard to the Dollar, just look at what Central Banks are up against (Bloomberg snippets below)
Nov. 12 (Bloomberg) – “Central banks from Bogota to Mumbai are imposing foreign-exchange curbs to take control of their soaring currencies from traders dumping the dollar.”
``Central banks are struggling to find new ways to intervene against their currencies and some of the proposals simply can't work,'' said Mirza Baig, an analyst in Singapore at Deutsche Bank AG, the world's biggest currency trader. Some plans are ``truly bizarre,'' he wrote in a report.”
`More Violent Correction'” An index tracking the dollar against seven major trading partners dropped to 71.11 on Nov. 2, the lowest ever, a week after the Fed reduced its target rate for overnight loans between banks by a quarter-percentage point to an 18-month low of 4.5 percent.””
Stephen Jen, head of currency research at Morgan Stanley in London, said on Nov. 2 that the dollar's slide threatens to turn into a ``more violent correction'' that may require joint intervention by the U.S., European Union and Japan. The dollar will trade at $1.51 per euro by year-end, Jen said on Nov. 8.”`
`The weaker dollar causes central banks to look at foreign inflows differently,'' Robert Fullem, vice president of U.S. corporate-currency sales at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. ``The market is pushing the central banks into corners. I don't have faith in them. They may have to push the envelope further.''
So, where do we go from here?
I wouldn’t put much faith in the Financial Wizards, as they are putting a band-aid on a gaping wound where a tourniquet is required. Sure, they can help to slow the bleeding, but with over 400 billion in toxic waste to be written down soon, bleeding to death will be the final outcome.
Bottom line: don’t worry about the noise generated by our Financial Wizards today. Over the mid-long term, this will be regarded as merely a blip... The dollar, financials and many equities are going much, much lower while real assets (Gold, Silver, Oil, etc) are going much, much higher.
For all our soldiers who are still in harm’s way today, let us give thanks and say a prayer for their safe return.
Best regards and Happy Veteran’s Day to all!
Don’t be alarmed though. This sell off, engineered by Central Banks to strengthen the dollar vs. nearly every currency except the Yen, is temporary in nature, and was done to (1) take some trade pressure off countries with strengthening currencies (2) restore some confidence back into the dollar, (3) reduce the nearly vertical ascent in gold/oil prices and (4) bring some green signals back into the ailing US equities market... They absolutely had to do this, because FASB 157 is to take effect on Thursday, Nov. 15. These new FASB provisions will make it much harder for banks to avoid “mark-to-market” pricing on their level-3 (off balance) securities, triggering much larger financial write-offs and potentially exploding into a new financial panic…
From Barrons: “ RBC Capital Markets interest-rate strategist T.J. Marta says that additional write-downs are coming and adds the U.S. banking sector is "embarking on its third major crisis since the 1920s." He adds: "Not only have the 'go-go' days of structured products come to an inglorious end -- at least temporarily -- but vast swaths of the financial system lie in ruins,"
The Financial Wizards understand that this is coming and they absolutely have to try to shore up investor confidence in the U.S. system beforehand… Today was a compelling, yet futile attempt at their manipulative ways.
So how did they engineer this?
As you all know by now, the Dollar has been bleeding badly and has been setting new record lows against almost every currency daily—except for the Yen. The Japanese for years have been trying to keep their currency artificially low to (1) enhance trade and (2) supply the global system with an endless spigot of cheap money. The Yen Carry Trade has evolved (Yen borrowed at .5% and leveraged at high multiples to invest in other areas) and has provided nearly free money for all who wish to blow big beautiful bubbles.
As previously stated, the Yen was practically the only currency NOT strengthening in direct relationship to the falling dollar. Therefore, in order to strengthen the dollar against the currencies it was falling against, make the Yen stronger… Voila! The dollar strengthens… Additionally, this Yen-Dollar manipulation was being rigged while concurrently having OPEC work to bring down Oil Prices.
With regard to the Dollar, just look at what Central Banks are up against (Bloomberg snippets below)
Nov. 12 (Bloomberg) – “Central banks from Bogota to Mumbai are imposing foreign-exchange curbs to take control of their soaring currencies from traders dumping the dollar.”
``Central banks are struggling to find new ways to intervene against their currencies and some of the proposals simply can't work,'' said Mirza Baig, an analyst in Singapore at Deutsche Bank AG, the world's biggest currency trader. Some plans are ``truly bizarre,'' he wrote in a report.”
`More Violent Correction'” An index tracking the dollar against seven major trading partners dropped to 71.11 on Nov. 2, the lowest ever, a week after the Fed reduced its target rate for overnight loans between banks by a quarter-percentage point to an 18-month low of 4.5 percent.””
Stephen Jen, head of currency research at Morgan Stanley in London, said on Nov. 2 that the dollar's slide threatens to turn into a ``more violent correction'' that may require joint intervention by the U.S., European Union and Japan. The dollar will trade at $1.51 per euro by year-end, Jen said on Nov. 8.”`
`The weaker dollar causes central banks to look at foreign inflows differently,'' Robert Fullem, vice president of U.S. corporate-currency sales at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. ``The market is pushing the central banks into corners. I don't have faith in them. They may have to push the envelope further.''
So, where do we go from here?
I wouldn’t put much faith in the Financial Wizards, as they are putting a band-aid on a gaping wound where a tourniquet is required. Sure, they can help to slow the bleeding, but with over 400 billion in toxic waste to be written down soon, bleeding to death will be the final outcome.
Bottom line: don’t worry about the noise generated by our Financial Wizards today. Over the mid-long term, this will be regarded as merely a blip... The dollar, financials and many equities are going much, much lower while real assets (Gold, Silver, Oil, etc) are going much, much higher.
For all our soldiers who are still in harm’s way today, let us give thanks and say a prayer for their safe return.
Best regards and Happy Veteran’s Day to all!
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