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Market Crash (Page 7)
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Clinically Insane
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Mar 17, 2008, 01:11 PM
 
FY'allsI:
Gold is good in an inflationary period. But right now, we're headed towards a DEflation.
Cash is king in a deflation.

-t
     
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Mar 17, 2008, 01:17 PM
 
Originally Posted by Eug View Post
^^^ I keep wondering if that's a joke account.

Anyways, there are about 5000 tons of gold in Fort Knox, and about the same in the Federal Reserve Bank in New York.

P.S. In the 21st century, I am surprised that people are still so fascinated with gold. Gold is a commodity, but not a particularly rare one, so it really shouldn't be worth anywhere near what it goes for.
What it goes for? No, no no... the money units change not real value. Real value items don't change much at all. The money units change around value items.

So for example if we could freeze the economy and let prices stabilize (as they may not be allowed to do quickly enough in this volatile climate) we would notice that an ounce of gold buys a nice suit, a nice pair of shoes, a belt and an a tie. Guess what? In 1900 an ounce of gold bought you a nice suit, a nice pair of shoes, a belt and a tie. Guess what an ounce of gold bought in 1800... Yup, the same thing! In 1700? Yep, same! In 1600? Yep, same! We can trace this back to dates before Jesus walked the Earth and find relative consistency all the way along. The value of gold doesn't change much - a little bit depending on mining and a few other things but overall not much - historically speaking. It's the fiat fractional reserve system (actually fractional AIR system these past few decades) that inflates or deflates.



-----------------------------------------------------------------
BTW, here's the two live graphs again just to keep them on the current page:



AAPL is a bit lower than several of the indexed averages as you can see but only
since the idea of a possible "crash" became widely circulated.



AAPL in Blue
( Last edited by Tesselator; Mar 17, 2008 at 01:26 PM. )
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Mar 17, 2008, 01:31 PM
 
Originally Posted by Tesselator View Post
So for example if we could freeze the economy and let prices stabilize (as they may not be allowed to do quickly enough in this volatile climate) we would notice that an ounce of gold buys a nice suit, a nice pair of shoes, a belt and an a tie. Guess what? In 1900 an ounce of gold bought you a nice suit, a nice pair of shoes, a belt and a tie. Guess what an ounce of gold bought in 1800... Yup, the same thing! In 1700? Yep, same! In 1600? Yep, same! We can trace this back to dates before Jesus walked the Earth and find relative consistency all the way along. The value of gold doesn't change much - a little bit depending on mining and a few other things but overall not much - historically speaking. It's the fiat fractional reserve system (actually fractional AIR system these past few decades) that inflates or deflates.
Once again, you show a troubling lack of economic history knowledge.

Historically--back to the time of Jesus and the Roman Empire to use your example--silver was by far the more precious metal, as there was far less of it in the world than gold. Gold was used for ornamental purposes, but rarely for currency. All Roman coinage was based on the amount of silver in it, and the metal the Spanish and Portuguese mined out of the Central and South America was silver, not gold. The massive increase in the price of gold to the levels we're used to didn't happen until the 1970s. Salt was also extremely valuable in the Roman Empire, so much so that soldiers could be paid in salt if they so wished. Furthermore, an ounce of gold was worth about $21 in 1913, or the equivalent of about $2,100 today.

Which is all to say, you don't really know what you're talking about.
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Mar 17, 2008, 01:46 PM
 
I dunno what you're talking about but you got your wires crossed big-time.

161 A.D.

161 A.D.

350 A.D.

395 A.D.

37 A.D.


You tried this kinda thing on me before too and every time I check out what you're saying almost none of it checks out.
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Mar 17, 2008, 01:56 PM
 
Originally Posted by Tesselator View Post
You tried this kinda thing on me before too and every time I check out what you're saying almost none of it checks out.
Then you need to list your sources, because they're misleading you.

While the Romans struck coins from many metals--silver, gold, bronze and copper--the bases of Roman coinage, and thus the monetary system, was the denarius, which is by far the most struck Roman coin. The Roman gold coin, the aureus, was struck relatively infrequently until the late Empire. Furthermore, the value of the aureus was defined by its equivalent value in denarii.

Everything else I said can be easily backed up by a little historical research. And, if you think that an ounce of gold bought as much in 1900 as it buys today, you need to read some history.
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Mar 17, 2008, 02:12 PM
 
Again you make no sense. Our "most struck coin" is the penny by far and it's copper. So? And that silver fluctuates and was once valued more than gold means what? Nothing. What's the deal with you always calling me out when most of what you say turns out to be wrong? Isn't there a better site for that somewhere else? Maybe www.irateblowhards.com or something? An ounce of gold for the most part and especially if we remove the cooking of the present-day books, held about the same value today is it did on most other days over the past 2,000 years.
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Mar 17, 2008, 02:16 PM
 
That reminds me...

It's time to kill the penny. It's totally useless.

     
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Mar 17, 2008, 02:19 PM
 
Originally Posted by Tesselator View Post
An ounce of gold for the most part and if we remove the cooking of the present-day books, held about the same value today is it did on most other days over the past 2,000 years.
Prove it.
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Mar 17, 2008, 02:26 PM
 
Didn't you know? Suits cost only one quarter as much in 2001.

P.S. I'm impressed the Dow made it into the green a couple of times today. I was expecting a several hundred point drop. There are still several hours until the market closes though.
     
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Mar 17, 2008, 02:31 PM
 
Originally Posted by Shaddim View Post
Nah, it'll stay solid, may even edge upwards a bit over the next 5-10 years. I don't expect 10% /yr from it, but maybe 4-5.

Now, platinum is another story. Smart money is there. I've heard many very savvy people claim it'll hit $4K /oz by 2011.
Platinum is very volatile however. The reason its gone up so much in the past few months is because of power disruptions in the countries in which it is mined. This has caused output to fall and speculators are everywhere. I've invested in a little platinum several months ago and its been fun to watch it rise and fall. Nevertheless, it has an advantage over gold in that it has many more industrial uses than gold does. It's not just piles of metal hanging out in a vault. On the other hand, platinum isn't viewed as the equivalent to "money" as much as gold is.

As soon as the economy shows signs of recovery, expect gold *and* platinum to fall significantly.

Anyway, whatever the market does I'm buying a PS3 in May no matter what. lol
     
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Mar 17, 2008, 02:32 PM
 
Originally Posted by Eug View Post
That reminds me...

It's time to kill the penny. It's totally useless.

Hehehe, Aren't they going to try and make steel pennies now? I heard they were.

Yeah, here it is: Nation & World | A penny may soon become a steel | Seattle Times Newspaper
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Mar 17, 2008, 04:56 PM
 
Originally Posted by Eug View Post
I'm impressed the Dow made it into the green a couple of times today. I was expecting a several hundred point drop. There are still several hours until the market closes though.
Heh. Go Figure. The Dow Jones actually closed up today. I was expecting a drop somewhere between 200-500 points.

AAPL also closed up today.


A penny is about as useful as... a penny in a vending machine. ie. It isn't useful at all.
     
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Mar 17, 2008, 05:48 PM
 
This seems relevant right about now:

--------------------------------------------------------------
March 12, 2008

Commentary: Russian Intelligence reports circulating in the Kremlin point to a sinister effort behind the toppling of New York's crime-fighting Governor. Eliot Spitzer had just begun a new probe into Larry Silverstein, the owner of the third World Trade Center building that was brought down in the September 11, 2001 attacks upon the US. and the Bush Families Carlyle Group.

WhatDoesItMean.Com

RUSSIA (March 11, 2008) — Reports consuming the US propaganda media organs and political elite today are centering upon the charges leveled against the Governor of New York, Eliot Spitzer, and who is said to have paid for the services of a high priced prostitute.

FSB reports circulating in the Kremlin today, however, point to a much more sinister effort behind the toppling of Governor Spitzer as he had just begun a new probe into Larry Silverstein, the owner of the World Trade Center brought down in the September 11, 2001 attacks upon the US, and the Bush Families Carlyle Group.

The focus of Governor Spitzer’s investigation, these reports state, revolve around the growing crisis embroiling the Carlyle Group as it nears total collapse and is facing insolvency due to Larry Silverstone’s withdrawal of over $14 billion from the embattled groups coffers, which could see the loss to New York State already troubled massive pension fund of over $10 billion.

Governor Spitzer has long battled with the former comptroller for New York States Pension Fund, Alan G. Hevesi, who holds duel Israeli-American citizenship, and prompted a US Federal Probe that charged Comptroller Hevesi of using the over $100 billion of funds entrusted to him for the personal benefit of his friends and family, to which Mr. Hevesi pled guilty for and paid a $5,000 fine.

Prior to his taking office as New York State Governor, these reports continue, Mr. Spitzer, as a prosecutor, had long targeted the United States Banking System for their vast theft of money from the American people, and had won billions in judgments against Bear Stearns, Credit Suisse First Boston, Deutsche Bank, Goldman Sachs, J.P. Morgan Chase, Lehman Brothers, Merrill Lynch, Morgan Stanley, Salomon Smith Barney and UBS Warburg.

It is more than interesting to note, too, that these are the same International Banking Giants who are now reeling under the Global assault against them, with Bear Stearns becoming the latest victim, and as we can read as reported by Britain’s Independent News Service:

"Panic swept the credit markets on reports of an insolvency crunch at both the US investment bank Bear Stearns and the mortgage giant Fannie Mae, triggering a dramatic surge in default insurance and rumours of yet another emergency rate cut by the US Federal Reserve."

As Governor Spitzer becomes yet another victim to vast power of the West’s war, political and media elite assault against him, and by their introduction of sex charges against him, as they have done to so many of their adversaries in order to destroy their credibility, the truest warnings of these events to the American people will no doubt be lost, again.

The most dangerous of these warnings are coming from the World’s richest man, Warren Buffet, as we can read as reported by the Market Watch News Service in their article titled: "Buffett and Gross warn: $516 trillion bubble is a disaster waiting to happen." which says:

"In short, despite Buffett's clear warnings, a massive new derivatives bubble is driving the domestic and global economies, a bubble that continues growing today parallel with the subprime-credit meltdown triggering a bear-recession.

Data on the five-fold growth of derivatives to $516 trillion in five years comes from the most recent survey by the Bank of International Settlements, the world's clearinghouse for central banks in Basel, Switzerland. The BIS is like the cashier's window at a racetrack or casino, where you'd place a bet or cash in chips, except on a massive scale: BIS is where the U.S. settles trade imbalances with Saudi Arabia for all that oil we guzzle and gives China IOUs for the tainted drugs and lead-based toys we buy."


There used to be a time when warnings were prudent to be given to the American people so that they could, in some small measure, protect themselves, but, and sadly, those times are now gone as these people have nearly completed their descent into the abyss of total slavery to their masters with virtually no knowledge of the horrific future that lies before them.

© March 11, 2008 EU and US all rights reserved. WhatDoesItMean.Com -- Sorcha Faal sorchafaal@fastmail.fm
( Last edited by Tesselator; Mar 17, 2008 at 06:14 PM. )
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Mar 17, 2008, 05:53 PM
 
Originally Posted by Eug View Post
Heh. Go Figure. The Dow Jones actually closed up today. I was expecting a drop somewhere between 200-500 points.

AAPL also closed up today.
Well isn't that due to another rate-cut? So basically they just split the dollar down again... So more dollars now equals the same value as before and the charts are reflecting that. We "see it" as being up but in actuality it's a down disguised. This is the basic meaning of rate cuts.
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Mar 17, 2008, 06:44 PM
 
I've always had the impression that gold is the investment choice of AM radio listeners. Am I wrong?
     
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Mar 17, 2008, 08:28 PM
 
Originally Posted by Tesselator View Post
Well isn't that due to another rate-cut?
No. There was a small rate cut on Sunday, but no rate cut today. There will be another cut tomorrow. But tomorrow is not today.


Originally Posted by Mithras View Post
I've always had the impression that gold is the investment choice of AM radio listeners. Am I wrong?
I listen to AM radio on the way to work, and have no interest in buying gold at this time.
     
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Mar 18, 2008, 02:38 AM
 
Originally Posted by Eug View Post
No. There was a small rate cut on Sunday, but no rate cut today. There will be
another cut tomorrow. But tomorrow is not today.
Sunday counts! It usually takes a day or two or sometimes even more for a cut to show
up on the charts. But damn WTH is that boob doing? Rate cuts left and right??? I told
you we would see the opposite of common sense moves. Rate cuts are the opposite of
what's needed. That's like setting a lead weight on top of a cracked glass-top table.


I listen to AM radio on the way to work, and have no interest in buying gold at this time.
Really! What does AM radio have to do with gold and buying and selling gold - or other
metals? Kind of a silly remark imho. Especially in these times. Our precious dollar is
going to tank. I don't hear anyone credible or who I trust saying that it wont. When
it does or even as it devalues, allot of people are going to be standing around holding
allot of worth-less paper. When it tanks completely the system will be replaced with
something. Whether it's the eurro, the amero, or even a barter system gold will fetch a
price - old no longer official, paper will not. A 100 dollar bill at that time will be worth
the same as a 1 dollar bill and the same as a piece of notebook paper.
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Mar 18, 2008, 03:01 AM
 
Maybe I should start keeping this with the pages too:





--
This is interesting: Banks face new world order, consolidation: report | Reuters
( Last edited by Tesselator; Mar 18, 2008 at 04:10 AM. )
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Mar 18, 2008, 09:53 AM
 
Dow up 200 points in early trading.


Originally Posted by Tesselator View Post
Really! What does AM radio have to do with gold and buying and selling gold - or other metals? Kind of a silly remark imho.
You don't say...

Here's a hint... It was a joke.
     
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Mar 18, 2008, 09:59 AM
 
Originally Posted by Eug View Post
Dow up 200 points in early trading.
Heh. Way to build more pressure in that cooker before it blows.
Been inclined to wander... off the beaten track.
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Mar 18, 2008, 10:09 AM
 
Originally Posted by Doofy View Post
Heh. Way to build more pressure in that cooker before it blows.
The pressure cooker went into the red zone last year. Basically what's happening now is that the Fed is slowly opening the valve so the market does lose steam but in a more controlled fashion. And I suspect it will work (to a certain extent), especially with companies like Lehman Brothers reporting better than expected earnings through these rough times.
     
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Mar 18, 2008, 10:37 AM
 
Originally Posted by Eug View Post
The pressure cooker went into the red zone last year. Basically what's happening now is that the Fed is slowly opening the valve so the market does lose steam but in a more controlled fashion.
I dunno Eug - to me it looks like they're sticking their finger in the dam. I reckon interest rates have got to go north of 15% before this problem even starts to be solved.
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Mar 18, 2008, 11:26 AM
 
Originally Posted by Doofy View Post
I reckon interest rates have got to go north of 15% before this problem even starts to be solved.
Why?

I disagree completely.
     
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Mar 18, 2008, 11:40 AM
 
Originally Posted by Eug View Post
Why?

I disagree completely.
Unusually low interest rates are what got us into this mess, and they'll get us back into this mess again more quickly now that the Fed has been trying to save us from ourselves.

I don't think interest rates have to climb as high as 15%, but they do need to be raised beyond 5%, at least.

Too much cheap credit encouraged this mess, and it has the potential to do it again.
     
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Mar 18, 2008, 12:09 PM
 
Originally Posted by Eug View Post
Why?
As Person Man says, it's low interest rates which caused this problem in the first place.

Not that I think they'll go up, of course. They need to go up dramatically, but they won't because it's in the bankers' best interest to keep the rate low so that borrowing continues.
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Mar 18, 2008, 12:29 PM
 
Originally Posted by Eug View Post
Didn't you know? Suits cost only one quarter as much in 2001.

P.S. I'm impressed the Dow made it into the green a couple of times today. I was expecting a several hundred point drop. There are still several hours until the market closes though.
Right, and my MacBook is the same as an Apple II. People always forget the "quality" issue in the CPI.
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Mar 18, 2008, 12:49 PM
 
Originally Posted by Person Man View Post
Too much cheap credit encouraged this mess, and it has the potential to do it again.
People buying more than they can afford got us in this mess. People refinancing to use home equity as an ATM got us in this mess. Banks granting loans to those that would've been denied 10 years ago got us in this mess. Greed and entitlement got us in this mess -- not low interest rates.
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Mar 18, 2008, 01:06 PM
 
Originally Posted by scottiB View Post
Greed and entitlement got us in this mess -- not low interest rates.
You think that the "greed and entitlement" would happen if the base rate was 15%?
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Mar 18, 2008, 01:18 PM
 
Originally Posted by Doofy View Post
You think that the "greed and entitlement" would happen if the base rate was 15%?
No but the point is that one can easily manage a system with low interest rates with prudent and practical lending practices. Remember, this is really a US-centric problem, despite the fact that interest rate is low in many different countries. These other countries haven't suffered this housing meltdown, and are not likely to either, mainly because their lenders weren't stupid enough to lend money so indiscriminantly.

I will bring up the example of Canada (because I live here). Some of the banks here have some exposure to this mess, but that's because they are exposed to ABCP from the US. However, the fundamentals of the mortgage market in Canada are super strong, despite the fact that mortgage interest rates are at historic Canadian lows. Why? Simply because the Canadian mortgage lenders are much more conservative in how they lend money.

Low interest rates are not the problem. Stupid lending practices are the problem.
     
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Mar 18, 2008, 01:57 PM
 
Here is an article illustrating some of this. (It's a bit old, but overall the info still is relevant.)

TheStar.com | Mortgages | How Canada avoids U.S. problems
While U.S. mortgage defaults continue to soar and subprime lenders succumb to years worth of dubious loans, Canada's mortgage market appears immune to the fallout. It appears Canadian conservativism has insulated us from the excesses of our American cousins.

"The (mortgage) market here is much healthier, the lenders are more prudent in terms of their approval process and Canadians are just more conservative in terms of their products," said Jim Murphy, president of the Canadian Association of Accredited Mortgage Professionals.

"Canadians lock in for longer terms, two-thirds of all mortgages in Canada are for fixed periods, the most common of which is five years."

Subprime mortgages in Canada can be defined generally as those offered when home purchasers do not fit the banks' prime mortgage customer profile. They may include self-employed people or those with insufficient credit history.

Murphy's association, which took the unusual step of issuing a press release to assure the public that Canada is not headed for the same fate as in the U.S., said there are many factors which have made the Canadian mortgage scene "a picture of health."

He said the overall arrears rate on mortgages in Canada remains "at or near record lows" of less than 0.5 per cent.


---

Numbers tell the tale of the two countries. In the U.S., subprime mortgages account for 20 per cent of the market, while here they make up less than 5 per cent, Murphy said.

As a result, the subprime default rate is approximately 2.1 per cent in Canada versus a U.S. default rate for subprime mortgages of 6.8 per cent, according to Xceed Mortgage Corp., a Toronto-based subprime lender which recently reported buoyant profits.


---

Another difference is that in Canada, "the vast majority" of low down payment mortgages are insured, said Peter Vukanovich, president of Genworth Financial Canada. A unit of U.S.-based Genworth Financial Inc., the company insures mortgages for lenders whose clients have down payments of less than 25 per cent.
Quite frankly, I was always shocked by some the US lenders' practices. Many of those weird "alternative" mortgages simply don't exist here.
     
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Mar 18, 2008, 02:19 PM
 
Well Eug, Canada seems to be running pretty much the same practices as the UK (I can't get a mortgage to save my life, for example - no credit history) yet the UK market would be hammering the bottom right now if it wasn't for the lack of supply (small island, too many people, too few houses).

The truth lies somewhere in-between our two opinions?
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Mar 18, 2008, 02:41 PM
 
Originally Posted by Doofy View Post
Well Eug, Canada seems to be running pretty much the same practices as the UK (I can't get a mortgage to save my life, for example - no credit history) yet the UK market would be hammering the bottom right now if it wasn't for the lack of supply (small island, too many people, too few houses).

The truth lies somewhere in-between our two opinions?
I'm not up on UK practices, but my impression was that Canada is more conservative in its lending than the UK too. Furthermore, because the UK has a vastly different landscape for housing demand, it's difficult to compare it directly to Canada and the US. People buy houses in the UK to live in or rent out. One reason I chose to highlight the comparison between Canada and the US is because housing-wise the styles are very similar. Detached homes are the norm, with lots of new suburban build-outs (with land to accomodate that), etc, along with a popular packed-together condo market in urban areas. The potential for a similar speculative market in Canada exists in theory.

However, despite the similarities, the health of the two markets (US vs. Canada) is vastly dissimilar, because the lending practices of the two markets are vastly dissimilar. Interest-only mortgages are very difficult to get in Canada, and furthermore the banks actively discourage them (presumably because they understand the risk). Also, low down-payment mortgages (eg. 5% down) are basically restricted to first-time home buyers, and almost always have to be insured. ie. If you have a condo now and want to move to a bigger house, you're often SOL if you don't have 10-15% for a down-payment. And even if you do have 10-15%, you'll still have to insure the mortgage. Insurance is only waived once you hit the 20-25% mark. (Actually, in some cases of large mortgages, they'll even ask you to insure a mortgage even if you already have a 25% downpayment. For a large mortgage they like to have 35% down before waiving the insurance requirement.) Furthermore, home mortgage interest in Canada is NOT tax deductible. We complain about that, but it does serve a purpose, which is to reign in speculative buying and housing prices.

Some people might view these tight lending practices as too restrictive. But sometimes it pays to be conservative.

EDIT:

Now that Ben has cut the rate in the US by 0.75%, it is way, way lower than the Canadian rate. It is of note however, that during part of the ramp up just before the US housing market meltdown, the US overnight rates were actually higher than in Canada.



Of course, some of you will say that the uber low rates in the US in the 2001 and later era were a big contributor, and that may be true to an extent, but the bottom line is that this meltdown likely would not have happened if the lenders were more prudent in their lending.
( Last edited by Eug; Mar 18, 2008 at 03:01 PM. )
     
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Mar 18, 2008, 05:07 PM
 
Nice.

Dow: +420.41 --> 12392.66

AAPL: +6.09 --> 132.82
     
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Mar 18, 2008, 06:36 PM
 
Originally Posted by Eug View Post
Why?

I disagree completely.
He's right though:
  1. Rate cuts = More corporate loans.

  2. More corporate loans = More dollars created and in circulation.

  3. More dollars in circulation = More inflation and a dollar that is
    worth less (meaning you and I get ripped off).

  4. More inflation = A bigger crash when it crashes.
It's pretty simple really. The fed is doing the opposite thing that needs
to be done. They are devaluing by design and building up a higher and
more precarious pile so that when it hits the fan it's gonna fly everywhere
and get on all of us.
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Mar 18, 2008, 06:53 PM
 
Originally Posted by Eug View Post
Nice.

AAPL: +6.09 --> 132.82
Not really. It went up $6... But since each dollar is now worth less (as will indeed
translate and filter into higher prices) because of the cut it actually didn't go up at
all. Depending on the percentage of the AAPL increase vrs. the percentage the dollar
devalued via the cuts.

If yesterday you had $2 and yesterday a loaf of bread was $2 and today you have
$4 but today a loaf of bread is $4 then nothing changed - we just put bigger numbers
on it. The problem here is that someone who had $200 in the bank for saving at the
beginning of that can now only buy $100 worth of stuff. He's just been ripped off for
half his money. The same for people who didn't get their wages adjusted too, etc.
( Last edited by Tesselator; Mar 18, 2008 at 07:00 PM. )
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Mar 18, 2008, 08:08 PM
 
Originally Posted by Tesselator View Post
Not really. It went up $6... But since each dollar is now worth less (as will indeed translate and filter into higher prices) because of the cut it actually didn't go up at
all. Depending on the percentage of the AAPL increase vrs. the percentage the dollar
devalued via the cuts...
Tesselator, there wasn't 6% inflation overnight. It is quite possible that the dollar will drop another 6% and inflation will rise in the next year, perhaps attributable to this rate cut. But Apple shareholders can sell their stock today. You are being way too pessimistic.

More inflation = A bigger crash when it crashes.
?
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Mar 18, 2008, 08:16 PM
 
This is a pretty good article IMO:


The Federal Reserve Is Destroying America
2008-03-17
Funny Money Report
Lee Rogers

___________________ __________________


It is incredible to see the rampant devaluation of the U.S. Dollar. The Federal Reserve just hours ago made a rare cut of 25 basis points during the weekend which will cause even more inflation. Gold immediately moved up $20 an ounce and the U.S. Dollar Index plunged under 71 in international trading. If this type of market activity continues the U.S. Dollar will have no value in a few months. While it is probably unlikely that we will see a hyper-inflationary collapse of the U.S. Dollar within the next few months, these policies are entirely unsustainable. If the Federal Reserve does not move to defend the value of the U.S. Dollar we will eventually see a hyper-inflationary collapse and worldwide financial turmoil. This view is also shared by other well respected financial analysts. Peter Schiff recently raised concerns about a hyper-inflationary collapse of the U.S. Dollar, Robert Reich a former Clinton cabinet member believes we are facing a depression and Alan Greenspan the man who caused this whole mess wrote in the Financial Times stating that we are facing the worst financial crisis since World War II. What’s amazing is that the Federal Reserve isn’t even trying to protect the U.S. Dollar because all they care about is saving the power of their private banking cartel. They don’t care about the U.S. Dollar nor do they care about the country itself. They are destroying this country through their actions and there needs to be an investigation into the controllers of this bank.

Alan Greenspan saying that we are facing the worst financial crisis since World War II is like a killer returning to the scene of their crime and explaining the results of their crime. Greenspan recently told nations in the Gulf to drop their currency pegs to the U.S. Dollar which encouraged a further drop in the U.S. Dollar. Greenspan’s Financial Times article will cause an even greater acceleration in the collapse of the currency. As the former head of the Federal Reserve, his comments still hold a great deal of importance with people around the world. This means that his comments can literally move the value of the U.S. Dollar one way or another. It is incredibly sick how Greenspan can get away with creating the current crisis we face with his low interest rate policies earlier this decade and analyze the problems that are occurring today that were a result of his own policies with no criticism from the corporate controlled media.

JP Morgan announced that it is completing its buyout of Bear Stearns marking further consolidation in the financial industry. Last Friday, the Federal Reserve with JP Morgan stepped in and bailed them out from going out of business. This was an unprecedented move by the Federal Reserve stepping in and bailing out a failed financial institution.

JP Morgan will buy Bear Stearns for $2 a share which is amazing considering that this stock was trading for around $50 a share just weeks ago. There’s also talk that Lehman Brothers and other large financial institutions might be facing a similar fate.

The U.S. Mint announced that it wants to start melting pennies using steel. According to the U.S. Mint it is now costing them 2 cents to produce every penny and 10 cents to produce every dime. Instead of targeting the real problem which is the Federal Reserve, they’ve decided they want to change the melt content of the coins which completely ignores what’s really happening. The U.S. Mint should be questioning the irrational policies of the Federal Reserve which has caused inflation to run out of control. It’s the Federal Reserve that is causing the metal prices to cost more which is resulting in the production cost of the coins to skyrocket. This is not very difficult to figure out.

There’s no question that inflation is out of control in this country considering that gold, silver, oil and food prices are skyrocketing. In order to provide even more liquidity for the banks, the Federal Reserve made a rare 25 basis point rate cut over the weekend and are poised to potentially cut rates again this week even as early as tomorrow. This is going to be catastrophic for the U.S. Dollar.

With all this going on it is amazing to see characters like George W. Bush and Henry Paulson state that the economy is doing just fine and not to worry about what’s happening. White House Press Secretary Dana Perino also stated at a recent press conference that she is not allowed to talk about the value of the U.S. Dollar and that all questions pertaining to the U.S. Dollar needs to be directed towards the U.S. Treasury. Of course Paulson the U.S. Treasury Secretary has absolutely no control over the value of the U.S. Dollar because that responsibility lies with the Federal Reserve since they set interest rates and fix the value of the currency. Amazingly when Ben Bernanke the head of the Federal Reserve testified in front of Congress, he directed any questions about the value of the U.S. Dollar to the U.S. Treasury despite the fact that he controls the value of money through their policies. This is absurd. They treat us like we are a bunch of idiots, and this is an obvious attempt by the establishment not to talk about the collapsing currency which is one of the biggest issues of the day right now.

There are even tent cities popping up in California. Of course the Federal Reserve can spend billions to bailout banks, but they won’t help the average middle class homeowner that might be thrown out into the streets as a result of what they did through their policies. When will people understand that the Federal Reserve is a private central bank that is merely looking to preserve the interests of the banking cartel?

Bush has confirmed that he will be meeting with the President’s Working Group on Financial Markets otherwise known as the Plunge Protection Team this week. There's no doubt that this will be an important meeting considering the recent events in the financial markets. It is clear that this group stepped in today to suppress the gold price. After a $20 spike during international trading, gold has lost all of its gains and the U.S. Dollar has seen an amazing recovery. This is totally ridiculous considering the combination of the Bear Stearns news, Greenspan’s outlook in the Financial Times and the rate cut. These people generally step in to move the price of gold down on days when you would normally expect it to move higher in price and today was no exception. Even the most novice of investors can understand that this type of activity makes absolutely no sense without market manipulation.

At this point it seems pretty certain that we are facing an inflationary depression. What’s awful is that much of this is being done by design. The Federal Reserve would prefer to save the banking cartel instead of doing what’s best for the American people. A stable U.S. Dollar would be what’s best for the American people but of course they aren’t moving in that direction. It is likely that we are seeing the start of a domino collapse in the U.S. financial system and it's going to get ugly. If you haven’t bought gold or silver already you are completely insane. In the next few years we may very well see a point in time where you can buy an ounce of gold for the same value as the Dow Jones Industrial Average. Only when we reach close to those levels will we know that we might be near a top in the gold price and even that is being conservative considering what’s happening.
( Last edited by Tesselator; Mar 18, 2008 at 08:23 PM. )
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Mar 20, 2008, 09:02 AM
 
Good advice, from last week: Steer clear of the new gold rush - Mar. 12, 2008

In the desperate search for something - anything - that will go up when U.S. stocks go down, investors have been stampeding into gold and other "hard assets."

If you are tempted to join this stampede, don't. As usual, the herd has it wrong. First, diversification works over time, not all the time. "On any given day when the market tanks," says William Bernstein of Efficient Frontier Advisors, "there's no shelter to be had. But the longer your horizon, the better the shelter you get from diversifying."

P.S. Gold is $918.60 right now, a huge drop since Monday.



It's also nice to see that oil prices are dropping too. It's now under US$100.
I hope this continues for a while... but not too much, because my country is a net exporter of oil.
( Last edited by Eug; Mar 20, 2008 at 09:15 AM. )
     
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Mar 20, 2008, 09:30 AM
 
IMO, folks haven't been hitting the gold because they're diversifying out of shares - they've been hitting it because they sense there's a major economic and/or political nightmare coming our way.

Gold isn't for day traders and other people looking for a fast buck - it's for folks who're prepping for the worst.

And gold hasn't dropped - the dollar has gone up. Gold can't drop or rise - it's the baseline.
Been inclined to wander... off the beaten track.
That's where there's thunder... and the wind shouts back.
     
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Mar 20, 2008, 09:33 AM
 
Originally Posted by Doofy View Post
IMO, folks haven't been hitting the gold because they're diversifying out of shares - they've been hitting it because they sense there's a major economic and/or political nightmare coming our way.

Gold isn't for day traders and other people looking for a fast buck - it's for folks who're prepping for the worst.

And gold hasn't dropped - the dollar has gone up. Gold can't drop or rise - it's the baseline.
Gold has dropped close to 10% in the last couple of days. The dollar hasn't risen anywhere near that.

Personally, I think a healthy price for gold would be a couple of hundred dollars less than it is now, but it probably won't get to that level for several years.

In the meantime, with this commodities pullback, the Canadian dollar is dropping too. I think that's a good thing. It's roughly around US$0.975 right now, and I think a healthy value for it is probably around US$0.90-0.95 (unless the US$ drops again significantly against the Euro).
     
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Mar 20, 2008, 09:58 AM
 
I'm not surprised, as I believe we're headed for a deflation.

Things get cheaper, money scarce.

-t
     
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Mar 21, 2008, 05:14 PM
 
Cheaper? Wasn't it you that said that before and several people corrected you?
I can't remember. But isn't depression and "hyper-inflation" related? The prices
will go UP and the dollar goes DOWN. I mean if the dollar goes down. Tie says
I'm being too pessimistic and I guess that could be. I keep expecting it (in my
mind) to crash overnight when all the "experts" are saying that it's now on a two
year fuse.

So AAPL will go up sometimes but a general down trend should prevail if those
guys are right. Likewise gold may drop for a week or even a month but will
indeed steadily go up. Err, actually I shouldn't that gold will go up or down,
From what I understand gold is a good measure of thumb which indicates
"people's confidence in the currency unit" and reflects somewhat the actual
dollar value. So the dollar index went up about 2 or 3 percent in the past few
days and gold dropped as a result I guess.

Still gold dropped about $100 an ounce which seems kinda radical to me.
Maybe someone dumped a bunch on the market or something. If they did
they made a ton of cash as it was like $1,030 for awhile.
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Mar 22, 2008, 03:03 PM
 
Oooo, Ouch!

Global Warming Bill Would Inflict New Great Depression

Good thing most of us know it's total BS! Now just to convince the dopes
in congress!
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Mar 24, 2008, 11:02 AM
 
JPMorgan ups bid for Bear Stearns to $10 a share

Shareholders of the company, once the biggest underwriter of mortgage bonds in the U.S., will receive 0.21753 JPMorgan shares for each Bear Stearns share they hold, the New York-based banks said today in a statement. That values Bear Stearns at about $2.4 billion, or about $10 a share. Under the terms of the deal the two firms struck on March 16, the takeover price had been $2.52 a share, based on last week's closing price.

So it looks like JP Morgan Chase was trying to get away with a forced fire sale, but was actually willing to pay much more.

Meanwhile, AAPL hit $138 today, and is now hovering just a little under that.
     
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Mar 24, 2008, 11:06 AM
 
I'm not sure if Chase was willing to pay more, or is just being pressured by the Fed to pay more.

At any rate, the signal the Fed sent was wrong. They can't bail out the banks that get in trouble bad business. The Fed actually doesn't have enough money to do that. If this should continue, this creates as many problems as if you just let the banks collapse.

-t
     
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Mar 24, 2008, 11:22 AM
 
Personally, if I were JP Morgan Chase and was only willing to play $2 a share for it, then there's no way I'd pay $10 for it, even with pressure from the Fed. I'd be more than willing to let them collapse.
     
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Mar 24, 2008, 11:25 AM
 
Originally Posted by Eug View Post
Personally, if I were JP Morgan Chase and was only willing to play $2 a share for it, then there's no way I'd pay $10 for it, even with pressure from the Fed. I'd be more than willing to let them collapse.
I agree. And I'm not saying that you were wrong.

I just think that Chase did NOT change their offer because they feel charitable. They were pressured by the Fed, but they know that $ 10 is still a bargain, because the Fed still pays the difference.

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Mar 24, 2008, 12:06 PM
 
Originally Posted by Eug View Post
Personally, if I were JP Morgan Chase and was only willing to play $2 a share for it, then there's no way I'd pay $10 for it, even with pressure from the Fed. I'd be more than willing to let them collapse.
I think it was financiers insult. A direct slap in the face for the past shun they had shown a few years ago.


BTW, AAPL moved up to $140 today and looks like it might close at between $140 and $145 somewhere.
Still not the $230 it was at but that's better than $120 for sure.
( Last edited by Tesselator; Mar 24, 2008 at 12:19 PM. )
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Mar 25, 2008, 03:12 PM
 
Originally Posted by Tesselator View Post
BTW, AAPL moved up to $140 today and looks like it might close at between $140 and $145 somewhere.
Still not the $230 it was at but that's better than $120 for sure.
W0rd. I sold my AAPL options today with some ~100% profit and put all the money plus some into Arques AG shares. Their stock has been beaten over the last months (went down from ~40 € to ~10 €) and is coming back now. Very interesting business angel / VC / business consulting company, if you are interested I get you more infos.

Symbol: AQU.FSE
ISIN: DE0005156004
WKN: 515600

Regards,
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Mar 25, 2008, 11:31 PM
 
Today wasn't a bad day for that at $141.98, up 15% since just over a week ago.
     
 
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