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Author Topic: Rational perspective of the financial markets - Federal Reserve exposed  (Read 13980 times)
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« Reply #40 on: January 13, 2008, 12:28:14 AM »

Grin Great video!

Hyperinflation Around the Globe
Update to article originally posted on www.DollarDaze.org on February 25, 2007.
By Mike Hewitt

Angola (1991-1999)
Angola went through the worst inflation from 1991 to 1995. In early 1991, the highest denomination was 50,000 kwanzas. By 1994, it was 500,000 kwanzas. In the 1995 currency reform, 1 kwanza reajustado was exchanged for 1,000 kwanzas. The highest denomination in 1995 was 5,000,000 kwanzas reajustados. In the 1999 currency reform, 1 new kwanza was exchanged for 1,000,000 kwanzas reajustados. The overall impact of hyperinflation: 1 new kwanza = 1,000,000,000 pre-1991 kwanzas.

Argentina (1975-1991)
Argentina went through steady inflation from 1975 to 1991. At the beginning of 1975, the highest denomination was 1,000 pesos. In late 1976, the highest denomination was 5,000 pesos. In early 1979, the highest denomination was 10,000 pesos. By the end of 1981, the highest denomination was 1,000,000 pesos. In the 1983 currency reform, 1 Peso Argentino was exchanged for 10,000 pesos. In the 1985 currency reform, 1 austral was exchanged for 1,000 pesos argentine.

Hyperinflation continued reaching a peak annualized rate of 4,923.3 percent in December 1989. At that time, government expenditure reached 35.6 percent of GDP and the fiscal deficit was 7.6 percent of GDP.

In 1990 the Argentine government announced a stabilization plan which included:

   1. Comprehensive liberalization of foreign trade and capital movements
   2. Privatization of public enterprises and the deregulation of the economy
   3. Reduction in the size of the public sector and reconstruction of the tax system
   4. Creation of a new monetary system, including the establishment of a Currency Board in April 1991.

Disinflation was gradual, with inflation falling from 1,344 percent in 1990, 84 percent in 1991. In the 1992 currency reform, 1 new peso was exchanged for 10,000 australes. The overall impact of hyperinflation: 1 new peso = 100,000,000,000 pre-1983 pesos. The inflation rate for 1992 was 17.5 percent, 7.4 percent in 1993, 3.9 percent in 1994 and 1.6 percent in 1995. By 1995, government expenditure represented 27 percent of Argentina's GDP.

Austria (1921-1922)
Austria became a republic after World War I. It continued to use the Krone as before in the Austria-Hungarian empire. However, post-war inflation, reaching a peak of 134 percent between 1921 and 1922, led to its collapse. The Krone was replaced by the Schilling at the rate of 10,000 Kronen equal 1 Schilling.

Belarus (1994-2002)
Belarus went through steady inflation from 1994 to 2002. In 1993, the highest denomination was 5,000 rublei. By 1999, it was 5,000,000 rublei. In the 2000 currency reform, the ruble was replaced by the new ruble at an exchange rate of 1 new ruble = 2,000 old rublei. The highest denomination in 2002 was 50,000 rublei, equal to 100,000,000 pre-2000 rublei.

Bolivia (1984-1986)
Before 1984, the highest denomination was 1,000 pesos bolivianos. By 1985, the highest denomination was 10 Million pesos bolivianos. In the 1987 currency reform, the peso boliviano was replaced by the boliviano which was pegged to US dollar.

Brazil (1986-1994)
For most of the early part of then 20th century, Brazil's money was called Reis, meaning "kings". By the 1930s the standard denomination was Mil Reis meaning a thousand kings. By 1942 the currency that devalued so much that the Vargas government instituted a monetary reform, changing the currency to cruzeiros (crosses) at a value of 1000 to 1. In 1967 the cruzeiro was renamed to cruzeiro novo (new cruzeiro), and three zeros were dropped from all denominations. In 1970 the cruzeiro novo was renamed, dropping the "novo" and once again being called simply the cruzeiro. During the 1970's while the Brazilian economy was growing at 10% a year, inflation was running anywhere between 15 to 300%.

By the mid 1980s inflation was out of control reaching a peak of 2000 percent. In 1986 three zeros were dropped and the cruzeiro became the cruzado (crusade). In 1989, another three zeroes are dropped and the cruzado becomes the cruzado novo.


A 500,000 Brazilian Cruzeiro bank note.

In order to avoid confusion and not associate the new currency with previous monetary policy, the cruzado novo is renamed the cruzeiro with no change in value in 1990. By 1993, three more zeros are dropped from the cruzeiro which becomes known as the cruzeiro real. In 1994 the cruzero real is replaced by the real (royal), worth 2.75 old cruzeiros reais.

A 1960s cruzeiro was, in 1994, worth less than one trillionth of a US cent, after adjusting for multiple devaluations and note changes. In 1994, the following measures were enacted:

   1. A constitutional amendment in 1994 which empowered the Central Bank not to finance the budget deficit
   2. The Central Bank made it illegal for regional banks to buy government-issued bonds
   3. Wages were frozen and a new currency -- the real -- was introduced as part of measures to de-index the economy.

As a result of these measures, prices dropped dramatically from July 1994 onwards and by 1997, inflation had been reduced to standard international levels. The overall impact of hyperinflation: 1 (1994) real = 2,700,000,000,000,000,000 pre-1930 reis.

Bosnia-Herzegovina (1993)
Bosnia-Hezegovina went through its worst inflation in 1993. In 1992, the highest denomination was 1,000 dinara. By 1993, the highest denomination was 100,000,000 dinara. In the Republika Srpska, the highest denomination was 10,000 dinara in 1992 and 10,000,000,000 dinara in 1993. 50,000,000,000 dinara notes were also printed in 1993 but never issued.

Bulgaria (1991-1997)
In 1996, Bulgaria defaulted on its international debt and narrowly escaped a revolution. From 1991 to 1997, Bulgaria experienced hyperinflation (rates of inflation exceeding 50%) that crippled its banking system. In winter 1996-97 in Bulgaria, hyperinflation and food shortages led to hunger protests. A currency board established in July 1997 slashed three zeroes off the currency.

Chile (1971-1973)
Beginning in 1971, during the presidency of Salvador Allende, Chilean inflation began to rise and reached peaks of 508% in 1973. As a result of the hyperinflation, food became scarce and overpriced. The economic and social troubles culminated in the 1973 coup d'état that deposed the democratically-elected Allende and installed a military government led by Augusto Pinochet.

China (1939-1950)
China first started using paper money under the reign of Emporer Hien Tsung in 806-821 AD due to a shortage of copper for making coins. The Europeans would not know about paper money till Marco Polo account of it in his Travels some 450 years later. Paper was issued again in 910 A.D. and become regular after 960 A.D. By 1020, the quantity of Chinese paper money has reached excessive levels. In 1160, the paper issues have become so numerous that they have become worthless. Emporer Kao Tsung begins reforms with a new issue to replace the old. By 1166 China is experiencing hyperinflation. This occurs again in 1448 with the Ming note. Some years later around 1455, China abandons paper money after over 600 years of experience. Europe would not begin using bank notes till 1661 with the first issue from the Bank of Sweden.

China saw an extended period of hyperinflation shortly after the Central Bank of China took complete control of the money supply and began issuing fiat currency. In June 1937, 3.41 yuan traded for one US dollar. By May 1949, one US dollar fetched 23,280,000 yuan for anyone who cared to have some. For more information on the subject click here.

Free City of Danzig (1923)
Danzig went through the worst inflation in 1923. In 1922, the highest denomination was 1,000 mark. By 1923, the highest denomination was 10,000,000,000 mark.

Ecuador (2000)
Officially pegged its currency to the US dollar on September 2000 after a 75% drop in value in early January that same year.

England
Under Henry I, the quality of England's silver coins fall dramatically. In 1124, the right hands of the mint masters were cut off causing a temporary improvement in the quality. Henry II reformed the English coinage in 1158 thereby restoring the prestige of English money which was maintained for the next three centuries.

By the end of the War of the Roses (1455-1485), the English currency suffered badly from clipping and counterfeiting of coins. Henry VII tried to prohibit the use of foreign coins in 1498. The mainly European and Irish coins were also underweight but not to the extent of the English coins.

Henry VIII debased the coinage of England as a means of raising revenue from 1543 to 1551 in what is known as the "Great Debasement". In 1560, Elizabeth I and her advisors, foremost among them being Sir Thomas Gresham (of Gresham's Law) brought about stability by establishing the pound sterling and began to recall the earlier debased coinage and reminting them to remove the base metal component. The pound sterling was valued as one troy pound of high purity sterling silver.

In 1696 England's silver coins, many of which are worn or clipped, were replaced with new. Full-weight silver coins.

Britain suffered through a long period of moderate inflation from 1935 to 1970. Below is a chart showing the falling value of the current British currency since inception (Data from MeasuringWorth.com).




During the German occupation of Greece (1941 to 1944), the monthly inflation rate peaked at 8.55 billion percent in 1944. Prices doubled every 28 hours. In 1943, the highest denomination was 25,000 drachmai. By 1944, the highest denomination was 100,000,000,000,000 drachmai. In the 1944 currency reform, 1 new drachma was exchanged for 50,000,000,000 drachmai. Another currency reform in 1953 replaced the drachma at an exchange rate of 1 new drachma = 1,000 old drachma. The overall impact of hyperinflation: 1 (1953) drachma = 50,000,000,000,000 pre-1944 drachmai.

France (1789-1797)
France did not start using paper notes until much later than other European nations due in part to the Mississippi Company debacle of 1719-1720.

In the spring of 1789 the French Assemblee decreed the issuance of 400 million paper livres, known as assignats, secured by the properties that had been confiscated from the Church during the revolution. Over the following years, the Assemblee continued issuing greater quantities of assignats and in addition to price controls, dictated a death sentence on anyone selling the notes at a discount to gold and silver livres. By late-1795 the amount had reached 40 billion and a new currency was issued, the mandat, which promptly lost 97% of its value over the next two years. In 1797, both paper currencies were recalled and a new monetary system based upon gold was instituted.

France also suffered through a long period of moderate inflation from 1944 to 1960.

Georgia (1995)
Georgia went through the worst inflation in 1994. In 1993, the highest denomination was 100,000 laris. By 1994, the highest denomination was 1,000,000 laris. In the 1995 currency reform, 1 new lari was exchanged for 1,000,000 laris.

Germany (1923-1924, 1945-1948)
During WWI, Germany borrowed heavily expecting that they would win the war and have the losers repay the loans. In addition to these debts, Germany faced huge reparation payments. Together, these debts exceeded Germany's GDP. In 1923, when Germany could no longer pay reparations, French and Belgium troops moved in to occupy the Ruhr, Germany's main industrial area. Without this major source of income, the government took to printing money which resulted in hyperinflation took hold. At its most severe, the monthly rate of inflation reached 3.25 billion percent, equivalent to prices doubling every 49 hours. The U.S. dollar to Mark conversion rate peaked at 80 billion.


Inflation 1923-24: A German woman feeding a stove with currency notes, which burn longer than the amount of firewood they can buy.

Some countries eased off on Germany's war reparation burden and a new interim currency, the Rentenmark, secured on mortgages on land and industrial property restored stability. In 1924, the Reichmark, replaces the Rentenmark and has an equivalent to the pre-war gold mark.

Germany suffered high inflation again after WWII. In the official markets ration cards and permits are more important than currency while on the black market cigarettes, soap, tinned beef and chocolate serve as currency. In 1948, Germany replaced the Reichsmark with the Deutschemark and abolished the price and wage controls and most of the rationing system.

Greece (1944-1953)
During the German occupation of Greece (1941 to 1944), the monthly inflation rate peaked at 8.55 billion percent. Prices doubled every 28 hours. Two currency reforms, one in 1944 and another in 1953, saw the new drachma replace 50 trillion pre-1944 drachma.
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« Reply #41 on: January 13, 2008, 12:28:52 AM »


Hungary (1922-1924, 1944-1946)
Hungary went through two hyperinflationary periods. From 1922 and 1924 the inflation in Hungary reached 98%. This seems quite timid when compared to the inflation rate of 41.9 quintillion percent reached in mid-1946 recorded as being the worst in modern history. At this rate prices doubled every 15 hours. By July 1946, the 1931 gold pengo is worth 130 trillion paper pengos.


The Hungarian National Bank has the dubious honour of circulating the largest denomination banknote - that being the 100 quintillion pengo.


A Hungarian man sweeps paper notes out of the gutter.

Israel (1979-1985)
Inflation accelerated in the 1970s, rising steadily from 13% in 1971 to 111% in 1979. From 133% in 1980, it leaped to 191% in 1983 and then to 445% in 1984. In 1985 Israel froze all prices by law. In 1985, inflation fell to 185% (less than half the rate in 1984). Within a few months, the authorities began to lift the price freeze on some items; in other cases it took almost a year. In 1986, inflation was down to just 19%.

Japan (1944-1948)
Japan first began printing paper money in the early part of the 14th century but was short lived.

In more recent times, Japan experienced post-WWII hyperinflation in which consumer prices rose by 5,300%. There is also the issuance of military yen (also known as banana money) to soldiers of both the Imperial Japanese Army and Navy. This currency was first issued during the Russo-Japanese War of 1904 and reached a crescendo during the Pacific War. During this time, military yen was forced upon the local population of occupied territories. Military yen was printed without regard for inflation, unbacked by gold and could not be exchanged for Japanese yen. When the Japanese occupied Hong Kong, military yen was forcibly exchanged with Hong Kong dollars at a ratio of 1 to 2. Anyone caught with Hong Kong dollar was to be tortured. After the exchange, the Japanese military purchased supplies and strategic goods from the neutral Portuguese port of Macau using Hong Kong dollars. On 6 September 1945, the Japanese Ministry of Finance announced that all military yen became void thereby leaving overseas holder of military yen with pieces of worthless paper.

Krajina (1993)
Krajina went through the worst inflation in 1993. In 1992, the highest denomination was 50,000 dinara. By 1993, the highest denomination was 50,000,000,000 dinara. This unrecognized country was reincorporated into Croatia in 1998.

Madagascar (2004)
The Madagascan franc lost nearly half its value in 2004. On 1 January 2005 the Madagascan ariary replaced the previous currency at a rate of 1 ariary for five Madagascan francs. In May 2005 there were riots over rising inflation suggesting the situation wasn't over.

Mexico (2004)
Mexico defaulted on its external debt in 1982, and experienced several years of inflation. On 1 January 1993, the Bank of Mexico introduced a new currency, the nuevo peso which was equal to 1,000 old pesos.

Since the Mexico Peso Crisis of 1994 the value of the Mexico peso has plummeted by almost 60%. The government contends that the devaluation was necessary to decrease the account deficit.

Mongolian Empire (13th and 14th Century AD)
Genghis Khan's empire went through two hyperinflationary periods. Kublai Khan, the grandson of Genghis and then emperor of China, circulated paper money to replace that of the Chinese provincial governments. This currency was known as The First Mongol Issue. It depreciated rapidly after its short-lived success from 1260 to 1263. Currency reform occurred in 1264, and The Second Mongol Issue, equally irredeemable, and unlimited in issue, replaced the earlier notes at a ratio of 1:5. This currency lasted for 1290 at which time it began falling in value till about 1310. It was replaced by a third issue at the same ratio of 1:5. Over-issue of these notes once again destroyed their value. During the final phase of the Mongol Dynasty in around 1350 huge efforts were unsuccessful in fixing the monetary situation.

Quote
"Population and trade had greatly increased, but the emissions of paper notes were suffered to largely outrun both, and the inevitable consequence was depreciation. All the beneficial effects of a currency which is allowed to expand with a growth of population and trade were now turned into those evil effects that flow from a currency emitted in excess of such growth. These effects were not slow to develop themselves. Excessive and too rapid augmentation of the currency, resulted in the entire subversion of the old order of society. The best families in the empire were ruined, a new set of men came into the control of public affairs, and the country became the scene of internecine warfare and confusion." Del Mar, History of Monetary Systems (1886)

The usurping Ming Dynasty issued yet more paper currency with the solemn legend "This paper money shall have currency, and be used in all respects as if it were copper money". There was no public confidence in the firmness of this declaration and at the outset the paper traded at 17:13 against copper coinage. Before long the ratio fell to 300:1.

Nicaragua (1987-1990)
Before 1987, the highest denomination was 1,000 cordobas. By 1987, it was 500,000 cordobas. Nicarauga went through a currency reform in 1988 which saw 1 new Cordoba replace 1,000 old cordobas. In the mid-1990 currency reform, 1 gold Cordoba equaled 5,000,000 new cordobas. Total impact of hyperinflation: 1 gold Cordoba = 5,000,000,000 pre-1987 cordobas.

Persian Empire (1294)
The city of Tabriz begins issuing paper money over a two month period with disastrous effects. Rashid al Din, prime minister of Persia describes both printing and paper money in his History of the World.

Peru (1984-1990)
Peru went through the worst inflation from 1984 to 1990. The highest denomination in 1984 was 50,000 soles de oro. By 1985, it was 500,000 soles de oro. In the 1985 currency reform, 1 intis was exchanged for 1000 soles de oro. In 1986, the highest denomination was 1,000 intis. It was 5,000,000 intis by 1990. In the 1991 currency reform, 1 nuevo sol was exchanged for 1,000,000 intis. The overall impact of hyperinflation: 1 nuevo sol = 1,000,000,000 pre 1985 soles de oro.

Poland (1922-1924, 1990-1993)
Poland suffered two bouts of hyperinflation. The first occurred from 1922 to 1924 when inflation rates reached 275%. After three years of hyperinflation, the 1994 currency reform saw 10,000 old zlotych exchanged for 1 new zloty.

Romania (2000-2005)
Romania is still working through steady inflation that began around the time when the Iron Curtain came down. The highest denomination in 1998 was 100,000 lei. By 2000 it was 500,000 lei. Consumer inflation that year was over 45%. In early 2005, notes of 1,000,000 lei circulated in Romania. In July 2005 the leu was replaced by the new leu at 10,000 old lei = 1 new leu. Inflation in 2005 was about 9%. In 2006 the highest denomination was 500 lei (= 5,000,000 old lei).

Ancient Rome
Early Roman coinage was entirely representative. It was copper and issued with a face value of about 3 times its commodity value. It was carefully made using the innovation of striking, rather than casting, and the dies used were of the highest quality and artistic complexity. They were extremely difficult to forge and the penalties were heavy. The Romans were probably the first to obey their own monetary laws limiting the supply of coins. As a result for 178 years there is no evidence of demonetization. On the contrary, the value of money increased in value as did the population and economy.

This changed during the Second Punic War. Hannibal and his legendary elephants conquered from Carthage in North Africa, through silver rich Spain, to the Roman copper mines in northern Italy (modern-day Tuscany) and threatened Rome from the north. In response, the Romans began to over-issue underweight and overvalued coinage to finance the massive military effort which was required to repulse the enemy.

What came out afterwards was a very different Rome. It was much more militarist and expansionist in order to support its large military. Within 100 years Rome's republican politics had subsided into what was effectively dictatorship.

By 270 AD, the precious metal content of Roman coins had fallen to only 4%. Emperor Diocletian issued vast amounts of debased copper coins which inevitably lead to price increases. Diocletian blamed the greed of merchants and in 301 AD issued the Edict of Prices declaring fixed prices with a death penalty for anyone selling above them. Merchants stopped selling goods but this led to penalties against hoarding. When merchants left their trade Diocletian countered with laws saying that every man had to pursue the occupation of their father. The penalty for not doing so was death.

In the words of Del Mar in his History of Monetary Systems, "for nearly two centuries, during which all that was admirable of Roman civilization saw its origin, its growth and its maturity. When the system fell Rome had lost its liberties. The state was to grow yet more powerful and dreaded, but that state and its people were no longer one."

The former republic of Rome descended into essentially what was serfdom.

Russia (1921-1922, 1992-1994)
Russia experienced 213% inflation during the Bolshevik Revolution and again during the first year of post-Soviet reform in 1992 when annual inflation peaked at 2520%. In 1993 the annual rate was 840%, and in 1994, 224%. The ruble devalued from about 100 r/$ in 1991 to about 30,000 r/$ in 1999.

Taiwan (late-1940's)
Severe inflation existed in the late 1940s due to factors such as corruption and the 2-2-8 Incident. Increasingly higher denominations were issued on the island, up to one million yuan. The new Taiwan dollar was issued in 1949 at a ratio of 40,000-to-1 against the old Taiwan yuan.

Turkey (1990's)
Throughout the 1990s Turkey dealt with severe inflation rates that finally crippled the economy into a recession in 2001. The highest denomination in 1995 was 1,000,000 lira. By 2000 it was 20,000,000 lira. Recently Turkey has achieved single digit inflation for the first time in decades, and in the 2005 currency reform, introduced the New Turkish Lira; 1 was exchanged for 1,000,000 old lira.


A 1,000,000 lira banknote, issued by Turkey.

Ukraine (1993-1995)
Ukraine went through the worst inflation between 1993 and 1995 with inflation rates peaking at 1400% per month. Before 1993, the highest denomination was 1,000 karbovantsiv. By 1995, it was 1,000,000 karbovantsiv.

In 1996, the karbovantsiv was taken out of circulation, and was replaced by the hryvnya at an exchange rate of 100,000 karbovantsivi = 1 hryvnya (approx. US$0.20 at the time).


A 100,000 Ukrainian Karbovantsiv bank note

United States (1812-1814, 1861-1865)
The United States has experienced two currency collapses. The first was the Continental Currency ("Not worth a Continental") the American colonists used to finance the Revolutionary War. While the Americans won their independence, their currency was destroyed in the process.

The second were the Confederation notes. In an effort to finance the civil war with the north, the Confederate States of America issued vast amounts of money. At one point, the Secretary of the Treasury recommended that counterfeit money be utilized. Anyone holding a counterfeit bill was to exchange it for a government bond. The government would then stamp it "valid" and spend it.

Below is a chart showing the falling value of the current American currency since inception (Data from MeasuringWorth.com).



Yap (late 1800's)
The island of Yap in the Pacific Ocean used varying sized stones as money, of which the largest weighing several tons were the most valuable. The stones had been brought by sea from the Island of Palau 210 km away. The journey was very perilous given the length of the voyage and the rough seas between the islands of Palau and Yap. Many of the stones were lost at sea. The risk associated with procurement of the "money stones" initially made them highly valuable. The Yapese valued them because large stones were quite difficult to steal and were in relatively short supply. However, in 1874, an enterprising Irishman named David O'Keefe hit upon the idea of employing the Yapese to import more "money" in the form of shiploads of large stones, also from Palau. O'Keefe then traded these stones with the Yapese for other commodities such as sea cucumbers and copra. Over time, the Yapese brought thousands of new stones to the island, debasing the value of the old ones. Today they are almost worthless, except as a tourist curiosity.


A large (approximately 8 feet in height) example of Yapese stone money

Yugoslavia (1989-1994)
Second worst hyperinflationary period in recent history with a monthly inflation rate of 5 quintillion percent. Between Oct 1, 1993 and January 24, 1994 prices doubled every sixteen hours on average. At the end of it, one novi dinar = 1,300,000,000,000,000,000,000,000,000 pre-1990 dinars. One account of the breakdown of the social structure is the example of a postman who waited a day to pay 780 phone bills with the equivalent of a few American pennies instead of trying to collect from the customers.


A 500,000,000,000 (500 billion) Yugoslav dinar banknote circa 1993, the largest nominal value ever officially printed in Yugoslavia, the final result of hyperinflation.

Zaire (1989-1996)
Zaire went through a period of inflation between 1989 and 1996. In 1988, the highest denomination was 5,000 zaires. By 1992, it was 5,000,000 zaires. In the 1993 currency reform, 1 nouveau zaire was exchanged for 3,000,000 old zaires. The highest denomination in 1996 was 1,000,000 nouveaux zaires. In 1997, Zaire was renamed the Congo Democratic Republic and changed its currency to francs. 1 franc was exchanged for 100,000 nouveaux zaires. The overall impact of hyperinflation: One 1997 franc = 300 billion pre-1989 dinars.

Zimbabwe (1999 - present)
The Rhodesian dollar (R$), adopted in 1970, following decimalization and the replacement of the pound as the currency, was set at a rate of 2 Rhodesian dollars = 1 pound (R$ 0.71 = USD $1.00). At the time of independence in 1980, one Zimbabwean dollar (of 100 cents) was worth US$1.50.

Since then, rampant inflation and the collapse of the economy have severely devalued the currency, with many organizations using the US dollar instead.

On 16 February 2006, the governor of the Reserve Bank of Zimbabwe, Dr Gideon Gono, announced that the government had printed ZWD 21 trillion in order to buy foreign currency to pay off IMF arrears.

In early May 2006, Zimbabwe's government began rolling the printing presses (once again) to produce about 60 trillion Zimbabwean dollars. The additional currency was required to finance the recent 300% increase in salaries for soldiers and policemen and 200% for other civil servants.

In August 2006, the Zimbabwean government issued new currency and asked citizens to turn in old notes; the new currency (issued by the central bank of Zimbabwe) had three zeroes slashed from it.

In February 2007, the central bank of Zimbabwe declared inflation "illegal" and outlawed any raise in prices on certain commodities between March 1 and June 30, 2007. Officials have arrested executives of some Zimbabwean companies for increasing prices on their products. (NY Times)


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« Reply #42 on: January 13, 2008, 11:41:46 PM »

The Great Depression

I inserted newspaper headlines that I found on Rense into a bare bones timeline of the Great Depression. I found it rather interesting to see what the media was saying in the context of what was really happening.

1929
February: Astrologer Evangeline Adams, who counts Charlie Chaplin, Mary Pickford, and J. P. Morgan among her clients, predicts the market will rise in the coming months.

March 4: President Herbert Hoover is inaugurated. Nicknamed "The Great Engineer," the former geologist and mining engineer takes office amid booming prosperity. During the campaign, he has promised: "We shall soon, with the help of God, be in sight of the day when poverty will be banished from this nation."

March 8: Michael J. Meehan begins one of the most successful brokerage pools in Wall Street history. Over the next ten days, he drives the value of R.C.A. stock up almost 50%. In today's money, his pool will make the colluding investors $100 million.

March 15: Newspapers quote Treasury Secretary Andrew Mellon saying there are bargains to be found in the bond market. Wall Street is in the midst of a buying frenzy. As the market rises, some begin to fear it will soon collapse. The Federal Reserve Board meets, but does not make any public statements.

Quote
        Radio Flashes High; General Motors and Steels Soar

The atmosphere of doubt and caution which Wall Street in recent weeks has come to regard almost as habitual on Thursdays was swept away yesterday in a rush of buying...

Perhaps the market's own strength weighed as heavily with speculative minds as the logic of the situation, since the tape is the one institution Wall Street does not argue with. At any rate, the market appeared entirely confident from the opening gong. It was a firm, almost buoyant, opening, many initial transactions involving large blocks at sizable price advances...

The advance was one of the most vigorous of the year, amounting to a net gain of 6.97 points in the Dow Jones "average" of thirty representative industrial issues...

-- The World, March 15, 1929

March 25: A mini-crash begins as investors start to sell, revealing the market's shaky foundations. For the many people playing the market with borrowed money, the day is a disaster, as margin calls wipe out their holdings. While the investors seek to borrow more money, interest rates soar to 20 percent. The New York Daily News calls it a "selling avalanche."

March 27: Banker Charles Mitchell announces that the national city bank will provide $25 million in credit to stop the market's slide. His move stops the panic, and call money declines from 20 to eight percent. Senator and former Treasury Secretary Carter Glass calls for Mitchell to resign from his post on the Federal Reserve Board because of his intervention in the market.

Quote
    Stocks Soar As Bank Aid Ends Fear of Money Panic
    By W. A. Lyon

    The stock market strode out from under the shadow of a panic in call money that so lately threatened, revived in all its old strength yesterday. Assured that the New York banks were ready with their boundless resources to prevent a money crisis, the public and the professional trader set out to repair the damage done to prices on Monday and the major part of Tuesday.

    Stocks in the aggregate, though bucking a 15 per cent rate for loans, enjoyed the greatest advance they have known in a single day in the last two years. Not even the surging bull markets of the memorable year 1928 saw such a day of heavy buying.

    -- New York Herald Tribune, March 28, 1929

Quote
    Banker Says Boom Will Run Into 1930

    That at least a part of the great amount of money in the securities market may represent temporary employment of funds eventually finding their way into business uses, and that the prosperity of the present business cycle will probably not end in 1929, is the belief expressed by the J. Henry Schroder Banking Corporation in the quarterly review of the London house of Schroder.

    -- The World, March 30, 1929

Spring: The American economy shows ominous signs of trouble. Steel production is declining, construction is sluggish, car sales are down, and consumers are building up high debts because of easy credit. Yet the stock market continues its upward momentum, heedless of real economic indicators.

May 14: The N.Y.S.E. opens a new bond room, adding 6,000 feet to the trading floor.

Summer: The market continues to rebound, and stocks hit record levels month after month.

August 17: Michael Meehan's brokerage firm launches a new service: an office aboard ocean liners, including the Berengaria. This convenience allows transatlantic passengers to buy or sell shares during the weeklong passage between the U.S. and Europe.

September 3: After a surge of optimism, the bull market reaches its peak -- the Dow Jones Industrial Average closes at 381.17. A newspaper headline trumpets, "Public Demand for Stock Appears Insatiable."

September 5: Bearish economist Roger Babson gives a speech, saying, "Sooner or later, a crash is coming, and it may be terrific." He has been delivering this message for two years, but for the first time, investors listen. The market takes a severe dip, which will be called the "Babson Break." The next day, prices will stabilize, but the collapse has begun.

Mid-September: The market fluctuates wildly up and down.

Quote
    Brokers to Open Offices on Ships

    The New York Stock Exchange decided yesterday to put to sea. It gave two brokerage houses permission to establish offices with continuous stock quotations by radio, on trans-Atlantic ships. Within a few weeks business will be following the flags of three nations across the bounding main.

    The American business man will be able to take a vacation in Europe without stopping for a single day his transactions at the centre of speculation...

    What the psychological effect may be remains to be seen. Lady Luck always has been a favorite companion for diversions seekers at sea, a fact that has provided good incomes to many generations of traveling card players. Ships' pools and the "horse races" on deck always have been popular. They may retain their popularity, but now they will be outclassed.

    -- The World, October 4, 1929

Quote
    Public Liquidation Spurred by Bears, Hits Low Market

    Scare Orders From All Over Country Halt Ticker an Hour in Feverish Day
    By Laurence Stern

    With speculative nerves rubbed raw under the persistent hammering of bearish traders, a renewed wave of public liquidation swept over the stock market yesterday, depressing prices severely and hopelessly clogging the quotation ticker...

    ...To the majority of the market's followers, who now must be counted in millions, the most significant aspect of the decline is that it has carried the average level of the list to a lower point than was reached on Oct. 4 in the sharp break that climaxed a month of gradual recession.

    This raises a pertinent question, whether the bull movement of the last five years has definitely given way to a liquidating market...

    -- The World, October 20, 1929

October 24: "Black Thursday." The economic bubble finally bursts. Stock prices fall sharply on a day of heavy liquidation. Ticker tape runs four hours later than normal at a volume of 12.9 million shares. Headlines will report the market's paper loss at $5 billion. A pool of bankers act to stem the drop by putting more money into the market, and President Hoover reassures Americans that U.S. business is sound. Within a few days, a headline will read, "Brokers Believe Worst is Over and Recommend Buying of Real Bargains."

Quote
    Brokerage Houses Are Optimistic on the Recovery of Stocks

    Brokers in Meeting Predict Recovery

    A reassuring message to the stock market community went out last night over the country-wide network of private wires operated by brokerage houses. This was the result of a tacit agreement reached yesterday afternoon at a special meeting of the partners of about thirty-five of the largest wire houses of the New York Stock Exchange, at which the stock market situation was canvassed thoroughly...

    ...Much of the selling of the last few days, the brokers felt, was induced by hysteria. The views of all of the brokers present were heard, and none knew of anything disturbing to the general market situation...

    -- The New York Times, October 25, 1929

Quote
    Brokers Believe Worst Is Over and Recommend Buying of Real Bargains

    Wall Street in looking over the wreckage of the week, has come generally to the opinion that high grade investment issues can be bought now, without fear of a drastic decline. There is some difference of opinion as to whether not the correction must go further, but everyone realizes that the worst is over, and that there are bargains for those who are willing to buy conservatively and live through the immediate irregularity.

    -- New York Herald Tribune, October 27, 1929

October 28: "Black Monday." The stock market falls 22.6%, the highest one-day decline in U.S. history. The crash triggers similar declines in markets around the world.

October 29: "Black Tuesday." Panic sets in as investors all try to sell their stocks at once. Over 16 million shares of stock are sold, setting a record -- and the market records over $14 billion in paper losses. Stock tickers cannot keep up with the heavy trading volume. At the end of the day, the market is down 33 points, more than 12.8%. Some of the nation's financial elite, including General Motors' William C. Durant and the Rockefeller family, show confidence by buying stocks, but their efforts fail to stem the tide.

Quote
    Gigantic Bank Pool Pledged To Avert Disaster as Second Big Crash Stuns Wall Street

    Largest Financial Powers in the City Meet After Day of Hysterical Liquidation Sinking Prices Below Thursday's
    By Laurence Stern

    After the stock market had come crashing down again in a veritable deluge of forced and hysterical liquidation, word sped through the financial district last evening that the largest banks in the city were prepared to exert their organized power this morning to prevent further disaster.

    Arrangements described as "fully adequate" were completed at a conference at the offices of J. P. Morgan & Co. at Broad and Wall Streets...

    Although no formal statement was issued, it was the consensus of those at the meeting that the worst of the liquidation is over and that a natural demand for investment stocks now available on the bargain counter should go far toward an immediate restoration of trading stability.

    -- The World, October 29, 1929

November 23: After weeks in freefall, the market hits its bottom and stabilizes. The New York Times reports, "Regular Schedule to be Resumed, but Trading Will Be Suspended Last Half of Week; Business Nearly Normal." The market's daily volume is at 3 million shares with "orderly although irregular" prices.

Quote
    Stocks Up in Strong Rally; Rockefellers Big Buyers; Exchanges Close 2-1/2 Days
    By Ferdinand Lundberg

    Revived by spontaneous investment buying and declarations of large extra cash dividends by leading companies, and free of the delirium that has recently gripped share owners, the stock market yesterday received a fresh start and scored a record comeback. Volume on the Stock Exchange totaled 10,727,320 shares, the third largest day on record.

    The high spot of the day from a stock market viewpoint was the statement by John D. Rockefeller that there was no need to destroy values and that he and his son, John D. Rockefeller Jr., had been heavy buyers of stocks for investment in the last few days, and would continue to buy at present prices...

    -- New York Herald Tribune, October 31, 1929

Quote
    Very Prosperous Year Is Forecast

    Guenther Analyzes the Report of Mellon Covering 1929

    That 1930 may be a very prosperous year, industrially and otherwise, without the peak conditions that made 1929 and exceptional year for business prosperity, is an observation made by Louis Guenther, publisher of the Financial World, in a statement based upon Secretary Mellon's fiscal report...

    "To grow too fast is often unhealthy because of the suddenness with which a readjustment must be met. By far and large the country would be better off were further progress made along more normal lines...

    Fortunately, we have returned to a more normal mind in appraising prospects. We are not looking for the Midas touch on everything to which we turn. That makes us more satisfied with normal incomes and normal profit returns."

    -- The World, December 15, 1929


1931
   
January 7: A report released by the Committee for Unemployment Relief states that over four million Americans are unemployed. [Reaching 15.9 for the year.]


1932

July 8: The Dow Jones Industrial Average reaches its lowest point of the Great Depression, closing at 41.22, down 89 percent from its peak in 1929.

[The year] The next years are the worst years of the Great Depression.
  • GNP falls a record 13.4 percent.
  • Unemployment rises to 23.6 percent. Over 13 million Americans have lost their jobs since 1929.
  • Industrial stocks have lost 80 percent of their value since 1930.
  • 40 percent of the banks fail [a total of 10,000 banks have failed since 1929]
  • GNP has also fallen 31 percent since 1929.
  • International trade has fallen by two-thirds since 1929.


1934

October 1: The Securities and Exchange Commission is created to regulate stocks, bonds and other commissions. Kennedy patriarch and former Wall Street speculator Joseph P. Kennedy is appointed as its chairman.

1940


This photo of a a food distribution center was taken in 1940.
It's part of the Library of Congress exhibition Bound for Glory: America in Color. It's the first major exhibition of the little known color images taken by photographers of the Farm Security Administration/Office of War Information (FSA/OWI) from 1939-1943.


1941

December 8: The day after a Japanese surprise attack on Pearl Harbor in Hawaii, the U.S. enters World War II.
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« Reply #43 on: January 14, 2008, 03:16:26 AM »

RECESSION IS HERE FOLKS !!  IT'S GOING MAIN STREAM MEDIA THIS MORNING IN EUROPE !!

US Automobile market is hit, sales expectation between -7% and -15% for 2008.
Inflation is going to follow big time soon.

Gold skyrocketed to 913$
USD/EUR at 1,49

Down we go.... expect a Stock Market collapse, if the FED reduce the interest rate it's the sign that they really wants to ruined the country once and for all.

Hope you took all appropriated steps to protect yourself from the coming economic armageddon.
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« Reply #44 on: January 14, 2008, 03:48:42 AM »

And the cause is inflation so Bernanke's plan...

INCREASE INFLATION TO SEND RECESSION INTO DEPRESSION!


Fed says recession risk trumps inflation fears
http://www.msnbc.msn.com/id/22595525/

Bernanke says Fed ready for aggressive rates cut
http://www.msnbc.msn.com/id/22594004/


And that my friends is the definition of TREASON

Stealing money from 90% of America, to give to globalist enemies foreign and domestic.

It does not get any clearer than this.
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« Reply #45 on: January 14, 2008, 04:35:22 AM »

And the cause is inflation so Bernanke's plan...

INCREASE INFLATION TO SEND RECESSION INTO DEPRESSION!


Fed says recession risk trumps inflation fears
http://www.msnbc.msn.com/id/22595525/

Bernanke says Fed ready for aggressive rates cut
http://www.msnbc.msn.com/id/22594004/


And that my friends is the definition of TREASON

Stealing money from 90% of America, to give to globalist enemies foreign and domestic.

It does not get any clearer than this.



I think that the depression at this point cannot be avoided anymore BUT by cutting interest rates more there is a high chance of HYPERINFLATION which is the worst case scenario and a crime against the american people by the FED. To say that aggressive rates cut is planned is completely insane. They will try whatever it takes to keep the economy up to the elections because if the crash occur before the elections RON PAUL will have the highest chance of winning.

I'm living in Europe but I'm so sad to see your great country being virtually crucified by the globalists, I fear that Europe is going to be next.

Fight for your life !
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« Reply #46 on: January 14, 2008, 05:54:31 AM »

Jack Welch says we will not have a recession "but it will feel like one" [WTF?]

just on Morning Joe MSNBC 7:50 AM

He also said it will be Hillary v. McCain, with Hillary winning.

Be advised that Jack is one the top king makers around.  So now we know how the elections are going to be fixed...toward McCain in the primaries.  I guess Rudy got his pink slip.
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« Reply #47 on: January 14, 2008, 06:08:43 AM »

Bernanke Finds his Voice   
             
By Mike Whitney
http://www.informationclearinghouse.info/article19058.htm

12/01/08 "ICH" --- On Thursday, Fed chairman Ben Bernanke gave the keynote address on the state of the economy and financial markets at a luncheon in Washington, DC. The tone of the speech was decidedly somber and could have easily been accompanied by a funereal dirge and 8 black-suited pall bearers. Bernanke avoided the opaque, hieroglyphic-filled language of his predecessor, Alan Greenspan, and gave a clear presentation of the facts. Unfortunately, the facts are bleak. The economy is in very bad shape.

“Financial market conditions...have produced a volatile situation that has made forecasting the course of the economy even more difficult than usual. (We have seen) continued increases in the prices of energy (as well as) a sharp and protracted correction in the U.S. housing market. According to the most recent available data, housing starts and new home sales have both fallen by about 50 percent from their respective peaks.”

 Bernanke made no effort to conceal the gloomy facts:

“Currently, about 21% of subprime ARMs are ninety days or more delinquent, and foreclosure rates are rising sharply ...Fraud and abusive practices contributed to the high rates of delinquency that we are now seeing in the subprime ARM market, the more fundamental reason for the sharp deterioration in credit quality was the flawed premise on which much subprime ARM lending was based: that house prices would continue to rise rapidly. (This) will have adverse effects for communities and the broader economy as well as for the borrowers themselves.”

  Bernanke was equally blunt about the credit crunch that resulted from the excesses in subprime lending:

  “One of the many unfortunate consequences of these events, which may be with us for some time, is on the availability of credit for nonprime borrowers...The far-reaching financial impact of the subprime shock is that it has contributed to a considerable increase in investor uncertainty about the appropriate valuations of a broader range of financial assets, not just subprime mortgages. (As a result) the problems in the subprime mortgage market may lead overall economic growth to slow.”

  Bernanke went on to give a very detailed account of how the banks “underwrote many of the loans and created many of the structured credit products (MBS, CDOs, ABCP) that were sold into the market. Banks also supported the various investment vehicles in many ways, for example, by serving as advisers and by providing standby liquidity facilities and various credit enhancements.”

  As the problems in subprime have grown, the banks have been forced to take on more and more of their struggling “off balance” sheet operations which dramatically increases their debt-load and further impairs their capital base. This explains why the banks have been reporting huge losses from their deteriorating collateral while their market value has dropped sharply. Now banks have become more restrictive in their lending and credit has become more expensive and less available.

When the banks are unable to issue loans; the economy suffers.

Bernanke added ominously: “The market strains have been serious, and they continue to pose risks to the broader economy.”

  Amen, to that. Since the troubles began in late summer, the Fed has slashed rates by a full percentage point to 4.25% and opened a Discount Window to provide billions of dollars directly to the banks. The Fed has also opened a Term Auction Facility (TAF) which has distributed $40 billion in 30-day repos to over 100 under-capitalized banks. The Fed is planning to loan another $60 billion in the next month. These repos are issued secretly (so depositors and shareholders don't know how bad things really are) and the Fed is accepting a “wide range of collateral”, which means that they are taking "structured investments" (MBSs, CDOs, ASCP) the same garbage that no one will buy on the open-market. In other words, the Fed has established a multi-billion emergency fund which features permanently-rotating loans for banks that made poor investments and are, for all purposes, already bankrupt. This is moral hazard at its absolute worst.

As Bernanke knows, 'permanent-rotating loans' is just a clever euphemism for nationalizing the banks and monetizing their debts at the taxpayers' expense. Many of these institutions are already insolvent. The Fed is just ensuring that there are no consequences for their leveraged bets and reckless speculation. Once again, it's socialism for the rich and capitalism for the poor.

But even these unprecedented measures do not really solve the basic problems of credit quality or the serious constraints on lending. For that, the Fed will have to aggressively slash rates hoping to revive the sagging economy.

Here's Bernanke's grim (but realistic) forecast:

“Financial conditions continue to pose a downside risk to the outlook for growth....The financial situation remains fragile, and many funding markets remain impaired. Adverse economic or financial news has the potential to increase financial strains and to lead to further constraints on the supply of credit to households and business...Incoming information has suggested that the baseline outlook for real activity in 2008 has worsened and the downside risks to growth have become more pronounced. Notably, the demand for housing seems to have weakened further, in part reflecting the ongoing problems in mortgage markets. In addition, a number of factors, including higher oil prices, lower equity prices, and softening home values, seem likely to weigh on consumer spending as we move into 2008.”

“The baseline outlook for real activity in 2008 has worsened and the downside risks to growth have become more pronounced.” That says it all. We're headed into recession and it's going to be a doozy.

Bernanke's assessment is only slightly different from the bleakest predictions of the doomsday web sites. Unemployment is on the rise which will continue to be a drag on consumer spending. Inflation is also likely to be a concern as the Fed slashes rates and food and energy prices go through the roof. Even so, the listless economy is so hobbled by the collapse in real estate and the subsequent meltdown in the financial markets, that the Fed will be forced to ease rate by at least 50 basis points at the next Board of Governors meeting followed by further cuts all the way down to 2.5%. (According to Goldman Sachs and Merrill Lynch) If that's the case, we can expect to pay 4 to 5 dollars for gas by the end of 2009.

Although Bernanke's candor is a welcome relief from Greenspan's circuitous “Fed-speak”, his dark prognosis does little to address the problems facing the markets. It's hard to tell whether we are entering a new era of Fed transparency or if Bernanke has simply taken the attitude that “When all else fails; tell the truth”. That's hardly a sign of personal virtue.

 The bad economic news is now cascading-down from all sides. The dollar is steadily weakening which sent gold to a new-high of $900 on Friday. Hours earlier, the Commerce Department reported that the trade deficit had skyrocketed 9% to $63.1 billion in November. That puts more pressure on the greenback as foreign investors will  continue to flee the US to markets with greater growth-potential.

 Also, the nation's largest brokerage firm, Merrill Lynch is expected to report losses of $15 billion on soured mortgage-backed securities. The nation's largest bank, Citigroup, is expected to report even bigger losses of $25 billion on similar investments. The nation's largest mortgage-lender, Countrywide, will (allegedly) face bankruptcy if Bank of America's $4 billion bid for the ailing company is not accepted. And, the nation's largest bond insurer,MBIA Inc., may need to raise $10 billion in capital to keep its AAA credit rating. (said William Ackman, president of Pershing Square Capital Management)

  Get the picture? The giants of the financial industry are either on the brink of annihilation or they have joined the long conga-line of haggard CFOs who are on their way to Beijing with begging bowl in hand. Battered banks and corporations are increasingly forced to get capital in the only place it is still available; China and the oil producing countries. Thus, the life's-blood of capitalism now surges through a communist artery. How's that for irony?

  On Friday, the RBC Cash Index reported that consumer confidence had fallen to an all-time low. The US consumer is over-extended, underpaid, and worried about everything from his soaring energy bills, to diminishing job security, to the mass foreclosures. The report was released just hours before the Dow Jones Industrial Average took a 246 point swan-dive in heavy trading. The prevailing mood on Wall Street is gloomy and the feeling is that the worst is yet to come. Judging by the extraordinary steps taken by the Fed; we could be facing a Force 5 fiscal-hurricane.

Economic soothsayer Doug Noland summed it up like this:

“The Mortgage Finance Bubble is a bust, Wall Street finance is imploding, and foreign financial institutions are keen to cut and run from the business of providing U.S. Credit... Worse yet, the economy is quickly succumbing to recessionary forces. With a high degree of confidence we can proclaim that the Mortgage Crisis has now evolved into a Corporate Debt Crisis – and this crisis will not be resolved anytime soon – by rates, by helicopters, or by bailouts.” (Doug Noland “Mortgage Crisis to Corporate Debt Crisis”, Prudent Bear)

  Thanks for your honesty, Ben, but all the exits appear to be bolted-shut. We'll have to ride this storm out from inside the bunker.

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« Reply #48 on: January 14, 2008, 06:17:04 AM »

Bernanke is still saying that inflation is a non issue and is going to keep on printing worthless money until everyone is in hoovervilles.
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« Reply #49 on: January 14, 2008, 06:56:53 AM »

Are You Ready for a Recession?

[VIDEO]: http://www.alternet.org/mediafiles/recession_31416_12012008.flv

By Adam Howard, AlterNet
Posted on January 12, 2008, Printed on January 14, 2008
http://www.alternet.org/bloggers/www.alternet.org/73583/


Dow Jones Index Suffers Worst Start to New Year Since 1904

In economic news, more signs are emerging indicating the country might be heading toward a recession. The reported unemployment rate hit 5 percent in December -- it was the biggest jump in unemployment since a month after the Sept. 11 attacks. The price of oil briefly topped one hundred dollars a barrel for the first time ever last week. On Wall Street, the Dow Jones industrial average suffered its worst start to a new year since 1904. The Nasdaq composite index dropped over five percent last week--its worst start to a new year ever. And the Times of London reports the living standards in Britain are set to rise above those in the United States for the first time since the 19th century.

Ethan Harris, the chief economist at Lehman Brothers, predicted 2008 would be a difficult year for the U.S. economy.

Ethan Harris: "We are going into a very uncertain period for the economy with lots of downside risks. The fact that the stock market started the year on a down note is a reminder that there are significant risks out there, so that's the message. It's just confirming what we knew, which is it's going to be a difficult year. The stock market could be up in the year if the economy can skirt recession, but it's going to be a choppy ride this year. "

President Bush: "This Economy of Ours is on a Solid Foundation" President Bush has attempted to put a positive spin about the recent economic news. President Bush: "While there is some uncertainty, the report is that our financial markets are strong and solid. And I want to thank you for being diligent. This economy of ours is on a solid foundation. But we can't take economic growth for granted. And there are signs that cause us to be ever more diligent in making sure good policies come out of Washington."

Adam Howard is the editor of PEEK.

© 2008 Independent Media Institute. All rights reserved.
View this story online at: http://www.alternet.org/bloggers/www.alternet.org/73583/
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« Reply #50 on: January 14, 2008, 07:02:17 AM »



   Bernanke is basically a victim.  The problems were started by the easy money days of Greenspan.  Bernanke is still not giving us underlying reasons of why this is all happening.  The big sucking sound coming is the implosion of the derivatives market. No one knows but some estimates say that it is around $1 quadrillion dollars ($1000 TRILLION) WORLDWIDE!
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« Reply #51 on: January 14, 2008, 08:29:20 AM »


   Bernanke is basically a victim.  The problems were started by the easy money days of Greenspan.  Bernanke is still not giving us underlying reasons of why this is all happening.  The big sucking sound coming is the implosion of the derivatives market. No one knows but some estimates say that it is around $1 quadrillion dollars ($1000 TRILLION) WORLDWIDE!

He might be a victim of past "insane" decisions but I can't believe he's not seeing that there is no other option than recession, instead of cutting interest rates like crasy he should have kept them fixed and start the recession. I mean when it's check-mate it's check-mate the only good decision as an economist would have been to start the recession process much sooner so I'm wondering if he is corrupted like the rest or if he received order from the neo-cons.

Like Paul Craig Robert said numerous times, he differs from AJ views on the subject, where AJ sees an agenda to strip americans from their wealth he sees arrogance and incompetancies.

I tend to join AJ views because the signs of economic collapse are too obvious to still take the wrong decisions, it's basic economic rules that when you know you can't avoid a recession the worst thing is to pospone it by cutting interest rates. The same for a depression, postponing a unavoidable depression by cutting rates leads to an hyperinflation.
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« Reply #52 on: January 15, 2008, 05:05:50 AM »

The Comeback Continent

By Paul Krugman
http://www.nytimes.com/2008/01/11/opinion/11krugman.html

14/01/08 "New York Times" -- - Today I’d like to talk about a much-derided contender making a surprising comeback, a comeback that calls into question much of the conventional wisdom of American politics. No, I’m not talking about a politician. I’m talking about an economy — specifically, the European economy, which many Americans assume is tired and spent but has lately been showing surprising vitality.

Why should Americans care about Europe’s economy? Well, for one thing, it’s big. The G.D.P. of the European Union is roughly comparable to that of the United States; the euro is almost as important a global currency as the dollar; and the governance of the world financial system is, for practical purposes, equally shared by the European Central Bank and the Federal Reserve.

But there’s another thing: it’s important to get the facts about Europe’s economy right because the alleged woes of that economy play an important role in American political discourse, usually as an excuse for the insecurities and injustices of our own society.

For example, does Hillary Clinton have a plan to cover the millions of Americans who lack health insurance? “She takes her inspiration from European bureaucracies,” sneers Mitt Romney.

Or are top U.S. executives grossly overpaid? According to a Times report, Michael Jensen, a professor emeritus at Harvard’s Graduate School of Business whose theories helped pave the way for gigantic paychecks, considers executive excess “an acceptable price to pay for an American economy that he believes has outstripped Japan and Europe in growth and prosperity.”

In fact, however, tales of a moribund Europe are greatly exaggerated.

It’s true that Europe has had a lot of economic troubles over the past generation. In the mid-1970s the Continent entered a prolonged era of sluggish job creation, which contrasted with vigorous employment growth in the United States.

And in the 1990s, Europe lagged behind America in the adoption of new technology. For example, in 1997 fewer than 15 percent of French homes contained personal computers and fewer than 1 percent were connected to the Internet.

But that was then.

Since 2000, employment has actually grown a bit faster in Europe than in the United States — and since Europe has a lower rate of population growth, this has translated into a substantial rise in the percentage of working-age Europeans with jobs, even as America’s employment-population ratio has declined.

In particular, in the prime working years, from 25 to 54, the big gap between European and U.S. employment rates that existed a decade ago has been largely eliminated. If you think Europe is a place where lots of able-bodied adults just sit at home collecting welfare checks, think again.

Meanwhile, Europe’s Internet lag is a thing of the past. The dial-up Internet of the 1990s was dominated by the United States. But as dial-up has given way to broadband, Europe has more than kept up. The number of broadband connections per 100 people in the 15 countries that were members of the European Union before it was enlarged in 2004, is slightly higher than in the U.S. — and Europe’s connections are both substantially faster and substantially cheaper than ours.

I don’t want to exaggerate the good news. Europe continues to have many economic problems. But who doesn’t? The fact is that Europe’s economy looks a lot better now — both in absolute terms and compared with our economy — than it did a decade ago.

What’s behind Europe’s comeback? It’s a complicated story, probably involving a combination of deregulation (which has expanded job opportunities) and smart regulation. One of the keys to Europe’s broadband success is that unlike U.S. regulators, many European governments have promoted competition, preventing phone and cable companies from monopolizing broadband access.

What European countries definitely haven’t done is dismantle their strong social safety nets. Universal health care is a given. So are a variety of programs that support families in trouble, helping protect Europeans from the extreme poverty all too common in this country. All of this costs money — even though European countries spend far less on health care than we do — and European taxes are very high by U.S. standards.

In short, Europe continues to be a big-government sort of place. And that’s why it’s important to get the real story of the European economy out there.

According to the anti-government ideology that dominates much U.S. political discussion, low taxes and a weak social safety net are essential to prosperity. Try to make the lives of Americans even slightly more secure, we’re told, and the economy will shrivel up — the same way it supposedly has in Europe.

But the next time a politician tries to scare you with the European bogeyman, bear this in mind: Europe’s economy is actually doing O.K. these days, despite a level of taxing and spending beyond the wildest ambitions of American progressives.

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« Reply #53 on: January 15, 2008, 05:15:40 AM »

Gold hits record above $910; platinum, silver soar!!

By Atul Prakash
http://uk.reuters.com/article/wtMostRead/idUKL1445710820080114

LONDON, Jan 14 (Reuters) - Gold surged to a historic high above $910 an ounce on Monday as investors rushed to buy the metal on further weakness in the dollar and expectations of a sharp cut in U.S. interest rates.

But the metal pared gains in afternoon European trade as some investors decided to take profits from a rally that saw prices jumping 50 percent in the past year, including a 15 percent rise in the last 30 days.

Gold's surge on the day also prompted buyers to snap up other precious metals, with platinum hitting a record high before giving up some gains. Silver was quoted below a 27-year peak, while palladium traded off its highest in two months.

"It's human nature to buy into a market that is already showing strength. Most fund managers have a herd mentality and they are just attracted to gains. Gold could go higher still, but we don't think this is a right time for buying," said Robin Bhar, metals analyst at UBS Investment Bank.

"From a technical perspective, we would obviously need to see a close above $900 that would be construed as a bullish sign. But fundamentally, we are very cautious and would not advocate going long here because positioning is still extreme. There is a risk of $50-$100 dollar correction at any time."

Spot gold <XAU=> jumped as high as $914 an ounce before falling to $902.10/902.80 by New York's last quote of 2:15 p.m. EST (1915 GMT), against $895.70/896.50 in New York late on Friday.

The most-active U.S. gold contract for February delivery at the COMEX division of the New York Mercantile Exchange GCG8 settled up $5.70 to $903.40 an ounce.

Japanese gold futures <O#JAU:> were closed for a holiday.

"If you look at the overall situation, there is a lot of fear about more bad news related to the banking sector. This is one of the main drivers at the moment," said Wolfgang Wrzesniok-Rossbach, head of sales at Germany's Heraeus.

"There is some profit-taking from the metal's highs, but no big wave of selling is seen here. Gold is trading in a normal range and is likely to hover in a wide band of $880-$920 in the near term," he said.

The dollar dropped to the lowest level in seven weeks against the euro and yen on Monday as fears that weak U.S. corporate earnings will push the economy closer to a recession, requiring the Federal Reserve to cut interest rates. [ID:nN14322154]

Interest rate futures are reflecting a 50/50 chance that the Fed could reduce its interest rate by three-quarters of a point between now and the Jan 29-30 meeting. FEDWATCH

A weaker dollar makes gold cheaper for holders of other currencies and often lifts bullion demand. Gold is also viewed as an alternative to holding the dollar, and thus the value of gold rises when the U.S. dollar falls.

SAFE HAVEN PLAY

"Option sellers are covering their positions. Also, hedgers are trying to undo forward sales after the $900 expected resistance was breached. In overnight trade, funds overseas also reacted to dollar weakness and rumors of rate cuts," said George Gero, vice president of RBC Capital Markets Global Futures in New York.

Gero also noted a big open interest of gold futures of more than 500,000 lots. Total open interest of COMEX gold futures eased 742 lots to a near-record 585,734 lots as of Friday, Reuters data showed. <NYMMTLFUT/VOI>

"Risk averse investors jumped on the bandwagon as the $900 resistance was surpassed," Gero said.

Gold's appeal as a safe-haven investment has increased due to worries of further write-downs among major financial institutions and credit market meltdown in the United States, the world's biggest economy.

On charts, gold's 14-day relative strength indicator (RSI) rose to 89 from just 47 a month ago. The market views an RSI of 30 or less as oversold and 70 or more as overbought.

In Singapore, physical dealers noted selling from holders who cashed in on gold's gains as well as limited purchases from jewellers at lower levels.

Spot platinum <XPT=> hit a record high of $1,590.50 an ounce before falling to $1,572/1,577, against $1,562/1,566 late in New York on Friday. Silver <XAG=> rallied to $16.58 an ounce before easing to $16.35/16.40, up from its previous finish of $16.19/16.24. Palladium <XPD=> rose to $380 before falling to $379/384, versus its Friday finish of $375/379. (Additional reporting by Frank Tang in New York and Lewa Pardomuan in Singapore; editing by Jim Marshall)
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« Reply #54 on: January 15, 2008, 09:06:06 AM »


Subprime Nation
http://wnd.com/news/article.asp?ARTICLE_ID=59693

Posted: January 14, 2008 9:29 p.m. Eastern

Since it began to give credit ratings to nations in 1917, Moody's has rated the United States triple-A. U.S. Treasury bonds have been seen as the most secure investment on earth. When crises erupt, nervous money seeks out the world's great safe harbor, the United States. That reputation is now in peril.

Last week, Moody's warned that if the United States fails to rein in the soaring cost of Social Security, Medicare and Medicaid, the nation's credit rating will be down-graded within a decade.

Our political parties seem oblivious. Republicans, save Ron Paul, are all promising to expand the U.S. military and maintain all of our worldwide commitments to defend and subsidize scores of nations.

Democrats, with entitlement costs drowning the federal budget in red ink, are proposing a new entitlement – universal health coverage for the near 50 million who do not have it – another magnet for illegal aliens. Moody's is telling America it needs a time of austerity, while the U.S. government is behaving like the governments we used to bail out.

California has already hit the wall. With an economy as large as a G-8 nation, the Golden State is looking at a $14 billion deficit in 2009 and a $3 billion shortfall in 2008. Gov. Schwarzenegger has called for slashing prison staff by 6,000, including 2,000 guards, early release of 22,000 inmates, closing four dozen state parks and a 10 percent across-the-board cut in all state agencies. The Democratic legislature is demanding tax hikes, which would drive more taxpayers back over the mountains whence their fathers came.

Meanwhile, Washington drifts mindlessly toward the maelstrom. With the dollar sinking, oil surging to $100 a barrel, the Dow having its worst January in memory, foreclosures mounting, credit card debt going rotten, and consumers and businesses unable or unwilling to borrow, we appear headed into recession.

If so, tax revenue will fall and spending on unemployment will surge. The price of the stimulus packages both parties are preparing will further add to the deficit and further imperil the U.S. credit rating. This all comes in the year that the first of the baby boomers, born in 1946, reach early retirement and eligibility for Social Security.

To stave off recession, the Fed appears anxious to slash interest rates another half-point, if not more. That will further weaken the dollar and raise the costs of the imports to which we have become addicted. While all this is bad news for the Republicans, it is worse news for the republic. As we save nothing, we must borrow both to pay for the imported oil and foreign manufactures upon which we have become dependent.

We are thus in the position of having to borrow from Europe to defend Europe, of having to borrow from China and Japan to defend Chinese and Japanese access to Gulf oil, and of having to borrow from Arab emirs, sultans and monarchs to make Iraq safe for democracy.

We borrow from the nations we defend so that we may continue to defend them. To question this is an unpardonable heresy called "isolationism."

And the chickens of globalism are coming home to roost.

We let Europe to get away with imposing value-added taxes averaging 15 percent on our exports to them, while they rebate that value-added tax on their exports to us. Thus, the euro has almost doubled in value against the dollar in the Bush years, as NATO Europe begins to bail out on Iraq and Afghanistan.

We sat still as Japan protected her markets and dumped high quality goods into ours and China undervalued its currency to suck jobs, technology and factories out of the United States. Now, China and Japan have $2 trillion in cash reserves. The Arabs have an equal amount of petrodollars. Both are headed here to spend their depreciating dollars snapping up U.S. assets – banks, ports, highways, defense contractors.

America, to pay her bills, has begun to sell herself to the world.

Its balance sheet gutted by the subprime mortgage crisis, Citicorp got a $7.5 billion injection from Abu Dhabi and is now fishing for $1 billion from Kuwait and $9 billion from China. Beijing has put $5 billion into Morgan Stanley and bought heavily into Barclays Bank.

Merrill-Lynch, ravaged by subprime mortgage losses, sold part of itself to Singapore for $7.5 billion and is seeking another $3 billion to $4 billion from the Arabs. Swiss-based UBS, taking a near $15 billion write-down in subprime mortgages, has gotten an infusion of $10 billion from Singapore.

Bain Capital is partnering with China's Huawei Technologies in a buyout of 3Com, the U.S. company that provides the technology that protects Pentagon computers from Chinese hackers.

This self-indulgent generation has borrowed itself into unpayable debt. Now the folks from whom we borrowed to buy all that oil and all those cars, electronics and clothes are coming to buy the country we inherited. We are prodigal sons, and the day of reckoning approaches.

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« Reply #55 on: January 15, 2008, 05:07:58 PM »

Alan Greenspan to advise hedge fund firm.
http://www.huffingtonpost.com/2008/01/15/alan-greenspan-joins-hedg_n_81583.html



Alan Greenspan, the former chairman of the Federal Reserve, “is signing on as an adviser to hedge-fund firm Paulson & Co., which has profited handsomely from” the housing bubble that some blame him for fueling. Greenspan’s consulting contract with Paulson will be the third he has signed since leaving his position at the Fed after 18 years.
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« Reply #56 on: January 15, 2008, 05:17:14 PM »

I guess it's time to pay the wolf with some of those chickens he's been watching.
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« Reply #57 on: January 15, 2008, 05:21:41 PM »




   The SOB stole millions from the Americans.  He must be on the verge of going on food stamps.  His wife, Andrea Mitchell is still working for NBC.  Must be hard times for these neocon scum!
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« Reply #58 on: January 15, 2008, 10:59:51 PM »



         http://www.bloomberg.com/apps/news?pid=20601109&sid=ayaa.uTo8bsE&refer=home
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« Reply #59 on: January 16, 2008, 02:27:55 AM »

Intel Falls on Forecast, Concern Growth Is Slowing (Update1)
http://www.bloomberg.com/apps/news?pid=20601087&sid=abmKi3BpdAQM&refer=home
By Ian King



Jan. 16 (Bloomberg) -- Intel Corp. dropped the most in more than five years in German trading after forecasting sales that fell short of analysts' estimates, heightening concern that the technology earnings season will disappoint.

Intel, the world's largest chipmaker, said after the market closed yesterday that first-quarter revenue will rise to as little $9.4 billion, short of the $10.1 billion predicted by analysts. The stock sank 14 percent.

The forecast stoked concern that technology companies won't be able to shrug off slowing economic growth and increases in corporate borrowing costs. Computer-related stocks, among the best performers last year, have the worst return among 10 industry groups on the Standard & Poor's 500 Index in 2008, losing 9.3 percent.

``This is a trend that you'll see given the uncertain economic environment we're in,'' said Pat Becker Jr., who helps manage about $2.5 billion including Intel shares at Becker Capital Management in Portland, Oregon. ``I don't think anybody is going to stick their neck out and put out guidance that they just don't feel rock solid about.''

Intel, based in Santa Clara, California, fell $3.07 to $19.62 at 9:15 a.m. in Frankfurt. The shares slumped to $19.48 in extended U.S. trading yesterday. If the decline holds in the U.S. today, it will be the biggest drop since October 2002.

Intel, whose processors power more than 75 percent of the world's personal computers, kicked off U.S. technology earnings reports this week. Microsoft Corp., the world's largest software maker, reports on Jan. 24. Google Inc., owner of the most popular Internet search engine, will announce on Jan. 31.

Investors ignored the 51 percent advance in profit at Intel, focusing instead on a sales report and forecast that missed predictions.

`Trash Basket'

``You hear all of the pundits saying the world is going to a trash basket and you worry,'' Chief Executive Officer Paul Otellini said on a conference call yesterday. ``At this point though, we don't see anything on the horizon, our customers don't see anything on the horizon. It would be imprudent not to be cautious about it though.''

Yesterday, Citigroup Inc., the largest U.S. bank, reported the biggest loss in its 196-year history on higher defaults on home loans. The U.S. Commerce Department also said sales at U.S. retailers unexpectedly fell in December.

Otellini, 57, told analysts that he wants to boost Intel's inventory levels and said he hasn't heard of any buildup of unused parts at customers, an indicator of a slowing demand.

Most of Intel's growth is coming from countries outside the U.S., which account for more than 75 percent of sales, Otellini said. Sales in China ``continue to boom,'' he said.

Gross Margin

Gross margin, or the percentage of sales remaining after subtracting the cost of production, was 58 percent in the fourth quarter. Intel expects that indicator of profitability to narrow to about 56 percent in the first quarter.

Sales missed the midpoint of Intel's forecast range by $88 million because revenue from a type of flash memory, called Nand, was hit by lower prices. Nand memory is used in music players and digital cameras.

``There's so much negative sentiment built right now that they would have had to have an unbelievable number to calm the stock down,'' said Daniel Morgan, a portfolio manager at Atlanta- based Synovus Securities Inc., which owns Intel shares.

Demand for personal computers weakened last quarter, just as chip shipments increased the most in eight years, said JPMorgan Securities Inc. analyst Christopher Danely. He cut his rating on Intel shares to ``neutral'' from ``overweight'' on Jan. 4.

Intel and Advanced Micro shipped about 20 percent more chips in each of the past two quarters than a year earlier, the biggest increases since at least 2000, Danely said. Demand isn't keeping up, leaving unused inventory, he said.

``If your company, whatever sector of the economy you represent, is in a bit of an economic slump, the chief financial officer will say to the chief technology officer: Let's defer purchasing those PCs this year,'' said Paul Meeks, director of research for L.R. Burtschy & Co. in Charleston, South Carolina. Intel's forecast for overall revenue growth is ``fairly weak,'' he said.
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« Reply #60 on: January 16, 2008, 02:07:13 PM »

7-year plan aligns U.S. with Europe's economy
Rules, regs to be integrated without congressional review

By Jerome R. Corsi
© 2008 WorldNetDaily.com

German Chancellor Angela Merkel, President Bush and European Commission President Jose Manuel Barroso at a White House summit meeting last April where they launched the Transatlantic Economic Council

Six U.S. senators and 49 House members are advisers for a group working toward a Transatlantic Common Market between the U.S. and the European Union by 2015.

The Transatlantic Policy Network – a non-governmental organization headquartered in Washington and Brussels – is advised by the bi-partisan congressional TPN policy group, chaired by Sen. Robert Bennett, R-Utah.

The plan – currently being implemented by the Bush administration with the formation of the Transatlantic Economic Council in April 2007 – appears to be following a plan written in 1939 by a world-government advocate who sought to create a Transatlantic Union as an international governing body...


Full text of the article:

http://worldnetdaily.com/news/article.asp?ARTICLE_ID=59713
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« Reply #61 on: January 16, 2008, 02:11:05 PM »

The European economy is still doing fairly well and expected to improve.


Maybe they can rescue us?
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« Reply #62 on: January 16, 2008, 04:40:38 PM »

JPMorgan 4Q Profit Falls 34 Percent
http://www.huffingtonpost.com/huff-wires/20080116/earns-jpmorgan-chase/

MADLEN READ | January 16, 2008 11:17 AM EST | 
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NEW YORK — JPMorgan Chase & Co. said Wednesday its fourth-quarter profit fell 34 percent after its exposure to subprime mortgages _ though much smaller than at banking peers like Citigroup Inc. _ devalued its portfolio by $1.3 billion.

CEO Jamie Dimon also attributed the profit decline at the nation's third-largest bank by market capitalization to worse-than-expected results in home equity loans.

Banks in the United States and around the world have been struggling with rising defaults on mortgages _ and now other loans, too, such as credit cards and auto loans. As banks have gotten more stringent in their lending practices, the economy has slowed, lifting the unemployment rate.

In anticipation of more problems with U.S. consumers' ability to pay back their loans, JPMorgan boosted its provisions for loan losses by $2.54 billion. That boost was higher than the $1.79 billion added during the third quarter and the $1.13 billion added in the fourth quarter a year ago.

Deterioration in subprime and home equity lending sent JPMorgan's net income down to $2.97 billion, or 86 cents a share, in the October-December period, from $4.53 billion, or $1.26 a share, in the same period a year earlier.

Revenue rose to $17.38 billion from $16.19 billion the prior year.

Analysts polled by Thomson Financial, on average, predicted higher fourth-quarter earnings of 93 cents per share, but on lower revenue of $17.05 billion.

JPMorgan's shares rose $1.74, or 4.5 percent, to $40.91 in late morning trading Wednesday. Its shares had fallen about 5 percent during the fourth quarter, and have traded in a 52-week range of $38.54 to $53.25.

Exposure to subprime mortgages _ in loans, bonds and CDOs _ is now at $2.7 billion, while exposure to leveraged loans fell to $26.4 billion as of Dec. 31 from $40.6 billion as of Sept. 30. But meanwhile, consumer credit losses in all areas are increasing, and JPMorgan expects them to keep climbing.

"Where home prices are down, delinquencies and chargeoffs are going up," Dimon said during a conference call with analysts, referring to auto loans, home equity loans, subprime mortgages and credit cards.

"JPMorgan is exiting one set of problems and write-downs in one part of the company but now must face more significant issues in the other half," Deutsche Bank analyst Mike Mayo wrote in a note.

The investment bank's profit plunged 88 percent to $124 million, and the card services' segment's profit fell 15 percent to $609 million as JPMorgan socked money away in preparation for rising default and delinquency rates in credit cards.

Also, the corporate business fell, due mostly to the effect of a $633 million gain during the fourth quarter of 2006 from the sale of some trust businesses.

So far, the banking industry has revealed about $65 billion in writedowns for the fourth quarter _ a figure that could climb higher as more results pour in over the next couple weeks. That's more than Bill Gates is worth, higher than the gross domestic product of Bangladesh, and equivalent to nearly 3 percent of the entire U.S. housing market.

JPMorgan is better positioned than most other banks, and many of its operations are performing well.

Commercial banking profit rose 13 percent to $288 million, Treasury and security services profit rose 65 percent to a record $422 million, and asset management profit rose 29 percent to a record $527 million.

Retail financial services edged up 5 percent to $752 million as improvements in mortgage banking, in a move that seems counterintuitive, offset weakness in auto lending and regional banking.

Citigroup _ the nation's largest bank by assets, but now the second-largest by market cap _ was not as well prepared as JPMorgan. On Tuesday, Citigroup posted a loss of $9.83 billion, after writing down $18.1 billion due to its huge losing bets on mortgage-backed bond products called collateralized debt obligations.

Citi has had to find $20 billion in cash from investors, mostly foreign governments, in return for stakes in the company. It also slashed its dividend and cut 4,200 jobs in the fourth quarter, after announcing 17,000 layoffs last spring.

JPMorgan cut several hundred jobs during the fourth quarter in its investment bank, card segment, commercial banking business and corporate unit, but over the course of 2007 added a net 6,000 jobs.

For the full year, JPMorgan's net income in 2007 was a record $15.4 billion, or $4.38 a share, on record revenue of $71.4 billion.
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« Reply #63 on: January 17, 2008, 10:01:15 AM »

No Respite From Financial Turmoil For Merrill Lynch In Q4 - Update 2 [MER]
http://www.rttnews.com/sp/todaystop.asp?date=01/17/2008&item=36&vid=0



1/17/2008 11:01:47 AM The overall credit crisis that is plaguing the financial industry during the second half of the year 2007 continues to impact the results of yet another financial services provider Merrill Lynch & Co. (MER), which announced its fourth quarter results on Thursday before the bell. The largest brokerage suffered worst ever losses in the fourth quarter following the writing down of $11.5 billion. The latest quarter results also fell shy of Wall Street analysts' expectations. There was no respite for the financial service sector going by the none-too impressive performance from the likes of Citigroup (C). The wider than expected write downs also forces investors to think that everything is not over for the financial industry on sub-prime woes. The way the financial companies are recording their write-downs or revealing the proposed write downs just few weeks before the quarterly results announcement clearly indicate that the first half of 2008 would continue to face the liquidity problem. Also, the full impact arising out of the sub-prime imbroglio is yet to be ascertained. As of March 2007, the value of U.S. sub-prime mortgages was estimated at $1.3 trillion with over 7.5 million first-lien sub-prime mortgages outstanding. About 16% of sub-prime loans with adjustable rate mortgages or ARM are 90-days into default or in foreclosure proceedings as of October 2007, which was roughly triple the rate of 2005.  Reports indicated that an estimated value of sub-prime ARM resetting at higher interest rates was U.S. $400 billion in 2007 and $500 billion for 2008. There is a strong belief that reset activity is expected to increase to a monthly peak in March 2008 of nearly $100 billion, before declining. While, on the one hand, the financial service providers are raising money mostly from Middle East to tide over their liquidity crunch situation, on the other hand they are recording write-downs for the losses they are suffering. It does appear that the financial industry is trying to avoid a panic situation by announcing their write-downs in a systematic manner rather than going in for one-time wholesale write-downs. Merrill chief executive officer John Thain in his interview to CNBC has corroborated this when he indicated that mortgage bets might not be over at Merrill Lynch. The recent quarter results comes on the heels of the company's announcement on January 15 that it was getting a fresh cash infusion of $6.6 billion to strengthen its balance sheet in the face credit crunch. It was only in December 2007 the brokerage firm mopped up about $6.2 billion of additional capital.

Fourth Quarter Results
The New York-based Merrill Lynch suffered a loss from continuing operations of $10.3 billion during the latest fourth quarter compared to net earnings from continuing operations of $2.2 billion in the year-ago quarter. The net loss during the same period was $9.8 billion or $12.01 loss per share versus net earnings of $2.3 billion or $2.41 per share in the prior year quarter. The company disclosed that weaker market scenario and net write-downs of $11.5 billion negatively impacted its 2007-fourth quarter results. This apart, the results included credit valuation adjustments of $2.6 billion in connection with hedges with financial guarantors on U.S. ABS CDOs. The latest quarter results clearly overshadowed the third quarter loss of $2.31 billion when it made a write down of about $7.9 billion for collateral debt obligations or CDOs and sub-prime mortgages. On average, 16 analysts polled by First Call/Thomson Financial estimated the company to suffer a loss of $4.93 per share during the fourth quarter of 2007. Net revenues for the most recent quarter were negative $8.2 billion compared to $8.4 billion in the previous year quarter. Ten Wall Street analysts had a consensus revenue projection of $398.51 million. Total non-interest expenses were $6.73 billion, sharply higher than $5.2 billion as compensation and benefits increased to $4.34 billion from $3.29 billion in the comparable 2006-fourth quarter.

Competitors Performance
Meanwhile, Merrill Lynch's competitor New York-based investment and financial services provider Goldman Sachs Group Inc. (GS) reported a 2.2% rise in its fourth-quarter earnings, helped by strong segmental revenues, especially in investment banking and asset management and securities services. The company said it earned $3.22 billion in the fourth quarter, compared to $3.15 billion a year ago. Net earnings applicable to common shareholders rose to $3.17 billion, or $7.01 per share, from $3.10 billion, or $6.59 per share, in the prior-year quarter. Goldman's quarterly revenue, net of interest expense, came in at $10.74 billion, up from $9.41 billion last year. Another peer, financial services firm Morgan Stanley's (MS) fourth quarter net loss was $3.59 billion or $3.61 per share compared to net income of $2.21 billion or $2.08 per share in the prior-year quarter. Net loss for the quarter applicable to common shareholders was $3.61 billion compared to earnings applicable to common shareholders of $2.19 billion a year ago. In the most recent quarter, the company recognized a total of $9.4 billion in mortgage-related write-downs due to continued deterioration and lack of liquidity in the market for sub-prime and other mortgage related securities. Consolidated net revenues for the quarter were a negative $450 million compared to positive revenues of $7.85 billion a year ago.

Segment Results
Merrill Lynch's Global Markets and Investment Banking or GMI suffered a pre-tax loss of $15.9 billion during the quarter as robust revenues from equity markets and investment banking failed to offset the net losses in Fixed Income, Currencies & Commodities or FICC. The unit registered negative net revenues of $11.8 billion. Net revenues from FICC were negative $15.2 billion largely due to net losses of $11.5 billion from U.S. ABS CDOs and sub-prime residential mortgages besides a $3.1 billion credit valuation adjustments in connection with hedges with financial guarantors. Merrill Lynch added that FICC was impacted to a limited extent by the write-downs from other residential mortgage and commercial real estate exposures. The company disclosed that market environment impacted FICC revenues as a fall out of challenging scenario on the face of financial turmoil in the U.S. resulting in substantially reduced client inflows and fall in trading opportunities. Merrill Lynch indicated that its net exposures to U.S. ABS CDOs were $4.8 billion compared to $15.8 billion in the previous quarter. Net write-downs were a whopping $9.9 billion in connection with higher-grade super senior ABS CDO exposures.

Net exposures to U.S. sub-prime residential mortgages slipped to $2.7 billion from $5.7 billion at the close of the third quarter and net write-downs amounted to $1.6 billion. This apart, the company's net exposures stood at $2.7 billion related to U.S. Alt-A mortgages and $9.6 billion in connection with residential mortgages outside the U.S. The company added that net write-downs relating to those exposures were about $400 million and $500 million respectively. Merrill Lynch claimed that its net exposures to commercial real estate, excluding Merrill Lynch Capital, were about $18 billion and the net write-downs towards these exposures were about $230 million in the fourth quarter. The company indicated net pre-tax write-downs of $1.3 billion in its investment securities portfolio of U.S. Banks Investment Securities Portfolio segment. Net revenues in equity markets grew 23% to $2.2 billion fuelled by global build out of the equity-linked platform and significant client volumes growth. These apart, net revenues from equity-linked trading, cash trading and financing and services increased sharply over the corresponding period last year. However, net revenues from private equity unit slipped more than $600 million. Investment banking net revenues also increased 22% to a record $4.9 billion reflecting significant upside in its equity origination and strategic advisory businesses that witnessed a growth of 34% and 58% respectively. Global Wealth Management's net revenues rose 12% to $3.6 billion and pre-tax earnings surged 30% to $914 million from the 2006-fourth quarter driven by robust revenue growth in global private client, continued concentration on operating leverage and the favorable investment impact in BlackRock.

Full Year Results
For the full year 2007 too, the brokerage firm revealed a net loss from continuing operations of $8.6 billion or $10.73 loss per share compared to net earnings from continuing operations of $7.1 billion or $7.17 per share in last year. Net loss was $7.8 billion or $9.69 loss per share versus net earnings of $7.5 billion or $7.59 per share in the previous year. Commenting on the results, Merrill Lynch chairman and chief executive officer said, “While the firm's earnings performance for the year is clearly unacceptable, over the last few weeks we have substantially strengthened the firm's liquidity and balance sheet.” Net revenues for the year 2007 plummeted 67% to $11.3 billion from $33.8 billion in 2006. The company blamed the poor performance in 2007 to significant fall in FICC net revenues during the second half of the year that more than offset full year net revenues in Equity Markets, Investment Banking and Global Private Client or GPC, and first half net revenues from FICC. Additionally, the weaker market scenario and net-write downs hurt its second half results.

Expectations
Going forward, Merrill Lynch believes that it could carry on the record results of its key businesses in 2008 too and confident of delivering growth and higher profitability for its shareholders.

Appointment
Meanwhile, separately, Merrill Lynch disclosed that it has hired Noel Donohoe Co-Chief Risk Officer. Donohoe carries more than 20 years of risk management experience in the financial services industry and will report directly to Merrill chairman and CEO.

Stock Movement
Merrill Lynch shares have lost 43% in 2007. During the day, the stock ranged between $50.93 and $54.23. Currently, the shares of the company are trading down by $3.62 or 6.57% to trade at $51.47 on a volume of 22 million shares.
---------------------------

Apparently the investor relation call was filled with anarchy.  People were screaming "f**k you asshole" to the CEO.  If somebody has the mp3, please post it.
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All eyes are opened, or opening, to the rights of man. The general spread of the light of science has already laid open to every view the palpable truth, that the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately
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« Reply #64 on: January 17, 2008, 10:03:19 AM »

Merrill Posts Record Loss on $16.7 Billion Writedown (Update3)
http://www.bloomberg.com/apps/news?pid=20601082&sid=aza8vH4Q9hhg&refer=canada
By Bradley Keoun


Jan. 17 (Bloomberg) -- Merrill Lynch & Co. reported a record loss after writing down $16.7 billion of failed investments, ousting its chief executive officer and losing almost half of its market value in 2007. The fourth-quarter net loss of $9.83 billion, or $12.01 a share, compared with earnings of $2.35 billion, or $2.41, a year earlier, the New York-based firm said today in a statement. Merrill, the largest U.S. brokerage, fell 5 percent in New York trading as the loss was almost three times bigger than analysts estimated and resulted in the first full-year loss since 1989. Chief Executive Officer John Thain called the results ``clearly unacceptable'' and said on a conference call that Merrill should stop taking risks with the potential to wipe out profit. Thain joined Merrill last month, replacing Stan O'Neal, whose gamble on building the subprime mortgage business backfired as U.S. homeowner defaults surged to a 20-year high. Merrill is the third of the five biggest securities firms to report results, capping the companies' worst quarter ever with a net total of $10.2 billion in losses reported. Thain, the former president of Goldman Sachs Group Inc., Wall Street's most profitable firm, has replaced senior executives and taken steps to replenish capital during the past month by raising $12 billion from outside investors.

`Kitchen Sink'
``We hope it's all written down and they've thrown in the kitchen sink,'' said Jeffrey Davis, chief investment officer at Boston-based Lee Munder Capital Group, which manages $4.8 billion and holds Merrill shares. ``Their core businesses have been impaired.'' Merrill, down 2.5 percent this year, fell $2.74 to $52.35 in composite trading on the New York Stock Exchange at 10:28 a.m. The writedown included $11.5 billion to account for the plummeting value of subprime mortgages and related bonds called collateralized debt obligations. Merrill also reduced the value of bond insurance contracts by $3.1 billion, saying provider ACA Capital Holdings Inc.'s credit rating had been slashed below investment grade, making it a less-reliable counterparty. The firm wrote down the value of other mortgages by $949 million, leveraged loans by $126 million and commercial real estate by $230 million. Its commercial bank units also took an $869 million charge for their investments in mortgages and related securities. ``Thain is repositioning the firm to start fresh with a strong balance sheet, once these couple of bad quarters get out of the way,'' said Matthew Albrecht, an analyst at Standard & Poor's in New York who rates Merrill shares ``hold.''

Citigroup Match
The fourth-quarter loss was the same reported earlier this week by Citigroup Inc., which took an $18 billion writedown related to its subprime-mortgage holdings and slashed its dividend 41 percent. Merrill's fourth-quarter revenue was negative $8.19 billion, as losses in the fixed-income division wiped out all revenue at the firm's investment bank and retail brokerage. At the brokerage, the world's biggest with a network of more than 16,000 financial advisers, revenue climbed 10 percent to $3.31 billion. Fixed-income trading revenue was negative $15.2 billion and equity trading revenue was $2.17 billion, up from $1.76 billion a year earlier. Debt underwriting generated $217 million in revenue, down 59 percent, while stock underwriting revenue dropped 21 percent to $375 million.

2007 Loss
The company's full-year loss was $7.78 billion compared with record net income of $11.6 billion at Goldman, the biggest U.S. securities firm by market value, and earnings of $3.2 billion posted by Morgan Stanley, the industry's No. 2 firm. Morgan Stanley and Bear Stearns Cos., like Merrill, reported their biggest losses in the fourth quarter. Goldman and Lehman Brothers Holdings Inc. had profits. All the firms are based in New York. Merrill said compensation costs fell 6 percent to $15.9 billion for the year compared with 2006. Thain has reduced 2007 bonuses in some divisions and cut jobs in the fixed-income unit, where the writedowns originated. Several executives tied to O'Neal have departed, including former U.S. brokerage chief McIntyre ``Mac'' Gardner. Thain also has recruited executives from his most-recent employer, NYSE Euronext, hiring Nelson Chai to replace Jeff Edwards as chief financial officer. Merrill, the third-biggest U.S. securities firm, fell 42 percent last year in NYSE trading, the third-worst performance among the 12 stocks tracked by the Amex Securities Broker/Dealer Index. Goldman, which profited by betting on a decline in prices for mortgage securities, gained 7.9 percent in the same period.

Goldman Sachs
Merrill, whose market value was greater than Goldman as recently as 2006, is now worth half as much. Thain, 52, worked at Goldman from 1979 to 2004, when he left to become CEO of NYSE Euronext. The writedowns by Merrill add to more than $100 billion of subprime-related losses reported since May by the world's largest banks and securities firms. Citigroup Inc. posted the biggest loss in its 196-year history earlier this week as the largest U.S. bank's subprime mortgage investments and related securities tumbled in value by $18 billion. With its capital depleted, Merrill said Jan. 15 that it sold $6.6 billion of preferred stock to a group of investors including the Korean Investment Corp., Kuwait Investment Authority and Mizuho Corporate Bank. The transaction followed the sale in December of as much as $6.2 billion in stock. Thain has freed up at least $2.1 billion in additional capital by selling assets, including Merrill Lynch Life Insurance Co. and Merrill Lynch Capital, a financer of medium-size companies.

Bloomberg Stake
Merrill is a passive, minority investor in Bloomberg LP, the parent of Bloomberg News. Thain said on the conference call that its 20 percent stake isn't for sale, as analysts including Michael Hecht at Bank of America Corp. had speculated. Thain also called the firm's stake in BlackRock Inc., the biggest publicly traded asset manager in the U.S., a ``core strategic asset.'' Before his ouster in October, O'Neal acknowledged that Merrill held onto many of the mortgage securities it created rather than selling them to customers, as it had before the housing market started to slow. O'Neal also bought subprime lender First Franklin Financial Corp. for $1.3 billion at the end of 2006 just as the market for housing-linked securities was beginning to wither. Merrill held $8.8 billion of subprime mortgages by June and $32.1 billion of collateralized debt obligations, or CDOs, securities packaged from mortgage bonds, loans and other debt.

CDO Holdings
Many CDOs were downgraded by Standard & Poor's and Moody's Investors Service as an increasing number of borrowers fell behind on home-loan payments, sending prices on some of the securities plunging to as little as 30 cents on the dollar. Merrill's 1989 net loss of $213 million, under then-CEO William Schreyer, was the first since the firm went public in 1971. That loss works out to about $350 million in 2007 dollars. Founder Charles Merrill, who burnished his reputation by telling customers to sell stocks just before the 1929 stock- market crash, would be appalled at the firm's ``bubble mentality'' of recent years, said Edwin Perkins, author of the 1999 biography of Merrill, ``Wall Street to Main Street.'' ``Things just get out of control, and once you're involved in it, there's no way to get out of it gracefully,'' said Perkins, now a professor emeritus of business history at the University of Southern California in Los Angeles.  To contact the reporter on this story: Bradley Keoun in New York at bkeoun@bloomberg.net
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« Reply #65 on: January 17, 2008, 10:18:52 AM »

The Voluptuous Maria Bartiromo Lies to America on The Tonight Show

8 min - Jan 17, 2008 -  (1 rating)
http://www.youtube.com/watch?v=RRZo-zGs3Ds


The media doesn't usually tell bold-faced lies, and they don't typically omit news.
They report the news but this how they deceive us. Just watch the video and you will see.
Tonight Show U.S.A. is Dead - Maria Bartiromo, but it's OK because we don't need to the US any more, says Bartiromo, we have the "Global Economy" and we shouldn't be isolated from the world. We should just roll over and say *to hell with the U.S.A.* - says Bartiromo.

Traitors are dismantling our once great industrial nation as all of the industry are being forced out to foreign countries to stay afloat, and farmers are forced to stop farming because they cannot compete in the "global market place".
America is going out of business, but that is good?
Most store bought goods even may foods now including most frozen fish come from Chinas sewage filled fish farms.
Yes.

But Bartitomo says "That's good".

WE have to take these traitors head-on.
Enough is enough.
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All eyes are opened, or opening, to the rights of man. The general spread of the light of science has already laid open to every view the palpable truth, that the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately
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« Reply #66 on: January 17, 2008, 01:32:38 PM »

Dow drops over 310
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« Reply #67 on: January 17, 2008, 02:02:11 PM »

Dow drops over 310
Attention Baby Boomers.  This would be a good time to sell all of those stocks in your portfolio you're planing to retire on.  No need to panic though, take your time.  Those who sell first will be able to retire, those who sell last can become greeters at th e local Malwart.
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« Reply #68 on: January 17, 2008, 03:26:40 PM »

I have been watching the Dow dropping at least 80 points a day for a while and in the past week and a half its been dropping fast 100 ponits here , 240 points the next day and so on .

I have been waiting to see on the news about stock brokers or investors jumping off tall buildings comitting Suicide over bad investments and losing everything.
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I am a realist that is slightly conservative yet I have some republican demeanor that can turn democrat when I feel the urge to flip independant.
 
The truth shall set you free, if not a 45ACP round will do the trick.. HEHE
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« Reply #69 on: January 17, 2008, 05:01:47 PM »

Yeah there doing a replay by lowering interest rates.  There hoping Yuppies will get loans and play the market.
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« Reply #70 on: January 17, 2008, 05:15:57 PM »

I don't have much, but most of my pitiful retirement is in AMERICAN Funds.   Please help.  I have an Edward Jones advisor, but he is no help.    He says no joyfully Oh it will come back up.

Also a 40l K was put into an IRA.

Should I put some in gold.   ANY advise anything at all would be appreciated. I will not come back and hit you.  Thank you.  Huh
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« Reply #71 on: January 17, 2008, 05:28:31 PM »

I'd invest any 401K's and Ira's as well as any stocks and bonds, minus the mining stocks. Get your assets out of US dollars and purchase gold, silver, platinum and palladium. For the dooms dayers, 90% junk silver coins and pre-82 pennies will come in handy if our economy collapses. Also, try to buy land without taking out a loan. You should look into purchasing a berkey water purifier and maybe even start a garden after all the word of our plants being grown for consumption are being messed with. Everyone has ideas and no idea is dumb. We're in this together as a nation and we need to stick together to survive our future.
God Bless these United States of America.
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« Reply #72 on: January 17, 2008, 05:36:54 PM »

Oh Lordy, about half of my jug of pennys, and other coins went into a coinstar machine just last week.

I think I will get that purifier.  With all the chemtrails lately don't know about the garden. Cry
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« Reply #73 on: January 17, 2008, 05:57:29 PM »

for anyone interested, you can purchase silver bullion coins and rounds at places like

http://www.apmex.com American Precious Metals Exchange
http://www.nationalcollectorsmint.com/category.jsp?path=-1&id=-1 National Collectors Mint
http://www.lsmint.com/ Lone Star Mint from Austin Texas
http://www.morganmint.com/ The Morgan Mint.

The 2008 ASE (American Silver Eagle) is visually different than years past. But the important thing to remember is the silver content being .999 fine silver. The purest govt. bullion coin is the Canadian Maple Leaf at .9999 fine silver. Also, The Chinese republic's govt. mint as well as the Royal Canadian Mint are the only govt. mints in the world that produce Palladium bullion coins. You can buy Gold American Eagles as well as Platinum American Eagles from apmex. As for the 90% silver, they sell bags of 90% or you can buy franklin halves, pre46 dimes as well as Morgan silver dollars. You can save on premium by purchasing silver rounds. APMEX rounds are high quality, but prefer Englehard and J&M Johnson Matthey. NOTE: APMEX has a minimum purchase of $50 USD. You can also go to http://www.kitco.com To see the spot price of the PM's as well as buy coins from them, even though they are more expensive than the sites listed above. For the big hitters, try out http://www.bulliondirect.com and purchase through nucleo, they will hold your PM's as long as you need. The thing with them is to have them store enough to make the shipping charges worthwhile. You can purchase Englehards in bulk from http://www.valleycoin.com/index.php?cPath=8_143_231

As for the Berkey purifier, you can purchase 1 at a lower than retail rate through the infowars.com webstore.

As for seeds, I found a great place that is decent on shipping
http://www.johnnyseed.com/ Johnny Seeds, grown naturally in Maine

If you're concerned about buying a gun and don't wanna go through all the BS, you can purchase a compound bow or better yet, a compound cross bow. Most states I believe you don't need a license, permit or registration, unless you plan to hunt.

Oh yeah, reason to save pre-82 pennies is that they are 90% copper and are worth 2.3 cents each. Once the melt ban is lifted, you could sell all those copper pennies and convert in silver/gold. Hope this helps. Smiley
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« Reply #74 on: January 17, 2008, 06:04:04 PM »

I sort of like that Burkey "light."   Might buy that.

As for the coins, would it be safe to hide them at my house somewhere.  I read somewhere not to get a certificate for them.

Another question, what does it mean to invest coins into an IRA account?  Does this mean to buy the coin, then take it to in my case Edwsard jones to invest?  I am not understanding what this means.
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« Reply #75 on: January 17, 2008, 08:28:06 PM »

Dow ends down 307, economic angst mounts
http://news.yahoo.com/s/ap/20080117/ap_on_bi_st_ma_re/wall_street_272
By TIM PARADIS, AP Business Writer  Thu Jan 17, 4:49 PM ET


NEW YORK - Wall Street extended its 2008 plunge Thursday, tumbling after a regional Federal Reserve report showed a sharp decline in manufacturing activity and as investors feared that downgrades of key bond insurers could trigger further trouble with souring debt. The Dow Jones industrial average lost more than 300 points, or nearly 2.5 percent, and skidded to its lowest close since March 16. The Standard & Poor's 500, the index closely watched by market professionals, fell nearly 3 percent. Stocks opened higher but quickly gave up their gains after the Philadelphia Federal Reserve said its survey of regional manufacturing activity registered a negative 20.9 from a revised reading of negative 1.6 in December. The reading came in well short of what Wall Street had been expecting and underscored the seriousness of the economic concerns that have gripped both Wall Street and Washington in recent weeks. Credit concerns also dogged Wall Street after rating agency Moody's Investors Service placed bond insurer Ambac Assurance Corp. on review for a possible downgrade. That possibility alarmed Wall Street because it would place all bonds insured by Ambac on review as well. Ratings agencies are concerned that bond insurers would be unable to absorb a spike in claims.

Investors fears of a slowing economy again dominated trading. "The Philadelphia Fed just announced dreadful numbers," said John O'Donoghue, co-head of equities at Cowen & Co. He said if you look back at Philadelphia Fed data for similar numbers, it takes you back to the 2001 to 2002 recession. "It's not rocket science — the economy is slowing dramatically, and it's being reflected in economic reports." According to preliminary calculations, the Dow, which had been up more than 50 points early in the session, closed down 306.95, or 2.46 percent, at 12,159.21. The Dow is now off 8.33 percent for the year; there have been just 12 trading days so far in 2008, but the index's frequent triple-digit losses have now forced it to give back its 2007 gains. The Dow had its lowest close since it ended the March 16, 2007, session at 12,110.41. The Dow's decline also left it about 150 points above 12,000, a level it hasn't closed below since November 2006. The broader market indicators also plummeted. The S&P 500 index lost 39.95, or 2.91 percent, closing at 1,333.25, and leaving it was a year-to-date loss of 9.2 percent, while the Nasdaq dropped 47.69, or 1.99 percent, to 2,346.90, giving it a 2008 deficit of 11.51 percnet. Thursday brought the lowest close for the S&P 500 since October 2006 and the worst for the Nasdaq since March of last year. Declining issues outnumbered advancers by more than 5 to 1 on the New York Stock Exchange, where volume came to a heavy 2.17 billion shares compared with 2.11 billion traded Wednesday.

Bond prices rose as stocks fell and anxious investors sought the safety of government-issued securities. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.61 percent from 3.68 percent late Wednesday. The dollar was mixed against other major currencies. The Chicago Board Options Exchange's volatility index, known as the VIX, and often referred to as the "fear index," jumped nearly 17 percent Thursday. Light, sweet crude fell 71 cents to settle at $90.13 a barrel on the New York Mercantile Exchange after Bernanke's prediction of slower economic growth this year. Slowing growth could dampen demand for oil. The Philadelphia manufacturing reading caught Wall Street by surprise — igniting fears that the economy is slowing precipitously and that policymakers might be too late in aiding it. Economists had expected the Philadelphia index would come in at a negative 1.5, according to Dow Jones Newswires. Instead, the negative 20.9 figure was the weakest since October 2001 when the economy was reeling from the shock of the Sept. 11 terror attacks.  Jim Herrick, manager of equity trading at Baird & Co., contends that the Philadelphia Fed reading and other recent negative economic reports indicate the economy is likely in a downturn.

Other economic reports added to investors' glum mood. The Commerce Department said housing starts plunged 14 percent to 1.01 million in December, marking the weakest pace of home building in more than 16 years. In addition, permits to build new homes dropped 8 percent last month to 1.07 million, the lowest level since 1993.  The week's steady flow of news, much of which has dented investor sentiment, has led to a growing chorus of calls for the Fed to cut rates. The Fed's monetary policy committee will meet Jan. 29-30 and is widely expected to lower its Fed funds target from the current 4.25 percent level. Bernanke on Thursday reiterated recent signals that the central bank will reduce rates for a fourth straight time.  Some on Wall Street have called for the Fed to intervene sooner with steep rate cuts.  The economic concerns come in a week in which some of Wall Street's biggest names have posted huge losses following bad bets on mortgage investments. Financial shares fell sharply Thursday after the reports have made clear that there is also increasing weakness in home equity and other consumer banking operations. The problems with subprime and home equity, along with a badly stalled housing market, are among the chief reasons investors are pinning their hopes on stimulus efforts and cheaper lending rates.  Merrill Lynch & Co. on Thursday posted a massive loss that underscored the depth of the economy's credit problems. The world's largest brokerage said it lost $9.91 billion in the fourth quarter, hurt by massive write-downs from investment and trades battered by the ongoing credit crisis.

John Thain, the new chief executive at Merrill, said he believes this will be the bulk of the company's write-downs from its subprime mortgage exposure. But he would not speculate about what 2008 might hold in store in other areas. Earlier this week, Merrill secured a new round of capital infusions from foreign funds.  Merrill fell $5.64, or 10 percent, to $49.45.  Moody's announcement that it will review Ambac came after the insurer booked a $5.4 billion write-down on its credit derivative portfolio during the fourth quarter.  Ambac plunged $6.73, or 52 percent, to $6.24, while Ambac rival MBIA Inc. fell $4.18, or 31 percent, to $9.22. First Horizon National Corp. fell $2.43, or 13 percent, to $16.48 after Standard & Poor's Ratings Services lowered its rating on the bank's long-term credit.  The Russell 2000 index of smaller companies fell 19.34, or 2.76 percent, to 680.57.  Overseas, Japan's Nikkei stock average closed up 2.07 percent. Britain's FTSE 100 finished down 0.68 percent, Germany's DAX index fell 0.78 percent, and France's CAC-40 fell 1.31 percent.
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All eyes are opened, or opening, to the rights of man. The general spread of the light of science has already laid open to every view the palpable truth, that the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately
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« Reply #76 on: January 17, 2008, 10:22:44 PM »

I thought it was really high at like 3000-4000 compared to the NYSE.

   DJIA     12159.20        -306.95 

12159 is insane.

But I mean doesnt everyone know that the Dow Jones is an Over inflated piece of crap?
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« Reply #77 on: January 17, 2008, 11:08:31 PM »



      http://www.larouchepub.com/pr/2008/080112trillion_bankruptcy.html
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Dig
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« Reply #78 on: January 18, 2008, 02:58:56 AM »

Writedowns on the value of loans, MBS and CDOs     

Business     Type     Loss (Billion $) 

 Citigroup   investment bank   $24.1 bln [56][57][58]
 UBS AG   investment bank   $13.7 bln [64]
 Morgan Stanley   investment bank   $10.3 bln [69][70]
 Merrill Lynch   investment bank   $8.4 bln [59]
 Crédit Agricole   bank   $4.8 bln [78][79]
 Freddie Mac   mortgage GSE   $3.6 bln [80]
 HSBC   bank   $3.40 bln [62]
 MBIA   bond insurance   $3.3 bln [93]
 Bank of America   bank   $3.3 bln [87]
 CIBC   bank   $3.2 bln [89]
 Deutsche Bank   investment bank   $3.1 bln [65][66]
 Barclays Capital   investment bank   $2.7 bln [60][61]
 RBS   bank   $2.6 bln [90]
 Bear Stearns   investment bank   $2.6 bln [67][68]
 Washington Mutual   savings and loan   $2.4 bln [91][92]
 Wachovia   bank   $2.4 bln [84]
 Lehman Brothers   investment bank   $2.1 bln [71][72]
 Credit Suisse   bank   $1.9 bln [81][82]
 JP Morgan Chase   investment bank   $1.6 bln[74][75]
 Goldman Sachs   investment bank   $1.5 bln [76][77]
 Wells Fargo   bank   $1.4 bln [83]
 LBBW   bank   $1.1 bln [73]
 Swiss Re   re-insurance   $1.07 bln [63]
 Fannie Mae   mortgage GSE   $0.896 bln [88]
 RBC   bank   $0.360 bln [85][86]
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« Reply #79 on: January 18, 2008, 02:59:31 AM »

Businesses filing for bankruptcy

Business     Type     Date 

 New Century Financial   subprime lender   April 2, 2007
 American Home Mortgage   mortgage lender   August 6, 2007
 Sentinel Management Group   investment fund   August 17, 2007[94]
 Ameriquest   subprime lender   August 31, 2007
 NetBank   on-line bank   September 30, 2007[95]
 Terra Securities   securities   November 28, 2007[96]
 American Freedom Mortgage, Inc.   subprime lender   January 30, 2007 [97]
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All eyes are opened, or opening, to the rights of man. The general spread of the light of science has already laid open to every view the palpable truth, that the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately
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