EMERGENCY ALERT - MONDAY UPDATE

by Michael M. Pennington 

THE STOCK MARKET

In the last 24 hours, the financial markets have witnessed epic events , none of which are good for the average citizen. The Dow was down about 500 points today and it’s very likely that more severe declines will be forthcoming this week. Mutual Funds have declined significantly as most stock funds carried AIG, Merrill, Lehman or all three in their portfolios. We could see a day or two of higher stocks if the FED reduces interest rates, but any rally will be met with fierce selling.  I advised all of my family members to sell shares early today. The downside risk here is considerable. Later, after Bernanke and the FED drop money from helicopters the US will enter a period of hyperinflation. At that time you shift back into stocks. In the meantime, capital preservation is all important. Already tonight, the Japanese market is at the lows for the year. There is much more bloodletting left.

GOLD & SILVER STOCKS

It defies logic that Gold was up $23 today and Silver was up $.32, and yet the HUI Gold/Silver Index fell by 5%. Some might say they were caught in the overall downdraft, but I say that these stocks are still being shorted massively by naked short sellers. Why? For the same reason the COMEX spot price has been hammered the past three weeks. The Government does not want all these dollars being liquidated to be attracted to the Precious Metals sector. This is one of the reasons why I buy physical metal instead of the shares. The shares are even more easily manipulated down through naked short selling. Anything made of paper and that can burn I recommend staying away from. If the regulators don’t ban naked short selling, technically the markets could fall to zero. There is a law now banning this trading, but the regulators look the other way because they and their friends  are making too much money because of it.

TEN BANKS CREATE A $70 BILLION POOL TO HELP TROUBLED INSTITUTIONS.

This announcement was intentioned to help quiet the market fears, as ten banks contributed $10 billion each to a pooled fund to help those institutions in trouble. What isn’t said is that this clever device is a fractional reserve pool allowing each of the ten banks to use 33.33% of the total, or $23.3 billion as a capital infusion on their own balance sheets. Thus they have “magically” created  $163 billion of “good” capital for their joint balance sheets. This is very bad however for the dollar, for investor confidence and for the integrity of the banks’ balance sheets and capital reserve.

PAULSON’S NEWS CONFERENCE

I got sick to my stomach today listening to this crap. The very people responsible for all of this happening are the very ones who created the environment that allowed it to happen. Yesterday it was Greenspan, today Paulson. Events such as we have witnessed of late just don’t happen overnight. I have been writing for months and even years that these days will arrive. Those behind the curtains who created this mess knew full well what the eventual outcome would be, Poole, Summers, Lindsey, Levitz, Rubin, Corzine, Kissinger, Brezhinski etc. They have had many months to put their plans into action and how it would be handled when the crisis comes public. You can also bet that these guys have positioned themselves to take full advantage of the current situation which is destroying many investor lives. They herd a willing media out in front of the cameras to assure the worried public that all is well. Not one CEO complicit in this scam has been investigated less much prosecuted. The fired CEO of Fannie Mae left his job with a $159,000 guaranteed monthly payment for life. You can bet that all of those who made huge sums shorting the gold stocks during this downdraft are re-positioning themselves right now to make huge sums when they allow the stocks to rise. What a deal, they go play the derivative game with their customer’s money. I get tired hearing them say they’re just playing the hand they were dealt. This is how all government crooks operate. Pass a law, ignore for a few years and then claim that their hands are tied by it after the crooks who passed it are collecting massive pensions on some beach. I can just imagine in the year 2014 where someone asks a  The Director of Homeland Security, “Why are you shooting all those people? The answer is “Well our options are restricted by the Patriot Act passed way back in 2003.”

WHAT THE FALL OF AIG WOULD MEANWade C. Smith
> 3329 S. Hwy 89
> Perry, Utah 84302

Mr. Greenberg was another of the corporate crooks who ruined a great company. He turned them from an insurance company into the largest global derivates player.  On Friday, they said they needed $10 billion in capital to stay solvent. The FED refused to help them thus far. Now they say they need

$75,000,000,000. The truth is they probably need more than that. No one has come forward to “merge” or “buyout” AIG. So late today, The New York Governor stated the State of New York will provide state taxpayer funds to help over the short term. There’s another loss for the citizens of New York. The problem here is that AIG’s derivatives will bring down the large commercial real estate division, and as result this could create a domino effect in the commercial real estate market that has been unscathed thus far.

Be prepared for more bad news in the financial sector. Like a cancer, these defaults will spreads. There are still trillions of dollars in derivatives that need defaulting. Two weeks ago the government warned about the critical nature of 179 banks. Today, they indicated as many as 1,000 could adversely be affected.

This entry was posted on September 16, 2008 at 10:35 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

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