Crash tomorrow?

[gtill]

Damon, I hear that all the time from people, just being able to grow openly would drop the price to manini.
The guys who make a living growing vegies, flowers etc.ie: farmers, will have it flowing in a month, and good stuff!

[Hotzcatz]

There isn't enough money to bail them out.

What are the Asian stocks doing tonight? That's an early warning for tomorrow. Hmm, they aren't thriving but they aren't tanking either. If we follow the Asian markets then it will be a bit of a down day but not a crash (just yet).

The financial markets aren't supposed to melt down until September.

[Rob L]

Since the Fed has the power to create money, it cannot possibly be that the don't have enough money to bail Fanny and Freddy out. The stock holders may be screwed however.

Aloha,
Rob L

[JWFITZ]

Definitely some wait and see going on this morning.

Sure, the Fed can print money, and that's what is going to happen. I think we can promise that. It's simply an untenable situation to let these two institutions fail. This would destroy the economy, the credit market, and a very large chunk of pension and retirement funds. The problems is that with every dollar you print, it's worse less than the last one, and in this case it's going to be very hard to keep up.

Get ready for 200 dollar oil. That's what the end result of this is going to be, or so I'd predict.

[Hotzcatz]

Do you suppose it is more of our money devaluing than the price of oil rising?

The markets declined a bit this morning, but news of the Federal government (as opposed to the Federal Reserve - which is NOT part of the U.S. government) bailing out Freddy & Fanny (at least to some extent) has kept the bloodbath to a minimum for now. Tax payers step in and take the hit yet again. I suppose it doesn't matter the economy is so far out of balance now, I doubt it can be rescued.

Has anyone noticed that the funds for the FDIC "insurance" plans are only about several billion dollars and the amount of money the FDIC fund is supposed to insure is over several TRILLION? There is something like 1.2 cents per dollar of "insurance" funds to cover the money that is "safe in the bank". Of course with inflation running over 10% (the inflation they tell you about is "core" inflation which does not include fuel or food prices - like we aren't going to be using food or fuel!) anyway, with the actual inflation rate of over 10% if you take your money out of an interest bearing account you will lose it faster than by keeping it in the bank. However if the banks fail (anyone notice IndyMac last week?) then even though you lost 10% by taking your money out of the bank (at an annual rate) you will still have it available when everyone else is getting their "insured" funds of 1.2 cents per dollar from the FDIC. Which is again, the taxpayers ultimately, isn't it?

Considering how often the taxpayers foot the bill and how poorly they are doing these days perhaps the only sensible thing to do is buy food while you still have any money left.

[JWFITZ]

Thoughtful posts always, Katz, I appreciate it. And the chickens are rocking, by the way!

As for oil prices, I can't tell, and I'm not sure anyone can. When oil reserves in the OPEC nations remain "state secrets," it's pretty hard to guess. What is clear is that we owe oil producing countries a lot of money, they're very tired of us devaluing our currency to skate out on it, and are going to get their money out of us in one way or another.

The FDIC will soon be bust. Take a look at WAMU this morning, if you haven't. There's the next sick puppy. I certainly noticed IndMac. Nice Saturday stunt. It's getting very near time to stick some cash in a coffee can some where.

It's very important, so far as I can see, to move to a lifestyle of "implicit" income rather than earned income. You don't want to do your business in dollars, or currency in general, because you'll be taxed to the hilt.

We can insure that in the next decade:

1) Wages static to negative against living costs.
2) Taxes will rise.

[EightFingers]

So...uhhhh...why didn't we learn from the S&L "crisis" during the 80's? It's the same ol' garbage again and again - corporate greed, please the shareholders at ANY costs way of thinking.
Indy was waaayyy overdue. Plan on seeing a lot more "empty buildings" in the very near future.

[Kapohocat]

quote:

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Originally posted by JWFITZ... Take a look at WAMU this morning, if you haven't.

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Seems many corps are taking their charge off's right now. Charge off's are not money moving at all. Just accounting practices to move a item that needs to be depreciated, or bad debt, etc from here to there. Money doesnt move.

It's more like gee, my old blue car is worth xxx because that is what I paid for it in 1989. But not really since it is 20 years old now so I am finally going to take the charge off the diff between the book value (usually what I paid for it) and the real current value. it's move the number from one column to another.

It is still the exact same car as it was yesterday.

Many investors will buy a stock when the real or current value is way below the "book value". Such as a company that bought property in California 30 years ago. The book value may be really low when it is directly opposite to my example above.

Here's an example:

US Airways Group Inc. says it will take a $622 million accounting charge in its second quarter to reflect the effect of soaring fuel prices on its value.

The company says in a Securities and Exchange Commission filing that a review led it to decide to write off the value of "goodwill" it had on its books since the company combined with America West Airlines in 2005. The term refers to the value of intangible assets such as reputation.

US Airways also says it will book an $18 million charge to reflect the decline in value of spare parts for its Boeing 737 aircraft.

[Hotzcatz]

Smoke and mirrors accounting, for sure!

If you want a reality check, go to your banking institution and try to take out a really large chunk of cash. Say more than five grand and less than ten so you don't have to fill out the Federal paperwork. Betcha they will do everything except handstands to talk you out of the idea. I'd give you about a fifty percent chance they will let you have the cash on the spot, more than likely they will tell you to come back the next day.

Then of course, you get to find a spot to put it that it won't get stolen, eaten by rats or burnt up in a fire.

Well, I'm back to the "buy food" idea. At the moment I'm doing drafting work in exchange for beef and lamb futures. (so many pounds of beef and lamb to be picked up at later dates. Sort of a withdrawal account at a meat locker.) That directly answers the "can I eat it" question in a real tasty and positive manner.

[Hotzcatz]

I don't see Freddy Mac as able to raise five billion by tomorrow. Will the Federal government officially take them over, do you think?

It took about three years for the markets to fully "deflate" during the Great Depression, so it will take about that long at least for this market to deflate, too, wouldn't you think? Perhaps faster since we now do everything digitally? It will go below 10,000 (although not on tomorrow). Perhaps as low as 8,000 eventually - like by 2010?

quote:

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Originally posted by JWFITZ

Thoughtful posts always, Katz, I appreciate it. And the chickens are rocking, by the way!

---

Chickens may be the currency of the future. They will probably hold their value as well as increase in value as opposed to money in the bank. And you can eat chickens. Who needs banks and markets when we've got chicken futures?

We should have another batch hatching out next Saturday. I've got about twenty I'm hoping will hatch and my neighbor has forty she's hoping will hatch. The same mixed breed "barnyard" chickens since our roosters are still too young to be "useful" so they would match the ones you already have if you need more.