Citigroup dominates global M&A market

According to a CF Magazine survey, Citigroup is once again dominating the worldwide market for Mergers and Acquisitions. According to the survey, knowledge of industry and market trends is the most important reason for choosing an investment bank, and insight into the corporates' own business is a close second. Relationship factors in choosing an advisor came fourth with 66% of respondents rating them as important.

Automakers

Chrysler LLC says it will allow customers to purchase cars under finance deals with payments similar to leases.

Cut Heating Costs

According to the USDA:

The reduction in wind speed behind a windbreak modifies the environmental conditions in this sheltered zone. The sheltered zone extends as far as ten to fifteen times the height of the windbreak downwind from the windbreak.

Keys To Obtaining Benefit

Key To Obtaining Benefit

• Understand each other's plans, hopes, and dreams.
• Take time to develop a written spending plan TOGETHER - visit HERE
• Plan your spending EVERY SINGLE MONTH - ensure that you are funding at least one of your dreams at all times
• Become debt free - calculate your Debt Freedom Date HERE

Distilled Knowledge

Here are some links:

Money Writers:

• Brip Blap asks what is ROWE and how does it affect the workplace?
• Winter’s coming and Frugal Dad looks at gel fuel fireplaces: a frugal home heating alternative.
• Generation X Finance gives this advice: read the fine print before signing any loan - you might be surprised at what’s in there!
• Here’s a wealth tip: lean the art of delayed gratification from Million Dollar Journey.
• The Digerati Life presents last minute gift ideas and shopping tips for holiday procrastinators.
• Money Smart Life also in a giving spirit writes Christmas gift cards - choosing the best gift card.
• My Dollar Plan talks about opening a new Solo 401k for the self employed.
• The Sun’s Financial Diary directs you to get your free ZoneAlarm Pro Firewall today!

More Financial Posts:

• Consumer Commentary writes GM wants you to fear its collapse.
• Blueprint for Financial Prosperity presents 100 money saving tips for the holiday gifting bonanza – all sorts of topics and categories and all sort of tips. Great read!
• Here are some ideas on how

The Five Dysfunctions Of A Team

I have recently finished reading The Five Dysfunctions Of A Team written by Patrick Lencioni.

A GREAT book. If you are a leader, this book will cause you to think through your team in a new way and could quite possibly take your team to a new level of performance.

Here are some key points I took from this book:

• Everything we do should be about making the company succeed
• No matter how good an individual team member is, everyone loses if the team loses
• Fear of Conflict = Artificial harmony
• Boring Meetings = Unnecessary Meetings
• It is important for a leadership team to keep walls between their teams torn down. Teams naturally tend to move toward isolation and a "Those guys over there are terrible, but we have got our act together" mentality.

Well written. I read this book in five to ten minute sections, and I found that it was very effective for me to read it this way. It allowed me to process what I read and then come back to it later having thought it through.

Information

WSJ Prime Rate: 4.00% - Difference from best liquid account: 0.00%
Next FOMC meeting: Dec. 16th
Fed Funds Rate: 1.00%
Fed Funds Rate Prediction

Savings, Checking, and Money Market Accounts:

                                          Hard         Debit    ACH

 APY  Eff.  Bank/CU/Other             Min  Inq. Checks  Card  Orig/Target FW link  Notes                          

4.00% 10/08 DollarSavingsDirect       $1K   N     N      N       Y/N*     fw link  1% < $1K, no fees, no ACH pull

4.00% 10/23 UFB Direct Traveler Svng $500   Y     N      Y       N/Y      fw link  500 AA miles; up to $4.50/stmt ATM reimb

3.80% 10/03 Venture Bank Direct        $0   N     N      N       Y/Y      fw link

3.75% 11/19 CNB Bank Direct            $0   Y     N      N       Y/Y      fw link  $1 min to open

3.75% 11/06 Corus Bank Ultimate MMA  $10K   N     Y      Y       N/Y               $100 open. $10K avoid $25/mo

3.75% 10/24 GMAC Bank Online Savings   $0   N     N      N       Y/Y      fw link

3.75% 07/01 Alliant CU Savings         $5   Y     Y*     Y*      Y/Y      fw link  If<$100,0% APY; *via linked acct

3.75% 10/03 OneUnited Bank Savings    $1K   N     N      Y       Y/Y      fw link  Int. quarterly. $50 open bonus.

3.75% 08/22 Provident Direct           $1   N     N      Y       Y/Y      fw link  limits on transfers. see thread.

3.75% 08/01 Union Federal Savings MM   $1   N     N      N       Y/Y      fw link

3.75% 10/28 Sovereign Bank MM        $75K   N     Y      N       N/Y               <$75k=3.25%, <25k=2.75%, <$10k=2.50%, *$2k min to avoid $5 fee

3.66% 11/05 Cap One Costco Savings   $10K   N     N      N       Y/Y      fw link  2.75% < $10K, no fees

3.65% 07/24 Flagstar Express MMA       $0   Y     Y      Y       Y/Y      fw link

3.60% 09/29 OnBank MM Savings          $1   N     N      N       Y/Y

3.25% 11/21 Amegy Bank MMA           $10K   N     N      Y       N/Y               $12/fee<$1K

3.57% 05/05 Century Bank MM           $1K   N     Y      Y       N/Y      fw link  only 3 free withdrawals/month

3.55% 07/29 Doral Bank Direct         $1K   ?     N      N       Y/Y      fw link  >$250 to avoid fees

3.55% 09/04 Cap One Online Savings   $10K   N     N      N       Y/Y      fw link  2.55% < $10K, no fees

3.52% 09/12 Nationwide                $1K   N     Y      Y       Y/Y      fw link

3.21% 06/30 Everbank YieldPldge MM     $0   N     N      N       Y/Y      fw link  Intro. 4.76%, $4.95/mo3.51% 11/04 Virtual Bank            $100K   N     N      N       Y/Y              $10k-$25k 3.05%,$25K-$50K 3.20%, $50K-$100k 3.30

3.50% 11/12 Indymac E-Money Market   $50K   N     N      N       Y/Y      fw link  $7 fee< $1K, FDIC run since 7/11

3.50% 10/22 ING EO Checking         $100K   N?    Y      Y       Y/Y      fw link  1.50% <> $50K

3.50% 08/20 Wachovia MM Savings       $1K   Y?    N      N       Y/Y               $2.5K to avoid $10/month fee. Rate varies by Zip.

3.50% 06/04 ShoreBank                  $1   ?     N      N       Y/?      fw link

3.50% 11/21 E-Loan Savings Plus     $100K   N     N      N       Y/?      fw link  $5K open. no min. tiered. $100/mo deposit req.

3.46% 04/22 Bank of Internet MM        $1   ?     Y      Y       N/Y      fw link  $100 to open, no fees

3.41% 05/05 Century Bank Savings     $100   N     N      N       N/Y      fw link  Only 3 free withdrawals/month

3.41% 11/01 Zions Deseret MMA       $2500   N     Y      ?       N/Y      fw link

3.40% 04/22 Umbrella pot o gold       $1K   N     Y      Y       Y/?      fw link 

3.35% 10/16 Salem Five              $100K   N     Y      Y       N/Y      fw link

3.31% 08/23 WT Direct Savings        $10K   N     N      N       Y/Y               0.50% < $10K, no fees

3.30% 09/12 E*Trade Complete Savings   $1   N     N      N       Y/Y      fw link  $25 Account opening bonus

3.28% 04/01 IGObanking Savings         $1   N     N      N       Y/Y      fw link

3.25% 10/22 FNBO Direct                $1   N     N      N       Y/Y      fw link

3.20% 04/09 Capital One Costco       $100   N     Y      Y       Y/Y      fw link  $1K to open

3.11% 04/22 giantbank.com MMA         $1K   ?     Y      N       Y/Y               Min. 1K to open, < 1K = 0%

3.05% 05/07 Savings Square             $1   N     N      N       Y/Y      fw link

3.05% 03/28 Amboy Direct Savings       $1   N     N      N       Y/N*     fw link  No ACH pull

3.00% 10/21 HSBC Direct                $1   N     N      Y       Y/Y      fw Link

3.00% 08/01 Emigrant Direct            $1   N     N      N       Y/N*     fw link  No ACH pull

3.00% 02/29 GMAC Bank Money Market   $500   N     Y      Y       Y/Y      fw link

3.00% 11/18 Citi Ultimate Savings      $0   N     N      N       Y/Y      fw link 

2.90% 11/18 Countrywide SavingsLink  $50K   N     N      N       Y/Y      fw link  <$10K 1.75%, $10K-$50K 2.90% 

2.90% 09/12 E*Trade MaxRate Checking  $5K   Y     Y      Y       Y/Y      fw link  0.5% < $5K

2.75% 03/19 ING Direct                 $1   ?     N      N       Y/N      fw link

2.75% 05/03 Apple Bank Grand Yield     $1   N     N      N       Y/Y      fw link  $2500 to open

2.75% 11/18 Citi Ultimate Money        $0   N     N      N       Y/Y      fw link  Must have Citi checking

2.60% 05/11 Presidential Bank         $5K   Y     Y      Y       Y/Y      fw link  $5K to open,  >$35K = 2.4%

2.50% 10/16 BankMutualDirect         $25K   Y     N      N       Y/Y               $125/mo if bal < $25K!

2.45% 05/21 SECU Advantage MM       $100K   N     Y      Y       N/Y      fw link

2.25% 11/14 WaMu Online Savings        $1   N     N      N       Y/Y      fw link  Run by JP Morgan Chase since 9/25

2.01% 11/17 EverBank FreeNet Checking  $1   Y     Y      Y       Y/Y

1.50% 11/14 Schwab Checking            $0   Y*    Y      Y       Y/Y      fw link  2nd hard inq. w/ margin

1.50% 08/17 AmTrust Direct e-savings   $1   Y     N      N       Y/Y      fw link  4% for 90 days new money 

0.60% 10/31 Fidelity mySmartCash       $0   N     Y      Y       Y/Y      fw link  Higher APY with FSLXX, ATM rebates

Reward Checking Accounts:

Most Reward Checking accounts have a cap on the balance that earns their high yield. Any balance above that cap will earn a much lower yield, typically 1.01% APY. They also have stringent requirements that must be met during each statement cycle, such as 10 debit card transactions, 1 direct deposit or other ACH transaction, receiving e-statements, and logging into on-line banking at least once. Not meeting the requirements for a statement cycle usually nullifies other features that might apply, such as ATM rebates, and drops the yield drastically, typically to 0.25% APY. Click on a link below or on Reward Checking Accounts (High Yield and Available to All) for details regarding a specific account.

APY   Eff  Bank/CU/Other             Min HInq HY Cap Debits ACH  FW link   Notes

6.31% 10/01 MidWest America FCU        $0  N    25K     10    ?   fw link   25K , 0.11% APY

6.01% 00/00 Charter Bank               $0  N    25K     13    T   fw link   25K , 1.01% APY

6.01% 04/01 Golden Plains CU           $0  ?    25K     10    T   fw link   25K , 0.51% APY

6.01% 00/00 Coulee Bank                $0  ?    25K     10    ?   fw link   25K , 1.01% APY

5.15% 05/31 First New England FCU      $0  Y    25K     12    T   fw link   25K , 3.00% APY

5.06% 04/09 Heartland Community Bank   $0  ?    30K     10    T   fw link   30K , 1.31% APY

5.01% 00/00 Coastal Federal CU         $0  N    50K     12    T   fw link   50K , 0.60% APY

5.01% 04/30 West Texas National Bank   $0  ?    25K     10    T   fw link   25K , 0.85% APY

4.51% 05/15 The Bank of Fayetteville    ?  ?    50K     10    T   fw link   50K , 1.01% APY

4.44% 02/05 1st Arkansas Bank & Trust  $0  N    50K     10   O/T  fw link   50K , 1.76% APY

3.01% 03/20 State Bank of Toledo       $0  ?    70K     10    T   fw link   70K , 2.21% APY

4.01% 04/01 Provident CU               $0  ?    25K     10    T   fw link   25K , 1.01% APY

3.51% 07/20 Connexus CU                $0  ?    25K     10    T   fw link   25K , 0.75% APY

Accounts not insured by the FDIC or NCUA:

                                          Hard         Debit     ACH

APY   Eff. Product                   Min Inq. Checks  Card  Orig./Target FW link  Notes

2.20% 10/24 Russell MMF                $1   N     N      N      NA/NA              RMMXX

2.97% 10/24 Fidelity Select MMF     $2.5K   N     N      N      NA/NA              FSLXX; Min. at Fidelity

2.94% 10/24 Fidelity Cash Resrv MMF $2.5K   N     N      N      NA/NA              FDRXX; Min. at Fidelity

1.69% 10/24 Fidelity Municipal MMF  $2.5K   N     N      N      NA/NA              FTEXX; Tax-exempt.

You can invest in a Money Market Fund (designated with MMF on this list) through various brokers, including on-line discount brokers. Use this APY calculator to convert the MMF's 7-day Yield to an APY based on daily compounding for comparison with other products in this Quick Summary. The MMF APY is converted from the 7-day Yield in the ticker link in the notes column. A Tax-exempt fund is one for which proceeds are not considered taxable income by the IRS. To convert a tax-exempt yield to it's comparative taxable yield, use this calculator.

Consultants

If you're in an M&A trajectory right now as a Director and you're starting to feel a little bit uncomfortable: don't worry: I expect an expanded role of independent advisors to the board likely to follow suit, moving well beyond fairness opinions into the above areas ;-)

Volatile Market

The sky is falling. This is an overdue correction. Start shorting! but don't get caught in the whiplash of the buyers.

Cookson (iancookson [at] gt.com) recommends the following useful shopping list in the "Financial Excutive" of Oct2004 for Key Responsibilities of the Board of Directors during an M&A:

1. What are the integration plans?
   (Short-term actions, Communication plans (immediate and ongoing), Synergy delivery plans (and likelihood they will be
   achieved), Internal controls compliance plan, Individuals accountable)
2. Is the strategic rational robust?
   (Closeness of fit with existing business, Acquisition's ability to leverage strengths and resolve weaknesses, Do economic realities match the story?, Other targets/options explored)
3. How will we manage implications of people and culture?
   (Closeness of cultural fit, Implications for future ways of working, Retention and rewards for key people, What is it that makes the business successful?, How this wilt be retained and built on?)
4. Viewing risks (in above) in context of price
   (Valuation, comparables, financing structure, Fairness opinion is independent, Due diligence is robust and directed to uncovering potential liabilities)
5. Board litigation protection
   (Process, deliberations and analysis documented, Use of independent experts)
6. Value added by board members
   (From personal experiences, Not simply monitoring management, Balanced perspective on weighing risks and rewards)

Dealmakers Attitude

A dealmakers attitude can be killing for long-term value creation. Ertel provides five tips that can help a negotiation team to work with the right (the-real-value-is-created-during-implementation) mindset:

1. Start with the end in mind
2. Help them prepare too (surprising or overbluffing the other side does not make sense)
3. Treat alignment as a shared responsibility (if your counterpart's interests are not aligned, it's your problem too)
4. Send the same one message to both implementation teams
5. Manage negotiation like a business process (prepare in a disciplined way and conduct post-negotiation reviews)

Dealmakers and Value Creation

To win, you have to envision your goal as (just) beyond the finish line so you will blow right past it at full speed. That makes good advice for managers, especially when you're dealing with complex negotiations such as in alliances, mergers, acquisitions and outsourcing. In corporate finance it often pays out to make sure both parties interests are aligned, even if that means leaving some money on the table. The most expensive deal is the one that fails...

Dealmakers and Value Creation

To win, you have to envision your goal as (just) beyond the finish line so you will blow right past it at full speed. That makes good advice for managers, especially when you're dealing with complex negotiations such as in alliances, mergers, acquisitions and outsourcing. In corporate finance it often pays out to make sure both parties interests are aligned, even if that means leaving some money on the table. The most expensive deal is the one that fails...

Achieving valuable growth

just finished reading a superb new book on value based management called "Questions on Value". One of the 11 papers in the book I liked most is about "Achieving valuable growth through M&A - Boardroom lessons for the acquisition game".

This article is a contribution of Mark L. Sirowe, Global Leader of the Mergers and Acquisitions practice of Boston Consulting Group and Professor at Stern University (New York).

It shows Mr. Sirowe is both a seasoned M&A consultant and an excellent lecturer. The article reads indeed like very good lessons at boardroom level on:
- how companies can establish strategic M&A processes and become an "always on company" as Sirowe calls it, and
- what boardrooms should go through on proposed deals.

To give you just a taste of the article, as a final M&A racing diagnostic Sirowe recommends boards to ask/think over the folowing questions:

• Is there evidence this deal emerged from a clear strategic perspective?
• How is this deal consistent with our long-term objectives for customers, markets and products/technologies?
• What are then stand-alone expectations of acquirer and target?
• Where will performance gains emerge as a result of the merger?
• Are the projected performance gains in line with the premium being paid?
• Which competitors are likely to be affected by the deal and how will they respond?
• What are the milestones in a 12-24 month implementation plan?
• What added investments will be required to support the plan?
• Who are the key managers responsible for implementing the plan?
• Which pieces of either company are good candidates for sell-off or split-off?
• Why is this deal better than alternative investments?

FDIC is bankrupt

FDIC is bankrupt. Its not disclosed. They dont have any insurance to Banks. Put your cash under your bed, walls, like our forfathers. Your CDs and deposits are not protected, its a myth. If the public knew the FDIC truth, its broke also their would be PANIC!

The next administration

The next administration---whether it's McCain or Obama---will be forced to restore the Resolution Trust Corp., which was created in 1989 to dispose of assets of insolvent savings and loan banks.

The RTC would create a government-owned management company that would buy distressed MBS from banks and liquidate them via auction. The state would pay less than full-value for the bonds (The Fed currently pays 85 per cent face-value on MBS) and then take a loss on their liquidation.

Commercial real estate

Commercial real estate is following the same downward trajectory as residential housing. They're both headed for the bottom of the fish-tank. Any slump in CRE will send unemployment skyrocketing while adding to the solvency problems facing the banks.

Banking System

The amount of stress on the banking system is unprecedented. The Fed is loaning out money hand-over-fist just to keep the scaffolding in place. Take a look at what is going on at the Fed's so-called "auction facilities" where the Fed is providing loans and US Treasuries for "unsellable" mortgage-backed junk and other toxic bonds. The numbers are staggering.

IRA

I hate to brag, but I converted my entire IRA to cash yesterday because a friend in high Chinese places emailed me about 3 days ago.

That looks like a $84k move. My shoulder is almost out of joint.

]

Getting out fo Debt, and Vacationing

A new moth, more relaxation. You too can get out of debt and enjoy vacation time. Just save up your vacation time by working hard, and then enjoy once you're debt free!


\

Storms

Things are not looking great, except that there is a great storm coming. Hopefully the Hurricane season will not contribute to the pending economic doom that is coming.

Book Inspections

Bank examiners from the Federal Reserve and the Comptroller of the Currency are inspecting the books of the two largest U.S. mortgage finance companies, Fannie Mae and Freddie Mac, as the Bush administration prods Congress to approve a plan that would enable it to inject billions of dollars into the companies.

According to Joseph Stiglitz

According to Joseph Stiglitz in his book, Towards a New Paradigm in Monetary Economics, the real reason behind the need of this company was to allow the US government to subsidize the banking sector in a way that wasn't very transparent and therefore avoid the possible resistance.

Hapy 4th

Happy fort of July. Remeber, if you're in debt you don't need to go out and splurge on fireworks, it will take the hole in your pocket and burn it.

Vacation Time

It's gonna be a great July with all the vacation time I've saved up. Posting will be sparse from mid August onwards.

searching and seizing laptops

U.S. officials have been searching and seizing laptops, digital cameras, cell phones and other electronic devices at airports and other border crossings, of random U.S. citizens re-entering the United States. Apparently, keeping the electronic gear for up to two weeks.

The Baltimore Sun has the story, here.

Rep. Anthony Weiner, D-N.Y wants Congress to amend current visa rules to allow 1,000 foreign models into the United States each year under their own immigrant classification.

Greg Mankiw has the details.

working cooperatively

John A. DiCicco, Deputy Assistant Attorney General for the Justice Departments Tax Division said in a statement:

We are working cooperatively with both the Swiss government and UBS to obtain this information. However, we are prepared to seek enforcement if that process is not successful.

Of course, with $20 billion in hidden assets at UBS, there are probably some major players who may have some influence at top government levels and who may attempt to squash the investigation.

Obamania

Oh, what some will do, say or advocate for the love of Obama.

Rising interest rates are certainly in the future, especially if another $500 billion "stimulus" package is launched, but Gross' timing on the accelerating inflation is off. The acceleration is already occurring. And somewhere, early on, in the next administration, whether it is an Obama or McCain administration, the inflation rate could very well hit 20%, if the Federal Reserve continues to print money at double digit rates.

Terror?

Sen. Joe Lieberman I-Conn. says a terrorist attack in the Unted States is likely in 2009.

"Our enemies will test the new president early," Lieberman, I-Conn., told Face The Nation host Bob Schieffer. "Remember that the truck bombing of the World Trade Center happened in the first year of the Clinton administration. 9/11 happened in the first year of the Bush administration.

Dodd-Shelby bailout

This $300 billion Dodd-Shelby bailout is an absolute crime. It bails out the banks by limiting their loss to 10%; a joke since many of the problem areas like CA are down as much as 30% already on the median in the past 12-months and the rate of acceleration of the price declines are picking up steam. The subprime crisis is nearly over and now Prime, Alt-A, Pay Option ARMs and Home Equity Lines/Loans are failing. If they get this $300 billion passed, another $1 trillion+ will have to come on its heels for all of the other bailouts.

chutzpah

Bernanke then had the chutzpah to add:

The Federal Reserve and other central banks have learned the lessons of the 1970s… as a central banker, I would be remiss if I failed to mention the contribution of monetary policy to the improved productivity performance.

Things are Different

Federal Reserve Chairman Ben Bernanke ’75 spoke to Harvard College’s graduating class today in Tercentanary Theatre at Harvard.

Bernanke spoke to the class about the year 1975, the year he graduated from Harvard. He told the class:

Then as now, we were experiencing a serious oil price shock, sharply rising prices for food and other commodities, and subpar economic growth. But I see the differences between the economy of 1975 and the economy of 2008 as more telling than the similarities.

Oh yeah, they are different alright.

Corrupt

John F. Marshall spent decades teaching at business schools and watching his students parlay his lessons into fortunes on Wall Street, according to NYT. But when he and another professor reached for some of those riches themselves, they decided to turn to insider trading, according to the SEC. It tuned into amateur night and criminal charges.

Potential Future Hyperinflation

The real value of all goods and services produced is lower than official GDP numbers when adjusted for higher inflation. More of it means higher prices, not increased output. It's how Williams makes his calculation, and he's worried. He sees inflation rising and a threat of hyperinflation ahead. He highlighted his concern in a recent April 2008 report called "Hyperinflation Special Report" with three dramatic sub-headings:

-- "Inflationary Recession Is in Place;

-- Banking Solvency Crisis Has Opened First Phase Monetary Inflation;" and

-- "Hyperinflationary Depression Remains Likely As Early as 2010."

More definitions:

More definitions:

-- Deflation - a decrease in goods and services prices, generally from a money supply contraction;

-- Inflation - the reverse of the above;

-- Hyperinflation - extreme inflation, as explained above, to a level where money becomes worthless or nearly so; according to Williams, the coming hyperinflation is because of a "lack of monetary discipline formerly imposed....by the gold standard, and a (Fed) dedicated to preventing a collapse in the money supply (and preventing) the implosion of the (ongoing) extremely over-leveraged domestic financial system;"

-- Recession - officially defined as two or more consecutive (inflation-adjusted) GDP contracting quarters; many economists don't agree on this, and some gauge conditions by the relative strength or weakness of industrial production, payroll employment, retail sales, and so forth; add it up and clearly the US is in recession; how bad and for how long will only be known in time;

-- Depression - a recession "where (inflation-adjusted) peak-to-trough contraction exceeds 10%; and a

-- Great depression - one where the peak-to-trough exceeds 25%. It happened only once so far in US history in the 1930s.

Wayne Barrett

Among this group of courageous and capable people is investigative reporter Wayne Barrett at the Village Voice. Here is his latest contribution:

How Andrew Cuomo Gave Birth to the Housing Crisis at Freddie and Fannie Mae

Missing Money and Collateral Fraud

Where is all the missing money and how do we get it back?

How big is the missing collateral black hole and how will it be resolved?

These two mysteries are essentially part of one mystery at the heart of the matter: Who is in charge of-and what are-the real financial flows and assets of the central banking/warfare complex that increasingly governs the resources on our planet?

The Housing And Economic Recovery Act Of 2008

It is not easy to engineer the bankrupting of the American middle class and the U.S. government.

There it is;

Ultimately, it is the only sure-fire way to stabilize the crumbling banking system and put a floor under housing prices. The effects on the dollar, however, will be catastrophic. Don't expect the greenback to survive as the world's "reserve currency". Those days are about over.

There it is; a taxpayer-funded bailout of Biblical proportions looming on the horizon, possibly as soon as 2009.

in terminal distress

The world's most prosperous consumer society is in terminal distress and no amount of "free market" gibberish will keep it from crashing.

The real origin of the problem is ideological. It's rooted in the prevailing "trickle down" orthodoxy which opposes any increases in wages or benefits for working people. Henry Ford realized what today's captains of industry and finance refuse to accept; that if workers aren't adequately paid for their labor---and wages do not keep pace with production---then the economy cannot grow because consumers do not have the money to buy the things they make.

It's just that simple. Greenspan and his ilk believed that they could prosecute the class war and make up the difference by relaxing lending standards, changing bankruptcy laws, and by creating a nearly endless array of exotic financial products that expanded credit. But shifting wealth from one class to another has its costs. By crushing the worker the Friedmanites have killed the golden goose.

Bloomberg News: "Banks routinely misstated borrowing costs to the British Bankers' Association to avoid the perception they faced difficulty raising funds as credit markets seized up."

The Economist summarizes the malaise

An article is this week's The Economist summarizes the malaise in housing in particularly apocalyptic terms:

"America's house prices are falling even faster than during the Great Depression. As house prices in America continue their rapid descent, market-watchers are having to cast back ever further for gloomy comparisons. The latest S&P/Case-Shiller national house-price index, published this week, showed a slump of 14.1% in the year to the first quarter, the worst since the index began 20 years ago. Now Robert Shiller, an economist at Yale University and co-inventor of the index, has compiled a version that stretches back over a century. This shows that the latest fall in nominal prices is already much bigger than the 10.5% drop in 1932, the worst point of the Depression. And things are even worse than they look. In the deflationary 1930s house prices declined less in real terms. Today inflation is running at a brisk pace, so property prices have fallen by a staggering 18% in real terms over the past year." ("The Economist")

Withering Economy Evidence Is Everywhere

Food prices are going through the roof.

The Labor Dept. assures us that core-inflation is only 4 per cent, but everybody knows it's load of malarkey.

Look around. The evidence of a withering economy is everywhere. In "good times" consumers shun the canned meat aisle altogether, but no more. Today, Spam sales are soaring; grocery stores can't keep it on the shelves. Everyone is looking for cheaper ways to feed their families.

The bottom line is that more and more people in "the richest country on earth" are now surviving on processed pig-meat.

White bread is up 13 percent, bacon is up 7 percent and peanut butter is up 9 percent. Inflation is rampant and there's no end in sight. The dollar is closing in on the peso and working people are struggling just to get by.

That says it all.

Last week, Oppenheimer analyst Meredith Whitney announced that:

"The real harrowing days of the credit crisis are still ahead of us and will prove more widespread in effect than anything yet seen. Just as strained liquidity pushed so many small and mid-sized specialty finance companies to the brink, we believe it will do the same to the US consumer. We believe losses will only accelerate further and far worse than the most draconian estimates."

Whitney has been one of the few consistently accurate analysts of the current market meltdown.

Prices Rise

"Commercial property prices in the US in February saw their sharpest decline since records began nearly 15 years ago as sources of finance for deals has dried up, according to data from Standard & Poor's out yesterday. Sales of commercial properties were down 71 per cent in the first quarter compared with a year earlier." (Financial Times)

To Readers

Away most of the month, and start of the next. Take care of your biz as I take care of mine.

Sound of Silence

The greatest enemy we have to face today is our own silence about so many things that we have ignored, until they have become totally unmanageable.

What people must do now is take off the headphones, remove our blindfolds, and remove our self-imposed gags. Then we need to demand basic changes to everything that passes for the norm.

Otherwise there will be a lot more dark-days than just a single Black Tuesday!

The United States Constitution stipulates that no payments can be made that are not provided for in an appropriations bill approved by Congress. Specifically, Article 1, Clause 7 states: "No Money shall be drawn from the Treasury but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time."

International Forecaster Weekly

International Forecaster Weekly

http://www.theinternationalforecaster.com/

Gold Gold Gold

Short Gold is more of a reason to buy Gold January 26th, 2008 - Short Gold may be Fools Gold, more Fed fraud, but the scams remain the same, conflict wars and taxes, bankrupting the middle class, the worry of greater meltdowns, the vulnerability of big stable funds, more reasons to just buy more metals