Strange Bedfellows & Stranger Events..............
Hmmmm;
Freddie Mac announces earnings will be DOWN - 40% year over year....cites DERIVATIVES problems (whodathunkit ?!?!)and will not issue quarterly's....great to be a GSE now isn't it ~
After recent mind-meld of the Worlds Central Bankers - the IMF announces desire of future gold sales.
< read - we must cap the canary in the coal mine indicator of rampant inflation and global market risk >
Goldman Sachs recent call for an Oil spike to $80 led to a selloff in the Energy Stocks.
$80 Oil didn't get anyone's attention....so
- now Goldman Sachs raises their call to a quote/unquote:
"Super Spike of $105 Oil" and their Analyst refuses to appear on CNBC.
- it should be noted (CNBC's Steve Liesman spoke a bit about this - this am) that many Investment Banks have recently held Investment Conferences with Endowments, Pension Funds and Institutional Investors on Commodity Investing.
- many have also recently added to and/or created new commodity trading groups....and:
GOLDMAN SACH's is the LARGEST trader of Energy Derivatives !
WHODA-F@#%'n-THUNKIT !!!!!!!!!!!!!!!!!!!!!!!!!!!! ?
< think outside the box...here people. Many laughed when I said that the US would use Oil - as an Economic Weapon of Mass Destruction to collapse the Chinese Economy so that the Chinese Communist Government would be toppled...ala the "former" Soviet Union...
Whenever economic and geopolitical policy intersect at mutual crisis points...strange bedfellows can exist...(and sometimes not so strange).
If Greenspan is forced to raise Interest Rates to levels required to deflate the Misallocation Bubble he's just created... the Bond & Derivative Markets face implosion.
Freddie/Fannie already cracking and being propped up, AIG story now unfolding....Euro Bankers noting per my post a few weeks back:
["
Ramping Oil Prices can do much of the work that rising rates can do.
Greenspan is caught in a box.
He must stop inflation. He must pop the Housing & Reflation/Liquidity Bubbles.
But if he raises rates to where they must go....a Derivative Implosion of unprecedented historic proportion awaits.
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The following is Hon. Mario Lettieri's speech to the Italian Chamber of Deputies on March 14.
The DERIVATIVES Bubble:
However, one year later, not only do we find confirmation of what we had written and what I presented in my first intervention, but unfortunately, we must also observe that the systemic financial crisis is producing shocks on the markets in an increasingly significant and negative manner, with increasingly serious and uncontrollable consequences, at a level which clearly goes beyond that of Italy.
The gap between the real economy and the economy based on financial speculation is of an almost inconceivable magnitude.
The leading market of course, is London, which is almost twice as large as the American market.
The BIS declared that it was quite worried because the speculative FUNDS, the so-called HEDGE FUNDS, have an increasing importance in these operations, to the point that 43% of all contracts do not involve a bank, but rather a HEDGE fund or insurance company as one of the counterparties. And this is a worrying fact, since banks, although they can be criticized and need to be more transparent, do offer a minimum level of guarantees, unlike these FUNDS.
Consider what has happened with certain large banks; for example, Morgan Chase alone, has increased its DERIVATIVES exposure by about $10,000 billion, almost the size of U.S. GDP.
The total value of DERIVATIVES exposure is thus larger than world GDP:
< ******************************* SOBERING *********************************>
We are faced with a situation in which, if there were crises that could lead to a crash, the situation would cause a global financial breakdown, with devastating effects on the economy, wealth, and life of many countries.
The most recent report available from the BIS, on DERIVATIVES at the end of December 2004, brings the total of contracts open at the end of June to over $220,000 billion: an enormous, scary amount, which highlights an increase of $50,000 billion more in 12 months!
It is definitely important to emphasize that, at the end of June 2001, according to the official BIS reports, OTC DERIVATIVES were $100,000 billion. Thus, in three years, there has been an increase of $120,000 billion, equal to three times world GDP.
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GM signaling default...
Fannie Mae is melting down....(see Freddie's DERIVATIVES note)...and rising rates can implode their derivatives book - leading to a market meltdown much larget than LTCM's.
AIG.... is now being recognized as another potential LTCM "Black Box" company....again (whodathunkit).
Citigroup is sanctioned against further mergers - untill it cleans up it's act.
Warren Buffett is being called to talk to investigators on the AIG debacle.
Morgan Stanley is having an internal meltdown.
The FED and THE NATIONAL BOARD OF REALTORS - has publically targeted the Housing Bubble.
US DEBT has doubled into this low-rate, re-flation bubble.
US Deficits have exploded.
USD has imploded.
China threatening War with Taiwan.
No Korea has a Clinical Psychopath with Nuclear Weapons.
Former Soviet Union satellites in upheaval.
Iran sabre rattling over Nuke's....Israel cocked & locked - and Three US carrier battle groups now converging on the Persian Gulf.
1. Never, ever, ever....will thinking outside the box and getting the "Big Picture" right - be more profitable.
2. More money will be made by understanding the historic events now unfolding in Global Geopolitics and the outside of the box Economic ramifications it will have - than by following the market fundamentals at the surface.
...people laughed when I spoke about the US being at "war" with China and stating that it will use Oil as an Economic Weapon of Mass Destruction.
- strange bedfellows have arrived at a historic intersection of mutual advantage.
tic' toc` and THINK OUTSIDE THE BOX ~
PS: further food for thought:
Oil: The Dividing Line of the New Cold War
atimes.com
["How fast and far China will fall is an open question. But one thing is certain: China is huge, and when it falls, it will not fall alone.
The result of even a mild recession could knock 1 million bpd of consumption off the top in just China, and a deep grinding collapse could possibly eliminate Chinese imports altogether.
Such a development would dramatically diminish international crude oil prices.
<..............................................................history, learn from it, or be destined to repeat it !.........................................................>
In 1997, the Asian financial crisis knocked out 6 million bpd of demand; prices fell by nearly three-quarters as a result."]
stratfor.biz
Message 21084258 IMPLOSION
China Financial Corruption Watch:
"Corruption is pervasive in China," said Larry Lang, a professor of finance at the Chinese University of Hong Kong.
"A lot of state-owned companies have been simply stripped clean."
fullermoney.com
By David Barboza of The New York Times, 22 March 2005
SHANGHAI, March 21 -
China has been shaken by a series of large-scale bank robberies in recent years, but they are not the Bonnie-and-Clyde type.
These are inside jobs: top executives, branch managers, loan officers and thousands of everyday employees have been running off with billions in customers' money.
Consider what has happened in just the first two months of 2005...
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...more money will be lost - by misunderstanding the entire China story than by any other single event in the last couple decades.
...more money will be made - by UNDERSTANDING the real China Story than any by other single event in the last couple of decades. |
