May 17, 2008

Economic Collapse in September?
by Clif Droke


A rumor is swirling around the Internet that an inglorious end to the U.S. economy is imminent. Unlike previous rumors to this effect, this one carries the weight of recent events in the financial realm and has many believing the rumor will come to pass.

Let's examine some of the claims being made: On March 18, 2008, a "closed door" session of Congress was held for only the fourth time in history. According to House Rule XVII, clause 9, it is forbidden for members of the U.S. House of Representatives to reveal the discussions held behind those doors. The penalty for leaking such information includes loss of seniority, fines, reprimand, censure or expulsion. According to news sources, one purpose of the meetings was to discuss new surveillance techniques to be used by U.S. Homeland Security. Rumors continue to swirl as to what the other topics of discussion took place in that meeting.

According to the Australia.TO newspaper, as reported in the May 2008 Last Trumpet Newsletter (LTM), several congressmen were so incensed about what was discussed behind those doors that they were compelled to leak the contents of the meeting. Following is what is rumored to have been discussed: Imminent collapse of the U.S. economy by September 2008; imminent collapse of the U.S. Government finances by February 2009; possibility of civil war within the U.S. resulting from the collapse; detainment of "insurgent U.S. citizens" in anticipation of their moving against the government; the potential for violent action taken by citizens against members of Congress due to the collapses; the merger of the U.S. economy with those of Canada and Mexico as a solution to the collapse; the introduction of a new tri-national currency called the "AMERO" as another economic solution.

http://www.safehaven.com/showarticle.cfm?id=10280&pv=1

I thought it would be soon but not THAT soon. I was also just reading this....


http://www.arabnews.com/?page=6&section=0&article=111488&d=4&m=7&y=2008

US, China tussle pushing world toward showdown
Syed Rashid Husain | Arab News


The World Petroleum Congress often dubbed as the ‘Oil Olympics’ has just finished, with Secretary General Abdallah Al-Badri calling the US to ‘stop harassing the OPEC’ — underlining once again the dangerous, deep divisions within the oil fraternity. With the debate getting scary, clouds have started to gather — ominous signs indeed. We are entering a definite red, dangerous zone. With each rising dollar in barrel market prices, temperatures are rising and fingers pointing. Things are getting murkier and still murkier. A new era, marked by deep distrust, seem to dawning.

“The time when we could count on cheap oil and even cheaper natural gas is clearly ending,” Chevron Texaco Chairman and CEO David O’Reilly delivered these ‘gloomy’ words way back in February 2005 — a literally gone by age. The price he was referring to was no match to the current standards. Markets had then just touched $50 mark. Later in March the same year the fire brand Venezuelan President Hugo Chavez reiterated and some say rather gleefully, ‘the world should forget about cheap oil.’ Both were dead on point. The world should definitely forget cheap oil.

Jeff Rubin of CIBC World Markets now is forecasting “oil prices almost doubling over the next five years”. That would mean at least $270 a barrel by 2013. Things have started to burst at seam.

Oil markets are changing global political balance in this unipolar world, taking the world along to a new era of ‘energy imperialism.’ The question of who can tame the markets has taken a back seat. Senator Joe Lieberman, the former US vice presidential candidate, commenting on the ongoing scramble for energy resources between the US and China says the race to secure their growing requirements “may escalate competition (between them) for oil to something as hot and dangerous as the nuclear arms race between the US and the Soviet Union”.

And the ongoing scramble for energy sources apparently explains why the Brown government is now strongly backing BP to get a big new slice of the oil drilling licenses soon to be issued in Iraq, and — astonishingly — has now also made clear it intends to annex a third of a million square miles of the seabed off Antarctica to pre-empt any rights to the oil it may contain.

The fight for oil has begun in earnest, writes Michael Meacher in Guardian.

The geopolitical implications of the gathering crisis on global energy supplies and markets are simply immense — at times even beyond our imagination. The risk of further military interventions and conflicts in the Middle East is clearly high, Meacher adds. Total world oil reserves today are estimated at 2.5-2.9 trillion barrels, of which half has now been already consumed, while half of the 51 oil-producing countries reported output declines in 2006.

Non-OPEC Russia and the world’s biggest oil exporter after Saudi Arabia, now is faced with its first annual decline in production in a decade. Output fell 0.9 percent to 9.76 million barrels a day in the first five months of the year.

Non-OPEC production is now expected to peak and decline within the next five years, driven mainly by burgeoning demand from China and the US, together with restricted output from Iraq.

The ability of OPEC to meet the gap would largely depend on how fast world demand grows and how extensively OPEC invests in new capacity, argued Meacher.


:scared:


If we continue to pour all of our (or China's) money into forever wars for oil instead of finding alternatives we may as well kiss our asses goodbye,

American 'Meltdown' is the Reason for the Money Injection by Fortis
June 28, 2008, 09:10 a.m.

BRUSSEL/AMSTERDAM (DFT) - Fortis expects a complete breakdown of the American financial markets within days or weeks. This explains, according to the bank insurer, the series of interventions on Thursday with the aim of strengthening themselves by € 8 billion. "We are ready at the last moment. The U.S. is doing much worse than we had thought,” said Fortis chairman Maurice Lippens, who insists that CEO Votron shall not be replaced. Fortis expects bankruptcies of 6,000 U.S. banks that have low coverage. "But the same goes also for Citigroup and General Motors, and thereby starts a complete meltdown in the U.S.”
http://theblogattheendoftheworld.blogspot.com/2008/06/us-meltdown-imminent-says-fortis.html

original German article
Amerikaanse ’meltdown’ reden geldinjectie Fortis
http://www.dft.nl/bedrijven/fortis/4339542/Amerikaanse__rsquo_meltdown_rsquo__reden_geldinjectie_Fortis.html

American 'meltdown' reason for money injection Fortis.
28th of June, 9:10
BRUSSELS/AMSTERDAM - Fortis expects a complete collapse of the US financial markets within a few days to weeks. That explains, according to Fortis, the series of interventions of last Thursday to retrieve € 8 billion. "We have been saved just in time. The situation in the US is much worse than we thought", says Fortis chairman Maurice Lippens. Fortis expects bankruptcies amongst 6000 American banks which have a small coverage currently. But also Citigroup, General Motors, there is starting a complete meltdown in the US"
https://www.kitcomm.com/showthread.php?t=19066


VOTRON TO REMAIN AFTER WAVE OF CRITICISM
U.S. 'meltdown' reason geldinjectie Fortis
June 28 08, 09:10
by our correspondent
BRUSSELS / AMSTERDAM (DFT) - Fortis expects within the next few days to weeks to complete the collapse of the U.S. financial markets. That explains the bank insurers interventions of the series Thursday at dealing with € 8 billion. "We are ready at the last minute. It goes in the United States much worse than thought, "said Fortis chairman Maurice Lippens, who maintains that CEO Votron to live. Fortis expects bankruptcies of 6000 U.S. banks that now lack coverage. "But Citigroup, General Motors, there begins a complete meltdown in the U.S.."

https://www.kitcomm.com/showthread.php?t=19066

Faster Inflation May Unleash `Financial Tsunami': Chart of Day
By Mark Gilbert
June 24 (Bloomberg) -- Rising consumer prices will leave more U.S. consumers unable to pay their debts and may lead to a ``financial tsunami,'' according to Bennet Sedacca, president of money manager Atlantic Advisors LLC in Winter Park, Florida.
http://www.bloomberg.com/apps/news?pid=20601109&sid=a8j2MuFdqA3s&refer=exclusive

Morgan Stanley warns of 'catastrophic event' as ECB fights Federal Reserve
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 1:29am BST 17/06/2008

The clash between the European Central Bank and the US Federal Reserve over monetary strategy is causing serious strains in the global financial system and could lead to a replay of Europe's exchange rate crisis in the 1990s, a team of bankers has warned.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/16/bcnecb116.xml

RBS issues global stock and credit crash alert
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 12:19am BST 19/06/2008

The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

"A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist.

A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

Such a slide on world bourses would amount to one of the worst bear markets over the last century.

RBS said the iTraxx index of high-grade corporate bonds could soar to 130/150 while the "Crossover" index of lower grade corporate bonds could reach 650/700 in a renewed bout of panic on the debt markets.

"I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names.

"Cash is the key safe haven. This is about not losing your money, and not losing your job," said Mr Janjuah, who became a City star after his grim warnings last year about the credit crisis proved all too accurate.
http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=A1YourView&xml=/money/2008/06/18/cnrbs118.xml

une 9, 2008
Central bank body warns of Great Depression
by Gill Montia
Story link: Central bank body warns of Great Depression
The Bank for International Settlements (BIS), the organisation that fosters cooperation between central banks, has warned that the credit crisis could lead world economies into a crash on a scale not seen since the 1930s.
In its latest quarterly report, the body points out that the Great Depression of the 1930s was not foreseen and that commentators on the financial turmoil, instigated by the US sub-prime mortgage crisis, may not have grasped the level of exposure that lies at its heart.

http://www.bankingtimes.co.uk/09062008-central-bank-body-warns-of-great-depression/

Barclays warns of disaster as Fed loses all credibility
By Ambrose Evans-Pritchard
The Telegraph, London
Friday, June 27, 2008

Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall "below zero."
"We're in a nasty environment," said Tim Bond, the bank's chief equity strategist. "There is an inflation shock under way. This is going to be very negative for financial assets. We are going into tortoise mood and are retreating into our shell. Investors will do well if they can preserve their wealth."

Barclays Capital said in its closely-watched Global Outlook that US headline inflation would hit 5.5pc by August and the Fed will have to raise interest rates six times by the end of next year to prevent a wage-spiral. If it hesitates, the bond markets will take matters into their own hands. "This is the first test for central banks in 30 years and they have fluffed it. They have zero credibility, and the Fed is negative if that's possible. It has lost all credibility," said Mr Bond.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/27/cnbarc...

No break for the environment in all this negative economic news.

China auto sales up 17% in first half year
http://news.xinhuanet.com/english/2008-07/09/content_8517864.htm

U.S. auto sales in the ditch in June
.....Through the first six months of 2008, sales were down 10.1% compared with last year. Total vehicle sales nationwide in 2007 were 16.1 million. At the current rate of sales, 2008 totals could be well below 15 million.

June's total was dragged down by an 18% decline for General Motors Corp., a 28% drop for Ford Motor Co., and a 36% slide for Chrysler, the worst of any carmaker.
http://www.latimes.com/news/printedition/front/la-fi-carsales2-2008jul02,0,616472.story

Bank losses from credit crisis may run to $1,600bn, warns Bridgewater
By Ambrose Evans-Pritchard
Last Updated: 1:59am BST 08/07/2008

Bridgewater Associates has issued an apocalyptic warning to clients that bank losses from the worldwide credit crisis may reach $1,600bn (£800bn), four times official estimates and enough to pose a grave risk to the financial system.

The giant US hedge fund said that it doubted whether lenders would be able to shoulder the full losses, disguised until now by "mark-to-model" methods of valuing structured credit.

"We are facing an avalanche of bad assets. We have big doubts as to whether financial institutions will be able to obtain enough new capital to cover their losses. The credit crisis is going to get worse," said the group in a confidential report, leaked to the Swiss newspaper SonntagsZeitung.

..............

If Bridgewater is anywhere near correct, governments alone have the wherewithal to rescue the system. This would mean the de facto nationalisation of the banking systems in the US, Britain and Europe.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/08/cnbridge108.xml