Hi there guys ‘n gals..

I am in full fledged weeks of stress ;)

I just went here to leave a few words!

Things are very very ugly out there..prepare urself for the biggest financial crisis/crash in the history of the world..get out take all ur cash..buy gold,silver,gas and ammuniton and cigarettes.

I wish everyone as much luck as he/she can get..

and begin to buy again when blood is flooding the streets..

this is REALLY unprecedented..

via TheFinancialNinja / Immobilienblasen

Breaking News: Lehman To Be Acquired by Tooth Fairy

The market responded with enthusiasm to reports that the Tooth Fairy has agreed to acquire Lehman. The purchase price has not yet been determined and will be set by Dick Fuld wishing upon a star, clicking his heels three times, and being transported back to that magical place where Lehman still sells for over $70 per share.

In related news, Lehman has agreed to sell all of its level III capital, including CDOs, ABSs, pet rocks, baseball cards, slightly used condoms, and credit default swaps written by MBIA and Ambac. Lehman’s level III capital will be acquired for 150% of its face value by Tinkerbell, who will carry it off to Neverland to be fed to a crocodile. Lehman is financing 90% of the acquisition at an interest rate that has not been announced; Tinkerbell’s up-front payment consists of a handful of pixie dust, three crickets, and a bullfrog. Analyst Dick Bove estimates that the bullfrog could eventually be transformed into three princes and a pumpkin coach. The deal gives Lehman no recourse to any of Tinkerbell’s assets other than the Level III capital. If Tinkerbell defaults, Lehman’s successor entity will stick its hand down the crocodile’s throat and attempt to get it to regurgitate. The firm’s historical value-at-risk analysis shows that sticking your hand down a crocodile’s throat is completely safe.

Treasury Secretary Hank Paulson issued a statement: “I am delighted that SWFs (Sovereign Wealth Fairies) continue to express confidence in the terrific values represented by American financial institutions. As I have been saying since August of 2007, this shows that the crisis is now over.”

Meanwhile, the SEC has announced an investigation of mean, evil, bad short-seller David Einhorn. While out for a beer with a friend, Einhorn reportedly suggested that the Tooth Fairy does not exist and that wishing upon a star is not a wholly reliable price discovery mechanism. Christopher Cox, chairman of the SEC, said, “Vicious rumors attacking the Tooth Fairy will not be tolerated. Our entire financial system and indeed the American way of life depend on the Tooth Fairy and wishing upon a star. How else could one value level III capital appropriately?” The SEC is reportedly planning to set up re-education camps for short-sellers.

via TheBigPicture

Economic Capital is as calculated by IRA.  All figures in $000 :

Source: TheBigPicture

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And additional I want to say that I am sorry for not posting very much! ;)

So little Time :(   But i am Long the EUR/USD ,GPB/USD and my strategy runs allong the thinking that the USD bounce is over and GOLD will soon show it again..I only wait for good for entrys.. 

Have a great Day

via Cryptogon

Jose Luis Rodriguez Zapatero, the Spanish prime minister, sought to address the “stagnation and slowdown” of the economy when he announced a package of 24 measures designed to lessen their effect.

Spain is among the European countries that, like Britain, have been hardest hit by the kock on effects of the economic downturn and credit crunch in the United States.

Mr Zapatero made the rare move of convening his cabinet during August, when Spaniards traditionally take their annual leave and Madridrelos escape the stifling summer heat of the capital. He called the meeting to approve a raft of measures that include the elimination of inheritance tax and the injection of finance into state housing projects.

The move came a day after figures showed that second quarter growth dropped to 0.1 per cent, its lowest level since 1993 when Spain emerged from its last recession and housing crisis.

“We face a situation of economic stagnation and a steep slowdown,” Mr Zapatero said after chairing the cabinet meeting and after cutting short his family holiday in the remote Doñana national park. “The government is working to make sure that the economy recovers as soon as possible.”

The cabinet approved the provision of a 20 billion euro (£15.9 billion) finance package in a bid to stimulate the economy and avoid a looming recession.

The package also aims to simplify environmental plans for public works and cuts red tape for small and medium-sized businesses. It will also boost railroad infrastructure, launch a partial privatisation of the airport system and allow longer opening hours for retailers.

The Spanish government’s new measures are in addition to an 18 billion euro spending plan announced in April aimed at reviving the economy.

But the conservative opposition have accused Zapatero, who was re-elected to a second term in March, of being too slow to take action on the economy and branded the government’s extraordinary cabinet meeting as nothing more than a publicity stunt.

Gooossshhh!

OFFICIALY my demonstration account is already wiped out..

My Risk Parameters were crushed some 450 Pips ago on EUR/USD positions and around 80$ @ Gold.

I had a plan to hedge but changed my plans in-between after opening the hedges and got hooked to my belief that the fundamental factors of the US economy never ever could allow the dollar to rally that much in the last few weeks.

Adding to these immense faults ,I had Price action screaming at me to short the Euro at around 1.5800. I even had a short open but closed it for a lousy 70pips because of the foregoing argument.

In retrospect I could have handled everything in a logic manner as my plans were prepared and sound.But overwhelmingly I feel that one reason stood out the most and that was that pleasure and pain of just being in the market.Like a Pavlovian dog or like a mouse trapped in an lab,I had to get my daily dose and ignored clear signs which were against my “belief”!

To this subject let me quote Jesse Livermore once again from Chapter V of his “Reminiscences of a Stock Operator”

“And right here let me say one thing:  After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this:  It never was my thinking that made the big money for me.  It always was my sitting.  Got that?  My sitting tight!  It is no trick at all to be right on the market.  You always find lots of early bulls in bull markets and early bears in bear markets.  I’ve known many men who were right at exactly the right time, and began buying and selling stocks when prices were at the very level which should show the greatest profit.  And their experience invariably matched mine – that is, they made no real money out of it.  Men who can both be right and sit tight are uncommon.  I found it one of the hardest things to learn.  But it is only after a stock operator has firmly grasped this that he can make big money.  It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.”

I think that I can say without much ego-polishing that I can identify the nature of fundamental trends quite early and my study of price action allows me to see good entry points to make use of them and should be able to make some good money with my forecasts. But being right and then trading right is an entirely different game.Patience is the key..and I have to learn it ..the best way is pain isn`t it ?

For example through my study of monetary history of hundreds of years of mankind marketplaces, I “knew” (very determined) that gold would go to 1k/oz and still “know” that gold will go to new highs a short few years from here.(Preserving wealth and/or enriching it..depending on your leverage)

But life is patient with me it seems and did not allow me to invest money “one cannot afford to loose”.Because now I know I would have lost it..and being right and loosing money is ,in my humble opinion, the worst pain a trader/investor can feel in his breast.

okay lot’s of I’s here :D Please wish me patience for the next try..I need 6 positive month before going live..

I will wait some time for my margin call (which will eventually occur) and then plan for the second public try.

Have a great weekend! I will ;)

Here some statistics for anyone interested..around 50% win/loss ratio in the middle of my second year is not that bad ,isn’t it?

…(of course there are still positions open..maybe they come back ;)

nearly 6 Month of Trading here->

Click Pic to enlarge

Following News Via Cryptogon ! The folks over there do an superb job and everybody can see it by the height of their monthly donations! I really have big respect for them!

Secret EU Security Draft Proposes Sharing Vast Amounts of Intelligence and Information on Europeans with the U.S. to Form “Euro-Atlantic Area of Cooperation”

China Tightens Currency Controls to Curb Inflows

Data Revision Reveals Almost Half of NYMEX Crude Oil Futures and Options Positions Are Held By Speculators

AIG WHACKED

American International Group Inc., the biggest U.S. insurer by assets, fell the most since going public in 1969 after writing down more than $11 billion of holdings and saying it won’t rule out raising capital.

Jobless Claims Rose to Their Highest Level in Six Years

And here one of the best Articles i have seen since a long time->

via FreetheMarketMan

Getting Closer to Debasing the Currency

by Thorsten Polleit, who is Honorary Professor at the Frankfurt School of Finance & Management.

I really love Rothbards Book! It`s an must for everyone interested in economics!! GO BUY IT!

and finally please watch this amazing trailer->

via Cryptogon/Reuters

Check out the chart, if you dare.

Banks borrowed a record amount of funds from the Federal Reserve in the latest week as the year old credit crisis took a persistent toll, while the commercial paper market continued to contract, signaling tough conditions for short term borrowers.

Banks’ primary credit borrowings averaged $17.45 billion per day in the latest week, the second straight week this had hit a record and up from $16.38 billion the previous week, Fed data showed on Thursday.

“It shows there’s a shortage of liquidity in the system,” said Christopher Low, chief economist at FTN Financial in New York.

Secondary credit the Fed extended, which is usually taken out by banks in need of emergency cash, rose to $89 million in the latest week, from $34 million the week before. Although these numbers are still very small compared with primary credit, “What that tells you is that there’s an increasing number of banks that the Fed is classifying as ‘unsound’ or inadequately capitalized,” Low said.

Analysts may watch the trend of secondary credit closely, given the travails of U.S. regional and smaller banks and the likelihood that a continued decline in house prices and rise in foreclosures and bad loans will deepen the difficulties of the banking sector for many months or years.

All via Cryptogon!

Ford’s Worst Quarter Ever

Homes in Some Stage of Foreclosure Increase 121%, 25 Million U.S. Homeowners About to Go Upside Down 

FDIC SEIZES TWO MORE BANKS: 1ST NATIONAL BANK OF NEVADA AND FIRST HERITAGE BANK

And here the ultimate bad news (and a bit late ;) ->

The overall US Bank Losses of 450 Billion USD are just the beggining.

I assume they will quadruple and more very soon!

National Australia Bank Writes Off 90% of Its U.S. AAA Rated Debt

The National Australia Bank’s decision to write off 90 per cent of its US conduit loans will have dramatic repercussions around the world. Wall Street will be deeply shocked when they understand the repercussions of what NAB has done. It is clear global banks have nowhere near provided for their exposures to US housing loans which in the words of John Stewart are experiencing a “meltdown”.

We are now way beyond sub-prime. NAB says that it is suffering a 55 per cent loss on American housing loans – an event that has never happened in the history of a developed country in recent memory. This is an unprecedented event and means that the cost of bailing out the US financial system is now far beyond the highest estimates. A US recession is now locked in, but more alarmingly, 55 per cent loan losses point to the possibility of a depression.

It means the cost of bailing out housing exposures to the two mortgage insurers will be so great that it will leave no room to bail out anything else and there are several US banks that are now in big trouble. NAB says that the dislocation in the residential market is separate from the corporate market, but the flow on is inevitable.

While global banks have been writing down their balance sheet assets, few have tackled their conduit exposures which are off balance sheet but to which they are ultimately liable.

This morning at around 6am I wrote that we had been experiencing a ‘dead cat bounce’. I had no idea that NAB would trigger the downturn and confirm what I had written. And of course Wall Street will receive a deep shock when it wakes up.

1. Paulson appears on Face The Nation and says “Our banking system is a safe and a sound one.” If the banking system was safe and sound, everyone would know it (or at least think it). There would be no need to say it.

2. Paulson says the list of troubled banks “is a very manageable situation”. The reality is there are 90 banks on the list of problem banks. Indymac was not one of them until a month before it collapsed. How many other banks will magically appear on the list a month before they collapse?

3. In a Northern Rock moment, depositors at Indymac pull out their cash. Police had to be called in to ensure order.

4. Washington Mutual (WM), another troubled bank, refused to honor Indymac cashier’s checks. The irony is it makes no sense for customers to pull insured deposits out of Indymac after it went into receivership. The second irony is the last place one would want to put those funds would be Washington Mutual. Eventually Washington Mutual decided it would take those checks but with an 8 week hold. Will Washington Mutual even be around 8 weeks from now?

5. Paulson asked for “Congressional authority to buy unlimited stakes in and lend to Fannie Mae (FNM) and Freddie Mac (FRE)” just days after he said “Financial Institutions Must Be Allowed To Fail”. Obviously Paulson is reporting from the 5th dimension. In some alternate universe, his statements just might make sense.

6. Former Fed Governor William Poole says “Fannie Mae, Freddie Losses Makes Them Insolvent”.

7. Paulson says Fannie Mae and Freddie Mac are “essential” because they represent the only “functioning” part of the home loan market. The firms own or guarantee about half of the $12 trillion in U.S. mortgages. Is it possible to have a sound banking system when the only “functioning” part of the mortgage market is insolvent?

8. Bernanke testified before Congress on monetary policy but did not comment on either money supply or interest rates. The word “money” did not appear at all in his testimony. The only time “interest rate” appeared in his testimony was in relation to consumer credit card rates. How can you have any reasonable economic policy when the Fed chairman is scared half to death to discuss interest rates and money supply?

9. The SEC issued a protective order to protect those most responsible for naked short selling. As long as the investment banks and brokers were making money engaging in naked shorting of stocks, there was no problem. However, when the bears began using the tactic against the big financials, it became time to selectively enforce the existing regulation.

10. The Fed takes emergency actions twice during options expirations week in regards to the discount window and rate cuts.

11. The SEC takes emergency action during options expirations week regarding short sales.

12. The Fed has implemented an alphabet soup of pawn shop lending facilities whereby the Fed accepts garbage as collateral in exchange for treasuries. Those new Fed lending facilities are called the Term Auction Facility (TAF), the Term Security Lending Facility (TSLF), and the Primary Dealer Credit Facility (PDCF).

13. Citigroup (C), Lehman (LEH), Morgan Stanley(MS), Goldman Sachs (GS) and Merrill Lynch (MER) all have a huge percentage of level 3 assets. Level 3 assets are commonly known as “marked to fantasy” assets. In other words, the value of those assets is significantly if not ridiculously overvalued in comparison to what those assets would fetch on the open market. It is debatable if any of the above firms survive in their present form. Some may not survive in any form.

14. Bernanke openly solicits private equity firms to invest in banks. Is this even close to a remotely normal action for Fed chairman to take?

15. Bear Stearns was taken over by JPMorgan (JPM) days after insuring investors it had plenty of capital. Fears are high that Lehman will suffer the same fate. Worse yet, the Fed had to guarantee the shotgun marriage between Bear Stearns and JP Morgan by providing as much as $30 billion in capital. JPMorgan is responsible for only the first 1/2 billion. Taxpayers are on the hook for all the rest. Was this a legal action for the Fed to take? Does the Fed care?

16. Citigroup needed a cash injection from Abu Dhabi and a second one elsewhere. Then after announcing it would not need more capital is raising still more. The latest news is Citigroup will sell $500 billion in assets. To who? At what price?

17. Merrill Lynch raised $6.6 billion in capital from Kuwait Mizuho, announced it did not need to raise more capital, then raised more capital a few week later.

18. Morgan Stanley sold a 9.9% equity stake to China International Corp. CEO John Mack compensated by not taking his bonus. How generous. Morgan Stanley fell from $72 to $37. Did CEO John Mack deserve a paycheck at all?

19. Bank of America (BAC) agreed to take over Countywide Financial (CFC) and twice announced Countrywide will add profits to B of A. Inquiring minds were asking “How the hell can Countrywide add to Bank of America earnings?” Here’s how. Bank of America just announced it will not guarantee $38.1 billion in Countrywide debt. Questions over “Fraudulent Conveyance” are now surfacing.

20. Washington Mutual agreed to a death spiral cash infusion of $7 billion accepting an offer at $8.75 when the stock was over $13 at the time. Washington Mutual has since fallen in waterfall fashion from $40 and is now trading near $5.00 after a huge rally.

21. Shares of Ambac (ABK) fell from $90 to $2.50. Shares of MBIA (MBI) fell from $70 to $5. Sadly, the top three rating agencies kept their rating on the pair at AAA nearly all the way down. No one can believe anything the government sponsored rating agencies say.

22. In a panic set of moves, the Fed slashed interest rates from 5.25% to 2%. This was the fastest, steepest drop on record. Ironically, the Fed chairman spoke of inflation concerns the entire drop down. Bernanke clearly cannot tell the truth. He does not have to. Actions speak louder than words.

23. FDIC Chairman Sheila Bair said the FDIC is looking for ways to shore up its depleted deposit fund, including charging higher premiums on riskier brokered deposits.

24. There is roughly $6.84 Trillion in bank deposits. $2.60 Trillion of that is uninsured. There is only $53 billion in FDIC insurance to cover $6.84 Trillion in bank deposits. Indymac will eat up roughly $8 billion of that.

25. Of the $6.84 Trillion in bank deposits, the total cash on hand at banks is a mere $273.7 Billion. Where is the rest of the loot? The answer is in off balance sheet SIVs, imploding commercial real estate deals, Alt-A liar loans, Fannie Mae and Freddie Mac bonds, toggle bonds where debt is amazingly paid back with more debt, and all sorts of other silly (and arguably fraudulent) financial wizardry schemes that have bank and brokerage firms leveraged at 30-1 or more. Those loans cannot be paid back.

What cannot be paid back will be defaulted on. If you did not know it before, you do now. The entire US banking system is insolvent.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com

Via Cryptogon/San Francisco Chronicle

Gov. Arnold Schwarzenegger plans next week to slash the pay of more than 200,000 state workers to the federal minimum of $6.55 per hour to help ease the state’s budget crisis, according to a draft executive order obtained by The Chronicle on Wednesday.

The governor also will order an end to overtime pay for all but critical services, a freeze on state hiring and the immediate layoff of nearly 22,000 temporary, seasonal and student workers.

“As a result of the late state budget, there is a real and substantial risk that the state will have insufficient cash to pay for state expenditures,” the executive order states.

Schwarzenegger’s staff would neither confirm nor deny that the governor plans to issue the executive order, but sources said he could take action as early as Monday. The state, facing a projected $17.2 billion budget deficit for the fiscal year that began July 1, has not approved a budget.

“The governor is looking at a number of different options to ensure that the state does not run out of cash,” said Aaron McLear, a spokesman for the governor.

But administration officials, who asked to remain anonymous, said that about 200,000 of the state’s 245,000 workers, both hourly and salaried, will see their pay trimmed back to the federal minimum wage of $6.55 an hour, saving the state up to $1.2 billion a month. Dropping the temporary and short-time workers will save an additional $28.5 million each month.

While the layoffs could be made immediately, the pay cuts might not be completed until mid- or late August.

The proposed pay cut for hourly employees would take their wages well below the state minimum wage of $8 an hour. But a 2003 California Supreme Court decision allows the state to chop workers’ pay to the federal minimum when a state budget has not been enacted.