Karma's a bitch, huh?
Love,
Jefferson County, Alabama

Keep your eye out for a bailout attempt and your riot gear ready in case they try it. No more bank bailout will be accepted by the people. Period.

J0nx wrote..

No more obvious bank bailout will be accepted by the people.

FIFY

Unfortunately, many of the actions by the Fed and gov't are indirectly helping to bail out financial institutions, but the people don't recognize them as such.

Just like Corzine, buying European debt with an insurance policy that paid off in the event of default.

All these financial firms trade employees and ideas. Exact implementations may differ between hedge funds.

Thats why there is never only one cockroach.

It took approximately 14 months from the first of the Bear Stearns hedge funds to blow up until the fall 2008 panic.

I would start the clock this time at Halloween, 2011. This is when MF-Global went BK.

IF THE SAME TIMESCALE HOLDS, the panic will arrive about the time of the presidential election.

If the EWP is correct and the count being used by many is correct, this decline is the start of wave III. For those not educated in EWP, the bottom in 2009 was wave I in this count. There will be a wave 4 and wave 5 to follow, if the principal holds.

To start to understand how the Robert Prechter target could be hit, you might start out by going to Yahoo business and pullng up the Greek market, which is now trading near a dime on the dollar of the peak. Elephants go back the way they came and the US market went from around 600 on the Dow to the 14,000 plus peak of 2007. It takes some imagination to figure out how a market could drop that far, but it is clear the answer resides in the solvency of governments and the financial system.

The point of all of this is the **** is about to hit the fan and it is going to be a truck load hitting an airplane turbine size fan. Wave 3 will finish low enough that the wave 4 rally isn't supposed to reach the bottom of wave 1. This means the marginal few that bought the very bottom on March 9, 2009, if they held, would end up being under water. So much for us that missed it, but I venture the big buck is going to show up for another shot.

The trouble with this count is the market has had more lives than any cat ever. Confidence has rested on QE's and the promise for more QE's, but they haven't restored solvency. They have merely given outfits like JPM more money to play around in the street. Money is about to start being destroyed faster than the Central bankers are willing to put it back out there. In Europe, the ECB has taken about as much crap debt in the LTRO's as they can stand to take. The CB in Greece has taken about all the collateral it can out of Greek banks. All these banks are aware they have bills they have to pay to other players in the markets and that central bank funds come at the expense of performing assets.

All the bulbs are blowing out at once. I advise reading this post on acting-man.

http://www.acting-man.com/?p=16962

Near the bottom there are charts of CDS's on various countries, including the US. These swaps are moving bearishly in a rapid manner at this time. Risk off is gathering momentum. The capacity of the system to generate credit is failing fast. The slow down in China is going to astound people, as they can't keep building empty homes and buildings and if they stop, it is a huge portion of their economy. Any positive growth (idiots calling for 7.5%) will only come as a result of fictional counting methods, as their construction industry is a major portion of their economy. I would check the balance sheets of any major mining companies I owned if I owned any of them, as the debt on them threatens their very existence, as they rely on China construction to support prices.

I don't believe the metals markets know which way to go. I think the problem with gold is the near term is already priced in and the market is going to be at the mercy of the need to raise cash, the unit of contractural settlement. The most liquid things will be sold. Thus, I sense the current rally in gold is a dead cat rather than a true change in direction. I don't believe I would short here though, as the bottom has held to this point. A break of the 1500 range would be another matter. I do believe that anyone with cash to spare should take advantage of any break down in the price of gold, as the very future of paper money is threatened by what is going on at this time. I would pick a spot ($1300 might be a good place to start) for an initial position and accumulate on the way down. Enough to live on for a year would be a good place to start. If this is the start of a real credit crunch, the gold to silver ratio should near 100 to 1. It is a key signal that a crunch is approaching at somewhere around 58 to 1.

Mann, I was reading this post and didn't see who it was by and thought this has got to be a Mann post and sure enough. You are one of the key players here along with a few others like Asi, Nanna, etc that I love to read. Your input here is invaluable to me. Almost prescient in its delivery. Thank you.

Quote:

Money is about to start being destroyed faster than the Central bankers are willing to put it back out there.

What the inflationistas fail to realize is that The Benanke is not going to play bagholder for the benefit of the politicos forever, because Bondzilla will down him in one gulp, bones and all, if he does. Being digested whole. Not a pleasant experience...

Mann- re: gold....when dollars become scarce, gold will plummet. The only reason to own gold is if future money is backed with it. If not, it is not worth much at all. And even if money is backed by gold, it could still lose value if there is no demand for $$$$ creation and deflation persists as the supply of gold expands but dollars are not being created.

Fiat is not dead, but it will be in a coma for a while until a new system rises. Ultimately gold is a relic and cannot work longer term as its supply is limited on earth so humanity will leave it behind along with many other relics.