Tuesday, September 30, 2008

THE DAY AFTER

Today's rally is just about what I expected. Yesterday $1.2 trillion disappeared and today about half of that came back into the market as brand new money; money that was liquid on the sidelines. In a liquidity crisis, liquidity gets sucked up like water flows down. A lot of this money is probably from brand new investors who have been suckered in, believing they were bargain basement buying. There were probably also a lot of first-time buyers. If this pump and dump crashes again within a month or two it will be wringing the American small investor like a wet towel and it could happen several more times, each one sucking up the last bits of cash Americans have and will need to make it. Look at the market between 1929 and 1932 when the REAL Depression arrived. It's happened before and we are repeating history. Today is only 1929 and I pray we get to 1932 as quickly as possible. Then things can begin to improve, especially if we can get the world more focused on Peak.

I could not agree more with Suze Orman that now is the worst time to buy stocks; the dust hasn't settled; and the worst is not over. Now is the time to watch. Too bad she doesn't get Peak Oil.

Finding out what foreign governments are doing is like pulling teeth.They don't want to start a mad run on US assets but they need out fairly quickly.

QUESTION FOR THE DAY?

Given that many nations are already treating us "poorly"; what do you think international reaction would be if our standard of living remained the same and everyone else's tanked? Will Dick Cheney stand up and feel the wrath? Sorry, the deal's already been struck. We go down first by many painful rungs from which we will not return. That keeps the nukes sheathed (they hope), and they aren't all Russian.

MCR

12 comments:

Mark said...

It was a very predictable dead cat bounce. Watch that cat bounce time and time again over the coming weeks and months.

QuackAttack said...

If another bank fails...say Citi...will the inevitable be there for ALL to see...will the runs on banks then begin...or will the back and forth of the markets continue through more failures...it appears mainstream sources are generally starting to freak out a bit

Chris XVX said...

U.S. Senate to vote on bailout Wednesday:
http://www.iht.com/articles/2008/10/01/business/01bailout.php

Doesn't it have to go through the house first???

I'm spreading your name Mike. All the best.

Dan said...

John Weley Rawles at survivalblog.com recently posted that he received over 17K visitors on the day the markets crashed. I wonder if you are experiencing the same bump? If you are I imagine what is needed is your best advice on defensive preparations for the kind of collapse you expect.

Mikael said...

I don´t think they (Wall Street) will give up before the Game is Over..

There is no way back, and they know it..

And you MICHAEL was right from page 1 to 676..

Thank you for letting me in on your secrets..
To help me prepare
Mike2

Sharon said...

Have you noticed?

We now have a "rescue plan" instead of a "bailout."

Just change the name and everything will be OK...lol

marketTrader2 said...

Where is the peakOilSingles.com website? Or at least what county in America is being targeted as a takeover for Peak Oil governance? We will not survive if we have City Hall demanding high property taxes and beating us with their police squad! We must take over a county now in 3..2..1..

agape wins said...

I have never voiced a criticism of the other Blogers here, everyone is civil, constructive, & informative!
Which is more than I can say for other sites!

I am/have been, writing for the common worker, the one who sweeps the floor, & washes the dishes,
for the small business owner, who can not, or will not dispose of their assets, or remove their service from the market, the single parent, without a car! The masses who are aware, because of Mike, & others like him, those who hear "Gold", & "Stockpile", and feel helpless.
The handicapped who feel trapped!
We need to give them some hope, a life raft, a lamp, a FUTURE.

We are going to loose our way of life, many their lives, we have to share hope, unconditional LOVE
(Agape), or we will encourage many to take the easy out!
There is no better time than now For Amae to have been verbalized, millions are going to be expressing
"the emotion of feeling", in it's negative aspect , We, each of us can express it's positive side,NOW!!

Where would, WE, the "Crossers of the Rubicon" be today- if mike would have quit the first time he
was threatened ?

As Mr. Ruppert said in his last
post, "It's a good day to Die",
our Enemy despises that sentiment,
if applied, it will defeat them!!

karlof1 said...

Also introduceed is The No Bailouts Act by Rep Pete DeFazio and other Progresive Caucus members.

greatblue22 said...

Okay. One's $ is out of the stock market, so now where to put it? I don't know whether to run left or right at this point. Can't really buy a can of soup with a gold coin. Who will be able to give you change? If you walk up with a silver quarter, dime, etc., most people will not see silver, they will see the old American no-value quarter. Any constrcutive advice would be greatly appreciated.

Mark said...

I expect to see confiscation of gold and silver coins and bullion before this is over. History repeats, and confiscation of fungible precious metals is the next predictable step when corrupt rulers loot the nation before it goes under. The question is whether precious metal confiscation comes before or after the rumored Amero (proposed new fiat currency blending the dollar, Canadian Loonie, and Mexican Peso). A new fiat currency such as the Amero would simply allow the elite to begin the fiat currency ponzi scheme all over again for the next 100 years.

Anyone holding gold or silver in a safe deposit box should consider squirreling some or all of it away in a safe hiding place at home or elsewhere. And use 2 hiding places: never put all your eggs in one basket. Another alternative is the Australian Bullion Company, which charges a slightly higher premium for bullion, but they store and insure your precious metals for you.

whistlingGrizzlyBear said...

about Mark's comment, "It was a very predictable dead cat bounce. Watch that cat bounce time and time again over the coming weeks and months."

... This reminds me of the movie Re-animator, where the mad scientist brings a dead cat back to life.
http://www.youtube.com/watch?v=UCM7oG9UGKc]

great if you have a dark sense of humor. Good escape from Peak Oil concerns.

I harvested some wheat today. It's supposed to be a seed crop. All I had was about 6 five gallon buckets at a community garden.

I still have rice growing, but it looks like grass, the way wheat looks when it first grows. The rice is about 4 months old, planted in June, watered once a week, with mostly sunny weather.

For explanations of the financial pseudo-crisis (how can it be a crisis if it was planned ?) I suggest John Mauldin's section at
http://www.investorsinsight.com/
He writes long essays with charts & stuff.

Besides some basic explanations & trusting your own instinct, for example a feeling that a persistent huge balance of trade deficit and a fiscal deficit are somehow bad, even if Cheney is chanting "deficits don't matter", one other reference for understanding this is SATYAJIT Das. He's a really smart Indian guy that wrote some of the core textbooks on credit derivatives (available through Amazon, if you really want to subject yourself to some heavy reading). He has a video online somewhere, I can't find it, where he explains credit derivatives. I remember feeling informed & alarmed after watching it.

A lot of people use the metaphor of a bet to describe derivatives, but I wonder if insurance is easier to understand. Plus, credit default insurance is a form of insurance, then the finan. industry got creative & created credit default swaps and other things I still don't understand, e.g. CDO-squared's. The models on which the derivatives are based apparently do not account (in their pricing) for the onset of $1.5 trillion in losses related to mortgage-backed securities. It's sort of like selling flood insurance, and then the whole country gets flooded at once - it puts the insurance company in a "bit of a bind". Well, a lot of derivative contracts are coming due and the companies that sold them can't pay them. The companies that used them to hedge risk also have their own (mostly huge) problems, and were counting on insurance which is not forthcoming.

So the end result is a financial system that looks like some old towels I have hanging up in the bathroom, missing over 50% of their threads and so tattered they're visually interesting.

This has got to be the most spectacular financial train wreck in the history of person-kind. As Peak Oil onsets, the next time there's a bubble, there won't be enough energy to construct such an extravagant house of cards as the one that is collapsing now.