CITIGROUP

I guess a lot of people read us. No one saw it coming before I did. Here's some more Citigroup updates. It's only a matter of time now.

As always, the sooner the better.

http://www.reuters.com/article/bondsNews/idUSBNG39268320081031

http://www.fool.com/investing/dividends-income/2008/10/31/worlds-scariest-stock-citigroup.aspx

This weekend I am going to go and blast a lot of holes in some paper targets that never did a thing to me...

And pray we make it till Tuesday. It's too late for an October Surprise now, but Pakistan is probably going to get out of hand within the next two months.

Let's get through the election.MCR

CITIGROUP

I guess a lot of people read us. No one saw it coming before I did. Here's some more Citigroup updates. It's only a matter of time now. As always, the sooner the better.

http://www.reuters.com/article/bondsNews/idUSBNG39268320081031

http://www.fool.com/investing/dividends-income/2008/10/31/worlds-scariest-stock-citigroup.aspx

This weekend I am going to go and blast a lot of holes in some paper targets that never did a thing to me...

And pray we make it till Tuesday. It's too late for an October Surprise now, but Pakistan is probably going to get out of hand within the next two months.

Let's get through the election.MCR

http://www.reuters.com/article/newsOne/idUSTRE49T9VI20081031

MCR wrote:

'You know I'm disappointed that some on this blog don't have better discriminatory or analytical skills. Stop chasing these distractive pieces of disinfo. They are so very easy to spot. Here, all are expected to do a little background research on their sources. We do not endorse hate mongers on this blog. And decades of experience have taught us that Neo-Nazis never put out anything reliable."
----------------------------------

JO wrote:

It's worth bearing in mind the dictum of the great JFK researcher Peter Dale Scott: "Disinformation, in order to be effective, must be 90% accurate."

To avoid muddying the treacherous waters in which we move, it's best, when posting warnings concerning the amero or any other putative danger, to do the research to come up with the best sources. This will avoid distracting misunderstandings.

When in doubt, http://www.oilempire.us/ is a good place to start as evidenced by the following comment:

"re: Amero comment at blog:

there may (or may not) be any truth to the Amero Conspiracy Theory, but an ultra right wing racist is not likely to be a place to learn any actual facts about the financial meltdown.

http://www.oilempire.us/map.html

Disinformation about Katrina

Media coverage of violence in New Orleans after the storm was greatly exaggerated and was used as the excuse for decreasing outside assistance to the survivors at their most vulnerable point. A few websites with a history of hoaxes (unintentional or deliberate) claim the levees were demolished -- the first was a white supremacist (Hal Turner) with a track record of violent threats (not investigative reporting). While Louisiana has a history of levees being breached during floods (ruin your neighbor to save yourself), the levees broke at the height of the storm, as predicted by many media articles for many years. It is unlikely the levees were deliberately breached, but it is true that New Orleans, if rebuilt, will have been ethnically cleansed of its poorest citizens. It is true that the US Air Force has researched weather manipulation for decades and boasts of a desire to control the weather by 2025 (exactly how much success they have had with this research is not publicly known). However, weather modification claims about Katrina distract from the fact that these superhurricanes show that climate change is here.
-----------------------------------------

http://www.alternet.org/rights/74255/

Computer Hackers Allege That Notorious Neo-Nazi Radio Host Is on FBI Payroll"

MCR wrote:

U.S. families brace for holidays without a home--

Take a second and read this. Sit with these families. Let's just stop a minute and walk a couple of steps with these people; the ones we all tried so hard to warn.

http://www.reuters.com/article/domesticNews/idUSTRE49T01O20081030?sp=true

MCR wrote:

THE RALLY THAT WASN'T -- BACKING THE ECONOMY INTO A FATAL CORNER

Instead of cutting rates by .75 points today the Fed cut by .5. What effect did it have on the Dow?

A few years ago Japan mistakenly cut rates down to nothing. They couldn't give money away. We're moving sharply in the direction and the Fed knows it will have to cut again and again to simply delay the inevitable. The Fed Funds rate is now 1 per cent.

But when rates get to zero there's nothing left to cut is there? Usually that's the time when there must be enough left to cut to do some good. I see this short-lived rally as a failed last ditch effort to help McCain. Also as pump and dump, pump and dump.

In the meantime the auto industry is shaking out. Kerkorian is liquidating Ford stock and GM and Chrsyler look certain to merge. That means that Ford must go down, and I suspect it will be very hard. Just think of all the ancillary shutdowns that must follow: parts manufacturers and suppliers, trucking companies, dealerships, tire companies, steelmakers, car rentals, ad infinitum.

What will that do to the Dow? How many jobs go then on top of the 750,000 already lost and the maybe million more that are already in the pipe to go from the lack of spending thorughout the economy.

A bottom in the Dow 5000s look pretty good right now, but maybe not. It might go lower. It's just like what happened when they took oil prices that should have been around $110 a barrel and spiked them to$147 in the name of demand destruction. A storm was unleashed that couldn't be controlled. It still can't. Once they saw the effects ofthe $147 spike they had to shut things down faster than I think they had planned. Now, it's just fire-sale, grab-what-you-can-and-run time for TPTB. That's what happens when you play with fire.

CITIGROUP DUCKFEATHERS

As I recall, Citigroup and Ford have had a long history going back to the financing for the Model T. I also seem to recall that somewhere Citi bought Ford's Finance arm, but I might be wrong there. I'm not going to look it up but I wonder which bank handles Ford's banking services. So which bank would lose Ford's cash -- the money it useswith fractional reserve banking to create $9 or more in loans to buoya drowning balance sheet?I'm not going to take time to look all this up, but I just grinned a little.This will probably eventuate in a US gov't bailout of Ford and/orCitigroup. Let them fail or save them; either way, it's the anvil thatbroke the camel's back.


Drum roll please. Can someone please shout, "Timber!"?

http://money.cnn.com/2008/10/29/news/companies/citigroup/?postversion=2008102914
*****************************

JO wrote:

Nouriel Roubini's Blog
Peak Money
Spy Fears: Twitter Terrorists; Cell Phone Jihadists
World's Mammals in Crisis (apart from the economic)
McCain's Real Petraeus Doctrine
US Special Forces Counter-Insurgency Doctrine
The Woman Greenspan, Rubin and Summers Silenced
GeoEye Releases First Half-Meter Color Satellite Image
Army of the Republic (novel)
From the book's jacket: "Read it while it's still fiction."

MCR wrote:

THE RALLY THAT WASN'T -- BACKING THE ECONOMY INTO A FATAL CORNER

Instead of cutting rates by .75 points today the Fed cut by .5. What effect did it have on the Dow?

A few years ago Japan mistakenly cut rates down to nothing. They couldn't give money away. We're moving sharply in the direction and the Fed knows it will have to cut again and again to simply delay the inevitable. The Fed Funds rate is now 1 per cent.

But when rates get to zero there's nothing left to cut is there? Usually that's the time when there must be enough left to cut to do some good. I see this short-lived rally as a failed last ditch effort to help McCain. Also as pump and dump, pump and dump.

In the meantime the auto industry is shaking out. Kerkorian is liquidating Ford stock and GM and Chrsyler look certain to merge. That means that Ford must go down, and I suspect it will be very hard. Just think of all the ancillary shutdowns that must follow: parts manufacturers and suppliers, trucking companies, dealerships, tire companies, steelmakers, car rentals, ad infinitum.

What will that do to the Dow? How many jobs go then on top of the 750,000 already lost and the maybe million more that are already in the pipe to go from the lack of spending thorughout the economy.

A bottom in the Dow 5000s look pretty good right now, but maybe not. It might go lower. It's just like what happened when they took oil prices that should have been around $110 a barrel and spiked them to$147 in the name of demand destruction. A storm was unleashed that couldn't be controlled. It still can't. Once they saw the effects ofthe $147 spike they had to shut things down faster than I think they had planned. Now, it's just fire-sale, grab-what-you-can-and-run time for TPTB. That's what happens when you play with fire.

CITIGROUP DUCKFEATHERS

As I recall, Citigroup and Ford have had a long history going back to the financing for the Model T. I also seem to recall that somewhere Citi bought Ford's Finance arm, but I might be wrong there. I'm not going to look it up but I wonder which bank handles Ford's banking services. So which bank would lose Ford's cash -- the money it useswith fractional reserve banking to create $9 or more in loans to buoya drowning balance sheet?I'm not going to take time to look all this up, but I just grinned a little.This will probably eventuate in a US gov't bailout of Ford and/orCitigroup. Let them fail or save them; either way, it's the anvil thatbroke the camel's back.


Drum roll please. Can someone please shout, "Timber!"?

http://money.cnn.com/2008/10/29/news/companies/citigroup/?postversion=2008102914
*****************************

JO wrote:

Nouriel Roubini's Blog
Peak Money
Spy Fears: Twitter Terrorists; Cell Phone Jihadists
World's Mammals in Crisis (apart from the economic)
McCain's Real Petraeus Doctrine
US Special Forces Counter-Insurgency Doctrine
The Woman Greenspan, Rubin and Summers Silenced
GeoEye Releases First Half-Meter Color Satellite Image
Army of the Republic (novel)
From the book's jacket: "Read it while it's still fiction."

MCR wrote:

CITIGROUP -- MARKETWATCH PUTS SOME WRITING ON THE WALL

Dagnabit, at least we know who said it first.

http://www.marketwatch.com/news/story/story.aspx?guid=%7B58fa552e-05b7-4f2e-b0f5-7dd531f414cb%7D&link=www.247wallst.com/2008/10/citigroup-c-won.html

That Harvard economist; the one they have called a prophet for prodicting all that I predicted... He will get his rewards in consulting fees and prizes. My success has been measured, from the start, by the number of lives we saved.

His story is remarkably similar to mine. I had never heard of him until today. I wonder if he's been reading me and -- if I thought it was worthwhile -- I'd might go see who wrote which stories first.

http://business.timesonline.co.uk/tol/business/economics/article5014463.ece
*********************
JO wrote:

Nouriel Roubini's articles have appeared in Le Metropole Cafe for many months, if not years. He broke into the mainstream in August with a profile in the New York Sunday Times Magazine.

It would seem that while his predictions were accurate, he made the mistake of timing them too precisely so that people who fixated on the dates alone triumphantly pronouced him wrong.

Dates are obviously the hardest aspect of predictions to pin down. It's a mistake to try to predict on the micro-level; there are too many unknowns and variables. And critics who don't understand the general principles one is promoting instead focus on minutiae, looking for trouble.

The Daily Reckoning, for instance, dispenses with dates but says that the DOW will hit the bottom at around 5000. It then performs the far greater service of explaining why it thinks so.

And the metaphors are worth everything: "a combination of fiscal and monetary stimulus in the early 2000s produced a huge party in the financial sector, with most of the liquor coming from residential mortgages. Banks all over the world got in the bubbly spirit. Too bad. Now, they’re all reporting in sick and calling the doctor."

Of course Mike's PG 13-rated description the other day was the sickness metaphor to end all sickness metaphors, literally.

MCR wrote:

THE HIDDEN GOLD PREMIUM -- Congratulations to Jamey Hecht


Last night a whole lot became clear about what's going on with gold prices. Not everything is explained but much more of the map has been filled in.

I was at the wedding of former FTW writer Jamey Hecht who also edited"Rubicon" for me. He and his new wife Sava were just beautiful together and the ceremony, at a time of great fear, was a welcome relief for all of us. It was probably the most beautiful wedding I've ever attended and I know we all send Jamey and Sava Hecht our best wishes. They are an amazing pair.

Seated at my table was an executive for a precious metals company. What he told me was something I have seen suggestions of, but nothing made it as clear as his explanation.

1. There's virtually no gold out there to ship, at any price.
2. Major dealers are paying some serious premiums to actually get physical gold. I was told that currently the major vendors are paying a $70 an ounce premium over spot price when they order lots of 5,000 or more ounces. Order fewer than 5,000 ounces and the premiums are much higher and even then there's no guarantee of delivery. So what's being charged small retail customers who just want an ounce or two? The best answer I could come up with is "whatever the markets will bear". So the so-called posted spot price is now meaningless and I smell a possible (I emphasize "possible") embryonic black market for gold emerging. That is something I hadn't expected for a couple of years yet.
3. Even with the premiums there is so little actual gold available to ship that half the big companies have stopped writing orders because they don't know if they'll ever be able to deliver. The other half are still writing orders on the hopes that they will get some gold --sometime.
4. The credit crash has made it difficult for large vendors to get float loans to finance purchases and expensive delivery and insurance costs. The only gold out there is dealer-to-dealer or whatever is being sold by private holders.

The problem appears to be global.

That means that I could take one of my Maple Leaves, add maybe $100 to the spot price, then add the standard Maple Leaf premium of say $10 anounce and then go out and demand an even higher price based on which dealer needed the coin the most. I can easily add $120 an ounce over spot to arrive at a reasonable market price. The executive's words were "Nobody is paying attention to the spot price anymore. It doesn'tmean anything."

That means that gold is being hoarded and kept off the market. There's only one reason for that IMO. Sure, one could argue that the hoarding is intended to drive up prices. But is that happening? Nope. Prices are low. What this says to me is that some with insider access are holding gold off the market pending a large breakout. When I suggested this the executive agreed instantly. It would have been like selling Iraqi oil at $40 a barrel instead of leaving it in the ground to sell at $80 or $100. Of course, that brings us smack dab into collision with the fact that plummeting oil prices are doing nothing to increase demand. TPTB and the economy itself have no choice but to unwind completely now. The plug was pulled too hard when oil hit $147. Whether that was inadvertent or intended we have yet to see but anyone hoping that falling oil prices will stabilize things is drinking some real bad Kool Aid.

Gold's breakout will be much different than what's happening with oil.

So we have opium/heroin/cocaine and gold being withheld from the markets at a time when cash is in short supply and credit is virtually non-existent. That confirms my position -- a position shared by many economic experts -- that the worst economic news is yet to come. The executive agreed that a major breakout in gold prices is imminent.

Yes, as one poster observed on the blog, things are happening very quickly. This next week is likely to be very tough. When I saw theWells Fargo chairman suggesting no bottom for six months I wondered how it could possibly take that long at the rate things are going."What'll be left in six months?", I asked myself. It's hard to say. I shared my analogy with the exec about how it seemed like the markets had dysentery and were on the verge of evacuating and he loved it."That's exactly it", he responded. "Very little is making sense anywhere and almost no one understands where they really stand. People are trying to redefine their positions at a time when there's nothing solid to stand on."

By definition then, we're a long way from the bottom. Because when the bottom is reached, everyone knows exactly where they stand... on the floor.

Right now all I'm focused on is getting through an election and an inauguration. I don't see any possible chance that anything remotely looking like a bottom -- with capitulation -- will happen before Bush and Cheney leave office. That's at least three months. It will be interesting to see if a strong psychological rally begins on November 5th. It will be a hollow rally and another round of folks going back to the bar after the Titanic has already been hit by the iceberg. In the meantime, those who get it are busy building lifeboats.

Stay low and stay dry. Make yourselves economically "small" in terms of exposure. I really believe the scariest part of this ride is yet tocome.

Oh, and for the person who yelled out that they wanted me to talk about ROOT CAUSES... That's all I have ever talked about. I wrote one book on them and published a newsletter that did nothing but talk about them for eight and a half years. You'll have a new book that talks more about them early next year. It will also more fully address the infinite growth paradigm.

Until you change the way money works, you change nothing. Money is still trying to work the way it has for more than a century -- but it's finding the resistance to that increasing as one paradigm ends and a new one begins. Let's pray that Alan Greenspan has an epiphany and suddenly remembers and understands what he did to help create this. I wonder if it will make him sleep better. Somehow I think he's sleeping pretty soundly. He did what he intended to do.

******************

JO wrote:

Some bullion now comes (if it comes at all) with a delivery period of up to three months and a hefty disclaimer: If they can't get a hold of the gold, you have the option of waiting another month or getting your money back; either the current price of the gold or the price when you bought it, whichever is higher.

What this means, of course, is that the dealers expect the price to remain suppressed for at least another three months, til the inauguration.

The schizoid disconnect between the suppressed price and the scarcity, even the unavailability of gold has been covered by GATA, the Gold Anti-Trust Association whose website, for those who might be new to this game, is http://www.gata.org/

PS: Sixty Minutes did a report this evening on Credit Default Swaps in which they asserted that, "Nobody knew how many there were."

Perhaps they should read another GATA-affiliated website, www.lemetropolecafe.com which provides the following on derivatives:

"as of December, 2007 there were:

$9 trillion Commodities Contracts (excluding gold) outstanding
$56 trillion Foreign Exchange Contracts outstanding
$393 trillion Interest Rate Market Contracts, outstanding

http://www.lemetropolecafe.com/chien_du_cafe.cfm


Congratulations, Jamey and Sava!

NOW HERE'S A REALLY INTERESTING READ.

Well Fargo's Chmn thinks a lot like we do. Very revealing about his belief that a hard-fast bottom is best. He gets that. For him, that would be six months from now. Wow! But all he wants to do is reignite the old infinite growth paradigm and he doesn't get Peak Oil.

http://www.businessweek.com/print/magazine/content/08_44/b4106000649486.htm

MCR

QUOTE OF THE MONTH

Peter Schiff today on CNN. My jaw hit the floor and I yeehaed like the Dodgers had made it to the World Series. -- "This is a phony economy. There's only one thing to do and that's tear it down completely and build a new one from scratch."

We aren't the only ones who get it. Now if the damned Libertarians would just get Peak Oil. There's an alliance that just might save the world.

WARNING: THE FOLLOWING MAY CONTAIN LANGUAGE THAT IS OFFENSIVE TO SOME-- PARENTAL CAUTION IS ADVISED

As a writer I have always thought it my highest duty to most accurately describe events as they actually are; hopefully in the fewest possible words. I watched the markets with a microscope all day today. There is only one way to describe what I saw. Let's begin with a commonly accepted term: "The markets took a dump". What I saw today was markets that are deathly ill with dysentery. In the natural world it was a leading cause of death. All day the markets leaked and squirted and the internal agonies were all too apparent, as were some very strange noises. The eruption is inevitable; the evacuation must happen. Distance, splash guards and protective gear are recommended. Hang on to your gold because the Fed is flat out telling people a .75 rate cut is coming.

IMPLOSION PLUS -- Turn on the printing presses while prices are falling rapidly, at a point in time when nothing has shaken out. Do it when the biggest crashes are still coming. The snake is eating its own tail. That's my original line from maybe eight or nine years ago. Now the bite nears the heart.

Citigroup Update

This could be big and it could hurt them real badly. One of the reasons why I watched Citigroup so closely from the start is that I have been documenting their criminal behavior for eight years or more; especially vis a vis drug-money laundering. Sure, there are lots of lawsuits out there. But when TSHTF I have always looked at the most conspicuously dirty player first. That's Citigroup. There was nothing about them for days when the crash started three weeks ago. Silence. That told me a lot. It told me that Citi was in heavy play behind the scenes and under the carpet. Citi is the one that can pull the plug. You can bet that the people filing this lawsuit have some damn good evidence. "Those who win in a rigged game get stupid". That was not my original line.

http://newsticker.welt.de/index.php?channel=fin&module=smarthouse&id=799319

MCR

MCR wrote:

I LOVE TOM WHIPPLE!

For years now he has demonstrated the clearest grasp and most articulate voice on understanding what Peak means and how it plays out. He makes me feel like I'm playing in the best infield in baseball.

This is what I wrote about today. He wrote about it too because we can feel how many just haven't gotten it yet and we both knew what your laments would be. I think I can speak for Tom when I say that our biggest fears are that not enough people will get it in time.

Inside joke for Tom: I love ya babe! [Spoken like a true case officer,which makes me worry that I may have met one too many in the last thirty years.]

The CIA is Wall Street. And we know from declassified documents that the CIA understood and was following Peak Oil way back in the 1970s.

So, here's my team: Whipple at third, Ruppert at short stop, Heinberg at second, Simmons at first, and Campbell at the plate. Robinowitz is in left field (no pun), Darley in center, and Quinn-Bachman in right. Kane is third base coach. Rice Farmer is first base coach.

Stan Goff is the umpire.

Jenna sweetheart, you're the one sitting in the dugout spitting all the time. (Oh, am I going to hear about that. Pray for me fans.)

Now everyone go read Whipple before I get cranky.

http://www.fcnp.com/index.php?option=com_content&view=article&id=3670:the-peak-oil-crisis-in-the-eye-of-the-storm&catid=17:national-commentary&Itemid=79

JO wrote:

You forgot Kunstler as pitcher, sweetheart.

MCR wrote:

GOLD AND OIL PRICES

I've seen a few postings the lead me to think that panic and fear are creeping into people's thinking. Perhaps I haven't been clear enough. And let me say that everyone should take a breath. This is going to be a long process and there's too much urgency creeping in to people's thinking. If you cave in now you won't stand a chance against what's yet to come.

GOLD

For the longer term (maybe 30-50 years) I do agree that gold by itself may not be a permanent answer to anything. It may prove to be but my vision doesn't reach that far. From 2004 through the present day, however, I have recognized something that many don't seem to grasp and I have said it clearly in my lectures and writings.

Too many people see that the end of the petroleum-industrial age is here and are planning and preparing to live in a post-petroleum world. That is a big mistake. It's great to start repairing your soil, plant a vegetable garden, reduce debt etc. But what lies before us is what I have called the "Transition Period" -- a period of turbulence, uncertainty, possibly violence, and massive social and economic dislocation. However money will be defined in the future, it will most certainly have to have one quality. It must be tied and limited bysomething tangible that is also finite -- like energy is. Historically, over maybe six thousand years, gold has been that accepted refuge and it still is. The thing with gold is that it is known, recognized and accepted already. Consider the advantage of gold as opposed to say, trying to get people to accept something new as money. That work is already done with gold. Of all the options available, I have chosen gold as a PART of my plan to survive the"Transition Period" because if one doesn't get through that phase,whatever follows is moot. This is not for just the "rich and famous" as someone said. Anyone can start buying small amounts of gold for a few hundred dollars. No, one cannot eat gold. But one can carry it. One can measure it. One can trust that it is what it is; an unreactive metal that is always the same weight and same measure. One can trade gold for other things. It doesn't require someone to go and look up in tables or other material to find out what it is. It is simple and it is universally recognized as a store of value. Gold is part of a recommended mix of many survival needs, not the only thing I recommend. During the transition period it will offer choices that few other commodities, with similar characteristics will. It is by far not the only tool in my tool kit, nor should it be in yours.

OIL PRICES

I guess I am a little disappointed that so many folks don't seem to understand what's happening with oil prices. It's been on the map for a long time. TPTB are losing their control as must happen as the paradigm shifts. The $147 price seen this summer broke the backs of over-extended consumers. Demand destruction was too successful. Everything that has happened since was triggered by that, and I repeat that I believe the July price spike was intentionally induced.The collapse hasn't even begun to hit home. Millions more are going to be unemployed and the business shut downs have only just begun. The trickle-down effect hasn't fully hit home. The economy has crashed so far, so fast, that even plummeting oil prices aren't reigniting consumption. Unemployed people don't drive as much no matter what the gas price is and they won't until they have a job again. The problem is that most of them won't have jobs again. All the economic predictions are saying that waves of shutdowns, layoffs and firings are still coming. Airlines are almost giving away seats because flights are getting empty. I just talked to someone at the dog park who flew round trip to NY for $349 two weeks ago. Then I spoke to someone who had just bought a roundtrip to Chicago for only $179. As all the Peak Oil experts have been saying for years, a collapse in oil prices is a very bad thing that makes the so-called Bumpy Plateau look like the Rocky Mountains. Why? It de-inecentivizes investment in alternative energies and delays any efforts to wean ourselves from oil. Oil below a certain price makes it no longer economical to invest in wind, solar, tar sands, deepwater or any of the more expensive alternatives and the things that can tide us over. Those regimes are already showing signs of shutting down. A couple of years ago Matt Simmons suggested to me that setting a floor of $100 for oil was a good thing. I agreed completely. We must have some stability to prepare. It is clear now that falling oil prices are not going to stabilize the economy, so we shouldn't look there. They are only going to make the future less safe for all of us. That being said, the recents hints that OPEC may cut production are a good thing. They will help conserve a resource for which we still haven't got an alternative.

MCR wrote:

CITIGROUP Update

I told you so...

http://uk.reuters.com/article/bankingfinancial-SP/idUKBNG38495120081022?sp=true


GOLD

Someone asked a pretty good question about gold.

I wouldn't worry.

In the history of mankind gold has been the ultimate flight capital after food, water and weapons. Long time FTW readers will recall how thoroughly FTW documented the manipulation of gold prices; primarily to avert fear and/or panic in the markets. We all owe a great debt of gratitude to GATA for so many years of meticulous research and education.

So should you be worried or surprised to see that at a time when the markets are imploding, the gold price being ruthlessly suppressed? All financial conventional wisdom says that gold should be soaring and God only knows which Peters they are robbing to pay Paul to do it. In my opinion, the counterintuitive and counter-rational movement in gold only suggests that the ultimate crash will be harder and deeper than it should/could have been. In desperation, those who have rigged the markets are dooming themselves -- and maybe us too. The longer gold's breakout is delayed the closer it will be to an at-time-of-death breakout and the more astronomical the price rise. It's like pushing a volleyball deeper underwater. The deeper it goes down, the higher it will explode out of the water when released.

Remember talking about capitulation? Well that's not just for stocks. True capitulation will also be the moment in time when gold is free to move to its rightful place.

You hold on to your stocks.

I'm keeping my gold, thank you.

MCR writes:

WHAT THE HECK IS GOING ON HERE?

Oh, baby. This is far from over.

http://www.reuters.com/articlePrint?articleId=USTRE49K8NM20081021

MCR
***********

JO writes:

Re the recent exchange over a blog comment which asked about two pseudo-journalists whom FTW emphatically does not endorse:

While collecting articles and writing for the blog for the last two and a half years, as well as reviewing comments before they get posted, I've been aware that some comments contain mis- or disinformation. The disclaimer to the right was posted to distance ourselves from them.

I've tended to err on the side of inclusion because:

1. I believe that the majority of the writers are innocent and are asking for direction.

2. Even though the guilty ones are not seeking enlightenment, we're not afraid of them. They tend to get defeated in arguments from other commenters which is enlightening all 'round. Sometimes 'wrong' questions can elicit good responses; witness Mike's comment below.

Of course, there's a limit. I'm probably inviting a deluge of nonsense from people who want to test this policy to see how far it will go. You won't see the worst of these comments and I'm not saying "Bring 'em on." Just.... Sigh.

DISCLAIMER ON ANTI-SEMITISM AND GOVERNMENT DISINFORMATION

Recently someone posted a comment referring our readers to two known disinformation agents, both of whom have expressed deep anti-Semitic, bigoted and racist sentiments over many years -- leaving a deep and well-documented record. One claims no plane hit the Pentagon and the other claims that he can prove that Peak Oil is a lie. One was kicked out of almost every movement he has participated in over the last six years for intentionally disruptive behavior and outright lies. I can prove that. The other is an advocate of alien visitations and many things that smack of distractive and disruptive "journalism" for the sake of personal profit.

We are seeing that the American people are growing wise to such tactics in the presidential campaign. We are also seeing that people are rebelling against such tactics. I cannot stop people who wish to tarnish me/us by posting links to racist or hate propaganda on other sites. But this is my blog, with my name on it. The work that all of us from FTW and I have done will not be tarnished by this kind of bullshit.

I am giving fair warning: Any links posted as comments on this website to these kinds of messages will be removed. There is no room for hatred or bigotry anywhere on this blog. We assume that those who participate here are educated and smart enough to avoid such references. Those of us who "get" it will not be slowed down by ignorance, stupidity, hate, or those who continually ask"college-level" discourse to be slowed to third-grade babble for their pleasure.

Complain all you want to, but on this blog, my decisions are final. The evil and the danger we are facing as a species transcends all human descriptors. Going out and "eliminating" all "Zionist bankers"will not solve the world's problems. The evil and the test lies within each of us -- all humans as a species. The biggest battles we fight are in our own souls.

Take your hate and stupidity elsewhere. It has no place here.

MCR

MCR wrote:

THIS HAS BEEN ON THE MAP FOR A LONG TIME
http://www.reuters.com/article/newsOne/idUSTRE49K0VH20081021

I loved Dmitry Orlov when Dale Allen Pfeiffer introduced me to himabout five years ago. FTW was the first to publish him. So, if it looks like collapse; walks like collapse; smells like collapse; and there's some collpase s--t laying around...

Do ya think???

**************

JO wrote:

The Secret War With Iran

According to the Federation of American Scientists, this is a new book translated from the Hebrew and based on interviews with Israeli intelligence officers which contains new information including the following:

Hizballah, acting as a proxy for Iran, temporarily refrained from taking American hostages between June 1985 and September 1986 in support of the arms sales deal between the U.S. and Iran that later became known as the Iran-contra affair.

The CIA is credited with 'brilliantly' dismantling the Abu Nidal Organization, 'sewing discord among its members by getting them to believe that they were being robbed by other operatives.'

Money as Debt
Video introduction to how the economy works

Central Banks All But Stop Lending Gold
The Seventy-Five Minute Market Rescue
Tongue-in-cheek article by John Crudele, intrepid gumshoe on the trail of the Plunge Protection Team.

Everything You Never Wanted to Know About Warren Buffett
A supposedly tell-all biography which is anything but.
GOP in Push to Erase Voters; Purges ACORN in Drive to Register Low Income
Flow
Film about water

Jerome Corsi Deported from Kenya



Plus.......

Permacultre: Beyond Green

This Friday October 24, 2008 at 6:30:

Henry George School of Social Science,
121 East 30th Street
between Park Ave and Lexington


Permaculture is a design system for creating sustainable human environment. On one level, it deals with plants, animals, buildings and infrastructures. However, permaculture is not about these elements themselves, but about the relationships we can create between them by the way we place them in the landscape.

The aim of permaculture is to create systems that are ecologically sound and economically viable, which provide for their own needs, do not exploit or pollute and are therefore sustainable in the long term. Permaculture is based on the observation of natural systems, the wisdom contained in traditional farming systems and modern scientific and technological knowledge.

With Mr. Philip Botwinick and Ms. Sharon Kimmelman of Local Energy Solutions (a Not For Profit organization educating about the interconnectedness of Energy, Economy and Food)


The Two Faces of Money

Saturday October 25, 2008 at 7pm

Park Slope Food Coop,
782 Union St.
(btw 6th and 7th Ave)


Food and Money have a long history. In fact, up until World War II, tea bricks were used as money in Siberia. Today, unfortunately, neither system is sustainable, but thankfully that’s beginning to change – for food at least. Money is a daily part of our lives too, but why is there no movement for a sustainable monetary system, worse yet, few people understand it. Join us for an opportunity to better understand our current monetary system – its origins, evolution, the current economic crisis, and how a sustainable monetary system is possible.

THE NUMBER OF MORTGAGES vs.PROPERTIES

I'm glad that several of you asked about my comment. It shows you're paying attention. I'm not sure how much help I can be for reasons out of my control.

I started receiving the warnings about the number of mortgages from Catherine Austin Fitts -- former Assistant Secretary of Housing -- in late 2004 or early 2005. That was followed by several key stories which had that choice morsel buried (as usual) in later paragraphs. Unfortunately, when FTW's computers were smashed on June 25, 2006 I lost the ability to locate those stories. As we reloaded new computers with all of my research from backups, the new IT tech changed all the dates on all of my 20,000+ stories to July 10, 2006 and the file names were changed in many cases. File trees were rearranged and my ability to search was really impaired. I just entered "mortgages" in my search engine and came up with more than 300 archived stories. I just can't go back and read through them all. In all I have perhaps 4,000 separate research files totalling 4 Gigs.

However, throughout 2005-6, I cited these alarming discrepancies in all of my lectures and I believe it's in my video "Denial Stops Here"compiled from my 2004 through late 2005 public appearances. I used Powerpoint slides and probably there's a slide in there with one of the stories supporting this.

I no longer communicate with Fitts in any way. The reasons are between her and me. Yet I have never had reason to doubt what she told me on this subject and there were substantiating stories. It was clear that the same addresses were being used on multiple mortgages and that fictitious properties had also been created to blend in and pump the value of bundled mortgage-backed securities. This pattern first appeared way back in the S&L crisis in the last years of Bush I. The RTC (Resolution Trust Corporation) was used to destroy or hide evidence and I would say "literally" complete and finalize the looting that happened then. The S&L crisis was, I believe, a trial run for what's happened this year. With time I am more and more convinced that the Bushes et al have known that Peak Oil was coming for a long time and have planned to loot wealth, keeping it out of the hands of those who could/would use it constructively. Note that both economic crises happened at the very end of Bush regimes. It has been the"cashing-out" process for their "base".

MCR

Read the last sentence. Either Citigroup is scrambling to clear out of positions that might sink it, or we are witnessing one of the greatest financial crimes in history; or both. TPTB always try to destroy the evidence. Remember, there are three times more paper mortgages out there than actual properties. The government is paying for the fictitious ones too.

http://www.bizjournals.com/buffalo/stories/2008/10/13/daily26.html?t=printable

Could Citigroup be one of the mechanisms for the shutdown rather than a victim? Why then did Buffet prevent it from getting something it needed so badly? Time will tell.

-- MCR

Citigroup Posts Loss Amidst Credit Costs

THE DAY OF THE LAST DEBATE

Pump and dump. Pump and dump. The heart beats its last few beats. Blood hemorrhages. Today the Dow lost more than 700 points. Again. Each time it goes up that is fresh money going in. Each time it sinks again that is the fresh money going out.

There has been no capitulation.

The economy of the United States is being destroyed beyond redemption. -- Good.

Only an entirely new kind of economy can emerge in the face of Peak Oil.

Last week I was flipping through the channels and I stumbled across George Soros (gag!) being interviewed by Bill Moyers (gag!). Soros was right when he said it was going to be a bad depression. He was also correct when he said that it was far from over and that this was the end of an era.

However, he was quite wrong when he held up a copy of his new book "A New Paradigm" and then described basically the same one we have now. We -- those who understand the issue -- will not permit a prince of the old paradigm to be the architect of, or perhaps a king in, the new. I called for a New Paradigm two and a half years ago in a speech on the same stage where Abraham Lincoln once spoke; at New York's Cooper Union... Years before that I was out-and-out plagiarized by Gore Vidal when he slapped his name on the original research and writing I had done on Zbig's book "The Grand Chessboard". I can live with that. But we will all be damned if we allow George Soros to define the next epoch of human history for us.

-- What in the World Is Happening With the Global Drug Trade?

Over the last few months I have tracked major seizures of cocaine bothin the Pacific and the Gulf. Three separate seizures involved semi-submersibles of small submarines that don't go under the water but sink flush with it to eliminate radar signatures. (Doesn't work well for satellite surveilance.) Each of those seizures was 3,000 metric tons or more. Then I found that the DEA had recorded earlier seizures this year totaling more than 4,000 tons. The last time I checked (2000), the U.S. was consuming only 6,000 metric tons of cocaine a year. What gives? There is no evidence I know of to suggest that consumption has grown. It's counterintuitive. I don't have the contacts I used to but I can tell you that in L.A. there is virtually no powdered cocaine to be found and it's been that way for months. There is a litle crack out there but I suspect that may be crystal meth -- "crank". Meantime Mexico has errupted into a virtual drug-defined civil war with hundreds, if not thousands, murdered.

Then today Matt Savinar sends me this story about how the world's heroin supply is disappearing:
http://www.bbc.co.uk/blogs/thereporters/markeaston/2008/10/map_of_the_week_the_mystery_of.html. Someone is stockpiling heroin. Heroin is the base drug of morphine. The opium poppy, papaver somniferum, is the source of opium, the most commonly used, and most effective natural pain killer in man's history. Heroin is made from opium. I fear that opium and heroin have become new hot commodities and there is no way that that much opium/heroin could be intended for "recreational" use -- or even to supply addicts. It seems that someone is banking heavily on a lot of people being in a lot of physical pain. -- Good job Matt, as usual. I can't explain what's happening wth cocaine. Is it being hoarded until the price goes up? Not likely, because no one will have money tobuy it in just a few short months. But then again, if it's dirt cheap,say $75 a gram...

I repeat that by itself, all the cash from the global drug trade is not relevant to the current economic crisis. I last estimated all cash generated by illegal drugs at aruound $600 billion a year. By itself, the Lehman bankruptcy was $750 billion or so. Then came the bailouts and the trillions in equity that has been destroyed.

I don't have time to do the research but I'm sure we'll find out what it means soon enough I suspect. This all smells so... , so... BUSH.

Maybe we'll see all the drugs turn up right after the markets bottom. That could squeeze a few final dollars out of the corpse.

-- The Last Debate

Thank God it's over. No major changes. McCain reminded me of Joe McCarthy when he attacked. McCain's face is saved. It was his best performance. Both men lied about energy. It's over.

Now all we have to do is to get to, and through, the election.

MCR

P.S. - Where, oh where is Citigroup? I see that they're in for a chunk of the bailout but the silence is deafening.

-- MCR

Revolution and Victory Gardens

Jenna Orkin


Revolution is in the air. Even Ben Stein says so.

The former Nixon speechwriter who crafted a whole persona out of a professorial drone (in the field of Economics, no less) is sounding a little bewildered these days. If the old saying is true that a radical is a conservative who's been arrested, Ben's acting like a Wall Street hotshot who wakes up to find himself in a jail cell with a bunch of weirdo peak-oil salesmen.
Politics makes strange bedfellows. Like so many other things these days, (Putin, for one,) human commonality is rearing its head in the oddest places.

Which means that so is enmity.

My former enemy is now my ally so who is now my enemy? Oh, right; I am.

The head-scratching, "expert"-addicted American is going, perhaps for the first time, to have to do some independent thinking. Not grabbing the nearest soundbite and repeating it to his buddies as though it were sage counsel; not summing people up with the snappiest stereotype, but real research, upending all his fondest, most comforting notions and assumptions.

Once that process begins, there is no end. The rabbit-hole of inquiry is one in which question leads only to bigger, more fundamental question. No longer can we automatically endow the older or even the more expert with authority. Like the earliest victims of AIDS who, for lack of knowledge among the medical profession, were forced to do their own research and come up with far-flung solutions which their doctors then adopted for their other patients as well, we must become the experts.

At least, expert enough to make rational decisions about our own lives. And in a world in which nothing can any longer be taken for granted, that is going to take some effort.

Where to start?

From scratch. Seeking knowledge not just from the purported experts, the "suits," but from anyone who seems to have a handle on whatever the given problem is. The off-hand dismissal of people who lack credentials can be suicidal.

In this way, true sustainability must come hand in hand with equality. Our deeply-rooted pyramid notion of society is going to have to crumble. Pyramids were built on slave labor. A different social structure might have erected a differently-shaped tomb.

Let the festivities begin.


****************

Meanwhile, the New York Times is also sounding radical note, muted by reasonably-cadenced prose.

In an article entitled, "Farmer in Chief," in the Sunday Magazine, journalist Michael Pollan lays out a presidential policy plan for growing food during the next administration.

It is filled with points which will sound familiar to readers of this blog as well as peak oilists and permaculturalists everywhere, denouncing monocultures which depend so heavily on pesticides and fertilizers and calling for a return to solar- rather than fossil fuel-based agriculture.

Pointing out the Dale Allen Pfeiffer nugget which Mike Ruppert has repeated in countless lectures, that it takes 10 calories of fossil-fuel energy to produce one calorie of food as well as other equally galvanizing tidbits (it takes 5000 gallons of water to produce a pound of feedlot beef) - the article also provides some history of our current food-growing practises:

"After World War II, the government encouraged the conversion of the munitions industry to fertilizer — ammonium nitrate being the main ingredient of both bombs and chemical fertilizer — and the conversion of nerve-gas research to pesticides."

That's a loaded sentence, couched in a multi-thousand word article, like a landmine in an idyllic pastorale. How many Americans, furrowing their brows as they read it over their morning coffee, are going to sit bolt upright in bed eighteen hours later at 3 A.M.? Probably not many, but otherwise Pollan would never have gotten away with it. This is but one straw on the camel's back and far from the last one.

Pollan advocates regional food economies both in America and around the world and recommends setting up a Strategic Grain Reserve modelled on the current Strategic Petroleum Reserve.

He also points out:

"Right now, most of the conservation programs run by the U.S.D.A. are designed on the zero-sum principle: land is either locked up in “conservation” or it is farmed intensively. This either-or approach reflects an outdated belief that modern farming and ranching are inherently destructive, so that the best thing for the environment is to leave land untouched."

Some of his proposals are creatively sensible:

To qualify as 'food' he recommends that an edible substance contain a minimum ratio of micronutrients per calorie of energy.

And while he doesn't use the phrase "Food, not lawns" he proposes that "the White House [should] observe one meatless day a week - a step that, if all Americans followed suit, would be the equivalent, in carbon saved, of taking 20 million midsize sedans off the road for a year."

The White House lawn should also be a paragon for the rest of the country.

"[T]ear out five prime south-facing acres of the White House lawn and plant in their place an organic fruit and vegetable garden.
When Eleanor Roosevelt did something similar in 1943, she helped start a Victory Garden movement that ended up making a substantial contribution to feeding the nation in wartime. (Less well known is the fact that Roosevelt planted this garden over the objections of the USDA which feared home gardening would hurt the American food industry.)"

Let's just hope his ideas are not all too little too late.

Michael C. Ruppert

Many of my predictions about the US gov't shutting down the economy were contained in my comments for Title 17 US Code reprints of major news stories. We don't have the ability to make those available to you but we have them. If you want to search for places where I discussed it, I suggest that you enter the term "demand destruction" in the Exact Phrase mode of the search engine. Also look for the words"looting" and "liquidation". Then go back and read GlobalCorp and --off the top of my head -- "As the World Burns" from 2004.

Demand destruction is what this is all about, not just for oil but for almost all commodities. If (as an example) the world consumed 85 mbpd this year, the economic crash may result in demand reduction to 79-80 mbpd next year. Coincidentally, that will probably match what global decline rates allow the world to produce. The severity of the crash still in progress leads me to suspect that decline rates are actually much steeper than acknowledged.

-- Oh, how I wish we had the NEPDG report.

Hope this helps.


MCR

9:30 PM EST

U.S. BUYING INTO FINANCIAL INSTITUTIONS

This move, announced today, is absolute confirmation for me that this is an intentioned shut down of the economy. Each bank or financial institution that the Treasury buys into will give it (and Goldman Sachs) the power to shut each bank down and to decide when it shuts down. It couldn't be more transparent. They're going to turn out the lights in an orderly fashion and it's obviously an attempt at a controlled fast crash. They've only got three months left in office. That would essentially make Barack Obama an economic janitor employed by the same firm. I can just hear Bush and Cheney cracking a joke about it.

MCR

c. 5 P.M. EST

UNDERSTANDING FRIDAY, Oct. 10th, 2008 -- NO CAPITULATION AND WORRIES ABOUT THE ELECTION

[DISCLAIMER:

From here on out I will write under the assumption that those who read me are familiar with Rubicon, the FTW site and its archives, and my videotapes. I'll assume that you already know what GATA is and that you understand all of my/our previous work on gold, intelligence agencies and economics. The reason for that is that I am, and will always be, most loyal and responsive to the thousands --perhaps tens of thousands -- who have been with me and the FTW gang for years. I cannot and will not go back and rewrite what I spent years writing and waste the time or focus of those who just need/want to hear what my inisghts are today. We just don't have time to waste. For those willing to do a little homework, the FTW acrhives are there and available. The easiest thing to do is to go to the FTW search engine (not a great one) and, under Search Options select "Find exact phrase". Then enter whatever terms or subjects that we use here andyou will find a quick-study course to help bring you up to speed. --MCR]


Bear in mind that everything that happened today happened in absolute silence about Citigroup. The latest there is that there is supposed to be a court hearing next week about a suit Citi may bring against Wells and Wachovia. Meantime, Citigroup has waived all claims to acquiring any of Wachovia's assets (cash deposits). My suspicion is that out of fear Citi is hanging back for any kind of discussion about its stability. Then again, they just might be waiting for the right moment to break the bad news to achieve the worst effect: capitulation. Citigroup is in a worse position than it was two weeks ago. It is still heavily weighed by bad mortgage debt and "bailout options" are becoming an endangered species, especially when Citigroup would be the biggest bailout ever -- by a wide margin. The seemingly blessed AIGwas/is nowhere near as big, especially in terms of impact.

VOLATILITY --

I have never seen such a volatile market as I saw today. I saw (maybe there were more) no less than eight swings back and forth between positive and negative in the Dow. Five of them were in the last hour of trading. Up by a hundred then down 800. Then back up to even. Then back down again to -600. And then back and forth by 200-300 pts five times. A key moment, when the Dow was down by 600+ was a sudden drop in the price of gold by around $50 an ounce -- out of nowehere. When that happened, the 600 point loss evaporated to 128 or so points. The continuing blatant manipulation in gold prices is so obvious as to be ludicrous. It is sucking the last bits of cash out there into the markets. GATA has been right all along and I have said so consistently for many years. The panicked sheep who have been"looking at" gold (late, but not too late) will hesitate and leave their money in stocks, blindly believing we have hit the bottom on Wall Street.

There is no bottom until there is CAPITULATION. Today's volatility was anything but CAPITULATION. It looks to me like the violent, last-gasp throes before death which I have seen before in real life.

Capitulation is when the market hits a bottom and just stays there...for days and weeks. When there are no signs of struggle or life. No heartbeat. No thrashing.

When the Citigoup bomb is going to drop is anybody's guess but I just don't see how we can go through next week without major media starting to ask questions on the air and in print.

I repeat that the U.S. government is doing everything it can to step on the economy like a cockroach. Every move by the Executive or the Fed has not helped, but hurt share prices. This is deliberate.

Christ, I'm tired. We all must be. And now I must sound a warning about something else. I am worried about the election. I am not predicting anything but I am worried.

Let me sum it up. Yesterday, I went to the dog park with Rags and we ran into a friend, an accomplished musician with a house and 401k and a pension plan. He stopped me and he said, "Mike, they can take my house, They can wipe out my stocks. I can sleep in my car. But please tell me that there will be an election, that it will be fair, and that there will be an inauguration." -- I looked at him and said, "I can't." I don't believe Obama's going to save us but no one will cry a bigger cry of gratitude and relief than I will on January 20th when someone else becomes president. It is clear that it should be Barack Obama. And it is about time that all the Goldwater/Dirksen Republicans started saying Bush and Cheney ain't any kind of Republicans we know." I'm starting to hear that a lot.

The hate levels are rising way too fast. The McCain campaign and the Bushes behind it are lighting matches under dry piles of bigotry, stupidity and viciousness. In the midst of this, the ACORN scandal erupts with the same kind of force that should have been used to focus on the 2000 and 2004 races. What the Republicans did then was orders of magnitude worse. But any attempt, by anybody, to mess with a free and fair vote should be pretty close to a capital offense. The Obama campaign is not doing what it should be doing, which is to take the lead on that story, get in front of it, and denounce ACORN with all the fire it has. The Democratic Party must stake out the ground that it protects the right to free and fair votes. But how often has the Democratic Party done what it should have done over the last eight years?

Last night I saw a video clip where Congressman Brad Sherman said, on the House floor, that Treasury Secretary Hank Paulson threatened martial law if the bailout bill was not passed last week. I repeat that martial law, as we have conceived it is not possible. There are not enough troops, badges and guns to impose it. Yet the citizenry may come to ask for it. Now my worry is that civil unrest will erupt under any of a half dozen scenarios: Election with harrassment and voters turned away. Election with eletronic votes stolen (which thepeople will not cave over this time) and Obama does not win: Further economic crises or just the impacts of the last two weeks reaching Main Street. Obama wins, things go south and Bush (Cheney) suspend the inauguration. Write your own...

There is nothing to do but wait and ride it out. Today presented a great opportunity to buy gold for those who haven't.

My plans for the weekend are to go out to dinner with a very exciting and fun person, play with my dog, take a long walk and work on my book.

I remember a line from a Robert Ludlum spy novel. "Rest is a weapon. Use it."

-- MCR

CITIGROUP UPDATE

CITI CAPITULATES


Michael C. Ruppert


Their pledge that although they are not seeking an injunction they intend to sue Wells Fargo and Wachovia "on behalf of shareholders"means the shareholders are going to take the fall. If you thought today -- when short selling came back -- was bad...

Citigroup's demise may not happen tomorrow but here's a clue. I tried to acess this story at the Reuters news site one minute after it was published at 6:06 PM EDT. The story was getting so much traffic that it took me two minutes to get a download and another two minutes to save it. The sell orders, shorts and puts must be flying off the screens at breathtaking numbers. Make money on the way up; make money on the way down.

All spotlights are turning to Citigroup. The perception that it may fail is already out there like fresh blood in the water. How much time they have is unknown but I'm convinced they're going down.

Like I said, this will remove all traces of hope. A real, global capaitulation in the Dow 5000s is now possible. I don't know anymore whether it would be better in the five or six thousands. But if we don't get down there, the capitulation hasn't happened yet.

Look, if you haven't got the nerve or skill to talk about Rubicon orFTW, then at least just go out and tell people that there's a guy, backed up by many wonderful people including the magnificent Jenna Orkin, who is predicting things with scary accuracy. He's been doing it for years. Citigroup is easy, quick proof. Go back and look at when I predicted this. You will be helping people and the more we help, the sooner -- the better prepared we are to start building a new post-petroleum/post industrial economy.

Just send them to the blog. They can find FTW and Rubicon from there.

MCR

http://www.reuters.com/article/newsOne/idUSTRE49892U20081009?sp=true

A WONDERFUL SIGN OF HOPE

Are we all worn out yet? After the events of this week and the debate, I felt like I'd just come through a war. Many are looking as if in shell shock. We're all just sitting back now and waiting for the economic bottom to spring from the uncertainty below us. We are waiting for the real trickle-down economics to do their brutal work. Yeah folks, this is what "Trickle Down" really means. (Tip of the hat to David Stockman.)--

Rest up people.

Somewhere back around 2002 I wrote something where I recall quoting an expert as saying that the Dow would be properly valued at around 6000. I agreed. Now, I have no confidence that 6000 will be a bottom. I justdon't know. But if Citigroup goes soon, I predict pretty much that the whole world will capitulate. That would be a really fast crash and very messy. The Great Depression was a series of capitulations from 1929 to 1932. The last capitulation was the most brutal as I recall. I may be wrong on that. I hear analysts talking about how this is much different because of all the post-Depression regulatory infrastructure. Bullshit! The post-Depression regulatory infrastructure is what was used to turn a serious-but-treatable infection into terminal cancer.

Human nature hasn't evolved much at all in eighty years either.

Sheriff Takes on Bankers

So here's something wonderful to cheer you up while you're catching your breath. It's about a really good cop; the kind that I tried to be. It's about a cop whose job it is to protect innocent people. It's about a cop who is refusing to evict tenants from foreclosed properties who are not behind in their rents. There are hundreds in his county, and he is THE Sheriff. He is the face of the law. His, the boots on the ground. This is a constitutional issue of enormous importance. A local sheriff is refusing to enforce state and federal laws. Can you imagine what would happen if the dagblasted FBI tried togo in and evict? (I know too many FBI jokes. -- They're all true.) Can you picture what would happen if armed sate police went up against armed county sheriffs? ...if the county sheriffs had the entire population of the county behind them? This is not hyperbole on my part. Read the last paragraph and connect the dots. They are on our map. TPTB are scared spitless by this, as well they should be. The Sheriff's holding all the aces and this might be as big as Lexington and Concord. It will be very interesting to see how the majors play this, or don't.

And now the corporations will have to crack the whip, stand up and say, I'm sorry, we run things around here. The ugly head rears.

Or maybe they will back down. Oh, how I wish a thousand county sheriffs would do this.

This is a sign that relocalization is already underway on many levels. This is a deep shift in public and political consciousness. The new era is springing up as we speak.

Yes, I predicted this too when I wrote years ago that people should not think of all badges the same way. As I saw collapse developing I saw a disintegration of top-down authority. I said that the local cops would protect the locals, even if it meant breaking the law to do it. That's why I came home for this part of the"transition". Local police have no choice. It's where they live too. Mark my words, no one will be able to back Sheriff Tom Dart down. And we just may have found a real hero. This could be a shot heard round the world. This is why I have always known that real martial law would be impossible as most people conceive it.

I remember an old Jeff Bridges alien-visitation movie. Don't recall the title. It was good though. In it, Bridges (the alien) looked at his human love interest and said regarding us humans, "You are at your best when things are worst." How true. How true.

Lawdy, let the cream keep rising!

http://www.cnn.com/2008/US/10/08/chicago.evictions/index.html

I think this story should get spread as far and wide as possible. Imean FAR AND WIDE.

MCR

Wells Could Win 75-80% Wachovia Deposits

This story speaks for itself.

We started hearing the "C" word today. Capitulation.

It hasn't happened yet.

Yet.

--MCR

Presidential Hopefuls Like Buffett For Treasury Secretary

...which is an indication of just how far apart our two candidates are. Then again, even MCR said he wouldn't bet against Buffett these days. (Granted, 'betting against' and appointing to the head of the Treasury aren't exactly the same thing.)

--JO

UPDATE OCTOBER 6, 2008 -- OPEN WIDE THE JAWS

The Republicans are throwing the election to the Democrats like it was a flaming bobcat on meth. I shudder to contemplate what might be left of the economy by January. I repeat that this is all good. It is leaving functioning infrastructure intact. But the speed with this is unravelling has made me worry about the possibility of civil unrest before the election. I do not think it likely, but it is remotely possible. Civil unrest before the election -- if serious enough --might give Bush the pretext to go CoG. CoG means continuity of government and the suspension of virtually every right we thought we had. Simple mathematics argues against this likelihood however. There are nowhere near enough troops inside the country to impose martial law. The military is stretched beyond belief and the combat veterans are worn out from multiple deployments and Stop Gap. The soldiers and Marines are not in a good mood. They want to go home to take care of their families. Martial law won't fly; not with 270 million firearms in private hands. Hell, probably two thirds of all law enforcement personnel in the country have just seen their pensions cut in half or worse.

I think about the martial law possibility about the same way that I have always viewed the likelihood of a U.S. attack on Iran. It isn't going to happen. And just as with a U.S. attack on Iran, the consequences could possibly be world-ending. So if civil unrest really does occur, then stand back and get out of the way because it might not be predictable or controllable. Chaos is a great way to escape from a crowded murder scene. Start a ballroom brawl so that the sheriff is too distracted to round up a posse.

What did we see today? Exactly what I anticipated. The global markets are melting down and we need to wait just a short time before the tsunami travels all the way around the world and lands back here again. There is so much great history if one studies the Great Depression. That map seems to be working here, except faster and with harder hitting shocks. Ain't progress grand?

CITIGROUP

A very short clock is totally on the side of Wells Fargo. The value of Wachovia evaporates every day as depositors close accounts in panic. Citigroup is hoping to avert its death by getting its hands on those deposits. When minutes matter, both sides have agreed to suspend litigation until Wednesday; litigation which had Citi lawyers banging at a Connecticut judge's front door on a weekend. Now let me see: Wells Fargo is a California company; Citigroup is New York and Wachovia is in North Carolina. Does that sound like a Supreme Court case to you?

If this litigates, both Wachovia and Citigroup are doomed. Wachovia becomes worthless and Citigroup implodes. I have written much about Citigroup and its alliances and history. It's on the web site. For this and all discussions I will assume that you, the reader, have read Crossing the Rubicon, much of the FTW site, and seen my videos "Truth and Lies of 9-11", "Denial Stops Here", and "The Paradigm is the Enemy". If you haven't, you should. Not only will that answer almost all of the questions I see appearing on this blog. It will give you answers to questions you haven't even asked yet. Rubicon is moving back up the Amazon best-seller list. Consider that Amazon ranks well over 400,000 books we're doing great. "Rubicon" has been at or near the #1 spot in Public Affairs/Administration all year.

http://www.reuters.com/article/newsOne/idUSTRE49546820081006?sp=true

Post Script

Now that the crisis has taken a global hold I suspect that we will see George Soros moving in the currency markets. How is anybody's guess and I won't have time to follow it. I have a great books that's almost finished.

For God's sake buy gold! Do it now.

All of this has been planned for years.. I warned you it was coming. What I want now is for all of you to read the same map I am reading --the one that I and the people at FTW made -- and to move it forward together. No one is as smart as all of us. Not even Rice Farmer. --;-)

-- MCR

Delta Force Officer Recalls Foiled Efforts to Find Bin Laden

Readers of Crossing the Rubicon will experience deja vu listening to this Sixty Minutes report on earnest efforts by the elite Delta Force to capture or kill Bin Laden after 9/11. A soulmate of Dave Frasca must have been behind the consistent denials of permission to act on intelligence and get the job done. Then, too, the order to rely on Afghan "allies" only sealed the failure of the mission:

"The Mujahideen would go up, get into a skirmish, firefight, lose a guy or two, maybe kill an al Qaeda guy or two, and then they leave," reports "Dalton Fury," author of a new book on the fiasco.

"It was almost like it was an agreement, an understanding between the two forces fighting each other. Almost put on a good show and then leave."

..."Osama Bin Laden is [to] many a Muslim’s hero," Fury says. "These guys in my opinion were more in awe of Osama Bin Laden than they were willing to kill him."

...And then something extraordinary happened: Fury's Afghan allies announced they had negotiated a cease fire with al Qaeda, something the Americans had no interest in. When Fury's team advanced anyway, his Afghan partners drew their weapons on Delta. It took 12 hours to end the bogus cease fire, precious time for al Qaeda to move.


A Look at Wall Street's Shadow Market

Steve Kroft's sputteringly outraged report on the financial meltdown officially inaugurated this week. The interview with, or should I say "performance by," Robert Pickle, CEO of the International Swaps and Derivatives Association, is a lesson in the use of the raised eyebrow as a response to a pointed question. You know you're dealing with an arch-villain when he embarks on a lecture on "lessons learned" so such a disaster can never happen again.

Buffett Invests in Nuclear Weapons Security

Buffett's associate mentioned in this article, Pete Peterson, took out a full two-page ad in today's New York Times concerning the national debt.

- JO

Citi Girds for Wachovia Takeover Battle with Wells Fargo

I am pretty well convinced that if Citi doesn't get Wachovia's cash deposits it's only a matter of time for them. IMHO the FDIC approved the Citi/Wachovia deal because it couldn't let Citi and Wachovia both fail. It looks like Buffet has decided that Citi needs to fail. FTW did much reporting on Citigroup and drug money laundering, plus its close and historical relationships with intelligence services like CIA. But I think that Citi is part of a faction that is losing out in the game of musical chairs. I would not bet a penny against anything Buffet tries to do at this moment.

MCR

THE BAILOUT

Well, I think the verdict on the bailout is in. Everyone seems to know it's going to fail already. The Dow fell like a brick after it passed. That gives credence to what I was saying that the Repubs intend to step on this economy like a cockroach. This bill was a steamroller on rocket fuel. Many Dems went along. P olitics didn't allow many members not to vote yes. The rock and the hard places.

Are you watching Citigroup? Today it was announced that Wells Fargoway outbid Citigroup to buy Wachovia. Citigroup thought they had it in the bag. Citigroup is saying they had a deal. Citigroup needs Wachovia's deposits desperately. It's up in the air, but my money is on -- and in -- Wells Fargo which almost totally avoided the real estate market all along. Boy were they smart.

Now California is ready to collapse.

And who was Ahnold's big financial guru? Warren Buffett.

Who is a major stockholder in Wells Fargo? Warren Buffet.

Who bought heavily into a bailed-out AIG? Warren Buffet.

Who bought out Constellation Energy? Warren Buffet.

The big guys are starting to show their cards. That means this is it.

Now I am interested in what Jackson Stephens and Alltel are doing but that would be much harder to see. Even harder to see into Carlyle or Blackstone.

A few days ago I asked if the rest of the world would go quietly down while the US partied on.

Today I ask if 49 states would go down while America's largest and most consumptive economy; the "Hollywood" image of consumption, thrived. California may fail within a month, bringing unforseeable consequences. I just watched my old Congressman Brad Sherman raise the obviuous question. "We just spent all our money on this bailout. So what's California going to do?" Then he essentially said that California is out of luck. Sherman is an accountant and financial expert who was one of FTW's many congressional subscribers.

So, why am I in California?

I am home.

This is coming to pass for all of us in short order. I'm glad to be in a place I know, with people I know, now that it's here. I can function here. -- Jenna and I used to talk about an old 1960s movie with Gregory Peck and Ava Gardner called "On the Beach". Great movie. Don't get the newer one with Armand Assante. It sucks.

The sooner all this happens, the sooner we can start fixing things. Let the old paradigm acknowledge and achieve its death quickly. A new paradigm is being born. We are already in the new era.

MCR
*************************************************************************************
Congress Passes Bailout; Focus Shifts to Fallout
Article informing portions of Mike's analysis above.

Note the fallout already unfolding in Europe:

Dutch-Belgian banking and insurance giant Fortis was broken up on national lines, with the Dutch government taking over its operations in the Netherlands, after an earlier rescue effort and asset sale failed.

In Switzerland, UBS AG, hardest hit among European banks by its exposure to subprime holdings, said it would cut 2,000 investment banking jobs.

Divisions have emerged within Europe over the past week, with Ireland offering guarantees on bank deposits, prompting a flight of capital from British lenders to Irish banks.


After Several Dark Years, Amtrak Does Well in Congress
Former Treasury Secretary Calls Bailout Plan 'Crazy'
JP Morgan Advanced $138 Billion to Lehman
Debbie Cook, Mayor of Huntington County, Candidate for Congress
One of the bright lights of the ASPO Conference last week - JO

New Ecuador Constitution Would Give Nature Inalienable Rights
Public Participation in Environmental Decision-Making
Report on pros and cons.

"Some participatory processes have functioned as a political tactic to divert the energy of the public away from engaging in dissent on important differences and into activities that are considered safer by an agency.... This use of public participation is counterproductive in the long run," the report said.

[Government] Secrecy Film
The Trade Secret Defense: Voter Tampering
Total Information Awareness in France
Bobcats Live in Foreclosed Home in LA
Where Have I Seen Sarah Palin Before?
Insights from an immigrant from Iran

--JO

After Several Dark Years, Amtrak Does Well in Congress
Former Treasury Secretary Calls Bailout Plan 'Crazy'
JP Morgan Advanced $138 Billion to Lehman
Debbie Cook, Mayor of Huntington County, Candidate for Congress
One of the bright lights of the ASPO Conference last week - JO

New Ecuador Constitution Would Give Nature Inalienable Rights
Public Participation in Environmental Decision-Making
Report on pros and cons.

"Some participatory processes have functioned as a political tactic to divert the energy of the public away from engaging in dissent on important differences and into activities that are considered safer by an agency.... This use of public participation is counterproductive in the long run," the report said.

[Government] Secrecy Film
The Trade Secret Defense: Voter Tampering
Total Information Awareness in France
Bobcats Live in Foreclosed Home in LA
Where Have I Seen Sarah Palin Before?
Insights from an immigrant from Iran

--JO

THE DAY AFTER THE DAY AFTER

A flat market today probably scared a lot of yesterday's new buyers.It should have. But not to fear; with the Senate's passage of the bailout bill, tomorrow will bring more of the sideline money in. That will be the money that was waiting for the bailout bill. You know, the one that still has to go through the House. Many of the rest will enthusiastically interpret that as a "rally" and more of the last remaining cash will come in. It will pump again and it will later dump harder, like a heart exerting all its force to beat the last few times.

You have no idea how hard this is for me to watch.

I have been checking the comments to my recent postings. I am humbled. Thank you. The truth and accuracy of the work we did cannot go unacknowledged by the mainstream media for much longer. All anyone in the media needs to do is to read FTW's last economic alert -- the onethat came out 11 days before our computers were smashed. We were doing so many things then. FTW's Pat Tillman series was in midstream. On a daily basis we were analyzing global news in a way that made sense to people and provided accurate forecasts. Our subscription base was expanding rapidly.

Investigative journalism has passed for me and that is totally appropriate now. I can accomplish more, in less punishing ways. I am working to finish my new book but I have to just sit back for a few days and see what shakes out.

I want to repeat something I have said for six years on the subject of gold. Never buy paper gold. Never buy gold stocks or gold futures. Always buy only physical gold. There is five times more paper gold out there than there is gold out of the ground. Buy gold bullion in either coins or ingots. Keep it close to you and keep it safe. Do NOT close out your safe deposit boxes. They are OK for the foreseeable future. There is no need to deny ourselves things that are still working or to get hysterical. There is enough fear to go around right now.


MCR

Editor's note: Also when buying gold or silver coins, avoid numismatics whose value derives in part from the artistic value of the coin. You're just interested in the value of the metal. - JO