above. Photograph: Steve Crisp/Reuters

By Robin Wigglesworth

Dubai’s request for a debt standstill for one of its largest state-owned conglomerates has raised the possibility of the largest Islamic bond default on record, rattling the global Islamic debt markets.

Nakheel, the Dubai developer behind many of the emirate’s gaudiest projects, has to find $4bn to repay an Islamic bond, known as sukuk, by December 14.

The Nakheel sukuk has been seen as an important indicator of how Dubai will manage the liabilities of its multifarious government-related entities, but a failure to repay the bond fully and on time could impact the global sukuk market, estimated at over $100bn. “There is a lot of shock and a little bit of anger,” said Nish Popat at ING Investment Management in Dubai.

“This is a major blow to the sukuk market. If it defaults, it would be the third one in the Gulf, and the largest Islamic bond default ever, and we’re still waiting to see how sukuk-holders are treated in situations like this. There aren’t any precedents.”

The sukuk market has already been rocked by its first big defaults this year, which many say will represent test cases for how debt-holders are treated in the case of restructuring or bankruptcy. Sukuk are based on Islamic law, or shariah, which bans interest and requires a tangible asset to underlie financial transactions.

They are structured so that investors typically receive income from a rent-generating asset, which is technically transferred to a third-party vehicle owned by the sukuk-holders for the duration of the bond. Nakheel’s Islamic bond, issued in 2006, is backed by land in Dubai.

Experts say that in most cases investors do not have legal recourse to the underlying asset. However, until a sukuk default is satisfactorily settled, uncertainty will cloud the market.

An investor in the Nakheel sukuk said: “This is mostly a Dubai issue, not a sukuk issue... (but) a default would obviously be negative for the sukuk market.”

source HERE

Will my Public Islamic Income Fund be affected by this Dubai Debt Crisis?
Wait and see...

Posted by Mr Thx Saturday, November 28, 2009 0 comments

This harkens back to the early days in the run-up to the invasion of Iraq. The same accusations of WMD development, the same MSM portrayal of a dictator and his evil henchmen, the same talk of UN resolutions. Except this time the focus is Iran

more HERE

Will this lead to a new war and bring world economics into next wave 3 of global depression? Wait and see.....

Posted by Mr Thx 0 comments

(Bloomberg) -- Dubai’s debt woes may worsen to become a “major sovereign default” that roils developing nations and cuts off capital flows to emerging markets, Bank of America Corp. said.

“One cannot rule out -- as a tail risk -- a case where this would escalate into a major sovereign default problem, which would then resonate across global emerging markets in the same way that Argentina did in the early 2000s or Russia in the late 1990s,” Bank of America strategists Benoit Anne and Daniel Tenengauzer wrote in a report.

A default would lead to a “sudden stop of capital flows into emerging markets” and be a “major step back” in the recovery from the global financial crisis,’’ they wrote.

The US public will be “outraged” by Citibank’s $8 billion loan to Dubai just six weeks after the bank was bailed out, US House of Representatives domestic policy subcommittee chair-man has said. Dennis Kucinich commented on the Dubai loan and other US banking investments as a congressional panel released a report that strongly questioned Citibank’s actions. The report, shown to 7DAYS, cites the Dubai loan as the largest of the “questionable transactions” by banks after the US government bailed them out. It notes that the loan to Dubai’s public sector came on December 14, just six weeks after the US government gave Citibank a $25 billion bail-out.

LONDON: The United Arab Emirate (UAE) has total debt amounting to $184 billion at the end of 2009, according to estimates by Bank of America-Merrill Lynch.

source HERE

Posted by Mr Thx 0 comments

KUALA LUMPUR: The worst of the global economic crisis is over and developing countries like Malaysia can expect to register 6% gross domestic product (GDP) growth next year, according to UBS Investment Bank (global economics) managing director Paul Donovan.

“Our GDP forecast of 6% for Malaysia is slightly higher than concensus but we are sticking to it,” he told a media roundtable on Global Macroeconomics Outlook 2009 yesterday.

Donovan said in South-East Asia, Malaysia was expected to lead the pack in GDP growth, ahead of Singapore, Thailand and Indonesia, which were all expected to record lower GDP growth (5% or below).

“By and large, Malaysia has not been significantly affected by the global economic crisis, as compared with the West,” he said, adding that the United States and Europe were now on a growth trend, albeit slowly.

He said UBS expected the growth trends in the West to continue to be slow, at least for the next couple of years, and that it might even take five to six years for the spare or excess stock capacity to be absorbed by the global markets, as many were still trying to reduce their inventory levels.

“While the worst is over, banks in the developed world are still cautious with their lending practices,” Donovan said, adding that many small and medium-scale enterprises were still facing a credit squeeze by financial institutions.

On the Asian front, he said, the economic fundamentals were much stronger, lead by China and India.

“We expect a V-shaped recovery for these countries, including Malaysia.”

He said that there was very little past impairments or obstacles to economic growth, as opposed to the West.

Donovan also said inflation, unemployement rates and interest rates were not expected to rise significantly in the region.

“Infact, we expect a strong rebound for Malaysia,” he said, but conceded that the country as a trading nation might have been slightly affected by lower export demand, especially from the developed world, during the peak of the global economic crisis.

During the crisis, he said, government spending and pump-priming activities worldwide had lifted consumer spending confidence.

“But we foresee lower government spending next year and expect the private sector and the domestic market to be the main drivers of growth.”

On the US dollar, Donovan said the currency might even strengthen in the coming months but was expected to weaken over the longer term.

On the stock market, UBS Securities Malaysia Sdn Bhd managing director and head of Malaysia Equities Leong Fee Yee said it was fairly healthy and that any upside would depend on the earnings performance of companies.

“And they (company earnings) have to be sustainable,” she said.

source HERE

Posted by Mr Thx Thursday, November 26, 2009 0 comments

KUALA LUMPUR: The Central Bank of Malaysia Act 2009 came into force yesterday, enabling Bank Negara to more effectively manage emerging risks and challenges.

With this, the Central Bank of Malaysia Act 1958 is repealed and thus ceased to apply, the central bank said in a statement yesterday.

The new Act provided greater clarity on the central bank’s mandate and vested it with the necessary powers and instruments to achieve this mandate, it said.

Specific powers for macro-prudential financial stability which to date had not been a common feature of traditional central banking legislation are now included in the Act.

These provisions, among others, supported increased surveillance, regulatory reach, oversight of money and foreign exchange markets and coordination with other regulators, including across borders, on crisis prevention, management and resolution, the statement added.

Consistent with the goal to promote Malaysia as an international centre for Islamic finance, the Act gave due recognition to the Islamic financial system in the country, Bank Negara said, adding that it provided for an enhanced role of the Syariah Advisory Council on Islamic Finance to facilitate consistent application of Islamic law on Islamic financial matters.

source HERE

The act HERE

Posted by Mr Thx 0 comments

MONTREAL — Gold production will continue to fall, despite a brief boost in 2009 and soaring prices, as deposits are exhausted and new discoveries remain elusive, say miners.

In terms of production, "2009 is the outlier as far as the trend," Omar Jabara, spokesman for US-based Newmont Mining, the second-largest gold producer in the world, told AFP.

Overall, "it's a fact that gold production from mines has been in decline since 2001 and has gone roughly from 85 million ounces to about 75 million ounces a year," said Vincent Borg, spokesman for number one producer Barrick Gold.

"It sort of goes down about one million ounces every year and our forecast is that it will continue to decline despite the higher price" for gold nowadays, he said.

Almost everywhere, mineral deposits are being exhausted and new deposits are not being found fast enough to replace them, these experts explain.

source HERE

Posted by Mr Thx 0 comments

Malaysia’s central bank held interest rates steady at 2.0 per cent today for a sixth straight time, and said the pace of recovery in the domestic economy was gaining momentum and inflation was expected to remain modest in 2010.

The widely-expected decision comes as Asia’s third-most trade dependent economy is recovering from an economic slump triggered by the global financial crisis. A pick-up in domestic demand helped the economy to contract less-than-expected 1.2 per cent in the third quarter.

“As price pressures and inflation expectations are expected to remain contained going forward, the assessment is that the current monetary policy stance is appropriate and will continue to provide support for economic activity,” the central bank said in a statement.

A Reuters poll showed 15 economists saying rates would be held at 2 per cent with the earliest sign of a hike coming after the first half of next year. -- Reuter

source HERE

Posted by Mr Thx Tuesday, November 24, 2009 0 comments

Benjamin Fulford – via The Silver Bear Cafe Nov 16, 2009

China has stealthily introduced a new financial system based on the renminbi which is well on its way to becoming fully convertible, according to a high-level Chinese source. In addition, China is purchasing 10,000 tons of gold to back up a new fund designed to develop and market heretofore forbidden and suppressed technologies. The fund will be based outside of China and will be controlled by prominent members of the Chinese overseas community. The gold purchase will take some time because of the logistics of transporting it and the Chinese wish to test it thoroughly. Both the Chinese government and MI6 now confirm reports that much of the gold sold by the Federal Reserve Board over the past decade is in fact gold plated tungsten.

For its part, the renminbi is now convertible with South American currencies, the rouble, Middle-Eastern currencies, the yen, South East Asian currencies and African currencies. "We will slowly introduce our new financial system in parallel with the old one and hope that people steadily migrate towards it," the Chinese official says.

Meanwhile, the latest G20 meeting ended in acrimony and chaos. The leadership of the West is in total disarray and will remain so until the Federal Reserve Board's bankruptcy becomes visible even to brainwashed section of the Western public. This is now expected by January or February. Both MI6 and a senior Chinese government source now predict the collapse of the Federal Reserve dollar by that time.

We are also hearing various reports that many Pentagon and other US alphabet suit agency figures with both US and Israeli citizenship have recently fled to Israel. Things are coming to a head.

China is proposing to replace the US dollar with the Hong Kong dollar

At a top secret high-finance meeting scheduled for this weekend, China will propose that the US dollar be replaced by the Hong Kong dollar, according to a senior MI6 source. The proposal is under serious consideration by the backers of the new financial system.

As we have previously reported most US dollars ever created are now backed by gold at the rate of 1/28th of a gram per dollar. The fraudulent Federal Reserve Board fiat dollars issued after September, 2008 are not. Nor are any dollars derived from fraudulent "derivatives." So, to replace the US dollar with the Hong Kong dollar all that would be required would be to rename the gold-backed dollars. Any new Hong Kong dollars issued would be backed by the Renminbi, according to the Chinese proposal.

The Federal Reserve note will fall to 0.03 cents by January

It can now be stated that all the US dollars connected to legitimate commerce are backed by gold at the rate of 1/28th of a gram per dollar. The remaining Federal Reserve Board debt notes will soon fall in value to 0.03 cents, according to extremely high level financial sources. This means all legitimate businessmen and workers paid in US dollars have nothing to worry about. However, high level con-artists selling financial "derivatives," will be left with 0.03% of what they thought they owned.

It is amazing to see how many intelligent "well informed" people still do not have a clue about what is going on. If you connect the dots in the corporate propaganda media, you should be able to see for yourself without going to so-called "conspiracy" news sites. Among countries that have publicly said they will no longer use dollars for trade with each other can be found: China, Russia, Japan, South America, the Arab league, Turkey, Iran etc.

source HERE

Posted by Mr Thx 2 comments

THE investment case for gold has become increasingly compelling with the Central Bank of London buying and a structural change in interest for gold as an investment product among retail customers, according to the latest research from Standard Chartered in London.

"Although the upside will be capped by lower jewellery demand, the increased availability of scrap gold as prices surge to new highs and a periodic dollar strength in the first half of 2010, will see gold moving higher to average US$1,300/oz in Q4-2010 once the dollar resumes its weakening trend," said Helen Henton, global head of commodity research at Standard Chartered.
Gold has averaged US$955/oz so far this year.

In its Commodities Quarterly report, Standard Chartered also forecast that corn and palm oil are likely to benefit from firmer energy prices in the second half of next year.

It also said that after plummeting in Q4-2008, commodity prices have performed well this year.

Crude oil prices are also up 74 per cent, but the energy complex as a whole is down this year as natural gas prices have been weighed down by a massive oversupply.

Crude oil demand which bottomed in Q2 is now edging higher.

The levels of demand is still however below previous peaks. Standard Chartered does not expect the crude oil demand to return to the previous peak (in Q4-2008) before 2012.

The weak demand growth and potential among the leading producers to expand output is likely to keep crude prices capped, with the average price for Q4 of 2010 forecast at $88 per barrel.
Crude oil has averaged $60 a barrel so far this year.

Among agricultural commodities, which have underperformed other commodities this year, corn is expected to lead prices higher in 2010 as a result of poor weather conditions in the United States and China.

Corn and palm oil are also likely to benefit from firmer energy prices in the second half of next year.

In contrast, the winning agricultural commodities of 2009 - sugar and soy beans – are likely to underperform as improved crops flood the market, dampening prices. - Bernama

source HERE

Posted by Mr Thx 0 comments

Investors should remain cautious on core banking stocks AMMB, CIMB, Maybank and Public Bank which stayed overbought despite last week's profit-taking dip, says a research head

Optimism in the early part of last week on hopes the listing of Maxis will encourage more institutional participation was proven wrong, as profit-taking followed after they shifted holdings in other blue chips to this top-tier telco and rebalanced their portfolios ahead of the year-end.

As a result, the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) fell from a fresh 18-month high, but closed positive for a third straight week, albeit gaining only 3.4 points, or 0.3 per cent, for the week at 1,274.36, with gains in Maybank (+10 sen), Axiata (+5 sen) and CIMB (+8 sen) offsetting the decline of Sime Darby (-11 sen).

Average daily traded volume and value improved moderately to 1.05 billion shares worth RM1.48 billion from 1.01 billion shares worth RM1.19 billion in the previous week, due mostly to the strong volume on Maxis from its listing on Tuesday.

The market is expected to deflate this week after the feel-good sentiment ahead of Maxis' listing and the rally in banking stocks drove the index to test the year's high of 1,288 last week. Optimism surrounding Maxis fizzled out the day after its listing as retailers and some funds locked in their profits. Retailers were content with their short-term gain of up to 16 per cent as the stock rose to a high of RM5.50.

Some rotational interest in Axiata was apparent as it is regarded as the only local telco stock that can give investors adequate exposure to foreign market with some growth appeal as Maxis and DiGi are perceived as dividend plays now in a matured domestic market.

There are no major domestic catalysts to drive the index this week unless some big corporations like Sime Darby can report better-than-expected earnings in the final leg of the third-quarter earnings reporting season that will end next Monday. However, no major surprises are expected. Even Bank Negara Malaysia is not expected surprise anyone in their policy meeting tomorrow. It is likely to leave the Overnight Policy Rate (OPR) unchanged as there are no inflationary pressures and the economy needs sustained monetary loosening for an extended period for it to chart growth. The potential floating of petrol prices at the pump next year will contribute to a higher Consumer Price Index but do not expect Bank Negara to adjust upwards the OPR until the second quarter or the second half of 2010. Any upward adjustment in the OPR will lead to higher base lending rates that will benefit the banking sector.

It is heartwarming to see a lower gross domestic product contraction of 1.2 per cent year-on-year for the third quarter 2009 period, against consensus expectation of 2 per cent. As external trade is still in the doldrums with exports contracting by 13.4 per cent and imports falling at a slightly lower rate, the need to sustain domestic demand is crucial to register a positive economic growth in fourth quarter 2009 and beyond. The accommodative monetary policy and fiscal expansion are likely to contribute to a positive growth of 2.5 per cent in the fourth quarter before gaining momentum to record a 2010 growth of at least 3.4 per cent.

Nonetheless, it appears that the market fully discounted the news of better-than-expected GDP growth as it had gotten wind of it from our premier a few weeks ago. As a healthy correction is vital for the benchmark index to continue its northbound journey next year, look to sell overbought blue-chip counters that had run ahead of their fundamentals while concentrating on buy opportunities in the small to mid-cap growth stocks.

Technical outlook

Shares on Bursa Malaysia ended higher last Monday led by banking stocks after a regional rally boosted by the Apec summit's endorsement of economic stimulus measures to sustain a global recovery. The market ended mixed the next day as profit-taking in banking stocks was offset by buying in core plantation stocks, but the broader market was negative due to keen profit-taking interest.

Profit-taking persisted for the next three trading days, as investors shifted funds from other blue chips to the newly relisted telco Maxis and rebalanced their portfolios ahead of the year-end. The profit-taking was also encouraged by weaker external markets, as concerns grew that the recent rally had outpaced or fully discounted the anticipated strong growth and earnings prospects for next year.

The FBM KLCI peaked at 1,288.42 early last Tuesday, the highest intra-day level charted since May 21 last year, before retreating to low of 1,270.74 in morning trade on Friday, hence contracting further to a 17.68-point trading range last week, against the 20.3-point trading range the previous week.

The daily slow stochastics indicator for the FBM KLCI has flashed a sell signal following last week's profit-taking correction, but the weekly indicator stayed flat at the highly overbought region. The 14-day Relative Strength Index (RSI) formed a bearish divergence against the index, while the 14-week RSI remained overbought with a reading of 73.99.

Meantime, the daily Moving Average Convergence Divergence (MACD) also flashed a sell signal, while the weekly MACD trigger line is poised to crossover for an imminent sell signal. The ADX line on the 14-day Directional Movement Index (DMI) trend indicator continued to deteriorate for a lower reading of 31.89 as of last Friday, while the +DI and -DI lines contracted further, suggesting more downward consolidation ahead.


Multiple sell signals from the daily slow stochastic, daily and weekly MACD and bearish divergence on the 14-day RSI on top of the persistently overbought 14-week RSI for the FBM KLCI have greatly increased downside risk for a more significant profit-taking correction this week. Moreover, with the beginning of the year-end school holidays likely to see a lot of market players taking their families out for well-deserved vacations, trading momentum should suffer as daily turnover dwindle below the one-billion-share mark.

As for the FBM KLCI, expect immediate downside cushion at 1,267, the 38.2 per cent Fibonacci Retarcement (FR) of the rally from the 1,233 pivot low of November 2 to last week's peak of 1,288. A confirmed breakdown on close below this level will see stronger retracement supports at 1,260 and 1,254, the respective 50 per cent FR and 61.8 per cent FR levels being tested. On the upside, expect immediate resistance at 1,280, with 1,288 as next resistance. Looking ahead, a breakout will see formidable resistance from 1,305, the April 29 2008 pivot high.

As such, chart wise, remain cautious on core banking stocks AMMB, CIMB, Maybank and Public Bank which stayed overbought despite last week's profit-taking dip. Look to take profits or sell trading positions on these banks, and switch to nibble gaming stocks Genting Bhd and Genting Malaysia as we anticipate investors will stay defensive until year-end. On lower liners, look to accumulate oil & gas related stocks such as Dialog, Kencana, SapuraCrest and Scomi Group with buy on dip calls given pending corporate exercises such as bonus issues and capital raising activities for future growth.

The subject expressed above is based purely on technical analysis and opinions of the writer. It is not a solicitation to buy or sell.

source HERE

Posted by Mr Thx Monday, November 23, 2009 0 comments

Quite often, I get suggestions from readers to review personal finance books that are promoted with a strong theme of fear. For example, just today a reader wrote to me with some eloquent questions from a book entitled The Coming Economic Collapse How You Can Thrive When Oil Costs $200 a Barrel. While I responded to his email, I was pretty clear to him that I had no interest in reading the book and would not be reviewing it.

To me, books like this aren’t delivering personal finance advice, they’re selling fear. When I browse through the personal finance section of my local bookstore, I see a lot of books with words like apocalypse and meltdown and collapse, talking as though these events are imminent and they will be catastrophic to your life in many ways and you had better act now on whatever advice they’re selling or else you’ll be in deep, deep trouble.

Although these topics are pitched as personal finance, the ideas they deliver to you really don’t have much to do with personal finance at all. This is about one thing and one thing alone: causing you to fear the unknown events that the future holds so that you make decisions that aren’t fully rational.

From my perspective, personal finance is about hope. It’s about a sense that if you make strong choices with your life, things will get better and you can put yourself in a better place.

continue HERE

Posted by Mr Thx Sunday, November 22, 2009 0 comments

November 15, 2008 @ 11:00 am - Written by Trent

Four or five times a day, I get an email from a reader who is worried about some absolutely apocalyptic prediction about what will happen to the global economy over the next several years. As I’ve stated before, I don’t buy into fear, but when someone writes to me with obvious deep concern for their future, I am compelled to help.

My conclusion is that if you’re worried about the economic future, the best place to invest is in yourself. Developing yourself into a more intelligent person with more skills and more connections will pay huge dividends if such an apocalyptic scenario were to occur.

What does that mean, exactly?

continue HERE

Posted by Mr Thx 0 comments

A source close to the British Labour Government has just given me reliable information about the most radical copyright proposal I've ever seen.
Secretary of State Peter Mandelson is planning to introduce changes to the Digital Economy Bill now under debate in Parliament. These changes will give the Secretary of State (Mandelson -- or his successor in the next government) the power to make "secondary legislation" (legislation that is passed without debate) to amend the provisions of Copyright, Designs and Patents Act (1988).

What that means is that an unelected official would have the power to do anything without Parliamentary oversight or debate, provided it was done in the name of protecting copyright. Mandelson elaborates on this, giving three reasons for his proposal:

1. The Secretary of State would get the power to create new remedies for online infringements (for example, he could create jail terms for file-sharing, or create a "three-strikes" plan that costs entire families their internet access if any member stands accused of infringement)

2. The Secretary of State would get the power to create procedures to "confer rights" for the purposes of protecting rightsholders from online infringement. (for example, record labels and movie studios can be given investigative and enforcement powers that allow them to compel ISPs, libraries, companies and schools to turn over personal information about Internet users, and to order those companies to disconnect users, remove websites, block URLs, etc)

3. The Secretary of State would get the power to "impose such duties, powers or functions on any person as may be specified in connection with facilitating online infringement" (for example, ISPs could be forced to spy on their users, or to have copyright lawyers examine every piece of user-generated content before it goes live; also, copyright "militias" can be formed with the power to police copyright on the web)

This proposal creates the office of Pirate-Finder General, with unlimited power to appoint militias who are above the law, who can pry into every corner of your life, who can disconnect you from your family, job, education and government, who can fine you or put you in jail.

source HERE

Posted by Mr Thx 0 comments

By Susan C. Walker
Fri, 20 Nov 2009 15:45:00 ET

Investors got burned twice over the past few years: first it was the drop in the stock market, then in commodities in 2008. So now they are piling into bonds -- municipal bonds, in particular. Why is that a bad idea with a deflationary depression in the offing? Here's what Bob Prechter said about how bonds will act in a deflation more than five years ago, and it's all beginning to play out now.
Excerpted from Prechter's Perspective, reissued 2004
Credit will contract [in a deflation]?

Bob Prechter: Yes, from long-term bonds al the way down to the broader measures of the money supply.

The credit implosion you see leads you to contradict the most deeply held convictions on Wall Street, like the conventional belief that bonds rise when the economy slows. You have most of them falling in a weak economy.

Bob Prechter: It's plainly not good for bond values if the issuers of bonds, i.e., the borrowers, suffer financially to the point of not being able to pay interest or principal, is it? In fact, billions of dollars worth of bond defaults in recent years clearly reveal the problem. What economists should say is that (1) in an environment of general growth and inflation, (2) when only a recession occurs, and (3) when the recession brings a reduction in inflation, then bonds typically rise in price as interest rates fall. Unfortunately, to most economists, the post-World War II period is the only relevant history, so bond investors don't place their view in the larger context of economic possibilities.

At what point might the economy deteriorate so substantially that its condition and trend are no longer bullish for bonds, but bearish?

Bob Prechter: When it reaches depression, and a depression is exactly what is on the agenda if the stock market falls to the extent that the Wave Principle suggests. The only way for a bond investor to survive a depression is to hold bonds issued by a strong borrower. Weak borrowers, such as most corporations and municipalities, will default. As investors come to the realization that default is a risk, rates on weak debt will rise as its prices fall.

What happens to the dollar?

Bob Prechter: During the deflation, the dollar's domestic purchasing value should rise as debt instruments denominated in dollars are defaulted upon. As dollars disappear, the value of the remaining dollars will rise….

source HERE

Posted by Mr Thx 0 comments

The long-feared financial disaster is still looming. Bad court decisions could set it off.

The commercial real estate market is on its last legs and unless drastic actions are taken, the effects on the broader economy will be catastrophic. The obvious problem is the excessive amount of debt placed on the properties and the amount of debt that has to be refinanced during a relatively short period of time.

Between now and 2013, at least $1.3 trillion of financing comes due, of which $160 billion was the result of securitizations. Unfortunately, as a result of the virtual disappearance of the secondary market, the weakened condition of the banks, and the amount of debt already held by insurance companies and pension funds, even under the best of circumstances, less than half of the outstanding debt can be refinanced. This is compounded by the collapse of the commercial rental market in the last 18 months as a result of the Great Recession. For example, office rents in prime areas of Manhattan that were in the $100-$120 a square foot range in 2007 are now trading (with rent concessions and work letters) at half that amount.

After two years of one financial crisis after another, the Fed has fewer cards to play, and the foreign investors who bailed out commercial real estate investors in the past are sitting on the sidelines waiting for the prices to collapse. This problem is exacerbated by the lingering effects of the recession: absence of credit; growing job losses as a result of falling prices, consumer demand and credit; the insolvency or near insolvency of so many institutions; and the loss of confidence in the U.S. economy by our trading partners

source HERE

Posted by Mr Thx Saturday, November 21, 2009 0 comments

President Barack Obama predicted Wednesday that the United States economy would grow again in the final quarter of 2009, pulling further out of a long and crippling recession.

“We have seen economic growth. We anticipate economic growth next quarter as well,” Obama said in an interview with Fox News from China. In per centage terms, the US economy grew at a seasonally adjusted 3.5 per cent annual rate in the July-September period from the previous quarter.

The growth exceeded analyst expectations and marked the strongest quarter since the third quarter of 2007 when a US subprime mortgage crisis triggered a global financial meltdown.
Obama acknowledged that while the US economy was improving it would still take time to get a grip on soaring unemployment, which passed the symbolic 10 per cent mark for the first time in 26 years last month. “I always said that job growth would lag behind economic growth,” he said.

“Nobody has been more disappointed than I have to see how high the unemployment rate has gotten, and I spend every waking hour when I’m talking to my economic team about how, where are you going to put people back to work.” Last Thursday, hours before embarking on his first trip to Asia as president, Obama announced a jobs forum would be held at the White House in December to try and tackle the crisis.

“This is an inexact science,” Obama said of job creation, noting that the huge US economy was hit by its worst crisis since 1933, the depth of the Great Depression. “The first measure of success of economic recovery is did we pull ourselves back from the brink? Have we gotten economic growth going again? We have. “The question now is, can we make sure that we’re accelerating job growth? That’s my number one job,” Obama said.

Federal Reserve chairman Ben Bernanke said this week that he expects the US economy to sustain its growth into 2010 despite “important headwinds,” including tight credit and weak employment.

Bernanke said he sees the economy maintaining growth — after expanding in the third quarter following four quarters of declines — despite fears of a so-called double-dip recession. The weak job market is an area “of great concern,” the Fed Chairman said in remarks to the Economic Club of New York, adding that the “best thing we can say about the labor market right now is that it may be getting worse more slowly.” -- AFP

source HERE

Posted by Mr Thx Thursday, November 19, 2009 0 comments

Hari ini saya telah berjaya menghantar borang permohonan untuk membuka akaun semasa yang ada Overdraft yang bersandarkan sijil ASB. Setelah menahan sabar berminggu rasanya sejak CIMB buat promosi OD BLR - 2.0% (akan berakhir pada 31/12/2009), akhirnya terlaksana juga projek OD/ASB saya ini.

Minimum sijil : RM12,000
Rate : BLR - 2%
MOF : 90%

1. Bawa buku ASB ke cawangan ASNB untuk membuat sijil ASB.

Saya telah pergi ke cawangan berikut

Amanah Saham Nasional Berhad
No. 12 & 13
Kompleks Perniagaan Al-Azim
Jln. KPAA1, Bukit Baru
75150 Melaka
Phone: 06-2827361 & 06-2840690
Fax: 06-2839940

Sampai disana, saya mengisi borang permohonan untuk membuat sijil ASB. Dikaunter, borang yang telah diisi dan RM10 diberikan kepada kerani yang bertugas. Tak sampai 10 minit, semuanya beres. Sijil bernilai $$$$$ ada ditangan.

2. Call personal banker kat CIMB Batu Berendam

Saya call dan maklumkan sekejap lagi saya sampai disana nak buat OD/ASB. Sebab dah kenal dengan personal banker tu so senang lar nak berurusan. Apa yang diperlukan sebelum berjumpa dengan beliau

- IC
- Salary Slip
- Sijil ASB
- Buku ASB

Sampai disana berikan semuanya diatas untuk dibuat salinan sambil itu, silalah mengisi borang permohonan OD/ASB. Itu saja. Lepas semuanya selesai, boleh lar buat-buat tanya pasal produk CIMB yang lain seperti Credit Card, Refinancing, ASB Loan, Unit trust dan macam-macam lagi. Ini dapat memberikan semangat kepada beliau untuk mempercepatkan urusan permohonan anda :)

So, sekarang tunggu masa nak sign LO.

Update 20/11/09

Baru tadi pergi sign LO dan buat ATM kad. Minggu depan dah boleh ambik buku cek. OD masuk dalam 1-2 minggu bergantung kepada PNB. So, sekarang tunggu duit OD masuk.

Kos yang perlu untuk projek OD/ASB CIMB ini :-

Sijil ASB = RM10
CIMB Fees = RM162.15
*Deposit Akaun Semasa = RM500

Total : RM672.15

*Syarat untuk buka akaun semasa baru, boleh keluar balik jika perlu.

Update 10 December 2009

Hari ni duit OD/ASB sudah masuk. Mulanya tak perasan Account Balance sudah berubah sebab melihat pada Overdraft limit yang masih RM0.00. Rupanya, kena tengok Account Balance sebab besoknya baru Overdraft Limit dikemaskini. Apapun, Alhamdulillah, projek OD/ASB terlaksana dengan jayanya.

Update 25 January 2010

Hari ni call cimb bank sebab nak top-up OD yang sedia ada. Agak terkejut bila diberitahu, jika buat top-up hari ini, OD rate sekarang akan ikut rate BLR - 1.65% bukan lagi BLR - 2%. Ingatkan top-up ni tak mengubah rate yang lama. So, terpaksa batalkan nak buat top-up, tunggu OD rate turun balik ke 2%.

*ASB Loan untung atau tidak?

Posted by Mr Thx Wednesday, November 18, 2009 2 comments


Minderjeet Kaur

KUALA LUMPUR: Government departments and agencies will slash expenditure from January to help reduce the fiscal deficit.

Chief Secretary to the Government Tan Sri Sidek Hassan said yesterday that certain departments and agencies might get 13.7 per cent less.

He said the deductions would depend on specific needs and the government would prioritise value-for-money projects for implementation.

Asked to comment on a report in a Chinese daily that the government may slash expenditure by up to 15 per cent, he said the government was looking at the needs of each department or agency.

He was speaking to reporters after opening the “Government Services Online: Leading Practice for Change” seminar here yesterday.

Sidek later announced the names of the six government departments and agencies whose portals had won fivestar rating.

The government had said in the 2010 Budget that the operating expenditure will be cut by 13.7 per cent to reduce the fiscal deficit from 7.4 per cent this year to 5.6 per cent next ye a r.

He said departments and agencies in the the information and communication sector will escape the cut as the government wanted to improve the delivery system.

“It does not involve a lot of money. It is about innovation.

It also involves e-government and e-filing. Whatever can be done electronically will be done.” He was also unhappy with the upkeep of government-run portals as most had not been updated over the past two years while some took about ten minutes to download.

“To get five-star rating, they have to update their portals, use proper language with pages opening in two seconds and not 10 minutes.” Of the 1,192 governmentrun portals offering online payment and approvals, only seven were rated five-star.

They were run by the Finance Ministry, Prime Minister’s office, Malaysian Administration Modernisation and management Planning Unit (Mampu), Minerals and Geoscience Department, Housing and Local Government ministry, the Selangor State Secretary and the myGovernment por tal.

Sidek hoped more departments would vie for five-star rating next year to help improve their delivery system.

source HERE

Posted by Mr Thx 0 comments

to all CG members....

this !@#$%^& guy has been scammed me for $50 in my 2nd transaction...please beware of this guy!!!

YM id : chonyinchen@yahoo.com
maybank acc: 101030074471 (KOH PHEI FANG)

here is the proof:

Show Recent Messages (F3)

aden_4700: bro
chonyinchen: yes?
chonyinchen: deal ?
aden_4700: yes
aden_4700: deal for 3.40
chonyinchen: $50 x 3.4 = rm170
aden_4700: ur acc no.
chonyinchen: ok
chonyinchen: wait
chonyinchen: bro
aden_4700: yes
chonyinchen: wait ya
chonyinchen: 101030074471 koh phei fang
chonyinchen: same account
chonyinchen: after that copy and paste the last page or bankbank to here
chonyinchen: ok?
chonyinchen: understand?
aden_4700: ok
aden_4700: 1minute left
chonyinchen: ok
chonyinchen: so ?
chonyinchen: 1 mins left?
chonyinchen: what mean?
aden_4700: transferring.....
chonyinchen: i c
aden_4700: New 3rd Party Account Transfer - Step 3 of 3

Confirmation status
Amount: RM170.00 Status: Successful
Reference number: 1350617049
Transaction date: 14 Nov 2009
Transaction time: 23:39:35
From Account 162106745635 WSA
New balance: xxxxxx
To 3rd Party Account Number: 101030074471
Account Holder Name: KOH PHEI FANG
Effective date: Today
Description of transaction: buying 50$ for LR funds........
chonyinchen: wait
chonyinchen has signed out. (11/14/2009 11:44 PM)

Last message received on 11/14 at 11:41 PM
aden_4700: there?
aden_4700: bro?waitin my payment..........
aden_4700: still waitin...

source HERE

Posted by Mr Thx Tuesday, November 17, 2009 0 comments

WASHINGTON - Federal Reserve Chairman Ben Bernanke on Monday said the central bank will keep a close eye on the sliding U.S. dollar even as he pledged anew to keep interest rates at record-lows to nurture the economic recovery.

In remarks to the Economic Club of New York, Bernanke engaged in a delicate dance.

He made clear Fed policymakers will keep rates at super-low levels. Yet through his words, Bernanke is also trying to bolster confidence in the dollar without actually raising rates, a move that could short-circuit the fragile recovery.

Story continues below ↓
advertisement | your ad here

Economists say a free-fall in the value of the dollar is remote but can't be entirely dismissed.

Although low interest rates can put additional downward pressure on the dollar, they are needed to encourage American consumers and businesses to spend more and fuel the economic turnaround.

source HERE

Posted by Mr Thx 0 comments

Politico reports that Jim Chanos is a big China Bear:

But there’s a growing group of market professionals who see a different picture altogether. These self-styled China bears take the less popular view: that the much-vaunted Chinese economic miracle is nothing but a paper dragon. In fact, they argue that the Chinese have dangerously overheated their economy, building malls, luxury stores and infrastructure for which there is almost no demand, and that the entire system is teetering toward collapse.

A Chinese collapse, of course, would have profound effects on the United States, limiting China’s ability to buy U.S. debt and provoking unknown political changes inside the Chinese regime.

The China bears could be dismissed as a bunch of cranks and grumps except for one member of the group: hedge fund investor Jim Chanos Read Story Here

source HERE

Posted by Mr Thx Sunday, November 15, 2009 2 comments

On 5:20 am EST, Thursday November 12, 2009

BEIJING (AP) -- China signaled Thursday that it's ready to allow its currency to rise just days ahead of a visit by President Barack Obama.

China's central bank said in its quarterly monetary policy report that it will improve the yuan exchange rate formation mechanism by taking into account changes in major currencies and not just the dollar.

By omitting its often-used language of keeping the yuan "basically stable at a reasonable and balanced level," the bank is suggesting a policy shift on yuan's exchange rate, analysts said. Beijing has held down its currency for more than a year.

The comments came three days ahead of Obama's visit to China. The president has said he would raise the issue of China's currency during his trip.

"The reference to changes in major currencies could signal a shift from the current de facto dollar peg to include other currencies such as the euro and yen," Alaistair Chan, an associate economist of Moody's Economy.com, said in a note.

The yuan's appreciation started in July 2005. But after rising nearly 20 percent, the currency has hovered around 6.83 to the dollar for more than a year as China took measures to protect local exporters battered by the global economic crisis.

"The yuan will certainly rise but not by a big pace. It is facing double-folded pressure," said Lu Zhengwei, a senior economist at China's Industrial Bank Co. in Shanghai.

Because the yuan is pegged to the dollar, which has weakened against other major currencies recently, Beijing faces increased pressure from other emerging economies that complain the weaker yuan means Chinese products were cutting into their share of the global marketplace.

But Lu said if China lets the yuan appreciate, it will hit exporters as business starts to pick up.

China's trade surplus in October totaled $24 billion, nearly double from September, while the slump of exports was the slowest in 10 months.

The central bank's report came after China reported improving industrial output, retail sales and trade figures for October, showing the country's economic recovery is on track.

Chinese central bank: http://www.pbc.gov.cn (in Chinese)

source HERE

Posted by Mr Thx Thursday, November 12, 2009 0 comments

Bursa Malaysia announced yesterday that Maxis Bhd will be eligible for fast entry into the FTSE Bursa Malaysia Kuala Lumpur Composite Index in accordance with the FTSE Bursa Malaysia Index ground rules.

This is because Maxis' full market capitalisation is expected to exceed 2 per cent of the full capitalisation of the FTSE Bursa Malaysia Emas Index, it said in a statement.

It said that several changes in the FTSE Bursa Malaysia Index series will take effect on November 20, subject to the listing of Maxis on November 19.

On the changes, Bursa Malaysia said Maxis will be added to the FTSE Bursa Malaysia KLCI with a shares in issue total of 7.5 billion and an investability weighting of 30 per cent.

Malaysian Airline System Bhd (MAS) will be removed from the index, it said.

MAS will be added to the FTSE Bursa Malaysia Mid 70 Index with a shares-in-issue total of 1.671 billion and an investability weighting of 30 per cent.

Tradewinds (M) Bhd will also be removed from the index, Bursa Malaysia said.

Tradewinds will be added to the FTSE Bursa Malaysia Small Cap Index with shares-in-issue total of 296.470 million and investability weighting of 30 per cent.

The changes will be simultaneously reflected in the FTSE Bursa Malaysia Top 100 Index and the FTSE Bursa Malaysia EMAS Index.

Bursa Malaysia said Maxis will also be eligible for inclusion in the FTSE Bursa Malaysia Emas Shariah Index and the FTSE Bursa Malaysia Hijrah Shariah Index at the next semi-annual review in December, subject to it passing the Shariah Advisory Council and/or the Yasaar screening methodology. - Bernama

source HERE

Posted by Mr Thx 0 comments

HONG KONG: Albert Edwards, an analyst at French bank Societe Generale who correctly predicted the Asian financial crisis, sees global equity markets at a new low and chances of another global recession in 2010.

Edwards, a prominent equities bear and a long-term critic of the policies of Western central banks, is sceptical of popular opinion that extreme policy responses will safeguard the West against a repeat of Japan’s “lost decade” of the 1990’s.

“People should question the happy clappy nonsense from sellside analysts,” London-based Edwards, a global strategist with SocGen’s Corporate & Investment Banking group, told a media briefing.

“We are not saying that people should not participate in the rallies – that will get you fired as a fund manager – but they should not become too convinced of the recovery,” he said.

Edwards is more worried about Japan in the near term as he expects the world’s second-largest economy to run into difficulty funding itself next year as demand for Japanese government bonds wane and bond yields rise further.

The significance of higher Japanese government bond yields was that it would cause some Japanese investors, who have been investing overseas in search of higher returns, to bring that money back home, he said.

Edwards expected China to go into a recession at some point as cyclicality catches up with the economy, and called people’s excessive faith in growth stories a “sick joke”.

He said while inflation was a concern, deflation was a bigger worry in the near term, at a time when Western and Japanese governments were effectively insolvent.

“If we get an economic downturn next year, when you have got core inflation at half a percent, I think there will be a real deflation panic, a bit like in Japan.”

Edwards picked grains like corn, wheat and soybeans as a more secular bet on China’s growth story over other commodities and their related stocks as these have lagged the broad rally in the markets.

“Equity valuations have been totally ridiculous for the last 10 years but I’m less bearish than I was two years ago because we have had one round of correction,” said Edwards. — Reuters

source HERE

Posted by Mr Thx Wednesday, November 11, 2009 0 comments


The cover of this document tells you the whole story. Everything you really need to
know abut personal finance can be summarized in just one page. Spend less than you
earn. Earn more. Live frugal. Do something sensible with the difference. Control your
own destiny. All of the other writing out there on personal finance is just details.
In fact, the rest of this document is just details. What youʼll find in the rest of this
document is a lot of additional detail about the points made on the cover. Beyond that,
this document is heavily footnoted. If youʼre reading this document on a computer, you
can click on those footnote numbers and immediately jump to online resources that
expand upon that point.
The hardest part of personal finance is just having the courage to take that first step.

Source here

Posted by Mr Thx Monday, November 9, 2009 0 comments

Disini saya menggunakan calculator ASB loan dan dividen untuk membandingkan 2 teknik penyimpanan yang menjadi bualan hangat masa kini iaitu;

i) Menyimpan sikit-sikit secara bulanan dalam ASB untungkah atau
ii) Buat pinjaman ASB dan bayaran bulanannya lebih kurang dengan teknik (i)

Kita set setiap tahun
ASB Dividen : 7%
ASB Bonus : 1%

Teknik (i)
Simpanan bulanan : RM600
Tempoh : 120 bulan @ 10 tahun

TAHNIAH! Pada awal januari tahun ke 11, anda telah mempunyai aset bersih sebanyak $105,160.93

Modal sebenar : 600 x 120 = RM72000
Dividen + Bonus = RM33,160.93

Bagaimana dengan teknik ke (ii), mari kita lihat

Teknik (ii)
Jumlah pinjaman : RM100,000 (Tidak termasuk insuran jika ada)
Tempoh : 20 Tahun
Bank : CIMB
Kadar : BLR - 1.65% (BLR semasa = 5.55%) = 3.9%
Bayaran bulanan : RM600.72
*Dividen Tidak dikeluarkan

TAHNIAH! Pada awal januari tahun ke 11, anda telah mempunyai aset kasar sebanyak $205,148.88. Ia bukan nilai aset bersih kerana anda masih berhutang dengan CIMB. Jadi berapakah nilai aset bersih anda? Mari kita lihat, berapakah baki pinjaman anda dengan CIMB pada awal tahun ke 11.

Ya, baki pada awal tahun ke 11 ialah sebanyak RM59,613.05. Maka, bagi mendapatkan nilai aset bersih anda itu,

Aset Bersih = Aset Kasar - Baki pinjaman = RM205,148.88 - RM59,613.05 = RM145,535.83

Disini, anda pastinya sudah mendapat jawapannya. Selagi kadar dividen ASB lebih tinggi dari kadar faedah pinjaman maka teknik (ii) lebih menguntungkan.

Posted by Mr Thx Sunday, November 8, 2009 2 comments

Almost everywhere I look in the mainstream financial media, I see story after story celebrating the end of the worst U.S. recession since the 1930's AND start of an all-out recovery to a brighter, smarter-for-the-pain bull market. "The grimmest days are now behind us," begins a November 5 BBC report. "All that talk of a return to the thirties now seems fanciful."
Yet let's take a look at some of the actual data. At the very BASIC level, these comparisons between late 2007 and today are quite eye-opening:
2007: 2009:
Unemployment rate: 4.6% : Unemployment rate: 10.2%
Fed's Lending Rate: 5.25% : Fed's Lending Rate: 0%
Year-over-Year Bank Credit: + 10% : Year-over-Year Bank Credit: - 6.8%
Consumer Spending: + 2% pace : Consumer Spending: .5% decline in September
ISM Service Sector Index: 55.8 (Sept.) : ISM Service Sector Index: 51.5 (Sept.)
U.S. retail sales report strong growth : U.S. retail sales: 1.5% decline in Sept.
Year-to-date auto sales: 3% decline : Auto sales: 10.4% decline in Sept.
Federal Bailout Balance: $0 : Bailout Balance: $13 Trillion, and counting
(P.S. On August 31, 2007, Federal Reserve Chairman Ben Bernanke explained: "It's not the responsibility of the Federal Reserve -- nor would it be appropriate -- to protect lenders and investors from consequences of their financial decisions.")
GDP growth in third quarter: 4.9% GDP growth in third quarter: 3.2%
(All Signs Point In One Direction: The November 2009 Financial Forecast Service reveals how every major sector is in position for a historic economic event. Get the complete story today, risk-free.)

Source here

Posted by Mr Thx 0 comments

1. Banks are hoarding cash.

Despite having received trillions of dollars in taxpayer-funded bailouts and lived through a litany of shotgun weddings designed to reinvigorate the shattered lending markets, most banks are actually hoarding cash.

So instead of lending money to consumers and businesses like they’re supposed to, banks have used taxpayer dollars to boost their reserves by nearly 20-fold, according to the Fed. The money the bailout was supposed to make available to the system is actually not passing “Go,” but rather getting stopped by the very institutions that are supposed to be lending it out.

Three-year average annualized loan growth rates were 9.6% before the crisis; now they are shrinking by 1.8%, according to Money magazine.

2. The United States exports inflation to China, which remains only too happy to continue to absorb it.

What this means is that low-priced products from China help keep prices down here. And this is critical to something that many in the “China-is-manipulating-their-currency” crowd fail to grasp. If China were to un-peg the yuan and let it rise by the 60% or more it’s supposedly undervalued by, we’d see a jump in prices here in everything from jeans to tennis shoes, toys, medical equipment, medicines, and anything else we import in bulk from China.

Chances are, the shift wouldn’t be dollar-for-dollar or even dollar-for-yuan, but there’s no doubt it would be significant.

Now, before I get a bunch of hate mail about this, let me just say I want to “Buy American” too. I’m all for supporting our native industry and our own domestic job markets. But in today’s world, “made anywhere” is really hard to do and even harder to support.

The interconnected nature of businesses and global manufacturing chains, not to mention the payment system, makes that nearly impossible. Granted, perhaps that’s part of the problem, but that’s a subject for another time. The lessons we learned in the 1930s are clear, and they must be acknowledged -- protectionism only makes matters worse, no matter how we feel about it personally.

3. Consumers are still cutting back.

Therefore, the spending that normally helps pull demand through the system is simply not there. I don’t know how things are in your neighborhood, but where I live, people are still cutting back.

Indeed, data from the US Department of Commerce and the Federal Reserve Board show that consumer spending growth averaged 1.4% a year prior to the crisis and is now shrinking at a rate of 0.7%. What this means is that people have figured out that it’s more important to save money than it is to spend it.

And, given that consumer spending makes up 70% or more of the US economy, this is a monumental change in behavior that all but banishes the last vestiges of the “greed is good” philosophy espoused by Michael Douglas as Wall Street pirate Gordon Gekko in 1987.

4. Businesses continue to cut back rather than hire new workers.

Therefore, wages and wage inflation figures are lower than they would be if the economy was truly healthy and the stimulus was working.

This is especially tough to stomach because it means people are still being marginalized, laid off, and “part-timed” instead of being hired. And that means that most of the earnings growth we’ve seen this season has come from expense reductions rather than top line sales growth -- and those are two very different things.

But while this is tough, it’s also helped keep inflation lower than it would otherwise be. Prior to the financial meltdown, job growth averaged about 1% a year over the last three years, now it’s falling by 4.2%.

The upshot?

Any one of these factors could change at any time. And that means investors who are relying on the Fed’s version that everything is okay and that the government is managing inflation may be in for a rude awakening.

The only thing the Fed is doing is managing to manipulate the data, and even then, not very well.

source here

Posted by Mr Thx Thursday, November 5, 2009 0 comments

Billionaire investor Wilbur L. Ross Jr., said today the U.S. is in the beginning of a “huge crash in commercial real estate.”

“All of the components of real estate value are going in the wrong direction simultaneously,” said Ross, one of nine money managers participating in a government program to remove toxic assets from bank balance sheets. “Occupancy rates are going down. Rent rates are going down and the capitalization rate -- the return that investors are demanding to buy a property -- are going up.”

U.S. commercial property sales are forecast to fall to the lowest in almost two decades as the industry endures its worst slump since the savings and loan crisis of the early 1990s, according to property research firm Real Capital Analytics Inc. The Moody’s/REAL Commercial Property Price Indices already have fallen almost 41 percent since October 2007, Moody’s Investors Service said Oct. 19.

Billionaire George Soros, speaking today at a lecture organized by the Central European University in Budapest, said a “bloodletting” may be coming for leveraged buyouts and commercial real estate.

“The American consumer will no longer be able to serve as the motor for the world economy,” said Soros, 79.

There is one comment from Anonymous said...(http://thecomingdepression.blogspot.com)

Watch and wait now. As I stated before after the Christmas massacre and the subsequent collapse of the Commercial real estate expect a MASSIVE bear market.

This WILL be the last opportunity to buy precious metals.

Also, Bob Chapman of international forecaster has stated that come next year the FED is going to try to keep this thing going by forcing banks to lend again. In other words another bubble. However, this time around it is going to be direct monetization where the FED gives the money to the banks and the banks HAVE to lend regardless.

This nuclear option will force liquidity into the end users hands (U.S. people) so we can BUY BUY BUY.

Since our economy is 70% Consumption this will be the feds last ditch effort.

However, the consequences are going to be ruiness with rampant inflation happening immediately from direct liquidity injection via the FED - Banks - Consumer.

Right now the banks are hording the cash and not lending. This will change next year once the mandate will be given to force lending institutions to give out loans. Think sub-prime 2.0 if you will.

This time around it will not work and will not create another 6-8 year bubble because the fundamentals are different this time. At best it will create the “illusion” of a couple quarters of GDP growth and Stock market increases. For example, look at the second quarter GDP results of a 3.5% increase. We all know that this was ONLY due to direct liquidity injections for cash for clunkers and the $8000 House credit. However, what is coming next is the examples above but on steroids.

So with that being said wait until early 2010 after the next crash to buy Silver on the cheap. Because after the next crash the above scenario will unfold and a Hyper-inflationary depression will ensue.

However, this will effectively impoverish the entire populace with inflation and after the next crash from this last lending scheme the Powers that Be will be able to devour all asset classes from the sheeple.

that I like to share with.

Posted by Mr Thx Monday, November 2, 2009 0 comments
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