Earthside Comments: Brother Barack is going to speak to a joint session of Congress this evening ... and to the nation. It is his job to reassure the American people and we hope that he performs this function well. Because the unvarnished truth is that there is little he and his federal government administration, the Congress, or the Federal Reserve can do to stop the economic crash that is occurring all around us right now.
Borrowing and print more dollars to bailout and rescue banks and transnational corporations is really just a fig leaf to cover-up the deep systemic and institutional failures caused by debt and globalization. Unfortunately, the racket of political campaign contributions in place here in the U.S. makes it impossible for President Obama or any other 'leader' in Washington to tell the honest truth and propose the hard, inconvenient measures that could move us to a genuinely sustainable economy.
So, hunker down -- Earthside readers have know that all of this was coming for years -- the best you can do is acknowledge your ringside seat watching some of the most momentous events in human history.
Red Alert: Major Meltdown Imminent! Your Escape... | Martin D. Weiss, Ph.D./Money and Markets
The nation’s largest banks are so close to collapse and the world economy is coming unglued so rapidly, a major Wall Street meltdown is now imminent.Specifically, it’s now increasingly likely that virtually all of our forecasts of recent months could come to pass in a very short period of time, including …
- Stock market crash: A swift plunge in stocks to about 5000 on the Dow, 500 on the S&P 500 and 900 on the Nasdaq … or lower.
- Corporate bankruptcies: A chain reaction of Chapter 11 filings or federal takeovers, including not only General Motors and Chrysler, but also Ann Taylor, Best Buy, Jet Blue, Macy’s, Saks Fifth Avenue, Sears, Toys “R” Us, U.S. Airways and even giants like Ford or General Electric.
- Megabank failures: Bankruptcies or nationalization not only of Citigroup and Bank of America, but also JPMorgan Chase and HSBC.
- Nationwide epidemic of small and medium-sized bank failures: Outright FDIC takeovers, with little prospect of nationalization.
- Insurance failures: State takeovers of companies like Ambac Assurance, Bankers Life and Casualty, Conseco, FGIC, Medical Liability Mutual, Mortgage Guaranty Insurance, Nuclear Electric Insurance, PMI Mortgage, Standard Life of Indiana and many others.
- Cities and states: An epidemic of defaults by thousands of cities, states and other issuers of tax-exempt municipal bonds.
- Stock market shutdowns: Trading halts on major, big-cap stocks … plus on-again, off-again exchange shutdowns, making it increasingly difficult for investors to liquidate their holdings at any price.
- Credit market deep freeze: A virtual shutdown in all debt markets except U.S. Treasuries. An avalanche of selling — and virtually no buyers — for corporate bonds, commercial paper, asset-backed securities, municipal bonds and all forms of bank loans.
- Government bond collapse: A steep decline in the price of medium-and long-term government securities, as the U.S. Treasury bids aggressively for scarce funds to finance a ballooning budget deficit.
Shocking? Perhaps. Avoidable? No.
Nor am I alone in anticipating this rapid unraveling of the economy and financial markets. This past Friday, at a Columbia University dinner reported by Reuters ...
George Soros said the financial system has effectively disintegrated, with the turbulence more severe than during the Great Depression and with the decline comparable to the fall of the Soviet Union, while ...
Paul Volcker said he could not remember any time, even in the Great Depression, when things went down so fast and quite so uniformly around the world.
Both recognize that we’re in a new era of chaos. What’s the landmark event that separates us from the past era of relative stability?According to Soros, it’s precisely the same event we forecast in 2007 and the same event we have repeatedly highlighted here in Money and Markets: The bankruptcy of Lehman Brothers.
That was the final straw that punctured the already imploding bubble. And it was the first major domino that set off the chain reaction of events now careening out of control: The collapse of consumer credit markets … surging unemployment … and now, a new set of even larger financial failures looming. ...
... Based on the analysis we presented here in August 2008 (”The Next Big Failures“) ...
Based on the frank recognition of the catastrophe by Soros and Volcker on Friday ...
And based on the trillions in government bailout funds already spent, lent or guaranteed ...
The fact is that the banking collapse has already occurred! ... MORE
Home Prices Post Record Annual Decline in 4Q | Associated Press/Yahoo! Finance
A widely watched index shows home prices tumbled by the sharpest annual rate on record in the fourth quarter and in December.The Standard & Poor's/Case-Shiller U.S. National Home Price Index plunged 18.2 percent during the quarter from the same period a year ago, the largest drop in its 21-year history. Prices are now at levels not seen since the third quarter of 2003.
In the month of December, the Case-Shiller 20-city index plunged 18.5 percent from December 2007 levels, while the 10-city index dropped 19.2 percent.
Prices in the 20-city index have plummeted 27 percent from their peak in the summer of 2006, and the 10-city index has fallen more than 28 percent.
AIG in Talks With U.S. Government, Sees $60 Billion Loss | Reuters
American International Group, rescued twice last year by the U.S. government, is asking for more aid and bracing for a fourth-quarter loss of roughly $60 billion, a source familiar with the matter said. It would be the biggest loss in a quarter in corporate history.The $60 billion would exceed Time Warner's $54 billion single-quarter loss in 2002 and dwarf the $24.5 billion loss AIG posted in the third quarter, when the government increased its rescue package for the insurer to about $150 billion.
Macy's Reports 59 Percent Drop in 4Q Profit | Associated Press/Yahoo! Finance
Target 4Q Profit Falls 41 Percent Amid Downturn | Associated Press/Yahoo! Finance
Office Depot Posts 4Q $1.54 Billion Loss | Associated Press/Yahoo! Finance
Comments