Bernanke must be fuming that Greenspan won't keep his mouth shut! Expect this comment to further erode the markets.
Remember that old commercial, that when "E.F.Hutton" speaks, people listen? It should be: When Greenspan speaks people listen!Excerpt from above:"....At least 20 lenders in the subprime mortgage sector, which serves borrowers with poor credit histories at high interest rates, have gone out of business as a result...."
Maybe Alan Greenspan should just "shut-up"! Finally someone is telling the truth about WHO created this mess!
Mar 15, 2007 Bank Bust & Sea Change: 3 Views Jim Willie CB 321gold . . . Inc
Excerpt from above:"....Greenspan was responsible for creating the mess, now he leads interference for reactive policy change. He has talked about a recession likelihood, but continues to deny a spillover of the housing debacle into the real economy. More accurately, he awaits the spillover. One should regard the Greenspan role as carefully orchestrated, not by any means accidental. He has created the psychological backdrop perfectly for Bernanke to cut official interest rates. Ben needed a shock to stocks, a change in sentiment and outlook. He got it....."
"....The shocking developments are at work now, a clear testimony to a failed self-regulated inflation management scheme abusing a fiat currency, just as Von Mises warned:
- MONEY SUPPLY GROWTH IS AT 10% (according to USGovt statistics)
- PRICE INFLATION IS AT 10% (disregard USGovt statistics)
- ECONOMIC GROWTH IS AT MINUS 1.4% (disregard USGovt statistics)
- THE HOUSING MARKET IS IN REVERSE
- ITS COLLATERALIZED MORTGAGE BONDS ARE IN FREE FALL ..."
Comment: UK has its own bad debt crisis just waiting to emerge Barclays, one of Britain's biggest banks, has demanded the immediate repayment of about $900m (£465m) of mortgage loans from New Century Financial, America's second largest sub-prime lender.
"...The collapse of New Century this week illustrates in spades the end game of Ponzi finance. All the incentives for Ponzi business models are front loaded, that being collecting fees and commissions for silly season and often fraudulent transactions. Once the string has been run, the loots from these transactions are stuffed into the criminal rat lines, and the game of musical chairs begins.
It is at this twisting in the wind “break point” that the hyperreality crowd gets the “surprise”, that makes their denial no longer an illusionary asset, but a liability. There is then a mad scramble to determine who becomes the final bagholders of the Ponzi scam. That’s when a term that will without doubt become increasingly familiar enters the lexicon, the “margin call”. Margin calls pull the plug on Ponzi finance “liquidity”....".
"....he is about to be named an adviser to Republican presidential candidate John McCain.Three years ago, Time magazine named Ferguson one of the world's "100 most powerful and influential people....."
"...he has stressed in speeches that investors are too complacent about geopolitical risk, notably growing instability in Iraq and elsewhere in the Middle East....."
"....While hardly alone in discussing risk, Ferguson offers fresh historical perspective. One of his key themes is the economic, social and political parallels between the world today and on the eve of World War I...."
"...."Niall has an ability to understand both current issues and historical trends. He reminds people that a catalyst for a significant market move can be quite small. The smart money likes to have a historical perspective....."
"....Thus, Ferguson says, there may be a case for adopting "the old Rothschild principle" of the great European banking family: a third in securities, a third in real estate and a third in art.
"But I'd go further than that," he says. "I'd want some exposure to commodities, but I would no longer privilege gold. If you're worried about a big war, buy missile manufacturers and sell investment banks...."
"....Which news to believe?
As a featured speaker at Morgan Stanley's (MS, news, msgs) November investment conference in the Bahamas, Ferguson talked about the conflicting messages of the news and business sections of today's newspapers. ..."
"When you read the news section, you'd think the world is going to hell in a handcart," he said recently, recalling his remarks. "If you read the business section, you'd put the paper down thinking that life is as good as it could possibly get. All assets are up. All markets are liquid. All systems are go. The two sections don't seem to be describing the same world."
"....Ferguson is intrigued by the behavior of the financial markets on the eve of World War I because stock and bond prices at the time registered scant concern about the impending cataclysm. This contrasts with the conventional view among historians that the war was all but preordained because of a decade of escalating great-power rivalries that erupted into violence after the assassination of an Austrian archduke by a Serbian terrorist in June 1914. If the smart money of that year was blind to looming disaster, perhaps the smart money of 2007 could be blind, too.
Ferguson was most surprised that the people who had more to lose from a war -- bond investors -- didn't see it coming. Investors had known since Napoleonic times that wars were inflationary and bad for bondholders, as World War I ultimately proved to be. Russian czarist debt was repudiated by the new Soviet government, and German debt was almost completely devalued by hyperinflation...."
Maranatha!
Deborah
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