The Lone Ranger's Silver Bullet Rate Cuts Saves Markets

1/22/2008

Elaine Meinel Supkis

The Fed performs a not unexpected rescue operation. Last night, they probably looked at world headlines and said, 'Hey, this is a global collapse, we should fix this by making global inflation much worse, drive the US deeper into debt and flood everything with red ink!' So they will and the whole world which has a trade surplus with the deep in debt US will revive this impossible trade situation and the Japanese are frantic to restart the carry trade mess which also flooded the world with red ink. This is what happens when systems are unbalanced. Time to examine past global banking/trade collapses.

The headlines are grim. We all watched in fascination as global speculators and traders panicked. A panic is a complex beast but it is fed by the same thing every time: too much debt is used to buy up debt instruments. This concept of destabilized trade systems being kept alive by destabilized banking systems where there is this impulse to increase the finances of the banks by offering ever-greater loans to an ever-greater pool of players in this equity game. This game always ends up being all about the equity players getting loans to gamble on markets and increasingly, to bid up the value of other loans which are put out to pay for something else entirely.

I want to use a classic example few people know about: the true trigger of the 1873 Panic. I read a lot of old news paper stories and several papers trying to describe this event which ushered in the Long Depression [what an interesting name, eh?]. I then had to digest this information and the usual place I do this is in bed, around sunrise, after heavy dreaming. As I leave the dream world, I must pass through the Gates of Lethe and there is where I meet the Rational Mind that seeks to figure out things from both the waking and sleeping worlds.

Today, the one at the Gates said, 'I found the trigger to the great panic of 1973! Remember the newspaper story from France that talked about how they must pay the Germans reparations for the war that ended just before this panic? Why, the government didn't want to TAX the French people nor part with the GOLD the government held so they had a LOTTERY that raised not only all 5 billion gold-backed francs but was so POPULAR the people OVERSUBSCRIBED and much more money was raised than the value of the DEBT!'

My eyes flew open. 'That is an exact replica of the Tulip Mania, the South Sea Bubble and the Mississippi Scam! As well as ALL OTHER BUBBLES!'

This sent me to thinking hard. Ouch. But I pressed onwards. Why are these bubbles so dangerous? We see similar, much smaller bubbles pop up and go boom without triggering the collapse of empires, the destruction of world banking and trade and long depressions. But every once and a while, they do this. So it pays to look again at the important bubbles, namely, the ones that destroy empires and cause global depressions.

I hauled out my 1882 edition of 'The Book of Days' published in London. On the chapter for January 11th, they have the story of 'The First Lottery in England'. In 1569, under Queen Bess, a lottery with prizes such as plates and merchandize like cloth, was held in front of St. Paul's Cathedral to raise money for improving the ports. King Henry VIII had successfully looted the entire Catholic Church in England a generation earlier but due to inflation that took off when Columbus found the New World's vast mineral wealth and gold and silver came pouring into Europe causing the value of both to plummet.

Note the inflation here. Because of this, raising revenues via traditional taxes brought in less and less value and the rich who got the goodies from the Church looting were very loathe to pay taxes [humans NEVER change, do they?] so they figured out the new lottery system cooked up by the Italians in Venice and launched it in England.

Here is the key part: 'The State lottery was framed on the simple principle, that the State held forth a certain sum to be REPAID by a LARGER sum.' The profits from the lottery pays the loans, in other words. It is a lending scheme that doesn't depend on interest rates but rather, encourages maximum sales of lottery tickets to increase the value of the debt to the DEBTOR as WELL AS the buyers of the lottery tickets who want the ever-growing pot offered as the inducement to join in this taxation scam. We know that lotteries that get big attract manic crowds hoping for the bigger and bigger pot. This is simple human psychology.

Back to the book in my lap: 'The GOVERNMENT gave £10 in PRIZES for every SHARE taken, on the average.
a great many blanks, or prizes under £10, left of course, a SURPLUS fr the creation of a few MAGNIFICENT PRIZES wherewith to attract the UNWARY PUBLIC.' This is part of the key. The chopping up of something into smaller CDOs and then selling these to the unwashed masses who must not be 'in the know.' Ignorance is important here.

Back to this very old book: 'Certain FIRMS ...know as lottery-office-keepers [or hedge funds, hahaha]...each taking a certain number of shares, the sum PAID by them was always MORE than £10 a share and the EXCESS constituted the government profit.' At first, this scheme brought in simple sums and everyone was happy. The government on the average, got £16 at the auction of the £10 shares and the contractors would repackage this and then resell it to the public at £20-22 per share, in several pieces from the chopped up shares. As time passed, the government allowed these shares to be chopped up into smaller and smaller bits which collectively brought in greater and greater profits.

Over time, people at the top figured out how to make this 'grow'. By 1780, a new scheme was cooked up. 'every subscriber of £1000 [tickets] towards a LOAN of £12,000,000, at 4%, received a BONUS of 4 lottery tickets, the value of which was [still] £10, and any oone of which might be the FORTUNATE NUMBER of £20,000 prize.' First, note how the prize grew in size. The government was addicted to this system because it brought in public money and on top of this, the rulers including the Prince of Wales as well as all the royal courtiers made money buying and selling shares of these lotteries. So it increased revenues and personal wealth and magic number madness gripped the nation. Now the bubble forms.

Back to this old book: 'The lottery MANIA brought other evils in its train. A species of gambling sprang up, resembling TIME BARGAINS ON THE STOCK EXCHANGE in which 2 persons, A and B, lay a WAGER as to theh price of Consols AT SOME FUTURE DAY; neither intend to BUY OR SELL...[they] did not possess the tickets could nevertheless lost or won by the failure or success of particular numbers, through a species of INSURANCE which was in effect, GAMBLING.' HAHAHA. A consortium of financial houses, desperate for greater profits, launched a market last March at the MarkIt.com. This is the infamous ABX Indices. The plot was to come up with novel ideas for gambling futures of each other's contracts and CDOs, etc and this gambling BETS on the future SPREAD of these things generated by the guys launching this index would increase in value as unwary investors [the great unwashed masses] would pour money into this gambling operation to buy shares of this reanimation of the old British lottery system of 1777. Talk about old things coming back to haunt us!

But the investors ran away in July and the value of these totally fake and utterly useless hedging shares that are in lieu of insurance, have all collapsed, some to less than 10% and the stronger, AAA shares lost so far, only 60% in value but all of this will be swept away in the ongoing panic we are witnessing today.

From the wise author of this old British book: 'The matter [of creating these insurance tickets] was reduced to a mathematical science, or to the application of the theory of probabilities. Treatises and Essays, Tables and Calculations, were published for the benefit of SPECULATORS.' All this led to a collapse that had powerful consequences. When the lottery bubble burst, the frantic government of Britain, fighting distant colonial wars in the New World colonies, decided to RAISE TAXES to PAY FOR THE WARS and to do this, they raised taxes on EXPORTS AND IMPORTS and strangled business for the American colonists who in turn, blew up and launched a REVOLUTION.

This is why, when we see the exact same things in modern times, it pays to read some history. All the bubbles in history are based ultimately on paying for unpopular wars or distant wars. All of the schemes based on raising sums that involve making money for the people contributing always balloon until they break. When they break, there is a collapse in finances, banks fail, etc. The Bank of England was born out of this mess described above. France, when they tried to pay for a war they lost, didn't tax the people but instead, created a very popular bubble which burst and caused all of the world to slide into a major banking crisis.

Dealing with changes of flows of funds can trigger cascading events. Usually, at the heart of such events is an empire trying to pay for wars via lotteries, subscriptions and fake land schemes like the French Mississippi fraud. 99% of the time, these subscriptions are for DEBTS that must be repaid and always, in the height of the MANIA, people go into DEBT to buy shares or tickets! This debt is uncollectible since only one or two people win the lottery and the other tickets, etc are WORTHLESS. The money that doesn't pour into pockets becomes a growing DEFICIT. The government always views these bubble funds as INFINITE and so, rather than being careful, they go on SPENDING SPREES. And increasing wars.

The Great Depression took off because Germany couldn't pay for the WWI reparations, the US lent both Germany and the two other victors, loans to pay these reparations and these funds were used by England and France for colonial wars and expanding their giant empires in Asia and Africa. Trade was grinding to a halt due to everyone trying to lock each other out of each other's colonial possessions so they could exploit their colonies for taxation funds which were used to drive up the domestic stock markets of the home bases.

Since Germany couldn't trade with much of the world due to France and England locking them out, the flow of money was one way: into Germany via the US loans and then out again via the reparations which then flowed back into the US again which caused banks to gain greater profits from this movement and which they used to lend to speculators buying stocks and bonds and such and everything was based on paying of great debts, government to government. When Germany could no longer do this because of rising difficulties after the French occupied the Ruhr, they halted payments and this caused a dynamic storm to rage throughout the global banking system and this was the true, ultimate trigger to the Great Depression and WWII.

The 1873 crash didn't trigger a world war with the European powers but rather, a land grab by them. Asia and Africa saw a world war and the tensions of this massive looting expedition which pitted the European empires against each other caused a hair trigger situation to develop which exploded right at the end of the Long Depression: WWI. Time to go visit today's news as the US stock market struggles to rise in the teeth of a howling economic wind pushing a hurricane of red ink:

Fed cuts rates 75 basis points in emergency move

Hoping to prevent a market meltdown and recession, the Federal Reserve lowered its overnight lending rate by 75 basis points to 3.50% on Tuesday in a rare move between formal meetings.

The cut came after global financial markets sold off in dramatic fashion on fears that bad bets in credit markets could spread further and drive the U.S. economy into recession.

It was the largest rate cut by the Fed since the early 1980s.

The Fed also lowered its discount rate by 75 basis points to 4%.

After a conference call Monday evening among the 10 voting members of the Federal Open Market Committee, the FOMC released a statement saying downside risks to growth remain. One member of the committee, William Poole, president of the St. Louis Fed, voted against the move.

"The committee took this action in view of a weakening economic outlook and increasing downside risks to growth," the Federal Open Market Committee said in a statement.

We saw the news last night that pre-sales of stocks showed a drop of 500 points set in cement to happen the instant the stock market opened today. Across the globe, on average, stocks fell around 7%. If the US market followed suit, today's drop should be around 840 points! This is a huge amount and would take it down to nearly under 11,000. That would put it 4,000 pts lower than in September, a very significant drop. This is very much bear territory at 29% drop. We have no doubt at all, this is a classic bear market now.

All stock market, tulip market, Mississipian share, South Sea Bubbly markets do the exact same thing: sales of shares drops a tiny bit and more people rush into the market to buy the 'cheaper' shares and it shoots up higher. Then, at the crest, it goes into wild gyrations up and down as people seek ever-more novel ways to fund the buying of shares in the hopes that they will gain more profit reselling the shares. The entire point of even having these things in the first place---to pay reparations, to pay for harbor dredging, to pay for hospitals or tulip growing---this is forgotten in the frenzy of getting rich quickly with pure speculation. I note with some dark amusement how, even hundreds of years ago, very smart people used math to figure out the system so they could exploit it. And they used Newton's new forms of mathematical reasoning to figure out how to make a profit buying and selling things that are meaningless. This works wonderfully for a while.

I become quite angry when I review the various formulas and magic numbers of the top economists because often, these are based on false premises, lies, cons and evasions and rather than explain or illuminate economic reality, they seek to further deform it for profit.

Today, the top bankers of the world are frantically trying to restart the US imperial bubble machine. This is impossible in the long run and perhaps, finally, even in the short run. As the US market prepared to open last night, the guys with the magic numbers refused to read history and figure out how these identical attempts at keeping things going have failed and they will try the usual, timeworn solutions. In this case, dropping interest rates further.

Bank of America Earnings Plummet After Loan Writedown

Bank of America Corp., the second- largest U.S. bank, said earnings dropped 95 percent after $5.28 billion of mortgage-related writedowns and higher provisions for future loan losses.

Fourth-quarter net income fell to $268 million, or 5 cents a share, from $5.26 billion, or $1.16, a year earlier, Charlotte, North Carolina-based Bank of America said today in a statement. Excluding merger and restructuring costs and a gain from the sale of Marsico Capital Management LLC, the company earned 5 cents a share, missing the 21-cent average estimate of 21 analysts surveyed by Bloomberg.

``Our fourth-quarter results were severely impacted by ongoing dislocations in capital markets and the slowing economy,'' Chief Executive Officer Kenneth Lewis said in the statement.

A trillion dollars vanished this last 6 months before the global stock plunge this week. The central banks of the West have infused nearly a trillion into the system to keep it afloat. But the PROFITS of the bankers as well as the BETS of the speculators which are based on FUTURES has collapsed and cheaper loans won't make this lost money reappear. It does two things only: INCREASES DEBTS AND INCREASES INFLATION.

I have mentioned in the past that the central banks should give up on the chimera of controlling prices. This Stalinist statist fancy has led to terrible consequences. The failure to prevent inflation caused all the top banks to simply lie about inflation. This scheme had borne great fruit: the speculators and financiers could exploit the differential between real inflation and the low interest rates charged by the banks to flood the world with easy money no one can possibly repay. This is where the derivatives markets comes in. The differential is also the derivative. This monster has grown to a size no one can comprehend. Is it $50 trillion? $500 trillion? Infinity? The numbers are now vast and impossible and are the fault of the manipulators refusing to use modern science to accurately gage real inflation and real money growth. Instead, they assisted these entities in wildly increasing the world's potential money supply which in turn, is now causing the whole system to collapse under a mountain of unsustainable debt.

The US government and Federal Reserve people are all making this much, much worse. We must travel to the other side of the planet to visit both Japan and China, two critical players in this evolving collapse.

Stocks: Nikkei Plunges To 28-Month Low On U.S. Recession Fears

TOKYO (Dow Jones)--Ever since its stock market bubble popped in 1989, Japan's equity investors have become accustomed to roller coaster rides.
***************************************************
Rising Yuan Suggests Shift In China Growth Strategy

TOKYO (Nikkei)--Defying expectations that China would not tolerate the yuan appreciating too rapidly, the currency's rise is picking up speed. The stronger yuan highlights Beijing's new thinking in favor of cooling the overheated economy and revising its long-standing policy of using cheap exports as the main engine of its economic growth.
***************************************************
ON THE RADAR: Falling Yields On 2-Year U.S. Bonds To Push Up Yen

TOKYO (Nikkei)--The yield on two-year U.S. government bonds, seen as most sensitive to changes in monetary policy, slid to 2.35% at the end of last week, the lowest level in three years and eight months.
***************************************************
BOJ Leaves Assessment Of Economy Unchanged

TOKYO (Dow Jones)--The Bank of Japan said Tuesday that the nation's economic performance has been weaker than what it forecast in its semiannual report in October, mainly due to a recent drop in housing investment and cautious corporate sentiment.
***************************************************
FOCUS: Fukuda In Test Of Endurance Against DPJ Over Diet Dissolution

TOKYO (Nikkei)--Everybody I have exchanged New Year's greetings with -- politicians, business leaders and people in the media alike -- believes the country will see a political showdown this year, and that 2008 will be a turbulent year.

Note the difference in Japan over this day's news! They are fatalists and know they will be in a grinding downturn because the US can't pay for endless loans via the carry trade. Note the business of being ACCUSTOMED to roller coaster rides. They have the machine at work to keep thing rolling no matter what.

The second story is very important: they still can't understand that China's new game plan is for the yuan AND the yen rise in tandem. The Japanese still hope that they can kill the yen and thus, undercut all competitors. Note that the yuan is now rising faster and faster. And so is the yen! When the bitter medicine of a stronger yen hits Japan in the future, I expect to hear howls of rage over there. But this is China's true policy: to force the yen up with the yuan and this, dear readers, is what we call, a MAJOR change in the flow of money.

Europe's stocks shot up last night due to the hope that the US will continue to allow a flood of value-added goods to flow from Europe to the US consumers who will have lots and lots of easy money as loans so they can buy frantically while losing wages...HAHAHA. Hope springs ever eternal when bubbles break! Will the Fed drop rates to .5%? Of course! They will do this with frantic speed because they imagine they figured out how the Great Depression happened: there wasn't enough lending!

I grind my teeth over that. Germany would have happily taken on infinite loans at 0% interest if they didn't have to pay any principal. Ditto America. We want to not even bother with any payments at all! Just give us the money! This mad belief is at the root of the malfunction of our present system. All the central banks in the world are dropping interest rates...EXCEPT FOR CHINA! All wealth of the world will now flow into CHINA because it has real interest rates. The differential between CHINA and the world will widen and China will reap the benefits of this in the long run. And they know this.

HK stocks dive 2,061.23 points amid global market havoc

Hong Kong stocks on Tuesday continue to dive 2,061.23 points, the largest single-day drop everin points, to close at 21,757.63.

The benchmark Hang Seng Index once plunged as much as 2,109.23 points, or 8.85 percent during the last half hour before diving 2,061.23 points, or 8.65 percent, lower from Monday's sharp losses to close at 21,757.63.

China knows they slammed the brakes on the global bubble's progress. They understand their markets will go down. But they recognize, it is a bubble and this is the only way to stop it. Bubbles must be halted by governments or they end up causing revolutions and wars. People hoping to get rich hate this but if the government works only for the rich like here in America, we see a nation being hollowed out, destroyed and betrayed to all potential enemies. The Chinese leadership fears this result and considers us an example of how NOT to do things, not as a shining example. They also see how Japan is harming its own people with the alternative system. The Chinese want harmony and safety, not risky messes that enrich 1% as all lottery/gambling systems operate. They want general prosperity. This is tricky, of course.

But China's alterations are in the long run, good for them and even for us. We may survive this mess by turning inwards again to rebuild this nation.

Chinese shares end more than 7% lower

Chinese shares plunged more than seven percent on Tuesday amid panic selling over worries of a possible U.S. economic recession.

The benchmark Shanghai Composite Index, which covers both A and B shares, tumbled 354.68 points, or 7.22 percent, to 4,559.75. It was the largest percentage points decline in seven and a half months.

The index plummeted as much as 8-plus percent in late afternoon trading.

The Shenzhen Component Index finished down 1,215.08 points, or 7.06 percent, at 15,995.85.

This is the 7% Solution. The US is refusing to drop 7%. We are choosing to disobey the Bear Market's decrees. The story last night about Godfather Death is instructive. When the godson, now a doctor, refused to listen to Death and instead, insisted on keeping the Princess alive, Death said, he would collect and it was the doctor who died. If the US tries all sorts of tricks to keep a dead stock market and commerce alive via dumping even more debts on this system that is far too deep in debt and has far too big trade deficits, this will only kill us all the more thoroughly in the bitter end. Let's go to China again to see the official news:

Government reactions in Asia-Pacific over stocks plunge

For his part, Indian Finance Minister Palaniappan Chidambaram urged Indian investors to stay calm after the Indian stock benchmark Sensex tumbled more than 11 percent in the first few minutes of trade Tuesday.

"We had anticipated the market to open on a downward trend and hit the circuit breaker. My advice to investors is to stay calm," Chidambaram said after the plunge.

India will be looking increasingly to China for guidance and leadership. Shockingly, so will Japan. Not willingly but with reluctance and fear. They know that China holds the fates of all nations in its hands and they will use this position to cement political power. The US, by psychotically trying to keep the Old World Order going, have actually ushered in the New World Order which is not the old guard ruling us with impunity but rather, a REVOLUTION as is proper with all global panics.

The history of such panics makes this plain as day. When Britain and France used the Long Depression to expand their empires, both Germany and the USA used this time frame to build rail roads, ports, navies, farms, factories and educational centers. As France and England denuded their home states to increase invasive military power that took in the raw resources of the world, their people got weaker and their incomes fell and they went hungry and in rags in slums or fled their homelands to the New Worlds. So when WWI and then WWII broke out, Germany and the US faced each other in a competition to see which would rule the world. The US won both wars. England and France continued their industrial/economic declines and depended even more on taking third world national resources but the US was much, much stronger at home and thus, in WWII, INVINCIBLE.

No longer. We have chose the foolish imperialist route of trying to seize all world raw materials and doing battle with endless, poorly armed natives who hate us more and more. Instead of building an empire, this is digging our grave.

After opening at a tremendous loss today, our stock market, expecting the Japanese solution to our problems, expecting free money, masses of donations based on debts sprinkled across the lands, more lotteries and tolls, more sales of our national resources, our factories and businesses, more bank deals where other nations buy up our financial system, this is all 'good news.'

The bear retreats to sharpen his claws and teeth for the next stage in this reproduction of the Great Depression. Also, a word of warning to everyone: the rulers are unwinding their own speculations. They need an 'up' market to sell to the great unwashed. They do this all the time. The Prince of Wales was never left holding the bag with the lotteries. The King of France skipped out of the Mississippi Bubble right at the top. The Bank of England was formed to deal with the South Seas Bubble so Her Majesty would not lose any sleep. And the Queen of England wants her pirate coves protected which is why Northern Rock is being tended with great care by the Prime Minister.

And in the US: we must bend all our financial systems to protecting the army of speculators who use debts to gamble in world markets. This will destroy our democracy as well as our nation. Perhaps, fatally. Seeing the wonderful effects of this latest sudden drop in interest rates only means they will clamor for more and more. As the Dragon raises rates at the opposite end of the planet.

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Comments

[tutterfrut]

It's a good feeling to know someone somewhere on a mountain with common sense and a treasury of human life research, willing to share it.
It makes me feel less lonely in this crazy 'euconmeny' that should rather make place for civilization again. Thanks Elaine...

[shargash]

"through a species of INSURANCE which was in effect, GAMBLING"

Hahaha -- Credit Default Swaps! I figure bookies invented CDS, but I didn't realize banks had used them so long ago. Heh. Everything new is old.

[Zeppo]

Today's cartoon is awesome!!

[Elaine Supkis]

I got this book from great grandpa.

Yes, when I read that, I jumped up and laughed so hard. 300 years ago, they had all the scams down pat. The Victorian writer professes astonishment that anyone could be so foolish as to fall for these schemes.

[Greg]

I cant see what all the fuss is about once everyone gets their $800 off of uncle Decider and uncle Shooter all the problems will go away.

happy days!!!

WTC 7 "just pull it"

[Greg]

WOW the waves crashing against the shore are getting bigger eh??? Maybe the decider can send these poor sods $800

Stunning jump in foreclosures
Carolyn Said, Chronicle Staff Writer

Tuesday, January 22, 2008

(01-22) 11:22 PST SAN FRANCISCO -- Foreclosures and default notices skyrocketed to record peaks in California and the Bay Area in the fourth quarter of 2007, according to a report released Tuesday. The information was a fresh reminder that the slumping real estate market is continuing to have a serious impact on homeowners, particularly those with risky subprime mortgages.

Lenders repossessed 31,676 residences in California in the October-November-December period, according to DataQuick Information Systems, a La Jolla research firm. That was a dramatic 421.2 percent increase from 6,078 in the year-ago quarter.

In the Bay Area, foreclosures rose an equally stunning 482.5 percent to 4,573 in the fourth quarter, compared with 785 a year ago. Contra Costa County, with 1,558 foreclosures, up 533.3 percent from a year ago, had the most, followed by Alameda County with 1,026 (a 514.4 percent increase) and Solano County with 704 (up 528.6 percent).

"Foreclosure activity is closely tied to a decline in home values," DataQuick President Marshall Prentice said in a statement. "With today's depreciation, an increasing number of homeowners find themselves owing more on a property than its market value, setting the stage for default if there is mortgage payment shock, a job loss or the owner needs to move."

It was the most foreclosures since DataQuick began tracking them in 1988 and more than double the previous peak of 15,418 foreclosures in the third quarter of 1996. The fewest foreclosures recorded were in the second quarter of 2005, when 637 homes were repossessed.

Mortgage default notices, sent by lenders when homeowners are several months behind on payments, also hit record highs. Default notices are the first step of the foreclosure process.

Statewide, lenders sent 81,550 default notices, up 114.6 percent from 37,994 in the fourth quarter of 2006. It was up 12.4 percent from 72,571 in the third quarter of 2007. It was the most defaults since DataQuick began tracking them in 1992.

In the Bay Area, default notices were up 136.9 percent from a year ago, with 12,704 households receiving them. Year-to-year increases in default notices ranges from 84.4 percent in San Mateo County to 199.7 percent in Sonoma County. Contra Costa had the most notices by number, with 3,805, followed by Alameda with 2,573 and Santa Clara with 2,162.

Another gloomy statistic showed that default notices are increasingly more likely to turn into foreclosures. Homeowners can resolve defaults by catching up on their payments, refinancing or selling the house for what they owe. Only 41 percent of homeowners in default were able to pursue these solutions, DataQuick said, compared to 71 percent a year ago.

DataQuick said most of the loans that went into default in the quarter were originated beween August 2005 and August 2006, during the height of subprime loan frenzy.

The median home price in California at year end was $402,000, down from $484,000 in March, DataQuick said. However, it pointed out that much of that decline is due to a change in the types of houses sold, as fewer high-end properties changed hands after mortgage lending tightened in August.

On a loan-by-loan basis, mortgages were most likely to go into default in Merced, San Joaquin and Stanislaus counties, DataQuick said. They were least likely to go into default in San Francisco, Marin and San Mateo counties.

[CEO Nutcracker]

"All the central banks in the world are dropping interest rates...EXCEPT FOR CHINA! All wealth of the world will now flow into CHINA because it has real interest rates. The differential between CHINA and the world will widen and China will reap the benefits of this in the long run. And they know this."

What about Russia's currency (ruble), or the Saudi's, or other oil bearing nations, emerging markets, like Brazil/Latin America?- Do their currencies peg with ours? Besides the loss of exports to our ever bankrupt nation, how are countries affected that did not buy into our hedge fund scam?

I know the Canadians dropped their rate when we did the last time. When it got to C$1.10/US people were actually crossing the border and shopping! GEE, you would think that would be something to encourage. But I guess it screamed US weakness, and Harper bow-wowwed to the bankers and dropped the rate, posthaste!

I'm expecting them to follow suit again if the C$ gets too strong.

[Elaine Supkis]

This is how a deflationary spiral works. Far from causing inflation in the consumer choice areas, this will see deflation while necessities will see tremendous inflation.

And yes, Canada will drop its rates. It has the second biggest trade surplus after China, with the US!

[CEO Nutcracker]

So this will 'spillover' in everyone's backyard.

Poor Canada. Gotta 'take one for the team'.

I've read an article that much of Latin America is sovereign now and will not allow the London exchanges to dictate market prices on their products anymore. They might be able to weather the storm if they remain vigilant.

We shall see......gotta rest up for tomorrow's next crash..

[Neuro Artist]

I wonder if this comming crash is designed for the controllers of the Federal Reserve Bank to get a hold on all the assets of the world. Soon the masses will demand that the Feds take over all the faulting banks, and thus all the underlying assets of the defaulting credits will belong to the Rothschilds. The deeper the crash the more to them....

[Elaine Supkis]

Nope. They are deluded about that.

China and Russia will own the world. Isn't that a very rich irony. Marx must be laughing to death beyond the grave.

[John]

"Foreclosure activity is closely tied to a decline in home values," DataQuick President Marshall ["Captain Obvious"] Prentice said in a statement.

LOL!

[Elaine Supkis]

You don't say? HAHAHA.

[Sonny Drysdale]

We miss your ranting madness on all the old message boards and forums. Please come back.