Elaine Meinel Supkis
Global liquidity continues unabated so of course, world stock markets will continue to soar. Indeed, the collapse of the US housing bubble is causing more money to flow into stock markets, not less. Even though many national banks are raising interest rates, this isn't enough to soak up all the red ink being generated by global government overspending/bond selling due to currency increases and inflation. The world's biggest economic destination is running in the red on all fronts still and the world's second largest is deliberatly depressing its ownn economy and the world's third largest economy is running in the green thanks to the other two needing it to eat up all the inflation both are generating.
Fang Fenglei, who founded China's first investment bank more than a decade ago, now wants to open one of the country's first independently run private equity funds, said two people with direct knowledge of the matter.Fang, who now heads the Chinese securities venture of Goldman Sachs Group Inc., is gauging whether regulators will support his plan for a 6 billion-yuan ($790 million) buyout fund, said the people, who declined to be identified as the talks are private.
Oh, I am estatic. A hedge fund hell hound is born and it is named 'Fang'! Far from being a grim science, economics is full of humorous tid bits. I often laugh, chortle or cackle when going through the news because it is all just very funny even if it can turn deadly serious. Since we are in the midst of a global funny-money episode, laughing is appropriate. So...Fang is going to run a private equity fund to do what?
He is part of the Goldman Sachs dog pack. So Fang has some attachment to the traitorous clowns who are running our trade negotiations with China via the Treasury Department. Um, someone ought to ring the 'conflict of interest' bell. Loudly. Ding dong! I harp on this issue because for some odd reason, virtually no one pays attention to all this. The big media guys think this is OK. So does most of our government and of course, Wall Street needs treason to get rich.
So we have a gang of Wall Street shysters who are selling our nation out, running our government that interfaces with Wall Street, working hard to destroy our trade balance and enable the Chinese in their long range plans to 'Be bank!' and run the global economy. This information should cause everyone to shudder. Why are we letting Goldman Sachs run our negotiations with foreign powers when they are in cahoots with these foreign powers? Eh?
Unlike the US, the Chinese government can and does put bullets in the back of any heads that think they can short shrift the country itself. We saw this just this week. Executing regulators for taking bribes...wow.
From the Fang article:
While standing in front of the panda pen at Washington Zoo in 1994, Fang and then-World Bank China Chief Edwin Lim hatched a plan to start China's first investment bank. The two formed China International Capital Corp. in August 1995.The company, 34 percent owned by Morgan Stanley, is the top arranger of share sales in China this year, data compiled by Bloomberg show.
Nine years later, Fang took a $100 million loan from Goldman to set up Gao Hua Securities, which the New York firm controls through undisclosed contractual arrangements. Gao Hua and New York-based Goldman formed the investment banking venture the same year, with Fang's company owning 67 percent and Goldman holding the rest.
It's unclear whether Goldman would be involved in any yuan- denominated fund raised by Fang, the people said. Goldman currently makes private equity investments in China with money raised from overseas.
Way back when the Chinese imprisoned or executed all the Maoists, they sent people to the US to discover how our banking and capitalist systems worked. I entertained a group for over a year and amused myself, giving them lessons. My favorite topic then as now was the issue of treason: our top leaders especially the President, are all open to bribery and making backroom deals for themselves that hurt our nation. This tendency to sell to the highest bidder is built into our election system why forces people to go out openly soliciting bribes in order to gain office and thus, the power to solicit even bigger bribes! They found this system puzzling but immediately saw the value of it as far as China is concerned.
I believe we can imagine that Fang won't bite Hu or Wen. Indeed, he probably reports directly to them for he has penetrated a top priority item on their 'things to control or corrupt' list. China is working day and night to thoroughly intertwine the top ruling elite financial systems and individuals in America with their own system. This co-opting of our rulers is how they intend to give us a gentle, soft landing.
That is, our eventual surrender to them. When they were with me, we discussed WWIII. I made it clear that there is a strong streak of suicidal maniacal emotions buried not very deep in our society and we could easily go bezerk if things go badly. China has lived next to the Japanese for thousands of years and indeed, tried repeatedly to civilize them. This included sending over Buddhists priests to preach peace and love and meditation.
The Japanese turned them into suicidal warrior priests who scream while plunging into battle with virtually no weapons! So the Chinese know the dangers of crazy warrior societies and don't underestimate them. They know that WWIII would be bad for them. They also know how to tweak us when they need us to go in some direction. For example, they have been very openly wanting us to finish the stupid Korean War and make peace with North Korea so China can then get that place re-united and in alliance with them and also remove the American military troops on China's flank.
Bush refused to even talk about this so they let Baby Dragon 'Me want to go boom!' loose to terrorize not only South Korea but Japan. This got everyone serious about negotiations and once again, the US is back at the table, snarling at Baby Dragon but negotiating.
China has long, long range goals. And one thing they want is to be our bankers and controllers and thus, have leverage over us. Loans, after all, are called 'leverage' and this is a good word for them. We don't control China, we only react to China's actions. China controls their own situation. This is called 'sovereignty' and is very connected with the thing our Goldman Saxon running our Treasury claims, he can't understand what 'soveriegn wealth' is.
He should call up Fang and ask him.
PBS, One on One with David Wyss, Chief Economist of S&P:
GHARIB: Now I understand that there are 612 mortgage securities on your credit watch list. And you're reviewing them and some of them will be downgraded. How many of them will be downgraded do you think?WYSS: Well, if we knew that we wouldn't have to put them on credit watch. But I would say, you know, the great majority. My personal guess would be at least 90 percent. Let's keep this in perspective. We're looking at $12 billion. That sounds like a lot of money -- it is a lot of money to most of us. It's only 2 percent of the sub-prime securities we rated during that period. And it's 0.01 percent of the U.S. mortgage market.
Watch, Dick, watch. See the mortgage securities fall. See Spot run. Run, Spot, run. Spot has three heads. Spot likes Fang. Fang has Chinese money. See Dick run to Fang. Good dog, Fang. Don't bite Dick too hard.
So, 90% of these things based on giving out funny money loans to deadbeats, are going bad? And of course, the stock market soars on this great news. Whee. Fang must have some pretty nice bones for all the other hedge fund hell hounds! The subprime is only 0.01%? Well, 90% of all mortgages were written over the last 30 years! And this subprime junk didn't come along until the last 10 years! And the super crazy loans that have a very high default rate, didn't appear until last year! So what if they are a small percentage of all loans in the last half a century!
They are a huge hunk of all loans handed out in the last 5 years! And it barely scratches the surface! For many people didn't finish paying off old mortgages, they 'tapped the equity' of their ATM homes and spent the money on things that won't make America strong in 20 years!
The reporter continues grilling Wyss:
GHARIB: Well, how exposed are hedge funds and also banks and insurance companies that hold these securities?WYSS: Well, one of the problems is we don't really know. We have a pretty good idea for the banks and the insurance companies. And for them we think this is a minor problem. But the hedge funds by their nature don't have to tell us what they hold. And as a result, we just don't know what they've got.
Aren't we happy that 50% of today's stock deals are being done by entities that are utterly occult and have strange names that hint to their dark side? People may laugh at me or think I am insane when I talk about the occult and our satanic ritualist rulers. But here it is: they make wealth IN THE DARK. We get to see only the tail end of their schemes and deals. And Fang knows a lot about this subterranean universe where funny money is created and then sent outwards with all fingerprints wiped off of it so people can't trace its passage!
The rise of a gozilla gang of secretive, occult, bizarre and totally 'new' entities, suddenly funnelling a massive amount of mysterious 'liquidity' into the world's stock markets should frighten everyone to death! This isn't right! This is BAD. Bad doggies! No, you can't chew up the couch and piss on the carpet when the lights are out!
The mess these hell hounds are creating is of course, hidden from view because the lights are off and this is 100% the fault of the Federal government and the Federal Reserves! And our election system, of course. These guys all want no light shed on the doings that are creating wealth out of thin air. They have all sorts of excuses about this. The dying dollar is good for America, they claim. Free trade makes us rich, they say with their teeth shining. Fang joins them, wagging his tail. Debt is wealth, they assure us. We are so in trouble!
The sheer generosity of the prices being paid (to buy up each other)suggests a new urgency creeping into play. In the past, mining companies were more cautious about over-expansion at the top of the cycle for fear of being caught out when prices slumped and having to mothball plants.But there is evidence this cyclical behaviour is now in the past as commodity prices settle on a more stable path, underpinned by strong, sustainable growth in emerging economies such as China, India and South America.
As a result, companies are now paying full prices for acquisitions even at what appears to be close to the top of the demand cycle. Is this wise? What happens if demand suddenly falls off a cliff? What happens if there is a currency crisis forcing a country to cut back on its imports?
What happens next? Easy: read up on the Great Depression. When the British Empire, which was the world's reserve currency, began to croak due to WWI, the US tried to prop up the dying empire, the dying currency. This propping up got bigger and bigger and bigger until it became the US defending the entire global empire of Britain in a war we call 'World War II'. These things have a way of collapsing big time.
The Chinese, Indian and South American economies depend on the US global empire sucking down all their sales and in return, giving them our gold or IOUs whereby we promise to be their slaves for the next 100 years. Of course, we can weasel out of this by declaring war on them and launching WWIII which is why China is being very delicate about all this: they want us to be beholden and peaceful, not bankrupt and violent.
But the Muslims fighting us want us very bankrupt and their wars on us and our invasions of their lands, seeking oil, are bankrupting us. China will not bankroll our invasions anymore. They want us to reduce our military in Asia but not the world, they want us leaking wealth, patrolling the Seven Seas for them! And they don't want us to make stuff to sell overseas like cars, for example! So we will see who will win this one. I am leaning more towards bin Laden winning due to the fact, he is suicidal and so are many Americans in charge of our government.
The Brits continue:
Then, of course, there is the ever present issue of the private equity industry. Would it find the pickings rich enough? A report from Ernst & Young suggests private equity is indeed alert to the possibilities. In the past it has kept a low profile, wary of the boom and bust cycles, but it could move in now that companies appear to be enjoying more stable trading conditions.Not surprisingly, shares in all the major mining companies moved sharply higher, anticipating more corporate activity, although Rio retreated 4.5 per cent to end at 3,810p. One broker, Keith Watson at Evolution, suggested that Rio could be vulnerable to an approach from a private equity group or powerful Chinese interests.
The minute there is 'stability' there is no risk, right? Always, the history of finance and booms and busts has a continuous storyline: if everyone thinks there is no risk, there is no downside and that everything will double in value forever, this is just about when a good, nasty collapse occurs. This is the human psychology element to creating wealth. If one thing is good, a zillion things that are the same are even better. The Chinese are certainly on a global shopping trip. Most of Hu and Wen's diplomatic business trips are actually all about this. They are very intent on making deals.
One place they are concentrating on is the US itself. Despite Bush's crude rebuffs directed at Hu during his last visit, Hu went off to the true power here, to Bill Gates. And made more deals there. Indeed, he was King to all the investing houses and others making money destroying our industrial base. Everyone is looking to China for handouts except for Miz Japan. She is furious about all this and is scheming to discover some tricky way of stopping China while still bleeding the US to death.
The UK reporter asks a good question:
Is the commodity sector in a super-cycle?YES
Are we in a commodities bull run; will it continue? I always answer with a resounding nod because one of the main factors driving my conviction comes down to a simple fact - supply and demand.
Look at the torrents of coverage the rampant Chinese, Indian and other emerging economies are receiving. It seems there is no end in sight to their precipitous growth and hunger for commodities, though while I broadly agree this is true for the medium to long term, one must always be selective.
The torrents of stuff is all connected to unequal trade. And the US trade deficit still continues to grow despite the dying dollar. Part of this is due to the rising cost of energy. But also the rising cost of imports. Many are needed here because our own industrial system is fatally compromised. Try buying a plastic garbage can made in the USA!
Yellen said the Fed focuses on core inflation, which strips out volatile food and energy prices, simply because it is the best tool to forecast future trends of inflation, in a speech to a business group in Anchorage, Alaska."The focus on core is that is seems like it is a better predictor of the underlying trends that will effect total inflation going forward, not because that is the objective of policy," Yellen said.
"I think markets have a pretty-good understanding of what the Fed is comfortable with in terms of inflation" despite lack of a formal target, Yellen said during a question-and-answer session following the speech.
"There is not a great deal of confusion about how we think about price stability in spite of the fact we don't have a specific, agreed-upon numerical objective."
How ingenious these liars are! She knows perfectly well, excluding food and energy from inflation calculations means the Federal government can drastically cut Social Security disburstments! They can cheat the elderly and the infirm! And many others. If she were honest, she would admit the new method has a very nasty purpose. If she were a nice person and not a hell hound, she would feel some of the pain the elderly are feeling right now. And so it goes: they are slated to die to make the rich richer.
There is no price stability! DUH! There is great inflation in things people need to stay alive. So crushing the elderly won't stabilize food prices for young families. Who are also being hammered by fake inflation statistics. And savers aren't being helped, either. They put money in banks and watch it buy less and less food and drive shorter and shorter trips. They are also hurting.
Old Yeller Yellin continues to lie:
The Fed routinely comes under criticism for not understanding the impact on consumer's wallets of higher prices of these basic staples.Yellen said the Fed understands how higher gasoline and food prices add stress to financially-strapped households.
"What matters to households and consumers is overall inflation. Food and energy are important parts of people's budgets. We should be concerned with what people are concerned with and we are concerned with what people are concerned with," Yellen said.
Wow. She sounds like she went to the School Of Saying Insane Things run by Rumsfeld. He doesn't know the unknown and she is concerned about concerns. And I am pissed about pissing. Why not send out a flock of parrots to repeat memorized lies? This is all we are getting. Right now, we can live in a fantasy courtesy of the Chinese who are preparing us to our future role as enforcers of Taiwan being joined with China and Japan being harnessed to the Chinese military system. And this is the future. You can bet on it. The yuan is growing stronger and the dollar and yen are both collapsing. I still see ritual demands for China to raise the value of the yuan so it dwarfs the yen and the dollar.
This will happen in good time, my dears.
Lehman Brothers Holdings Inc. said the worst of the global credit market rout caused by the U.S. subprime mortgage slump is over and investors should buy European investment-grade debt.``The worst of the hedging process is behind us,'' Lehman credit strategist David Brickman in London wrote in a research note. While there will be ``more bumps to come,'' the selloff this week is ``overdone.''
The risk of owning European investment-grade corporate bonds rose by the most in more than three years on July 11, according to traders of credit-default swaps. Lehman Brothers in New York, the fourth-biggest U.S. securities firm, London-based Barclays Capital and Societe Generale SA in Paris say investors overstated the risk of slowing economic growth and the effect on earnings.
Companies have ``strong'' cash reserves and the default rate is near the lowest on record, Lehman said. Any deterioration in credit quality is likely to be ``gradual.''
Strong cash reserves in dollars? That is shrinking rapidly, isn't it? Last I looked. The credit quality is good? Oh, really. This is identical to 1928: all was well, there was no way the market could crash. The new trusts spread risk and would prevent any downsides from running out of control. And Germany wasn't going to default on its debts and Britain's dying currency wasn't going to affect the US dollar at all. Etc. And when the market began its wild swings in 1929, it went up and up during the dog days of summer. Arf.
Up and up it rose. To the skies! No one ever saw stocks shoot up during the quiet summer months so everyone expected it to shoot up in October, the traditional month it shoots up. Only October, around my birthday, is the very favorite time for the biggest stock collapses. For some reason when Libra slides towards the scorpion, all hell breaks loose. One feature these collapses all have is the sudden rise in summer based on everyone buying each other out rather than investors looking for new companies.
General Electric Co. plans to sell WMC Mortgage, the company's three-year-old U.S. subprime mortgage unit, following a surge in defaults by borrowers.``The mortgage industry has greatly changed since the purchase of WMC,'' Laurent Bossard, chief executive officer of the division, said in an e-mail to employees yesterday. ``The current subprime market environment has made a significant negative impact on the business.''
All the big investment houses are shooting those hell hounds or unleashing them and shoving them out of the yard and slamming the gate shut. Now they will be rich! Those dogs won't rip up the neighbor's lawn or bite the mailman. And maybe the Chinese landlords down the block will put a bullet in the dog's head and rid us of it! Yes.
ON THE RADAR: Mutual Fund Sales Seen Swaying Brokerage ResultsTOKYO (Nikkei)--How well securities firms were able to take advantage of the shift from deposits to investment among Japanese individuals will likely be reflected in their April-June earnings results, slated to be released starting the week of July 23.
ANALYSIS: Markets Already On Lookout For 'Next Next' Rate Hike
TOKYO (Nikkei)--Bank of Japan Gov. Toshihiko Fukui's remarks at Thursday's press conference following the central bank's decision to stand pat on interest rates left many bond traders convinced that there will be a rate hike in August.
The poor Japanese are scared. They can't save a yen if their lives depended on it. It is now obvious the Bank of Japan has no intention of facing reality and raising interest rates. Instead, they will continue this game forever! And I do mean, forever! They can't stop or the US will collapse and they have a lot of money invested here. And Japanese savers use the internet to get information and they now can park their money anywhere on earth so they are looking for blue chip stocks. This is why the blues are shooting up. These stocks always do this when peope are scared.
When times are good, people buy interesting or new stocks. When they are scared, they look to the old war horses. The Nikkei's 'Inside View' editorial suggests that the Bank of Japan kept interest rates near zero to help the US subprime markets. I agree. The US can't let this destructive freight train stop. Correction: Goldman Sachs can't let this freight train stop. So it will continue until our country is good and ready to surrender to the Chinese. Because they will win thanks to the more powerful yuan. And of course, Germany will collect its little bit too thanks to the rising euro.
From the Big Picture, a good economic blog to peruse:
As we noted yesterday, Wal-Mart reported same store sales gains of 2.4% vs. its 1% to 2% forecast. They stated that home goods and apparel sales were weak but grocery sales surged.There are two reasons for this. We discussed the FOOD INFLATION factor extensively yesterday. The second element is "slumming." Middle class families are now shopping downscale, looking to save some cash. Whole Food (WFMI) shoppers are going to Krogers, who's former clients are going to Target (TGT), whose former customers are now in BJs and CostCo's, whose former clients are going to Wal-Mart.
This is not a sign of strength.
And he is right. Inflation is forcing everyone to move down a step. The elderly and others on fixed incomes move down, too, the next step being soup kitchens and charity pantries. I did a small shopping trip for fruits and some other small items and it came to over $50 and it was no way a full shopping cart. Not even the six kleenex boxes! Yellin may think she fools me but I would really love to see her give this speech to at some center for retirees.
Culture of Life News Main Page
“Of course, we can weasel out of this by declaring war on them”
Snip... “In the 1930s, the U.S. military developed a detailed 94-page document called "Joint Army and Navy Basic War Plan - Red” for invading Canada. The plan called for the U.S. military to launch a surprise attack to capture the port city of Halifax, cutting the Canadians off from their British allies. Canadian power plants near Niagara Falls would be seized as the U.S. Army invaded on three fronts — marching from Vermont to take Montreal and Quebec, charging out of North Dakota to grab the railroad center at Winnipeg, and storming out of the Midwest to capture the strategic nickel mines of Ontario. Meanwhile, the U.S. Navy seizes the Great Lakes and blockades Canada's ports.[1]
That invasion plan was scrapped as World War II began.”
http://www.sandersresearch.com/
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Posted by: Canuck | July 19, 2007 at 04:54 PM