Paulson braces public for months of tough times
WASHINGTON (AP) -- Treasury Secretary Henry Paulson sought to reassure an anxious public Sunday that the banking system is sound, while also bracing people for more troubled times ahead.
"I think it's going to be months that we're working our way through this period -- clearly months," he said.
Paulson said the number of troubled banks will increase as they struggle to cope with big losses on bad mortgages. The government this month took over IndyMac after a run led it to become the largest regulated thrift to fail.
"Of course the list is going to grow longer given the stresses we have in the marketplace, given the housing correction. But again, it's a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation," he said in broadcast interviews.
"We're going through a challenging time with our economy. This is a tough time. The three big issues we're facing right now are, first, the housing correction which is at the heart of the slowdown; secondly, turmoil of the capital markets; and thirdly, the high oil prices, which are going to prolong the slowdown," he said.
"But remember, our economy has got very strong long-term fundamentals, solid fundamentals. And you know, your policy-makers here, regulators, we're being very vigilant."
"I'm very optimistic that we're going to get what we need from Congress here, because Congress understands how important these institutions are," Paulson said.
"Our first priority today is the stability of the capital markets, the stability of the system. And these institutions have investors all around the world ... and those investors need to know that we in the United States of America understand the importance of these institutions to our capital markets and to our economy and to our housing market," he added.
Cover your ears... Henry Paulson is FULL OF SH*T. He has been since day one of this financial crisis. He has repeatedly lied and told half-truths about every aspect of this financial crisis. The jug heads in the Congress lap up every one of his lies as fact because they themselves are completely clueless as to what is going on. "He's Henry Paulson, Goldman Sachs honcho and Treasury Secretary, he must know what's really going on and how to fix it."
Henry Paulson is the "fox in the hen house". He is more than responsible for this financial tragedy, and now he wants carte blanche from the Congress to "fix the mess". Congress should be demanding this crooks head, not bowing to his whims.
Henry Paulson should be dragged through the streets of Washington chained to a Dodge pickup while angry taxpayers throw empty beer bottles at him. This man is a traitor to the nation. This man and his cabal of banking criminals at the Fed have jeopardized the sovereignty of our nation, and deserve nothing less than the price all traitors must pay: the DEATH PENALTY.
Months? Let's see Hank, 12 months equal a year. I guess "months" just sounds better, eh Hank? Very strong long-term fundamentals? Hank, you and your cronies have burdened this nation with an insurmountable debt load. A debt load that is in EXCESS of $45 TRILLION. A debt load that is at this time COMPLETELY unfunded. And you expect even the dolts in Congress to believe this puff of smoke about "strong long term fundamentals"? Congress doesn't understand jack. Aren't all public servants required to take random drug tests? Vigilant? You have been vigilant in your destruction of our financial system, of that you can be sure. You have no interest at all in the American taxpayer and how this financial crisis that you and your cabal at the Fed have engineered will burden them for possibly the next two generations. You have but one priority, to save the sorry asses of all those that have been a part of this financial flim-flam operation of yours. If Americans in general weren't so stupid and apathetic, you'd have been out of a job months ago. Bailout Fannie Mae and Freddy Mac? They have been stealing from the public trough long enough...let them die on the vine. If you and your predecessors were so "vigilant", how did these two government sponsored scams fall into such disarray to begin with? That is the question of the day, Hank. Vigilant? You are absolutely FULL OF SH*T.
Gold and Silver both finished the week just ended down. This was the first week in the last FIVE that Gold and Silver did not close up. Both have retested their recent breakouts, and should be expected to resume their treks higher shortly. If you are looking to buy Gold and Silver mining stocks, now is the time.
Oil at $130 reamins VERY expensive. The rumors of Inflations demise are pathetic. Inflation has barely gotten out of the gate... The current uptrend in Oil remains intact unless or until it breaks below $124. Tropical Storm Dolly bears watching as it enters The Gulf Of Mexico this week. The Hurricane season is spooling up right on schedule. Tropical Storm Cristabol raked the Carolina Coasts this weekend, and a tropical wave exiting the coast of Africa early this week holds the potential for a dandy storm to develop by this time next week. All this should be good for a bit of a bounce in the Oil markets this week.
The Philadelphia Bank Index has hit a wall of resistance here, and we expect the recent rally in banking stocks to parrish shortly, and take the stock markets back down with them as the pros sell into this suckers rally. CNBC is pulling your chain if you believe one word of their drivel about a bottom in banking stocks...not even close folks. There are TRILLIONS of Dollars still to be written off by these zombie banks before there is even a hint that a bottom is in.
FIRST FACE OF MELTDOWN
I CONTEND THAT FANNIE MAE IS THE PRIMA FACIE OF THE END OF THE US FINANCIAL EMPIRE. Fannie Mae, the national US secondary mortgage supplier and vast agent to assist in controlling interest rates, is failing. Their high jinks maneuvers a few years ago to buy their own debt securities constituted self-dealing and self-propelled Ponzi methods, doomed to disaster. Denials are thin. All talk about not nationalizing the firm is confirmation of eventual nationalization. All talk about its equity not being destroyed is confirmation of an eventual zero stock price for FNM shares. All claims that Fannie Mae remains structurally sound are about as false as a claim that USGovt statistics are accurate. All denials of their insolvency serve as confirmation that they are indeed badly over-burdened by debt obligations in excess of assets. All claims that their implosion, meltdown, and failure are unlikely should be heard as clear confirmation of precisely that risk.
I CONTEND THAT FANNIE MAE IS THE PRIMA FACIE OF THE END OF THE US FINANCIAL EMPIRE. Fannie Mae, the national US secondary mortgage supplier and vast agent to assist in controlling interest rates, is failing. Their high jinks maneuvers a few years ago to buy their own debt securities constituted self-dealing and self-propelled Ponzi methods, doomed to disaster. Denials are thin. All talk about not nationalizing the firm is confirmation of eventual nationalization. All talk about its equity not being destroyed is confirmation of an eventual zero stock price for FNM shares. All claims that Fannie Mae remains structurally sound are about as false as a claim that USGovt statistics are accurate. All denials of their insolvency serve as confirmation that they are indeed badly over-burdened by debt obligations in excess of assets. All claims that their implosion, meltdown, and failure are unlikely should be heard as clear confirmation of precisely that risk.
-Jim Willie CB
JP Morgan’s Dimon: Prime Mortgages Look “Terrible”
“Our expectation is for the economic environment to continue to be weak – and to likely get weaker – and for the capital markets to remain under stress,” he said in a press statement. “We remain conscious that since substantial risks still remain on our balance sheet, these factors will likely affect our business for the remainder of the year or longer.” Part of that weak economic outlook can clearly be attributed to mortgages. In a surprisingly short conference call with analysts, Dimon suggested that losses in JP Morgan’s prime mortgage book could triple in the foreseeable future as the credit mess moves out of subprime and into Alt-A and jumbo loans.
As faith in bank bailouts dims, losses set to deepen
Saturated with bad news, investors appear to have thrown in the towel. As they do this, the risks that both consumers and businesses will face further retrenchment at the same time is growing.
Bernanke appeared conscious of this possibility, using his testimony to back away from earlier assertions that the risks to economic growth had diminished.
"The possibility of higher energy prices, tighter credit conditions, and a still-deeper contraction in housing markets all represent significant downside risks to the outlook for growth," he said, even while stressing concerns about inflation.
Back in April, the International Monetary Fund got some criticism for offering an estimate of total crisis-related losses, including insurance and home equity, that reached the $1 trillion mark. At the time, many analysts believed that number was too high. With the crisis deepening, the estimate may have prove conservative.
It recently emerged that the Federal Deposit Insurance Corporation, or FDIC, has a secret list of about 90 banks that could run into trouble. Developments surrounding Fannie and Freddie suggest that list could get longer.
The International Forecaster
What you are witnessing is the acceleration of a complete systemic breakdown of the US and world financial systems and economies. It is happening right before your eyes. It is in your face. The Scylla and Charibdis of real estate finance, Fannie Mae and Freddie Mac, which are currently in possession of, or have insured, over 5 trillion dollars worth of mortgages, a good portion of which are nothing but toxic waste, have imploded and will now be nationalized in the most egregious example of moral hazard in the history of the world. As this socialism for the rich transpires, IndyMac Bank has gone up in smoke. This is the second largest bank failure in US history and the largest such failure in over 23 years. Adding insult to injury, 10% to 20% of the FDIC's insurance reserves have just gone up in smoke along with IndyMac just as the hundreds, and what may eventually turn out to be thousands, of bank failures that are anticipated get started in earnest. What does that leave for future failures if only one bank failure wipes out a fifth of the FDIC's reserves? Next up on the chopping block may be Downey, First Federal, Wachovia and Washington Mutual, which are not small fry by any means. Mattresses and freezers may soon be the savings vehicles of choice for those who can't afford a home safety vault as Depression Era mentality becomes the psychology du jour.
You must not allow these reprobates and sociopaths to steer our country in this direction. Fannie and Freddie, like the Wall Street bankster fraudsters, must be allowed to fail, and their various shareholders and bondholders must suffer the consequences. Otherwise, we have only been pretending to have markets that are run on capitalist principles. What Paulson and Bernanke are proposing is the next step toward an evil, corporatist, fascist system of government which consists primarily of governmental partnerships with elitist transnational conglomerates where moral hazard is the market mantra, a system which would have made Hitler and Mussolini green with envy. The Illuminati want to consolidate their power by bailing those they want to survive, and by allowing those they want to destroy to fail. The failures which they allow to happen will be absorbed by surviving elitist companies, consolidating their power into fewer and fewer entities for easier and tighter control over resources and production. The Illuminati also want a far greater grant and centralization of regulatory power in the Fed, or in any successor organization, which they might create if they decide to kill off the Fed with all the toxic waste from Fannie, Freddie and the Wall Street fraudsters. Any such replacement organization will be a super entity that makes the Fed look like a paragon of virtue, and the excuse given for its creation will be a cessation to all the corruption, turmoil and abuse of which the owners of the Fed, or of the new super entity, have themselves been the main cause. This is the Hegelian Dialectic on steroids. Create the problem and suggest the solution. And if the solution suggested is not desired by the people, stuff it down their throats anyway but whatever cunning and deceit is necessary in true Machiavellian fashion.
Fear in the Streets – The Real Deal
A necessary skill for investors during this time is patience. In the coming weeks and months we suspect that fear will become our friend, driving many investors into our sector for the first time. Inflation is now in the daily news and everyone will soon know that they must have gold or silver in their portfolios.
-Dudley Pierce Baker
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