Confidence Is Key

Dollar Rallies On Stronger US Data, Stocks, Lower Oil
NEW YORK (Dow Jones)--The dollar rallied versus its major rivals Tuesday morning after U.S. stocks gained amid a decline in crude oil prices and an improved July consumer confidence index.

The dollar gained across the board to a five-week high against the euro, yen and Swiss franc, with the Dow Jones Industrial Average up more than 100 points on the day. The buck also advanced to a 1 1/2-week high against the U.K. pound as crude oil futures fell to $121.10 a barrel on the New York Mercantile Exchange, its lowest level since May 15.

Meanwhile, the Conference Board said its July index on consumer confidence moved up slightly to 51.9, from a revised 51.0 in June. The July reading was slightly better than the 51.0 reading expected by forecasters.
http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=96d48cc1-eb03-4c2c-90df-3d6b6a5d9d2e

What a truck load of crap! Consumer Confidence was up a gigantic 9/10 of 1%. Hallelujah! Ding- dong the financial crisis is gone, the financial crisis is gone. Ding-dong Inflation must be dead. C'mon everybody, you know the words! Second verse same as the first... Oh my and Oil prices have plunged a WHOLE $3 Dollars AGAIN! The economy is saved! Just ignore the fact that they are at $121 a barrel...$50 more than they were 12 months ago. And stocks were up? Yes the SEC will decide this evening if naked-short selling bank stocks should continue to be forbidden. Better cover your shares ahead of that news.

Ever wonder just where this Consumer Confidence number comes from? Me too! So we went looking. And not only was it easy to find, it was easy to see what a load of crap it is.

The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS. TNS is the world's largest custom research company. The cutoff date for July's preliminary results was July 22nd.
http://www.conference-board.org/economics/ConsumerConfidence.cfm

They asked 5000 people, out of 300 million "How's life treatin' you?" and we're supposed to believe they speak for the nation? LOOOOOOOOOOOOOOOOOOOOOOOOOOOL! I'm sorry, but this information is hardly worth much in the face of the economic crisis staring down this country. People ran to the US Dollar on this bit of drivel? Somebody shoot me, I can't bear the stupidity any longer.

If things are so great, why was Oil once again down on the "pure speculation" that demand will drop in the months ahead because of the weakening economy. Clearly the economy is over the bump in the road and is ready to soar to new heights. The 9/10 of 1% JUMP in the Consumer Confidence number clearly proves that. If the economy is all set to rebound according to those interpreting these pithy Consumer Confidence numbers, then the demand for Oil should remain, not fall. This is asinine!

I many respects, all of what we have witnessed and heard over the past month has been a desperate attempt by those "in power" to maintain "confidence" in the financial system. The financial system, for what little it is worth these days is nothing more than a charade. Spin and double speak are used 24/7 to give the perception that the financial system remains sound, despite the "rumours" to the contrary. You know, rumours like these horrific profit losses in the banking sector, or the relative insolvency of Fannie Mae and Freddie Mac. None of those rumours are true. Hanky Panky Paulson, Bumbling Ben Bernanke, and the inept US Congress have fixed everything.

What Our Officials Most Fear
What do our officials most fear? They fear the public’s loss of confidence. Events are driving their improvised attempts to stem a general loss of confidence in the dollar, in them, the financial and monetary system, and the government as a whole.

It is not clear that they recognize that this is their greatest fear. But even if they do recognize that this is their greatest fear, they have no clear roadmap for dealing with it.

On May 13, 2008, Chairman Ben S. Bernanke spoke of many things, as he often does, of economic growth, of housing losses, of liquidity, of financial strains, and so on. And in doing so, he obscured his main fear. He fears our fears. He fears fear itself. He fears our loss of confidence in the currency and the monetary system and in the entire system itself. If he doesn’t, he should or soon will. Such a loss of confidence is inevitable.

Bernanke does not fully and openly express these broadscale fears. It would not be politic to do so. He might fan the flames of fear. When he is alone with himself in quiet moments, do these large fears cross his mind? Maybe, but it is just possible that he is not fully aware that these are his main fears. His self-knowledge may be deficient.

The Fed Chairman understands that confidence in the financial system and in banks in particular is the foundation of the system. Without it, lending evaporates and the economic system grinds to a halt until people arrange new channels of borrowing and lending. Bernanke, being a central banker, sees the solution to this as providing liquidity in a host of new and creative ways. It is the "how" of providing liquidity that interests Bernanke. The techniques of providing liquidity while not introducing moral hazard and not inflating the money supply are what fascinate him.

Our other major financial official is Henry Paulson, who is Secretary of the Treasury. I need only provide the titles of two of his speeches to make my point. On July 22, 2008, he gave a speech with the title: "Reinforcing Market Stability and Confidence." He stated unequivocally that these were his "highest priority." He means it. On June 5, 2002, while still Chairman and CEO of Goldman Sachs Group, Inc., he made a speech titled "Restoring Investor Confidence: An Agenda for Change."

Paulson in his speech tackles the topic of confidence in a very broad way. He touches upon banks, failing banks, the IndyMac failure, the FDIC, the financial markets, and non-bank financial institutions. Paulson is always attempting to reassure the people that the system is sound, so that they will have confidence in it. On January 22, 2008, for example, he said "I continue to have confidence in the underlying strength of the global economy."
http://news.goldseek.com/LewRockwell/1217338319.php

I don't know about you, but I don't have any confidence in either of these two Pinocchios. It is truly scary, how the public is so easily misled by the spin and double speak of these two. It speaks volumes about the level of education in this nation. What a bunch of dumb asses. I guess even more scary is the fact that most people in this country never even hear, or are aware of the spin and double speak being spewed by these two reprobates. How could they be when they sit in front of their big screen TVs absorbed by the view. I guess they missed these headlines today, not to make mention of all those I have posted here for the past five months.

Home prices drop by record 15.8 pct. in May
Private housing index shows home prices dropping by record amount nationwide in May
NEW YORK (AP) -- Home prices tumbled by the steepest rate ever in May, according to a closely watched housing index released Tuesday, as the housing slump deepened nationwide.

The Standard & Poor's/Case-Shiller 20-city index dropped by 15.8 percent in May compared with a year ago, a record decline since its inception in 2000. The 10-city index plunged 16.9 percent, its biggest decline in its 21-year history.

No city in the Case-Shiller 20-city index saw price gains in May, the second straight month that's happened. The monthly indices have not recorded an overall home price increase in any month since August 2006.
http://biz.yahoo.com/ap/080729/home_prices.html

Merrill asset sales stir question of credibility
Merrill Lynch asset sales, share offering indicates crisis not over for Wall Street
NEW YORK (AP) -- Merrill Lynch & Co.'s latest move to clear failed credit market investments from its books is likely to pressure other financial companies to dump their troubled holdings -- and, like Merrill, at a steep discount. But another round of write-downs or asset sales won't raise investors' ever-sagging confidence in the sector.

Merrill said late Monday it was selling repackaged mortgage-backed securities for $7 billion -- just weeks after they had been worth $31 billion, giving them a current value of about 22 cents on the dollar. Analysts believe that sets a new and very low benchmark that other Wall Street banks -- including Citigroup Inc., Lehman Brothers Holdings Inc., Morgan Stanley, and JPMorgan Chase & Co. -- might have to meet when valuing their own investments.
http://biz.yahoo.com/ap/080729/merrill_lynch_sale.html

Analyst sees $8 billion Citi writeoff after Merrill move
BANGALORE (Reuters) - Citigroup Inc may write down about $8 billion in the third quarter from its exposure to collateralized debt obligations (CDOs) after Merrill Lynch & Co agreed to sell its CDOs at a sharp discount, Deutsche Bank analyst Mike Mayo said.

The analyst also forecast a third-quarter loss and widened his 2008 loss estimate for Citigroup, the largest U.S. bank by assets.

We do think the CDO sale is large and diversified enough to be applicable to others with similar exposure and that the monoline settlements will pave the way for similar enough transactions," analysts at UBS said.

They said Citigroup has the largest exposure to both CDOs and monoline bond insurers, and that investors could expect further incremental write-downs in coming quarters.
http://biz.yahoo.com/rb/080729/citigroup.html


NAB will shock Wall Street
The National Australia Bank's decision to write off 90 per cent of its US conduit loans will have dramatic repercussions around the world. Wall Street will be deeply shocked when they understand the repercussions of what NAB has done. It is clear global banks have nowhere near provided for their exposures to US housing loans which in the words of John Stewart are experiencing a “meltdown”.

We are now way beyond sub-prime. NAB says that it is suffering a 55 per cent loss on American housing loans – an event that has never happened in the history of a developed country in recent memory. This is an unprecedented event and means that the cost of bailing out the US financial system is now far beyond the highest estimates. A US recession is now locked in, but more alarmingly, 55 per cent loan losses point to the possibility of a depression.

It means the cost of bailing out housing exposures to the two mortgage insurers will be so great that it will leave no room to bail out anything else and there are several US banks that are now in big trouble. NAB says that the dislocation in the residential market is separate from the corporate market, but the flow on is inevitable.

While global banks have been writing down their balance sheet assets, few have tackled their conduit exposures which are off balance sheet but to which they are ultimately liable.
http://www.businessspectator.com.au:80/bs.nsf/Article/NAB-will-shock-Wall-Street-GV4M7?OpenDocument&src=stf

And traders bid up the Dollar on a PATHETIC 9/10 of 1% rise in Consumer Confidence? Is this country screwed or what? A systemic financial collapse is all but inevitable now. These butterfly bandages these knuckleheads keep slapping on a sucking chest wound are NOT going to save the patient, only prolong the agony and lead to an even more painful death. A Confidence Crisis has got to be just around the corner.

Meanwhile the flim-flam man Paulson is trying to convince us that the way out of the housing crisis is to create more easy money to loan it to people who can't afford to pay it back. Brilliant! Let's solve the problem by doing more of what caused the problem to begin with. Only will change the name and nobody will know the difference as long as the "think" we're doing something to fix the problem. BRILLIANT! ...and what in the hell is the Treasury Secretary doing drumming up mortgage options anyways?

A New Way to Generate Mortgages
The financial establishment came together Monday in search of a new way for banks to come up with cash for home mortgages. Regulators, bankers and traders, led by Treasury Secretary Paulson all pledged to do their best to get a “covered bond market” going in the United States.

Covered seems to be a synonym for collateralized, but it also has other meanings that may be appropriate in this effort to salvage the housing market.

At best, a covered bond market would provide a cheaper source of financing for banks while reassuring investors that their money will be safe.

It is highly unusual for the government to take such a major role in getting a market established, but Treasury officials said their action was needed to get more money into housing loans.

In Washington, Mr. Paulson said that “as we are all aware, the availability of affordable mortgage financing is essential to turning the corner on the current housing correction.

“We are at the early stages of what should be a promising path, where the nascent U.S. covered bond market can grow and provide a new source of mortgage financing,” Mr. Paulson said.
http://www.nytimes.com/2008/07/29/business/economy/29place.html?_r=1&oref=slogin

First, would somebody please tell Hany Panky Paulson that "we", as in most people, are NOT all aware of anything related to the credit crisis...most believe it is over, LOL. And then tell this misleading monetary monkey that "affordable housing" is what caused the housing crisis. The LAST thing the housing market needs is more cheap money for people who can't pay it back to borrow. Cheap mortgages are NOT the answer. Going back in time and recreating the problem is NOT going to fix it!

And of course, with Consumer Confidence soaring today, and Oil price plunging $3, it only made sense to flee the Precious Metals today...at least if you're an American. How unAmerican to own Gold. Don't you have any "confidence' in the financial system? Do not be persuaded to dump your Gold and Silver. 2nd qtr GDP estimates are due Thursday morning, with non-farm payrolls for July due Friday. Consumer Confidence could be in for a big test later this week.