Did You Buy More Gold And Silver Today?

INVESTMENT BANKS HAVE ACCESS TO THE FEDERAL RESERVE’S SPECIAL LENDING FACILITY INTO NEXT YEAR AND THE MARKET RALLIES.

The opposite should be the case. If the market was at all sophisticated they would know the continued need for the Fed to bail out investment banks while taking worthless paper and lending against it is very bad news. It implies that the problems are more intractable and deeper than the banks initially indicated. They should also realize that investment banks will be borrowing from this facility for years to come.
- Monty Guild www.GuildInvestment.com


ON TUESDAY:

Bernanke Says Fed May Continue Lending Into Next Year
July 8 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke, seeking to allay renewed concerns over the health of the nation's financial system, said the central bank may extend its emergency-loan program for investment banks into next year.

``The Federal Reserve is strongly committed'' to financial stability and is ``considering several options, including extending the duration of our facilities for primary dealers beyond year-end,'' Bernanke said in a speech to a conference in Arlington, Virginia.

Bernanke also endorsed proposals to set up a federal liquidation process for a failing investment bank. The Treasury should ``take a leading role in any such process'' in consultation with regulators, he said. Such a resolution mechanism may help reduce concern that investors and dealers begin counting on Fed aid in case their bets go wrong.
http://www.bloomberg.com/apps/news?pid=20601068&sid=a5zMHu3rx3JM&refer=home

Fed considers extending emergency loans for Wall Street
WASHINGTON -- The Federal Reserve is considering giving squeezed Wall Street firms more time to draw emergency loans directly from the central bank to help them overcome credit problems, chairman Ben Bernanke said Tuesday.

In an extraordinary action, the Fed in March agreed to let investment houses go to the Fed -- on a temporary basis -- for a quick, overnight source of cash. Those loan privileges, which are supposed to last through mid-September, are similar to those permanently afforded to commercial banks for years.

"We are currently monitoring developments in financial markets closely and considering several options, including extending the duration of our facilities for primary dealers beyond year-end should the current unusual and exigent circumstances continue to prevail in dealer funding markets," Bernanke said in prepared remarks to a mortgage-lending forum in Arlington, Va.
http://gata.org/node/6409

Upon reading this "news" one quickly asks them self, "If the credit crisis is over, as so many have claimed the past two months, why would the Fed need to continue funneling money to the investment banks 'indefinitely'?" The geniuses in the Forex markets apparently failed to ask themselves this question, and immediately bid up the Dollar on this "news" believing that once again the Fed was riding to the rescue of the financial system and guaranteeing not only its survival, but that of all the investment banks as well. Nothing could be further from the truth.

Dimon says credit crisis could worsen
ARLINGTON, Va (Reuters) - JPMorgan Chase & Co (NYSE:JPM - News) Chief Executive Jamie Dimon said on Tuesday some problems in the credit markets have been resolved, but that does not mean market conditions will not deteriorate further.

"I do think we have some very serious issues to face," Dimon said at a mortgage lending forum sponsored by the Federal Deposit Insurance Corp. "Things could actually get worse."

Wall Street investment banks should not be considered too big to fail...
http://biz.yahoo.com/rb/080708/dimon.html

Mr. Dimon may be in bed with the Devil, but yesterday he flat out spoke the Truth. Bumbling Ben tried to tell us the Truth, but that would go against everything the Fed stands for. The Fed has no respect or use for the Truth. There is no more credit crisis because now, according to Bumbling Ben we are only enduring "unusual and exigent circumstances".

Fed Sees Turmoil Persisting Deep Into Next Year
WASHINGTON — Federal policy makers have concluded that the turmoil plaguing the housing and financial markets is likely to spill deep into 2009, becoming one of the most significant domestic problems to confront the next president when he steps into the White House in January.

Ben S. Bernanke, the chairman of the Federal Reserve, publicly indicated on Tuesday that he believes the problems will persist into next year when he outlined a series of steps the Fed is considering in the coming months.

One such step would extend low-interest lending programs to Wall Street’s largest investment banks into next year. The programs, one of which was set to expire in September, can continue only if the Fed issues a finding that there are “unusual and exigent circumstances” that justify them.
http://www.nytimes.com/2008/07/09/business/09housing.html?_r=2&adxnnl=1&oref=slogin&ref=us&adxnnlx=1215655220-vXBn1JbFw1dnxz3oCdiu2w

I thought he was just making those words up to throw us off the scent. I guess things really are worse than we've been lead to believe. Today's reaction on Wall Street should have come as no surprise after traders had a night to think about Bumbling Ben's latest "words". They also had this little data point to consider as well when reconsidering the "bottom in banking stocks":

Concerns about credit, housing wipe $1.3 trillion from S&P 500's financial companies in 2008
NEW YORK -- U.S. financial companies have lost more than $1 trillion in value this year, and yet another decline on Monday shows concerns aren't going away soon.

Banks and brokerages began the week lower on the same fears that have been proven toxic since last summer in the ongoing credit crisis. The financial sector was hit with a confluence of troubles on Monday: cautious remarks from a Federal Reserve official and new capital concerns at Freddie Mac and Fannie Mae.

The drop in names like Lehman Brothers, Morgan Stanley and Merrill Lynch caused the financial section of the Standard & Poor's 500 index to lose almost $150 billion in value on Monday, according to the rating agency. That means S&P 500's 85 financial components have lost some $1.3 trillion since the sector reached a high last October.

Even more startling is that shares of 35 of the companies, which include insurers, have lost more than half their value so far this year. The financial sector used to be the index's main driver, and many economists believe that the broader market will rise or fall on their health.

"Some would argue that perhaps the sell-off in financials is overdone, but at the same time there is just much uncertainty out there about write-offs, loan losses, and how bad the housing market is," said Jim Herrick, a director of equity trading at Baird & Co. "For a period of time the pain was in the big money center banks, but now it's spreading."
http://biz.yahoo.com/ap/080707/financial_losses.html

$1.3 Trillion as of Monday. How much was wiped out today? How much will be wiped out tomorrow. 40% of the profits in the S&P over the past decade have come from the financial sector. This is what happens when a nation quits manufacturing things, and turns to selling toxic OTC derivatives to the world to turn a profit. How many of you saw the headlines regarding large regional bank IndyMac yesterday? How many banks as we move forward face the same fate?

IndyMac Bancorp shares dip; analyst sets $0 target
NEW YORK (AP) -- Shares of IndyMac Bancorp Inc. plummeted Tuesday morning after the company stopped accepting some loan submissions and trimmed its work force, and an analyst cut his price target to $0.

Late Monday, the mortgage lender said it has stopped accepting new loan submissions in its main mortgage lending divisions and plans to slash 3,800 jobs, or more than half of its work force. In addition, the company said its second-quarter loss will be wider than in the first quarter.

In a letter to shareholders, Chief Executive Michael W. Perry said IndyMac is working with U.S. banking regulators, who have determined the company is no longer well capitalized and have asked it to submit a new business plan designed to improve its financial footing.
http://biz.yahoo.com/ap/080708/indymac_bancorp_out_of_the_gate.html?.v=2


IndyMac's fate could test banking regulators
WASHINGTON (Reuters) - Deeply troubled mortgage lender IndyMac Bancorp Inc (IMB.N: Quote, Profile, Research) may have bought some time through sharp cuts in operations and selling some branches but its survival remains in question, creating a major test for banking regulators.

In particular the significant size of IndyMac's deposits that are insured by the Federal Deposit Insurance Corp might present a challenge. If the deposits, which total more than $17 billion, had to be guaranteed, that could temporarily dent the FDIC's war chest of around $53 billion.
http://uk.reuters.com/article/ousiv/idUKN0932999520080710

Stop and think about that for a minute. This is just ONE bank. What happens when so many other struggling banks we've yet to hear about, follow IndyMac into the cauldron of banking has beens? Does the word DEPRESSION ring a bell? I googled "IndyMac". For a real hair raising tale of what this country will soon face, follow this link to the results of that google: http://news.google.com/news?sourceid=navclient&hl=en&ned=&q=indymac

Forget about the nonsense over in the Oil market. $4, $5, $10, or even $20 drops in the price of Oil are not going to magically fix anything or halt the tsunami of inflation building off the shores of America. The price of Oil should be the least of our worries. The more money the Fed prints and shovels out the back door in an attempt to prop up the investment banks that created these "current unusual and exigent circumstances", while at the same time they're promoting a "strong Dollar", the higher the price of Oil is going to go. No matter what Iran, Israel, or the US Military does or doesn't do. The more the Fed tries to "fix things", while avoiding the Truth, the worse things are going to get, and the worse things will be in the future. Dark clouds, VERY DARK clouds are gathering on the horizon.

Did you buy more Gold and Silver today?

Dollar’s Doomsday
An earthquake analogy is appropriate. When countervailing forces are at work, as in tectonic plates moving against each other, pressures build up. Initially there are minor tremors felt along the fault line. Eventually the pressures become so great that a major movement takes place. An earthquake happens with sudden, unexpected, ferocity.

The same sort of thing happens in markets. It is the source of the saying that “markets spend 90% of the time making up their minds and 10% of the time doing what they have to do”. Countervailing pressures build up causing minor tremors. Then pressures continue to build until there is a major change in the market place, the equivalent of an earthquake.

The US dollar index was 120 seven years ago. It is now 72, a decline of 40%. This magnitude of decline over a seven year period gives the impression of several minor declines (tremors) stitched together. The world situation is now fast developing to the point where the downward pressures on the US dollar will become overwhelming and there will be a sudden, earthquake-like, decline to a level where there is the prospect of the US trade deficit being eliminated.

Once the US Dollar index drops to a new low below 70, events will probably happen quickly. That will be the signal that the dollar’s doomsday will not be far away.
http://news.goldseek.com/AlfField/1215529200.php