Money Matters Newsletter

Marc's Notes:

The market plunged close to 1000 points (DOW) on Thursday and left no doubt what I have been trumpeting. This market is a very dangerous place. The plunge is being investigated but the answer needs no close inspection by me.
It was a culmination of Wall Street losing control in an environment that is as close to “dire” as you can get.
Huge amounts of money are being thrown at the banks for free from the Federal Government to “liquefy” the system. In short, the banks made billions on home mortgages, insuring home mortgages, packaging home mortgages, betting on AND against home mortgages, using almost interest free money from your government. The government was asleep at the switch and turned the other way as home prices exploded upward. The social agenda trumped politics (what else is new) so while everyone was making money, no one cared to look. Congress insisted banks loan to low income families to satisfy minority interests. Banks were actually punished for NOT LOANING to low income buyers so they HAD TO in order to get federal money and stay afloat.

Marc's Notes:
The Dow plunged at one point almost 1000 points today amid a flurry of news about Greece and its bailout. The FEDS stepped in and rescued the DOW by buying futures which resulted in a loss in only half as much but take heed. The money of kings, GOLD,  soared as investors fled to the only NON PAPER CURRENCY in existence.

As goes Greece, so goes us in a few years. Now sit back and watch the fireworks. Expect Greece to break out in violence only to be quelled by gun blasts. Stock markets meanwhile are left to digest the aftermath and who knows what that aftermath will be. The 1000 point plunge today matched only the 1987 plunge and now we learn  it was because of glitches in electronic trading.
Sure.
Now excuse me, but wasn’t this addressed and blamed for the 1987 crash?

And weren’t we assured these glitches were solved?

We never learn do we?

Marc's Notes:

Markets gyrating down now due to the Greek problems. We mentioned in the last few updates that this debt disease was obviously spreading to entire countries, signaling what I have been saying since this whole thing started.
It wont be enough.
The question is now can the IMF and the Central banks stop further spread. Knowing what I know about the trillions in losses worldwide being papered over with money printing, the off balance sheet shenanigans the countries and the companies are pulling to hide the real losses, my answer is no.

Marc's Notes:

The markets are gyrating because of many things that are happening. First off, economic figures coming out of Washington are mixed. Keep in mind if these statistics were not fudged by the Government, most of the news would show the recovery is NOT happening. Secondly the housing bust is only showing signs of relief because of government credit programs. There have been lots of them in many forms. One was a credit for new home buyers and then was expanded to include anyone. The FHA meanwhile suspended its home flipping rule. It used to be you couldn’t use government money to buy a house you were going to flip; now you can. The Government is also rebating companies to rework your home loan, pay your mortgage outright, loan you money for fix ups, and many other programs to get you to either buy a house or stay in yours. All these programs appear under the “compassion” umbrella but actually most of it is to get the house OFF the banks books so YOU take the hit, not them, and to get you to stay in the house as it continues down in value. You thought they were just being nice?

Listen to our show # 86, Should You Stop Paying Your Home Mortgage”. This details the REAL reason they want you to own your home. It’s because they are going down in value and they don’t want them back. The banks also want to get rid of what properties they have. But the end result will be a slow grind down in home values where you take the hit on the way down and they keep your home mortgage payments. They also are sucking in more “suckers’ to buy homes. All those that didn’t get sucked in on the first go around are being enticed by these programs to get railed now, get in more debt now, and enslave themselves to overpaying for homes and therefore overpaying in mortgage payments. Think housing has bottomed? Anyone want to bet me? By the way, I won my bet with my “ advisor” friend who bet me last year. (For those wondering). Mark my words- Housing will continue its slide as government programs expire.

Everbanks new Market Safe CD is based on Gold, Silver and Platinum.

After talking with them I have decided to not go hog wild over this CD for the following reasons:

1)    They mentioned a new CD more like the BRIC foreign currency CD should be announced shortly. The BRIC had better terms in my opinion and I was specifically interested in a foreign currency CD rather then a metals CD for the reasons listed below.

2)    We have lots of gold holdings and I actually do have a gold Market Safe CD from Everbank already. The terms on that CD were a bit different then this new one. Keep reading…

Marc's Notes:

The Dow continues its ascent and looks to possibly assault 11,500 with a possible target of 11,750. Will it? Who knows! Fundamentals sure don’t support it, yet the markets can stay illogical longer then one can stay liquid, so never “fight the Fed”.  We will take any UPS in stocks we can and for as long as we can.

Bailouts continue with 300 million allocated for Cash for Appliances. This program is a lot like cash for clunkers where the Federal Government pays you to go to Best Buy or Sears. Combine this with all the other bailouts and stimulus money and its no wonder Wall Street thinks its getting better.

The new Money Matters T Shirts are on the website!  See the left menu bar under T SHIRTS!
Check it out! Only 12 bucks includes shipping and tax.

Wow. Cool Shirts Marc!~

Marc's Notes:

Markets flirting again with 11,000 and actually held it yesterday but plowed back below this morning on ALCOA’s posted revenue, then back over again this afternoon.  We mentioned ALCOA posted a profit a few weeks back and the market rallied, but the profit was due to their firing 1/3 of the work force!  Well, maybe they should fire all of their workers and post a stellar profit. At least for one quarter, then they won’t have any profit at all. So the truth comes out in their revenue figures. Not only did they miss estimates that were revised downward anyway, if you note that aluminum prices surged 57%, yet ALCOA only posted a 18 % gain, net sales were OFF much more then reported.