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PREVIEW
In
the current market
we completed the first down
leg of the 3rd leg
down. The 3rd leg
down has five steps.
The first
leg ( which itself
has five steps) was
completed on March
9, 2009. There has
been a sharp rally
as expected, as
shown in the book. The rally
will continue. for
another 6 months or
so. We
should get
40% to
50% rally from the
bottom into the fall
of 2009, which will
be followed by a
further decline as
explained in
the book.
......
Chapter 3
****************************************************************
Radical Steps To Solve The Real
Estate Problem
The downward tsunami in
America’s real estate market and
the banking system can be
halted; only by radical steps
that the administration needs to
take ASAP.
The real estate is crumbling and
homeowners have now lost $10
trillion, and 12 million
families have mortgages in
excess of the value of their
homes. The poverty effect of
falling house prices and
unemployment moving up toward 7
to 12% will hold consumer
spending back from its former
70% contribution to our economy.
Here
is a set of 9
radical steps that we recommend
:( SEE Chapter 4 of The book)
********************************************************
We do not
like to play the role of those
foreboding evil events, but
after going through the first
two innings of the unfolding
disaster, we cannot but show
what are the consequences. We're
fast slipping into the abyss.
Massive
amounts of fresh new cash. is
being poured into the various
markets by central banks first
timesince the events of 9-11.
Global
economy is suddenly contracting
Many of the world’s largest
banks suddenly are going broke
Iceland & Pakistan have already
declared pseudo bankruptcy and
have gotten help from IMF.
Riots are
commonplace in Iceland & chaos
is rampant in Pakistan.
*******************************************************************
The
British Government has almost
nationalized the banking
industry and Britain is
devaluing its currency to new
lows against the dollar. Iceland
is not alone. Estonia, the Czech
Republic, Slovakia, Latvia,
Slovenia, Poland, Hungary in
Eastern Europe all have
overvalued currencies and large
current account deficits. Sweden
has been lending to these
countries. So Sweden is also in
trouble and other European banks
lending to these countries are
also getting burnt.
Because of falling commodity
prices, South American countries
Chile, Peru, Argentina, Brazil,
Venezuela and Mexico will all be
in trouble. South Africa, New
Zealand and Australia are also
getting into trouble.
Commodity
deflation will ruin the
economies of Middle East,
Africa, and Russia, as these
countries are so dependent on
commodity prices.
Some
people think that China & India
might survive this disaster.
Asia cannot remain immune.
Increased domestic demand will
not be able to offset the
slowing demand worldwide.
Singapore is in recession; Both
India and China have seen the stock market and
housing bubble collapse.
India will be in much better
shape compared to other
countries.
***********************************************************
There are qualities of heart
like that of kindness,
compassion, purity, truth,
honesty (integrity), and peace
that are more important than all
the economic theories. There are
other qualities of the heart
that are equally important like
that of beauty, selflessness,
care, non-violence, faith, hope,
and trust in the human spirit.
On the other side of the
equation are fear, insecurity,
cynicism and mistrust, they are
the kind of negative emotions,
and are equally contributing to
our financial mess worldwide.
People act irrationally when
under the pressure of fear and
insecurity.
*****************************************************
We need to build a new,
stronger financial system where
financial institutions are not
allowed to rob the treasury (
effectively you and I). Because
the government is unwilling to
let big, related financial
firms
to fail — and because executives
at those firms knew it — they
engaged in highly leveraged
risk-taking.
Recently Greenspan said that he
was “in a state of shocked
disbelief” that “the
self-interest” of Wall Street
bankers hadn’t prevented this
mess. He should have known
better. The financial firms will
rob you day and night if you let
them. To restore confidence we
need better regulation and tools
for oversight . We discussed
that in Chapter 4 how the banks
continue to rob the taxpayers of
this country. Rome is burning
while we are fiddling.
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