|CODE RED: Economy in Collapse||01.22.09|
Drastic Actions Will Be TakenGerald Celente, director - The Trades Research Institute
President Barack Obama will use his poll shattering popularity to swiftly enact policies that will prove to be among the most costly and potentially destructive in America's history, predicts Trends Research Institute Director Gerald Celente.KINGSTON, NY
"We are forecasting dramatic measures will soon be taken by the Obama Administration that will worsen the credit crisis and severely damage the nation's economic system," says Celente.
According to The Trends Research Institute Director, the new President who swept into the White House on a tidal wave of unprecedented enthusiasm and the blessings of a strong majority, will have free reign to take whatever actions he deems necessary. "Whatever Obama wants, Obama gets. Desperate, scared and not knowing what to do to survive the economic storm, people are seeking a messiah to save them, and Obama is their man," said Celente. "When fear rules, reason and logic are ruled out." (According to an AP poll, 71 percent of Americans believe the economy will improve during the first year of the Obama presidency.)
The 332-point stock market decline that greeted Mr. Obama into office (a record breaker for Inauguration Day) and today's 105-point market decline will be followed by a steady stream of worsening economic news and major financial calamities, Gerald Celente forecasts. Just as President Bush exploited 9/11 as a pretext to wage the War on Terror, invade Iraq, abrogate the Constitution and exert broad Executive powers (with bipartisan and majority public support), President Obama will be given even greater latitude to fight a war on economic terror, predicts Celente.
For example, Timothy Geithner, President Obama's nominee for Treasury Secretary, has pledged to expand and prolong government intervention in the financial markets. He said his economic team would take "forceful" and "substantial action" on a "very dramatic scale" to "forge an integrated strategy on how best to achieve currency realignment."
Celente advises to closely read the signals that have been clearly telegraphed by Mr. Geithner. "From proclaiming a bank holiday, confiscating gold to backstop devaluing currencies, mega-bailouts for the too-big-to-fails ... to nationalizing public firms and dollar devaluation ... whichever of these or other actions are taken, the financial burden will fall on the American people," Celente forecasts.
Blame the Little People In his inauguration speech President Obama warned Americans of tougher times ahead and for the need to make greater sacrifices. In doing so, the President placed equal blame for the global financial crisis on the public's "collective failure to make hard choices," along with the "consequences of greed and irresponsibility on the part of some."
"The President is correct. Many have spent beyond their means, borrowed themselves into debt, took risks playing the markets, and speculated on real estate," said Celente. "But comparing Main Street's financial missteps to the large scale corruption and criminality of the banks, brokers, insurance companies, hedge fund operators, mortgage companies, rating agencies and buyout firms that cooked the books, enriched executives, ripped off clients and rigged the numbers, is further evidence that Obama is a Wall Street man.
Trendpost: Do you know where your money is? Is it safe? Will you be able to get it when you need it? What will you do if trading is temporarily suspended on Wall Street? Will you be able redeem your CD's? The new Treasury Secretary promises "a very dramatic scale" of action that may in turn require you to take very dramatic counter measures to protect your assets. We forecast with great confidence that whatever actions Washington takes to save the "too big to fails," they will prove very costly for the "too small to saves" who will be forced to foot the bills and eat the losses.
Downturn accelerates as it circles the globe (Jan. 24, 2009)
Economies worse off than analysts predicted just weeks ago -- The world economy is deteriorating more quickly than leading economists predicted only weeks ago, with Britain yesterday becoming the latest nation to surprise analysts with the depth of its economic pain.Britain posted its worst quarterly contraction since 1980 on the heels of sharper than expected slowdowns reported from Germany to China to South Korea. The grim data, analysts said, underscores how the burst of the biggest credit bubble in history is seeping into the real economies around the world, silencing construction cranes, bankrupting businesses and throwing millions of people out of work. "In just the past few days, we've had a big downward revision, we're seeing that an even bigger deceleration is on the way than we thought," said Simon Johnson, former chief economist at the International Monetary Fund and a senior fellow at the Peterson Institute for International Economics. The depth of the troubles, analysts say, indicates that nations may need to spend more than the billions of dollars already planned on stimulus packages to jump-start their economies, and that a global recovery could take longer, perhaps pushing into 2010. Analysts are particularly concerned about the slowdown in China and the recession in Europe. There is mounting concern about the stability of the euro and the British pound, which dropped to a 24-year low against the dollar yesterday. Analysts are fretting about the possibility of a debt default in a euro-zone country that could send fresh shock waves through global financial markets. The problems in Europe now appear to be as bad if not worse than those in the United States. In the last quarter of 2008, the British economy shrank at an annualized rate of 6 percent. That is worse than economists expected, but also showed the British recession may be even harsher than the one in the United States, where analysts predict data expected next week will show the U.S. economy to have contracted between 5 and 5.5 percent in the last quarter of 2008. (...) "The question now is not how bad will 2009 be, but will we recover in 2010 and if we recover, will it only be anemic?" said Andrew Scott, professor of economics at the London Business School, adding that the housing bubble is bigger, consumer debt is higher and the speed of the slowdown faster than in previous recessions. CLIP
Flood of foreclosures: It's worse than you think (January 23, 2009)
Banks are moving slowly to list repossessed homes for sale, which could mean that housing inventory is even more bloated than current statistics indicate. -- NEW YORK (CNNMoney.com) -- Housing might be in worse shape than we think. There is probably even more excess housing inventory gumming up the market than current statistics indicate, thanks to a wave of foreclosures that has yet to hit the market. The problem: Many foreclosed homes and other distressed properties that are now owned by banks have yet to be listed for sale. The volume of this so-called 'ghost inventory' could be substantial enough to depress already steeply falling prices when it does go on the market. (...) Bank-owned properties are in worse condition than ever because the foreclosure process is taking longer than ever. As much as a year can pass between the time a borrower first misses a payment and the final auction sale, according to Youngblood. During that time, houses often deteriorate because owners have neither the money nor the incentive to maintain them. Some disgruntled homeowners may even deliberately damage homes before they leave." According to our servicing folks, it's taking more time for lenders to get properties in saleable condition," said Mechem. The phenomenon of a growing ghost inventory doesn't promise to get better anytime soon, as long as the rate of foreclosures continues to ravage the market. There were more than 3.1 million foreclosure filings in 2008, according to RealtyTrac. Said Sharga: "I don't see how we can avoid another 3 million in 2009."
Twenty-five people at the heart of the meltdown ... (26 January 2009)
The worst economic turmoil since the Great Depression is not a natural phenomenon but a man-made disaster in which we all played a part. In the second part of a week-long series looking behind the slump, Guardian City editor Julia Finch picks out the individuals who have led us into the current crisis. -- Alan Greenspan, chairman of US Federal Reserve 1987- 2006 -- Mervyn King, governor of the Bank of England -- Bill Clinton, former US president -- Gordon Brown, prime minister -- George W Bush, former US president -- Senator Phil Gramm -- Abby Cohen, Goldman Sachs chief US strategist -- Kathleen Corbet, former CEO, Standard & Poor's -- "Hank" Greenberg, AIG insurance group and 17 others...
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