It is tempting to make a fool of the ECB prez Jean Claude Trichet who truly thinks that inflation is anchored here in Europe, but I won't.

No, today we look at the ease banks still collect fresh capital. Who are those sucker investors who bring their money to the big ovens? Don't you think it isn't amazing? Invest now in banks?????

Via the Winter blog I found a nice article (source), quote:

As of last Friday, North American banks had raised $158 billion in capital since the third quarter of 2007, almost matching the $175 billion in losses they reported during that period, according to J.P. Morgan Chase. 

Comment: Isn't this amazing? 158 US$ in fresh capital and who are those sucker investors? These so called 'investors' don't have a clue how banks work with their off balance items (that don't count in the reserves), their Level 3 assets who are not measurable, their this and their that.

Lets just look at one more of the amazing details in the article, quote: 

For instance, at the same time Wachovia announced a net loss of $350 million in mid-April, it said it had sold $3.5 billion worth of common stock and $3.5 billion of preferred. Mr. Welshimer noted that some banks, such as Wachovia, have tried to pre-market offerings to make sure they get sufficient interest from investors and also to be able to mitigate bad news about losses with the announcement about fresh capital. 

Comment: The sucker investors simply do not understand that when Wachovia raises 7 billion while posting only 350 million losses, future losses will simply amount to 7 billion or more.

Luckily there is no problem for me; With the policies of Alan Greenspan an awful lot of non productive capital was pumped into the US banking system and economy. All this excess capitol has to be burned away before that economy can function properly again. Banks selling stocks or whatever what is a good way to burn money.
Anyway it is better compared to investment in food and commodities because those investors are the real sucker investors from the Rape Pillage and Plunder Investments... 

Lets leave it with that, till updates. 

(24 June 2008, temporary update) Long awaited: Two important statistics!

Statistic one: About US corporate earnings, mostly the S&P index (source) quote: 

Second quarter profits are expected to fall at a rate of 10.2 percent, compared with the Monday estimate for a drop of 9.6 percent. At the end of May, analysts expected a 7.3 percent drop.

A worsening outlook for consumer discretionary and financials was behind the bleaker earnings view. 

Comment: Long have I been waiting for stuff like that, also these are only expectations... If true, the US stock markets needs to decline at least 10% in this quarter.

Statistic two: Case Shiller housing index (source) quote:

The S&P/Case Shiller composite index of 20 metro areas fell 1.4 percent in April from March and slumped by a record 15.3 percent over the year.

Economists expected prices for the 20-city index to fall 2.0 percent in the month and 15.9 percent from April 2007, according to the median forecast in a Reuters survey.

S&P said its composite index of 10 metro areas slid 1.6 percent in April for a record 16.3 percent annual drop.

Comment: 15.3% decline year on year means over 3 trillion of US family housing lost equity this year... For me it is still funny to observe that there is absolutely no talk whatsoever on numbers like this in the mainstream media. Ha! How come that those millionaires from CNBC never talk about that?

And why not do some easy to understand calculation?

From March to April house prices declined 1.4% in the 20 metro areas.

That is 1.014^12 = 1.18 thus 18% year on year.

Hence: luck is on my side because the monthly decline is still above real year on year decline; we have not reached the turning point yet. We must be cautious because I did not build the calculations on a raw data set but it was retreived from the media sources mentioned above. But it is reasonable to suspect the turning point still ain't there.

Till updates.    

(19 June 2008) Today I found a sad update from oil actions from the Iraqi puppet regime. Although it is now 2008 they still abide by the classic definition of a puppet regime. What has this puppet regime done when it comes to building hospitals in Iraq? Practically nothing, and on a whole lot more they constantly prove they are just another puppet regime.

Let me name four oil companies, here they are:

Exxon Mobil, Shell, Total and BP. 

According to this iht file they have reaped the new oil contracts. I am mad beyond hell with my anger. The Kurdish were allowed to place the new contracts and even when names like 'Hunt oil' from Dallas entered the scene, I kept my mouth shut.

This time I will not keep my mouth shut: We cannot have the pre Saddam oil companies take over like nothing has happened like for example the one million deaths from the economical sanctions against Iraq. And so after I invited the Afghanis I again remember you folks of the impending Military Bloody Day that is located at 26 July this year...

And so, if the Iraqis have any pride left, do they allow the old oil companies to provide more profits to fatbag Americans? And give rise to the old oil powers again? I don't think so and I call on the Iraqis to make the US military pay for their Rape Pillage and Plunder investments they are making.

Let me quote from the iht file: 

"There is an enormous amount of oil in Iraq," Raymond said. "We were part of the consortium, the four companies that were there when Saddam Hussein threw us out, and we basically had the whole country." 

Comment: And big oil still wants that country back, for example because lately they have some demand problems. Would the Iraqis like to be some real population or do we have future stuff like 'we basically had the whole country' 

Better kill the slime before the slime kills you! 

Till updates. 

(18 June 2008) In this update I want to look at three items:

Item one) Wise words from hedge fund manager Paulson, he thinks there will be about 1.3 trillion in down writings related to the US housing market.

Item two) Some analyst(s) from the Royal Bank of Scotland foresee a stock market crash of about 25% somewhere in the next three months.

Item three) We ponder if financials will again decline another 50% from the present values.

So lets begin with

Item one) Let me quote (source):

June 18 (Bloomberg) -- John Paulson, founder of the hedge fund company Paulson & Co., said global writedowns and losses from the credit crisis may reach $1.3 trillion, exceeding the International Monetary Fund's $945 billion estimate.

Comment: Since this Paulson has made giant profits from the US housing decline his words carry more weight than the words of a lot of other folks. From the IMF we know already they are dumb beyond the Piccadilly circus and my estimation is: two trillion or more. Let me explain in a nutshell:

When you study US median house prices and US median income for the period 1996 to 2006 you arrive at the conclusion that from the top the median house price will decline about 50%.
And 50% of total US family housing equity is something like 10 to 12 trillion US$.
If from that decline in family house equity only one fifth makes it to the books of the financial institutions you have two trillion in direct down writings related to the jokes Alan Greenspan performed.

So far for item one, we proceed with

Item two) Let me quote (source): 

The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks. 

Comment: In the months before the collapse of Bear Stearns Cos I too thought that the crash scenario was the most likely, but at present the US Federal Reserve has five programs of 'providing liquidity' so instant crashes are avoided that way. Therefore the scenario known as 'death by a thousand cuts' is still the prevailing scenario.
Although inflation is rapidly rising (and the Central Banks did not foresee that!) I still view this as another squeeze on the profits of companies, but I have to admit that this squeeze is even broader compared to the credit crunch.
My estimation is that stocks will decline a lot more but that there are no reasons to expect a sudden tsunami in stock decline. Look for example at how easy the banks collected more and more money to 'strengthen their balance sheets'; this only proofs that there is still a large pool of sucker investors out there who have too much money and too little brains because any idiot could see you must not invest in banks... 

This brings us to the latest item:

Item three) In the picture below you can see what giving up the golden standard did for the US financials. In this world of fiat money they almost made it to 25% of total market cap and that is a bit strange don't you think?
Don't get me wrong, I am not advertising for going back to the golden standard, but in my humble opinion a commercial bank is just like a water company; important because you can't live without them but regulate them otherwise they will choke you...

My dear reader, make up your own mind: Having financials being such a large part of total market cap, is that healthy for the economy in the long run? 

(The picture is from Societe Generale and I found it via Barry)

Till updates. 

(13 June 2008, updated 15 June) Today I feel like preaching to the ECB but first we have this:

Exactly five months ago (see this Financial 2 update from 13 Jan) I gave some prize to Chinese and Kuwaitis for the most stupid mega deal for the year 2008. (They were that dumb to invest about 5 billion in one of those weird American banks.)
And although we have observed hundreds and hundreds of so called 'experts' stating the credit crisis was almost over, my analysis of the situation is still standing and I am sorry to say but this whole crisis is not over by far.

__________________________ 

Before we proceed with preaching to the European Central Bank I would like to explain the difference between 'embedded' and 'anchored' inflation.

Anchored inflation is a situation where there is indeed inflation but workers cannot demand higher wages so a lethal 'price wage spiral' can be avoided.

Embedded inflation is a situation where the working population expects continuing inflation and thus will do their very best to get enough wage increases to compensate for the inflation.

So far the theory, lets now look at just some facts from the last time:

Fact 1) ECB President Jean Claude Trichet thinks that European inflation is anchored, anyway he said so.
Fact 2) Today the last labor unions here in Holland made the deals with the employer unions; result 3.3% more wage while the labor unions started the negotiations with 3.5%.
Fact 3) Here in Holland consumer inflation stands at something like 2.4% at the moment.
Fact 4) The labor unions reported that a record of strikes was needed in order to get the desired results. (That is true, strikes hit a multi year record.)

Conclusion: Here in Holland inflation is not anchored but embedded.

Fact 5) In Spain shops are running empty only because of protests against high fuel prices.

Conclusion: Likely the Spanish workers do not like a Trichet anchor around their neck either.

Fact 6) For the most years the ECB has not met her own 2% threshold on inflation and not met her money supply threshold of 4.5%. Both were higher almost all of the time.

Conclusion: The European Central Bank, more often than not, does not stick to her own mandate. If the ECB did not stick to her mandate in those easy years, why should they do it now? With every policy setting meeting they loose more and more credibility.

Fact 7) The Central Banks and the commercial banks have created the present credit crisis, the Americans are (as usual) most to blame but the Europeans kept silent during the Greenspan years.

Conclusion: And now this Trichet mental dwarf comes telling us we should keep wage demands low... Why not let the banks pay for the mess they have created?
They did this although some governments are also to blame. The Spanish and UK governments simply deserve their decline of real estate, or not?
All in all: countries that sided the most with the USA not only have the most problems but also create the most. The nations pushing for lower and lower rates and more and more debt are the ones who kill countless millions in the development nations because our pension funds hang out the day trader on the food and commodity markets.
Don't forget that in the not so long ago past most food and metal markets were globally just an average Nasdaq listing size market...
Of course most Central bankers do not know that, but what do Central bankers know anyway? 

Title: Trichet the anchor of the Euro? I don't think so...
  

We end this update with a funny note: I have found a niche of the US housing market that is still booming, the folks in those houses have 'gift wrapping rooms' and 'florist rooms'. Here is the fun.
That housing market is tale telling for eight years of Dubya; the best US prez ever! 

Update from 15 June:

On seekingalpha dot com was a nice article about Central Banks fighting inflation, the title of the article was: 
Will the World's Central Banks Successfully Fight Inflation?
The answer is of course a big NO because right now the ECB is already 3 to 5 months too late and given the time delay at witch rate increases work the stagflation scenario is still the most likely at this point in time.
If you scroll down that article you can read my comment on it at entry number 4.

On Bloomberg dot com you can find a nice article about wage increases in Europe, let me quote a bit of fun from there (source):

"One element of the ECB's analysis has changed quite substantially from before: the assessment of wage developments." 

Comment: If the ECB did not get it in the last six months, they will not get it in the next six months. So although rate hikes are desperately needed, they will rather likely not do it for reasons still not understood by me.

__________________________  

This update was started with the most stupid financial mega deal for the year 2008.

Today I found the most stupid more pumping oil up deal done by Saudi Arabia. From next month on rumors say the Saudis will pump up about 500 thousand extra barrels a day. Why is this the most stupid oil deal?

There are dozens of reasons, let me name only a few that carve some wood:

Reason 1) Daily shortage is about 1.5 to 1.6 million barrels a day, with the extra output it will be 1.0 to 1.1 a day. So the pension and hedge funds will keep on playing their oil tricks on the oil futures markets.

Reason 2) Lately the Paulson clown (that is the US Secretary of the Treasury) stated more than once that speculation on oil markets was simply not true. It was only very insignificant because 'futures follow the real markets'.
And with so much moral backwind the pension and hedge funds will keep on buying more and more oil futures and roll them over month in month out.

For me it is utterly weird to observe that the Saudi oil sellers do not understand the nature of the oil pricing mechanism; have they forgotten all those years when oil was between 20 and 30 US$ a barrel? And they always nicely pumped up more because the Americans said the global economy would suffer if oil went too high?
The Saudis were slime in those years because the US economy profited the most from the below 30 US$ level and now we are in the endgame the USA speculators profit the most from the rise. So again the Saudis are only slime.

Some folks call it a Mad Max economy but I prefer Rape Pillage and Plunder Investments; if the Saudis are to stupid to see what is actually happening it is not my problem. If the Saudis willfully let this slaughter continue in the developing nations, let Allah judge these slime heads and not me...

Till updates. 

(10 June 2008) Lately we have all kinds of central bankers coming along, first we had the 'pretending to be hawkish' Jean Claude Trichet telling folks that in the next meeting we could see yes or no a rate hike. So that was idiot number one because today we also had the yoy wholesale inflation from Germany running at above 8%.

On the comments of idiot number one we observed idiot number two named Bernanke from the US FED.

Idiot number two informed us that the 'downside risks' to the US economy were parked on Pluto and thus it is time to look at the dollar value because there is a tiny tiny relation with inflation.

After idiot one the Euro shot up to 1.58 US$.
After idiot two the Euro shot down to 1.55 US$.

The ECB should be ashamed of herself; they turn their mandate into second hand toilet paper while in the mean time pension funds make a stupid run on food and commodity markets. And why not ask the Italians to leave the Euro, pick up their beloved lire again and see what it does for Italian inflation?

In the meantime you sure must view the next CNBC video where five Americans do not shout hard enough and enemy combatant Dubya also throws a coin in, link:

http://www.cnbc.com/id/15840232?video=765631137  

After all that long term wisdom from that video you can visit the Winter blog where I found that link:

http://wallstreetexaminer.com/blogs/winter/?p=1709  

And if you are still hungry about more of that complicated financial stuff, why not hang out at Barry's place? Link:

http://bigpicture.typepad.com/  

If after that you are still hungry, you are some big beast and my advice to you is: Try to kill some Americans, it does not have to be that coffin stuff but if you can bring great fire power against those idiots you are my friend...;)

Till updates.  

(08 June 2008) The main dish of this days update is a message to the OPEC but we start with two times big big fun.

---Funny detail one: Finally the two bond insurers where you could buy an AAA rating in case you didn't have one are downgraded from their AAA status. About one trillion is downgraded two notches and we are not talking about bank investment vehicles. No no, down to earth municipal bonds and stuff like that.
Wow, one trillion downgraded... That is expensive...;) Link:

http://www.bloomberg.com/apps/news?pid=20601087&sid=apwRNJVHwpBQ
&refer=home  

---Funny detail two: For years and years I am arguing that the information streams at the Pentagon are highly dysfunctional. What did the Pentagon boyz & girlz do?
On 95 new weapon programs they are 300 billion over budget!
Ok it isn't victory but 300 billion is still 60% of one year non war funding (war funding goes via borrowed and earmarked emergency spending). US Senators speak about a 'crisis' but that is rubbish; crafting new weaponry is so deeply rooted in the US society and economy that this will survive for at least a year or two (may be longer). The USA might give up the status of the US$, they might give up this and they might give up that. But they will never give up crafting new weaponry, that detail was already understood by me in Oct 2001... Here is the Reuters fun:

http://www.reuters.com/article/marketsNews/idUSN0340101120080603?sp=true  

And for the main dish:

When oil was before 120 US$ a barrel I promised OPEC to update before it would breach 140. This is the update. 

Last Friday the DOW Jones plunged almost 400 points while the price of a barrel of crude oil shot up almost 11 US$. So if there is any idiot left still saying that US investors have nothing to do with the price of oil, commodities and food; let this idiot stand up so we can identify you and kill you.

OPEC has been right all these years; speculators are a big hinder for the normal evolution of prices in regard with supply and demand for the wide array of oils there are. From light sweet crude to heavy sour oil; the Western economists know that we have to blame India and China. 

But now these Western academics are standing in their underpants; an oil hike of almost 11 US$ has never been observed before...
And OPEC has to understand that these Western academics tell the same crap about food: it is China's hunger for meat that is to blame...
In the meantime countless millions can't buy rice let alone meat.

I hope that the best investment that OPEC can do right now is to keep the oil below the surface so future generations can have some kind of life.

Weighing all in all I would say: No need to pump up more oil. Better think of a relatively large third oil market beside the two in the USA and Europe. And spread happiness around the world, spread happiness instead of US weaponry around.  

Till updates. 

(06 June 2008) Today we will look of course at the Federal Reserve Z1 release that came out yesterday. But first we have some fun:

Only yesterday I mentioned that under the Dubya regime the Americans can't even pay for their road maintenance and today a Media report popped up on the Drudge report. I knew it was bad but that it was this bad already is of course perfect news; more and more the USA starts to look as some former communist republic...

Here is the usatoday fun.

Now for the serious stuff: US debt growth of the entire financial sector. As you can see in the table below the debt of the US financial sector on herself is over one gross domestic product. In the third column you see the Q on Q growth and if you would annualize these figures you see that debt growth in the financial sector is always a multiple of the gross domestic product growth.

Since the debt in that part of the economy is larger than an entire GDP you might think that the Americans have a problem. Not some small problem but a giant problem in that sector of the economy only...
So not the Americans; no financial journalist over there writes upon such boring stuff. You will never find it in the minutes of the Federal Reserve. But in fact it will break their military might, this is obvious. It is also obvious that this happened under the Dubya years of ruling America. For Dubya the economy is easy to understand: All that matters is that people have money in their pockets... Real money on the back of wealth creation or borrowed money, to Dubya it is irrelevant.

Most Americans are relatively stupid and think that the credit crisis is only something that is somehow related to sub prime mortgages. Yet sub prime was only the weakest link; the credit crisis is a big big squeeze on credit availability.

When mid 2007 the credit crisis broke out, in the last column you can see it's effect on debt growth in the US financial sector. Now we have the 2008 Q1 figure in you see debt growth was still 827.4 billion US$. If you withdraw this from the total profits in the US financial sector you likely end up with a negative figure. And this has been going on for many years.

All those who have large amounts of outstanding debt still don't get it: Most of the outstanding debt will never be paid back... If you think otherwise, please explain how the combined US financial sector is going to pay back this 16 trillion?

We close the day with a quote from the Winter blog:

All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident. - Arthur Schopenhauer (1788 - 1860) 

Till updates. 

(05 June 2008, temporary update) I did some thinking on the previous update, I did some typing on my calculator and I arrived at a possible second explanation about the one trillion collateral as absorbed by the US FED:

It might well be this is only a cumulative number. And when you look a bit at the money streams in the other programs this is the most likely explanation.
On the one hand this is a pity but on the other hand total combined real reserves of the US commercial banks is 130 billion in the negative right now. And who does not like the concept of banks having negative real reserves and positive borrowed reserves?
It is a bit like a US citizen who borrows 10 thousand US$ from the bank giving his SUV as collateral and after that says his savings are 10 thousand US$...;)

Lets get serious: Tomorrow we have another Z1 release and I am waiting for weeks already. After all last year I calculated that the US financial sector as a whole needs 2500 billion more debt in order to stay profitable in 2008. So tomorrow is a very interesting day on that detail.

In another development in the Iraqi equation the present US government tries to get 50 military bases, control of Iraqi airspace and legal immunity for all American soldiers and contractors. So enemy combatant Dubya still tries to get the oil...
It is definitely worth an investigation: Is Dubya indeed the most stupid US president ever? And, if confirmed, is the US population also stupid because they not only voted once but twice for this guy?
Ha, the stupid Americans! They never saw the housing crisis coming, their roads are beyond repair because of lack of money and the US financial system is the same mess as Iraq. Welcome to the heritage of Dubya; the guy will be a long long footnote in history about how not to run a world power...

Here is the independent file with the secret Dubya plan.

In the funny news department the DOW soared over 200 points on retail sales (read more inflation) and labor news (read insignificant news because of it's volatility).
Let me quote some retard named Goldman (source), quote:

Alfred E. Goldman, chief market strategist at Wachovia Securities, contends the market is entering a stronger period because of investors' ability to not overreact to some bad news such as rising oil prices and a weak dollar and to focus instead on the retail sales and jobless claims numbers.

"What investors are doing is looking beyond the valley to the peaks ahead," he said. "The big picture is that we're in a market that's transitioning from a bear to a bull."

The Dow rose 213.97, or 1.73 percent, to 12,604.45. 

It looks like the DOW traders get more and more desperate because the next file found states that foreclosures are still on the rise with more fun to come. Lets quote some statistical fun (source):

In fact, Americans' equity in their homes -- usually their single biggest asset -- now has dropped to the lowest level on record in figures going back to the end of World War II. Homeowners' portion of equity fell to 46.2 percent, which means the amount of debt tied up in their homes exceeds the equity they have built up.  

Comment: If this goes back to World War II you can bet on it that HELOC loans are not included therefore a 35% figure is far more realistic. If it truly would be 46.2% we would not have, quote from the same source:

The report also found that more homeowners slipped behind on their monthly payments. The delinquency rate jumped to 6.35 percent -- or 2.87 million loans -- compared with 5.82 percent for the previous three months. Payments are considered delinquent if they are 30 or more days past due.

Comment: I still am living in a dream world and still there is no statistical detail observed that will prevent the destruction of the US military might. Ok there will be some stubbornness before the Americans start creating wealth from work again, but that is their problem and my fun...;) 

Till updates. 

(03 June 2008, on 05 June added the second explanation, see below) Today I viewed some very funny news and I studied some real serious stuff. Lets start with the fun department:

The US Federal Reserve chairman Bernanke told his audience via satellite that he was worried on inflation... And he tried to sound hawkish...

I almost fell from my chair from laughter, the idiot Bernanke has lowered rates so far that real rates are negative. This induces a 'cash is trash' mentality and thus the oil, food and commodity markets are flooded with money driving up everything with an absurd speed. And after that this idiot comes telling he is worried about inflation...

We finally have proof: Bernanke is indeed a clone of Alan Greenspan! 

Title: The Clone worries...
   

 __________________________

And from the department of serious affairs we have: 

Just a few days ago I informed you that I did not understand much about what was happening at the New York FED. In just a few days my knowledge has increased by a lot because I came across this article from Barry Ritholz. Here is the article:

http://seekingalpha.com/article/79727-the-fed-credit-crisis-inflation  

I consider Barry the best writer on the entire Seeking Alpha dot com, but being the best writer on that website is not a very great achievement since most writers over there are rather amateurish. So not Barry. And, just like me, he loves math. His graphics are always a jewel for the eye and he is a good writer too.
In short: For me Barry as an individual has more credit than the whole Federal Reserve & he also has more brains than the combined US Central Bankers...

When Barry gets interviewed by stupid media folks he is Mr. Polite himself and when you read what he writes you hear the lion roar.

Where I as a dumb person thought that the FED had only pumped about 150 billion US$ via three programs that I follow, Barry placed the next link to the New York FED:

http://www.newyorkfed.org/markets/Forms_of_Fed_Lending.pdf   

And thus there are not three but five new programs of taking in thrash from banks (AAA grade investment stuff, often mortgage backed stuff but also car loan and student loan related stuff). But most of all, quote: 

Further, the OpEd notes that the Fed has -- at least so far -- staved off a total financial meltdown through their alphabet soup of credit facilities, lending nearly a trillion dollars to banks and brokers against all sorts of sketchy collateral. 

Comment: So why is this trillion not reported in the FED H3 file that is supposed to track those 'providing liquidity' programs? (See http://www.federalreserve.gov/releases/h3/Current/)
There are two possible explanations:
--ONE) That is because in H3 only the Basel one rules are tracked and hence the missing 850 billion US$ have to go to the so called 'off balance' items from the commercial and investment banks.
Only somewhere next year Basel two will set in and off balance items need to count for the reserves of banks too, rather likely we will hear from 'technical difficulties' in 2009 when it comes to implementing Basel two...
--TWO) The mentioned one trillion could be a cumulative number over all five programs over the entire lifespan. This could be because the money auctions (the TAF program) is about 600 billion US$ cumulative.  

Title: So in fact, this already could have happened...
   

At last I want to make an easy to understand calculation as why it is so stupid to leverage up all that stuff. It is about investment bank Lehman Brothers, right now they are leveraged up something like 27.1 and in some time it is 25.

How does it work?

Lehman Brothers takes 10 US$ million from it's on balance books and places it in the off balance files. With a leverage of 25 they borrow 240 million US$, this gives a war chest of 250 million US$ to hang out the 'investor'.
When those investments decline only 4% they have lost 10 million from the war chest so they are left with 240 million US$.
You understand: All of the original on balance money has been lost.
But there is no problem: After all we have left 240 million, why not take out 5 million and with a leverage of 50 we borrow another 245 million US$ from the same pool of sucker investors?

And so on and so on, this explains why the leverages only climbed all those years until the credit crisis broke out. And if Barry is right with the detail that the US FED has taken one trillion of that shit on her balances; why invest in the USA??? 

Title: Till updates, have a nice life or try to get one!
   

(02 June 2008) Man oh man, today I found a wonderful graphic that paints some giant damage for the Americans in general and future budgets for the US military in particular. The graphic was found in an article on the economist dot com:

http://www.economist.com/world/na/displaystory.cfm?story_id=11453745  

The article is relatively low class because it does not say that US family housing value leaks away at a 10 to 12 billion US$ a day. Ok ok, the article says that the present decline is bigger compared to all what happened during the great depression. But for me that was old news.

Lets enjoy the graphic, it is from Robert Shiller so it is one 100% reliable:

Title: After waiting for over four years: Here I come you fucking US military!  
    

I don't recall how long ago I wrote that the US military might will be destroyed more or less the same way as they won the cold war with Russia, it could be 2004 or even 2003. But I have been right all the time while the Americans only added weight and more and more one yard wide ugly wives popped up on their streets.
Do you know why Americans love one yard wide females? I don't know why they love those one yard wide females but they have plenty of them...

Brrr & bah! Disgusting are those one yard wide wives. Till updates...;)  

(30 May 2008) Today two things: One of the most strange phone calls from my entire life and in the second part I will try to explain that indeed total reserves of the US commercial banks very well could be far below the official H3 report on this.

Part 1) Over two months ago I went to a new energy provider named Eneco, but the contract still isn't validated so I phoned 0900 - 0201 to get to the consumer help.
At first you get one of those menu's with stuff like 'If you have a question about your bill dial 2'. And lucky me: They female menu voice also said that this conversation was recorded for training purposes. So it's recorded...

After dialing through the menu the phone was answered. (Phone call was done around 16.30 local time) The guy said:

'Goedenmiddag Reinko, ik ben Censura on Dominicus en waarmee kan ik u helpen?'

Translated this is:

'Good afternoon Reinko, I am Censura on Dominicus and what can I do for you?'

My dear reader, don't you think it is a bit weird that when you make your first phone call to your new energy provider they already know your name? Lets leave it with that and turn in the next part to the serious stuff (the destruction of the US military).

Part 2) Lately the US Federal Reserve is constantly 'providing liquidity' to the US financial system. Why they do this I do not understand completely since the US investors have plenty of money to pump up oil, food and commodity prices on a global scale. (Look at the pdf file from 26 May; if you use the reported oil data in there US index investors are driving up oil prices 37.2% as a point estimate.)

The three 'providing liquidity' programs are:
1) TAF (Term Auction Facility),
2) PDCF (Primary Dealer Credit Facility) and
3) TCLF (Term Securities Lending Facility).

On 23 May I already argued that if the garbage as collateral accepted by the FED is only worth 90 cents on the dollar, we already have one third of total US banking reserves wiped away. To make my case that indeed the total US financial system is under water we only look at the 'terms and conditions' of these three programs.

Here we go, we look at details of the accepted collateral of course:

1) TAF (source), the detail that counts says that the local US Central Bank tells what it's worth. Quote:

"Collateral value" means, with respect to the assets pledged by a Participant to its Local Reserve Bank, the value, as of the Bid Submission Date, assigned by the Local Reserve Bank to such assets.

Comment: The local reserve bank estimates the value.

2) PDCF (source), the detail says it are the primary dealers like former Bear Stearn Cos that define the value of the pledged collateral. Quote:

Eligible Collateral
Collateral eligible for pledge under the PDCF includes all collateral eligible for pledge in open market operations, plus investment grade corporate securities, municipal securities, mortgage-backed securities, and asset-backed securities. Collateral that is not priced by the clearing banks will not be eligible for pledge under the PDCF.   

Comment: Collateral that is not priced by the clearing banks (the clearing banks support the primary dealers) says it all. 

3) TCLF (source). The detail says that the New York bank tells what it is worth, but the FRBNY uses two schedules and schedule 2 has 5 sub schedules. Quote:

Eligible Collateral
In order to prevent securities lending from affecting overnight bank reserves, loans will be collateralized with eligible collateral rather than cash. Eligible collateral will be determined by the FRBNY and includes (see the source).  

Comment: I do not have a clue as what is happening over there. It also raises questions about the definition of 'cash' at the New York FRB...

__________________________

Weighing all in all it still is a bit strange that the Americans have plenty of money to disrupt food and commodity markets on a global scale while at the same time do weird stuff like asking the primary dealers what the pledged stuff is worth actually on 'the day it is pledged'. The PDCF is definitely the most weird one but I completely do not understand what TCLF is.

All we know 100% sure is not to invest in the US financials.  

Till updates, have a nice life or try to get one!   

(28 May 2008) Two things today: The weird behavior of the DOW Jones and a detail from Afghanistan.

--DOW Jones: Today it was reported that year on year US family housing lost about 3000 billion US$ in equity (source) and so US commercial real estate must also have had a solid hit in the last 12 months. It was 14.4% down year on year while the US government lately reported a 3.1% decline (source). By the way, the US government uses data from Freddie Mac (that is a bastion of solid accountancy reporting...)

US consumer confidence was at a 15 year low. More and more car loans are under water and the stuff is even spreading to second hand cars.

Yet the DOW climbed on the 'news' that new home sales were up 3.3% but it was 'seasonally adjusted'. The US commercial department did not say what the real figure was and zero so called 'financial journalists' asked for the real figure.

In short: Given the news this was a day of computer trading programs that only work with so called technical analysis so all that negative news is simply neglected...
And thus the Wall Street traders could sit back all day long and eat bread and meat.

--Afghanistan: After the lawful killing of Dennis van Uhm, the son of the Dutch military leader general Peter van Uhm, suddenly all reports of the Mujahedin being cowards have suddenly stopped. 

And although there are no Media reports on this; suddenly it is in the mind of the local 'military experts' that confronted with all this Dutch artillery and air power, the Afghani fighters simply are far more brave compared to those Dutch 'fighters'.

Again I would like to congratulate the Afghanis with this perfect and lawful killing of Dennis van Uhm. Like stated so many years ago: If you help me I will help you...;)

For this year 2008 it was advised to the Afghanis in the last year 2007 to try and kill about 10 to 20 Dutch military folks, this policy is still valid. Otherwise the other NATO countries will not get the message that flows from the lawful killing of Dennis van Uhm.

Weighing all in all: This year there will be only one so called Military Bloody Day and it is located in the heat of Summer: 26 July 2008.

It is mostly for the Afghanis but if the Iraqis want to help also you won't hear complaints from me. After all now the credit crisis has turned into a food crisis we have to kill more Americans.

So let it be official:

Next MBD and the proceeding 15 days too of course is located in time at 
26 July 2008.

As far as I see reality, it will be the only MBD of this year. 

Till updates, think well and fight well.

(26 May 2008) Man oh man, I already suspected pension funds for a long time of pushing up food and commodity prices. Via the blog from Russ Winter I found some good information that indeed validates my insights or my suspicions.

But it is all true: the policies of the weird fool Alan Greenspan will kill countless millions in the future.

And I am sad, there are almost no Americans killed while this is so important right now. Waiting for the US Senate pushing for some legislation is like waiting for the US highways to get repaired...

The light version of the info found is the next:

http://wallstreetexaminer.com/blogs/winter/?p=1664  

And on the U.S. Senate Committee on Homeland Security and Governmental Affairs website you can find a 19 page pdf file that is definitely worth saving to your hard disk. Try to grasp it's future consequences, they make me sad. Here it is: 

http://hsgac.senate.gov/public/_files/052008Masters.pdf  

I am sad that nobody kills Americans for this, why let the American pension funds kill countless millions and there is no retaliation???
Lots of people still don't get it: Making dialogue with the Americans is utterly dumb, killing is the answer. Please remark that I am not responsible for the way the Americans behave, I have no influence on US politics whatsoever, not in the past and not in the future.

It is sad but killing that slime is the only way.

Just a quote from page 8 of that file:

There are hundreds of billions of investment dollars poised to enter the commodities futures markets at this very moment.26 
If immediate action is not taken, food and energy prices will rise higher still. This could have catastrophic economic effects on millions of already stressed U.S. consumers. It literally could mean starvation for millions of the world’s poor.27

Remark: The US military needs a very skewed populace with many poor (the trailer trash people) in order to fill her ranks. But right now the military desire gives rise to millions of distressed US folks and countless deaths on a world wide scale.

Therefore once more:

Kill more Americans! 

It is logical, it is morally ok. Why not kill a few more of this slime? 

Till updates.   

(23 May 2008, corrected 25 May) According to the US Federal Reserve it is only arithmetic that the non borrowed reserves are negative, quote (source):

The negative level of nonborrowed reserves is an arithmetic result of the fact that TAF borrowings are larger than total reserves. 

Therefore lets do some simple arithmetic ourselves, remark that for long periods of time the total reserves of the US commercial banks were 40 to 42 billion US$. 

Lets look at the 'arithmetic result' on 22 May: 

125000 + 15401 - 111855 = 28546 million US$.

Thus life is easy to understand: Since Nov last year about one third of the real reserves of the US commercial banks have gone...

Of course it is not in the main stream news since this news is bad for advertising income, let that be the problem for the main stream journalists and not my problem.  

Correction: I was forgotten that the FED had three programs to 'provide liquidity' to the commercial banks and the primary dealers, look in the source file at the 'Primary' column under 'Other borrowings from the Federal Reserve, NSA' where another 13+ billion is parked.

It's no problem; we only have to wait a few months longer. Stuff like this simply has to run it's course. Likely family housing value will decline another trillion this Q2, lots of car loans are already under water because of rising fuel prices, commercial real estate is declining faster and faster, the option mortgages will reset two times this year, foreclosures are still on the rise, housing inventory is still on decade long highs and that guarantees further price declines. Level 3 assets are still rising and so on and so on. It looks that the financial mess in the USA is from the same level as the mess in Iraq, a great achievement done by team Dubya! Ha, in these months you only have to wait for what new 'AAA investment grade' collateral is accepted by the FED and you know what next part is under water in this lovely credit crunch...;)

So I am sorry I made a mistake, but although the H3 report from the US Federal Reserve does not reflect it; my guess is that total reserves of the US commercial banks are indeed declining rapidly. And if the accepted collateral by the FED is worth 90 cents on the dollar, we already have lost one third of total reserves of the US commercial banks...

At last: The concept of 'borrowed reserves' comes from the other side of the milky way from some weird financial universe. If you would have won one million in a lottery, would you bring that to a bank that lived on borrowed reserves?  

Till updates. 

(19 May 2008, this is a more or less scientific update so I dunno if it's temporary or not) From the high mountains of advanced math I come thundering down to the green valleys where the math dwarfs live.

This update is for the Wall Street traders who all are math dwarfs by definition. I have found a YouTube vid that even you can understand. It is about exponential growth and I know you all get a severe headache only when you hear that word so take some pain killers if you need them.

Here is the vid, please look at that elderly American academic that explains exponential growth in a way that even you folks can understand:

http://www.youtube.com/watch?v=F-QA2rkpBSY&NR=1 

After you have seen the video you understand that the American academic is only trying to explain how exponential functions like f(t) = 1.07^t behave.

In my world I would formulate it as this: Wow wow wow, this American academic is capable of taking a product integral from the constant 1.07! For an American this is just unbelievable & also did you notice there were zero obese people in the YouTube vid??? (Where did they hide them?)

Lets get serious: I want to destroy the US military might and the most efficient way right now is doing that via destruction of the US financial system. You Wall Street folks rather likely think this is not a good idea.

So let me give you a few shots:  

Shot 1) In the last seven years total debt of the US economy upon herself grew about 8% a year, the FED never had a problem with that because beside debt growth they also have to 'finance' inflation and GDP growth.

Give it a bit of time my dear Wall Street traders; 8% debt growth year in year out.

Shot 2) It is not in the main stream news because most financial journalists are math dwarfs themselves, but right now the total of debt that the US economy has upon herself is over 50 trillion. Since 8% of 50 trillion is just 4 trillion you folks need 4000 billion more debt this year, there is only one little problem:
There is a so called 'credit crisis' going on.

Shot 3) This one I leave to the imagination of the Wall Street traders; what would you publish as shot number 3 if you were in my shoes? 

That's the end of this update, I am smiling ear to ear because I cannot find any reason or any kind of data set that will protect the US military from future finance withdrawal. Till updates my dear math dwarfs, till updates.  

(15 May 2008) Today the US President Dubya gave a 'speech' in the Israeli Knesset (that's the Israeli parliament). His speech writers (Dubya cannot write his own speeches) had done their best:

God had given some promise to Moses, king David and some more folks and the new created state of Israel was the fulfillment of that promise. And the Israelis were 'God's chosen people'.

After my humble opinion, when you have six decades of war this rather likely is not a fulfillment of Gods promise.

And Dubya praised the Israelis and held them high as an example for the other 'terrorist supporting' nations in the region. Yeah yeah Dubya, Israel is indeed a beacon for freedom; over there Palestine females give birth at children at military checkpoints because the fucking IDF won't let them go to the hospital. Welcome in the land of the free Israelis... (Lets hope the OPEC starts withdrawing a bit of oil from the two main oil markets because I like oil a bit more higher please.)

Lets zoom in on the main contradiction in the Dubya speech:

Dubya said that is was wrong that innocents got killed while trying to achieve 'political objectives'.

Please my dear reader, let that one sink in; when innocents get killed while trying to achieve political objectives, Dubya considers that terrorism.

My dear reader, what is the highest 'political objective' in these centuries and decades? Isn't that the creation of a state?
But then, what about all those Palestine villages that were wiped off the map?
The Palestines were innocents in those days.

Elementary logic, with Dubya's own definition of terror in my hands, says that Israel is founded with a massive use of terror. And this explains why we still have so much terror at the scene in the present days. But very likely Dubya will never grasp that one; that's a pity for a lot of people.

Till updates. 

(13 May 2008) In this world there are a lot of holes where all long term stupidity has flown too. For example the military regime of Myanmar is one of those holes with a lot of stupidity: Because they refuse to accept foreign help they will kill countless thousands.

Yet compared to the military regime of the former Birma, I think the US Senate is capable of killing countless millions. If the next quote is true than I have never ever observed a part of government holding so much power and at the same time is so utterly stupid. So utterly stupid and so much lack of just the most elementary economical insights, compared to the US Senate the Wall Street traders are true Albert Einsteins.

Don't believe me? Here is the quote (source):

Also Tuesday, the Senate voted 97-1 to direct President Bush to stop adding to the nation's strategic petroleum reserve. Some lawmakers feel that these shipments, which average 70,000 barrels a day, are pushing oil prices higher. The administration argues that that amount is a pittance compared to the 21 million barrels of oil the U.S. consumes each day. 

Comment: In the first place it is global demand that drives oil prices and in the second place it are the actions of so called 'investors' that drive commodities up so much. The implications are stunning: The US Senate does not understand the damage Alan Greenspan did with his policies...
Wow, 97 to 1. They think that 70 thousand barrels a day is pumping up the prices...
The Myanmar regime easily fits one thousand times in this hole of stupidity.

The advice given: Kill more Americans, the richer they are the better. 

Till updates. 

(11 May 2008) Via some relatively simple media files I would like to guard you to 'where we are' in terms of the credit crisis. The only thing left out is the 'leverage problem' because no reliable media files or whatever info was observed.

We start with Russ Winter, Russ knows a lot of stuff but his writings are always difficult to follow. Lately US credit card consumer debt was about 2 to 3 times as high as so called 'economists' expected.

Russ explains why it is so easy to understand why credit card debt is climbing so fast, it is known as a Ponzi scheme (inside a Ponzi financial unit, debt is so high that for only paying the interest the unit needs to borrow more). Both USA citizen Russ as Dutch citizen Reinko agree that the whole US economy is a Ponzi scheme.
Here is the link:

http://wallstreetexaminer.com/blogs/winter/?p=1625  

__________________________ 

Some of the machinations of the US Federal Reserve are discussed by Gary North on goldseek dot com. Gary is very pessimistic about all that swapping of US government bonds by the FED to the primary dealers.

Ok, I can understand his fear because it took the FED from 1914 to 2008 to build up something like 800 billion in government bonds. And ok ok, in just a few weeks one third of that reservoir is pumped into the primary dealers stuff.
But Gary forgets that the Federal Reserve has unlimited access to more government bonds, they simply buy it from the US treasury...
I mean the reserves of the Social Security funds are also 'bought' treasuries, there is no reason the Federal Reserve could do the same. 
The article from Gary contains important information about how the US banks avoid down writings and that is the reason I place it here. 
Here is the link:

http://news.goldseek.com/LewRockwell/1210170240.php    

__________________________ 

From a website named the dailyreconing dot com I place a few more articles from different writers. They are very far in their thinking but do not connect the dots on very important issues.

For example: They report about the height of the derivatives (only $164.2 trillion in Q4 2007) and at the same time report stuff like the P/E ratio on the DOW industrials is climbing fast but they do not connect the dots...
If you connect the dots you understand there is a 'killer threshold' on the DOW and if the killer threshold is taken, the whole 164 trillion derivate positions come thundering down.

Lets go from writer to writer:

1) Dan Denning reports that now the Federal Reserve accepts credit card debt as collateral for both the money auctions as the government bond swaps.
Here is the link:

http://www.dailyreckoning.com.au/us-fed-credit-card-debt/2008/05/05/      

2) Dan Denning reports that so called 'Level 3' assets are growing in all five US investment banks. Dan thinks it is 'bad news' while I know this is good news. In these days Level 3 is the thrash bin of the banks. It goes more or less like this:
Many years to late regulators forced banks into Level 1, 2 and 3. Level 1 is the most easy to understand and sell while Level 3 is the most complicated and therefore in these days most difficult to sell financial 'products' (for example second order call options on a collection of 15 baskets of securities who are backed by derivatives on credit swap positions and some down to earth sub prime mortgages in the UK and California).

Very likely you do not want to buy such stuff...;) Yet similar kind of stuff is in the Level 3 of the banks. Here is the link:

http://www.dailyreckoning.com.au/level-3-assets/2008/05/08/   

3) Richard Daughty wrote some good stuff on the total of derivative positions as hold by the US banks. For myself speaking; Take a visit at the Basel based Bank for International Settlements, it is a combined website for over 50 central banks. Go through the derivatives sections on that website and you see: This is beyond belief.

Without any insult to the above mentioned writers who do not have the fruits of their labors quoted but only linked, here is a funny quote from Richard:

The report shows that the notional value of derivatives held by U.S. commercial banks has suddenly plunged by a whopping $8 trillion, which is (unbelievably) still only 5% of the total, and which merely takes the total down to the aforementioned-yet-still-staggering $164.2 trillion.

When I realized that $8 trillion is more than half of America's GDP, that is when I realized that "Houston, we seem to have a problem, as we are on fire, and we are tumbling out of control into the sun where we will soon be fried to a cinder." 

Comment: Richard is a bit non scientific with this, he should have stated that absurd large derivative positions on relatively small assets are outside reality.
My dear reader, what do you think? When the USA has a Gross Domestic Product like only 13 to 14 trillion and has derivative positions like this, would you invest or would you withdraw investments from the USA?

Here is the article from Richard:

http://www.dailyreckoning.com.au/derivatives-commercial-banks/2008/04/29/  

Lets leave it with these five financial articles, they are not from the Main Stream Media because it is impossible to draw any insight from the Main Stream whatsoever. CNBC, CNN and the Dutch based RTL7 all under perform in painting a realistic picture.  

That's it, have a nice life or try to get one. Till updates. 

(09 May 2008)  Today I placed a new update in the NightmareOnWallStreet files, here it is.

For the rest we only look at the Lebanese stuff:

The Hezbollah has to understand they have my full support, I too do not understand why this government tries to crack so hard on you. Does this Lebanese government not understand that the Hezbollah is on the US list of so called terror organizations?

And once you are on that stupid 'anti America' list you can never leave it, just look at Nelson Mandela. Nelson is still on that list... 

And at the moment Hezbollah looses her military might, the fucking Israelis will come in for the kill. That is relatively easy to understand. What shit is in the minds of the 'Western supported' Lebanese government?

Therefore the advice is as follows: Avoid a political coup by all means but bring some real bad days or weeks to the official Lebanese army.

Holy Moses, why is the political insight of the Lebanese government running at the IQ 43 level? They have that Israeli slime next to them and they try to wipe out the military power of Hezbollah???

I do not understand why they try to rule via stupidity, it is from the same stupid level as we have in the former republic of Birma. 

Till updates.

(05 May 2008, this may be a temporary update or not). Is the Federal Reserve picking up more garbage while providing 'liquidity to the markets'? I have argued on many occasions that they do and if indeed this Yahoo file is correct we have the next, (source) quote:

The central bank last week announced new steps to aid with tight credit conditions by increasing the size of cash auctions to banks and allowing financial institutions to put up credit card debt, student loans and car loans as collateral for Fed loans. 

Comment: Car loans a collateral for US bucks (also loans...)? Very interesting, the world reserve currency needs to absorb car loans on her balance sheets in order to 'provide liquidity'? The car loans stuff has of course a bit to do with General Motors (see the previous update below).

Car loans on the balances of the Federal Reserve??? Please my foreign investors who like to invest in the USA: Is it wise to invest or is it better to withdraw?

Car loans on the balances of the Federal Reserve???

Any idiot still investing in that country is only asking for the big haircut.

That's it, till updates. 

(02 May 2008) It was a lovely week on the financial markets; when Central banks start contradicting themselves we only have more and more smell of what I call 'the endgame'.

Let me give you two examples of contradiction:

1) The Bank of England promises to the UK banks they will have full support, the support will be secretive and only after 30 years the amount of support will be unveiled.

Contradiction: A few days later the BoE tells the public that this whole credit crisis is a bit overblown and that sub prime mortgage related losses might well be only 50% of what the banks think themselves.

2) The US Federal Reserve told the public that there is no recession at all because there was still 0.6% growth of the US gross domestic product.

Contradiction: Only one or two days later they told they will take in 50 billion more of 'investment grade collateral' (read garbage) in exchange for US dollars. So in the next week the combined real reserves of the US commercial banks is about minus 150 billion. (The FED says that is only arithmetic...)

__________________________

It is all so funny because finally the journalists start complaining that you just cannot explain the way the DOW Jones and similar stuff moves...

And that is true my dear RTL7 and CNBC journalists; it is a long way to the Piccadilly circus I can tell you that!

__________________________

Since the financial journalists have proofed this week they are not worth their salary, lets zoom in on one detail that speaks for the broad market:

This week it was reported that General Motors had a loss of something like 3.3 billion. (Of course this loss was related to their financial services arm.) And so the GM stocks shot very high and so called financial journalists explained 'the loss was likely not as big as expected'.

Of course the financial journalists forget that there is over one trillion in derivates outstanding on GM. (Only the credit default swaps are something like one trillion, lets not forget the ordinary put and call options on GM.)

It is well known and well documented that JP Stanley Bear Morgan sold this stuff without administering if it was 'call' or if it was 'put'. (As long as we sell more 'puts' we are ok because we are America...)

Of course 'put' is the danger of a collapse of this one trillion joke on GM and therefore it is rather logical that GM posts a large increase in their DOW value (meaning the stock price climbs fast) when they report a loss.

Why is the GM example a detail to the behavior of the entire market?

Just look what the DOW Jones did; it ended above 13 thousand so this year there is only about 2 or 3 percent loss on that index for this year. 

I guess the DOW Jones is the safest place to be if only a GM component has over one trillion in derivates hanging over it...

That's it, have a nice life or try to get one.

(30 April 2008) Today I feel the need to go for a little ego trip, not for very long but I rejoice in the news as it was found today.

What is the case?

Well I am very dissatisfied with the weird behavior of the US stock markets and the DOW Jones in particular lately. Therefore I quote from my own writings from 13 Nov 2007, it was an estimate of how much equity in home value would be lost... (source):

That amounts to something like 7 to 7.5 trillion US$ / year or over 20 billion US$ a day. 

Comment: Since the 13 Nov publication was the opening salvo for the NightmareOnWallStreet I did add some pure propaganda in it. I am so sorry for mixing truth and lies, I really am ...;) 

What about the ego trip?

Ha, when you look at the Case Shiller housing index for the first quarter, something like 6 trillion in US home value will be lost this year. Some Washington think tank comes up with the next (source), quote:

The Case-Shiller data released yesterday indicate the rate of house price decline is accelerating. The 20-city index declined 12.7 percent over the last year, while the 10-city index fell 13.6 percent. However, the annual rate of price decline over the last quarter was 24.9 percent in the 20-city index and 25.8 percent in the 10-city index. At this rate of price decline, the excesses of the housing bubble will have largely disappeared by the end of the year. At the same time, the price decline implies an incredibly rapid loss of wealth. In real terms, the rate of price decline in the 20-city index would imply a loss of almost $6 trillion in real housing wealth over the course of the year, an average of $85,000 per homeowner.

Comment: The think tank is relatively good because if the reported 24.9% 20 city index is correct it is indeed something like 5.8 to 5.9 trillion. Yet they have a major fault in their thinking: at this speed it will take more or less one year longer for the US housing bubble to have disappeared. And that is another 6 trillion in lost private home equity my dear but stupid Wall Street traders! 

 __________________________

This year the so called 'option mortgages' will jump to their real interest level, I have never studied the size of that fun but it is definitely comparable to the problem generated by the sub prime mortgages.

In the UK it was reported for the first time in many years that house prices are declining too and although I never wrote one word on it, This is important news too since the UK is also a bit bubbled up.

And so on, and so on; let me say it one more time:

The DOW will hit 7000.

If you have any information contradicting this, please give it to me.

So far for my ego trip, have a nice life or try to get one!

Till updates.  

(29 April 2008) Today the US Federal Reserve will have a so called 'policy meeting' and it could be they lower rates again... And by doing so force the pension funds to swap many billions in government bonds to weird investments in food stuff and so.

So long term investors like pension funds are turned into day traders on food markets, welcome to the strange world from Alan Greenspan & co. Some Swiss banks are even advertising with this; they advertise with 'portfolio managers' that manage 'pension money' and the advertising slogan is 'Thinking new perspectives'.

But 'Thinking new perspectives' leads to countless millions who go down from two meals a day to only one. Crafting more financial products will not help while there is still far too much money in the system.

And who pumped all this destructive money into the system? Yes yes yes, it is Alan Greenspan. The second culprit is the ECB Jean Trichet who still has his M3 money growth year on year growing above 10% while at the same time insulting workers that they should keep their 'wage demands' low. In this it has to be remarked that the US Federal Reserve stopped publishing their M3 money growth in 2005 because 'No additional economical insights are gained from this'.

It just keeps me wondering: Why do only so little people see the dangers of pumping up so much money into the real economy? And after that throw some cookies at some monkeys (with this I mean the Dubya tax package relief of 600 US$ for every US taxpayer, also known as the 'stimulus plan').

And about thinking new perspectives; suppose every US taxpayer would not get a lousy 600 US bucks but 60 thousand or even 60 million...
Would it change the US economical situation just one quantum?

Till updates.

(24 April 2008) Today I would like to look at two points; looking as why the US stock markets act so counter intuitive and may be a new recipe for the future feast meal (here is the index for the future feast meal). Here we go:

-- I do not post any longer updates on the US stock markets because they behave that weird. And when you cannot make logic of it you must stop commenting on it. Of course I perfectly know why the US stock markets behave so weird: they are slaves of the outstanding derivatives positions and if the US stock markets at some point turn 'too low' the whole financial structure will collapse while on other stock markets you only have to wait for a so called 'rebound'.

I can try to explain this once more but I found a superb article that explains a relatively large chunk of the stuff involved. If you do not understand it, it is recommended to save it to your hard disk and at a later point study it further.
Please do not back down because of CDS stuff (CDS = credit default swap, it is just another financial derivate but it is nice to know that inside the USA there is 50% of world gross domestic product outstanding of this stuff). Here is a quote from that file (GM is general motors):

Another example. The market cap of GM is only about $11B. However, based on estimates in the CDS market, there are about $1 trillion in CDSs betting on GM and their bonds. Any change in GM's situation, will create a rippling effect in this $1T CDS community of GM. 

And here is the link:

http://news.goldseek.com/GoldSeek/1208412360.php   

Again: save it to your hard disk and study it so you understand the erratic behavior of the US stock markets. For other nations it is also of relevance to understand this article because when you have to disinvest large chunks of money you must have a solid story... Until the present day there are still lots of central banks who do not understand the significance of these insights.

--The second item: A new recipe? Yes I am thinking about a rather simple fishsoup that can even be cooked in the heat of Iraq and the mountains of Afghanistan. If I write it, it will have the next title: Dennis 'Can I have some air support' van Uhm fish soup. Problem is: I do not have a clue at to what herbs and vegetables the Iraqis and Afghanis can use both. So the local cooks have to deal with that problem and of course use their own experience... 

That's it but because Dennis is cremated tomorrow in Beuningen we just have to post some (propaganda) fun once more:

Title: Do not worry my dear Dutch, below you see only black and white trailer thrash that could not find a normal job... 

Till updates, have a nice life! 

(22 April 2008, temporary update) Today the new Dutch leader of the Dutch military forces was giving an interview to the 'Media'. And ok ok, he took it like a man...
He took it like a man: The first morning in office it was reported that his son was killed...
And we cannot deny this: Giving an interview like this proves that general van Uhm is not a coward; That's a fact. But I cannot give him my condolences, sorry man but with a police force like this in Groningen I just cannot do this.

Yet, since Uhm is Dutch why not proceed in the Dutch language? Here we go:

Volgens mijn inschatting is het maximaal 48 uur nadat het grafkistje van Dennis de grond is ingezakt (misschien doen ze een crematie, dat weet ik niet) is het vet janken voor onze dappere generaal. Ik denk: zaterdag ochtend. Ja, de zaterdag ochtend is een goed beginpunt om te beginnen met janken...

Voor de rest heb ik slechts twee punten:

Punt één: De generaal van Uhm heeft zo zijn gedachten omtrent het al dan niet toevallig zijn van de dood van zijn zoon. De generaal beschouwt dit als puur toevallig en de defensie top en de politieke mannetjes hebben ook deze mening.
Ok, die hebben we dan weer in de spreekwoordelijke broekzak...

Punt twee: In een nogal lang verleden heb ik vrij uitvoerig geschreven omtrent het statistische detail dat in Irak het zeer wel moeglijk is we inderdaad tegen meer dan tegen één miljoen doden staan te kijken. Beide studies, hoewel heel verschillend, waren toch vrij rigoreus: Hoeveel doden zijn er in dit huishouden en is er wat bewijs daarvoor.

De allerduurste studie was iets als 50 duizend US$.

Echter ons klotenleger doet allemaal rare dingen en zegt niet heel eenvoudig dat je toch makkelijk op de begraafplaatsen van Irak de echte getallen kunt vinden?

Waarom zeggen jullie dat niet? Het is namelijk zeer waarschijnlijk dat 'het' meer dan één miljoen is...

En omdat jullie dat niet doen dwingen jullie mij om de overlijdens advertenties omtrent de dappere Dennis als toilet papier te gebruiken.

Het spijt mij dat dit moet maar natuurlijk heb ik nagedacht omtrent de legale consequencies van dit gedrag: de Nederlandse wet zegt dat het niet verboden is om krantenpapier te gebruiken op het toilet...

Daar kan je het voorlopig mee doen mijn geliefde Nederlandsch leger,

Tot opdatums!

(18 April 2008, third and temporary update) We rejoice in the lawfull killing of Dennis van Uhm, the son of the highest ranking Dutch general. We do this in the Dutch language, here we go:

Gaaf hè? Hadden we eerst deze week het bericht dat het Nederlandse leger ongeveer een  25% te lage instroom heeft dus kon ik mijn advies aan de weledele Afghanen bijstellen en BAM twee dagen later die lieve Dennis tussen zes plankjes!

Wat is de reden van deze opdatum?

Nou voor de kijkbuis paradeerden wat politici, militaire 'analisten' en generaaltjes buiten dienst en hun opvattingen zijn een compleet vat vol tegenstrijdigheden.

Zo maakt de vijand vanwege onze 'militaire superioriteit' gebruik van laffe middelen als op afstand bediende bermbommen en sluipschutters. Oh?
Dus ons leger heeft geen scherpschutters want dat is 'laf'?
En wat op afstand bediende bommen betreft; hebben wij niet nogal veel artillerie? Dat is pas dapper: Vanaf meer dan 10 kilometer op een dorp gaan schieten... Om van de helden van de luchtmacht nog maar te zwijgen.

De conclusie omtrent 'lafheid' is duidelijk: Als wij na 14 doden al 25% minder instroom hebben in ons leger dan is dit land bevolkt met laffe mensen... Dit is een land van lafbekken, dat is evident!

Dan hadden we ook nog die mafketel van een Balkenende, meestal heeft hij ze wel op een rijtje maar volgens hem was het de bedoeling van de vijand om de politieke wil van de missie te ondermijnen. Nou dat was nogal kort door de bocht, natuurlijk hoop ik daar wel op maar pas als we die in de broekzak hebben kunnen we verder.

Nee, voorlopig zijn we veel minder ambitieus: Als slechts veertien Nederlandse afgevulde lijkkistjes aanleiding geven tot 25% minder instroom dan is het handig om dit jaar eens 10 tot 20 kistjes meer af te vullen en te kijken hoe het dan staat met de instroom. Wel met je poten op de grond blijven: Realistische doelen in realistische tijdframes...
Het politieke doel is er heus wel: Jaap de Hoop Scheffer voor paal zetten in de NAVO in Brussel. Die provincie hoofdstad Den Haag acht ik niet erg opportuun; dat kan nooit een doel op zich zijn, hooguit een bijkomend voordeeltje.
Jaap heeft straf nodig omdat de NAVO veel en veel te laat besloot om lichtere bommen te gebruiken en hoewel ik al een poosje geen 'daily air summary' van het Pentagon heb gelezen is het zeer waarschijnlijk dat er nog veel te veel air power wordt gebruikt (wat dan om één of andere voor mij onbegrijpelijke reden niet 'laf'is).

Van Balkenende had ik beter verwacht, het Geert Wilders probleem heeft hij in mijn visie goed aangepakt maar hier laat hij de nodige steekjes vallen: Afghanistan is op dit moment gewoon bezet door een groot aantal legers, opbouwwerk is gewoon niet mogelijk onder deze omstandigheden. 1 + 1 = 2 Jan Peter...

En tja, by the way, als waarom de Afghanen en Irakezen zich iets zouden aantrekken van mijn slagveld adviezen? Tja, als je dat na zeven jaar nog niet snapt dan snap je het over zeven jaar nog niet dus ga ik dat echt niet nog eens uitleggen. Er zijn ook leerlingen die gewoon niet x kunnen oplossen in 2x = 10, meestal is dat geen cognitief maar een emotioneel probleem. Nou die militaire 'analiticy' die het hebben over 'laffe aanvallen' zitten precies in die hoek: het is heel eenvoudig te begrijpen waarom de Afghanen en de Irakezen mij serieus nemen, maar als je het niet wilt begrijpen dan is dat jou probleem en niet de mijne. En als middelen van de vijand 'laf' zijn terwijl je zelf op veel grotere schaal soortgelijk spul gebruikt dan ben je toch echt een mafketel.

Nou, ik kap met deze opdatum; het was een prachtige dag nu deze Dennis dood is, het is net alsof Allah een klein handje helpt. Ja het was een prachtige dag, ik dank de Afghanen en natuurlijk dank ik de Almachtige.

Tot opdatums.

(18 April 2008, second update) Sometimes good or bad news comes in a lot of small packages, sometimes it comes in the size of cubic lightyears. This was definitely the week of the cubic lightyears! What is the case?

Well for the fourth day on a row I could go into the city without all those annoying and irritating police cars. After almost seven years of that shit it feels wonderful.

And only four days ago I published a message to the Afghanis asking them to try and kill 10 to 20 Dutch military folks this year...
Yesterday the Dutch military forces got a new commander; general van Uhm is taking it over from that Berlijn guy. Today, on his first working day, there was this incredible news: Two Dutch military folks dead and one of them is named Dennis van Uhm. Yes, the son of general van Uhm is dead.

Oh oh Dennis 'can I have some air power' van Uhm: your fate is a strange one!
Just unbelievable, this news is so beautiful: A big fist of emotion strait into the heads of the Dutch military leadership.

Oh oh you bags of slime: Today you simply got what you deserved for so long.

And to the Afghanis:

CONGRATULATIONS!

Till updates, have a nice life or try to get one! 

(18 April 2008) A message to these stupid RTL7 journalists who still have not figured out how simple it is to find some of that hidden US government debt.

It is just a small chunk but in the next link you can read it for yourself (I hope that stupid RTL7 journalists can read English). Here is the link:

http://www.socialsecurity.gov/OACT/TR/TR08/II_cyoper.html#94983  

Read down until you see 'Assets at the end of 2007' are 2,023.6 billion or just over two trillion. The whole problem with this is that these are  2,024 billion in US government bonds. The workers have paid their money and these supposed to be savings are turned into US government bonds and their savings are spend already...

Furthermore you have to pay some kind of interest on that kind of bonds, the interest is paid with more bonds... The US government is paying herself with more bonds...

To understand how big emotion has set in have this weirdo stuff told to the public we have no problem until 2041 or beyond:

False alarm on Social Security...  

Lets leave it with that. Till updates.

(16 April 2008) A message to OPEC:,

Like promised before crude oil broke the 100 US$ a barrel threshold, now with the 120 US$ threshold in sight I have to update.

It looks like the OPEC has been right all these years: Output is more or less at the right levels and all those hysterical journalists that only point at some artificial difference in daily output compared to demand are wrong.

It looks like all that 'investor' money that pumps up commodities is the largest culprit. These so called 'investments' are viewed as a hedge against inflation, as far as I know reality it happens on all levels of money: the M3, M2 and even the pension fund M1 level. For example: The idiot monetary policies from the US Federal Reserve forces pension funds for years on a row to skip government bonds and go for the taking of risk. In this we have to blame the obese fatbags from the USA first.

On the other hand, the world economy has swallowed the rise in oil prices fairly good. It are the rises in food prices (again a large chunk of US M3 and M2 money is to blame for that) that cause real problems for real people. Therefore there is no problem with oil in the range of 120 to 140 US$. So the new threshold is 140 US$.

Now of course the OPEC is not the savior of this present financial system, but development nations need refined products at reasonable prices. For example: Wherever you live on this world, it is reasonable that for one hour of unskilled labor you always have the same kilo's of bread. This is what I call the 'labor standard for elementary needs' every human has.

Furthermore, why should OPEC deliver to the two main oil markets in the USA and Europe? Just craft some advanced contracts that for example give developing nations a crude price of at most 63 US$? But the developing nations do not have refineries but need the refined products, so help them...

Of course there will be smuggling problems and of course there will be thieves. Of course there will be regimes that think supporting the USA is wise for their own safety. This all does not take away it is wise to implement wise policy and that is the labor standard & not the shit sold by the US Federal Reserve.

__________________________ 

In another development I have found freedom for as long as it lasts: an unbelievable thing has happened! What is so unbelievable?

Well, for two days on a row I could do my stuff as an individual (stuff like going out for shopping) and for two days on a row I did not see one police car!

In the last five to seven years I never had such a freedom! It feels wonderful I can tell you that!

In the last seven years, only when I crossed the border with Germany by bicycle I could enjoy living without police attention!

Lets hope the previous update from 14 April will reach the Afghanis so I can live a few days longer without that annoying police attention...:(  

Till updates, have a nice life or try to get one!  

(14 April 2008) A message to the Afghanis:

Some time ago I advised to try and kill something like 28 Dutch soldiers. Yet, to my surprise, already the Dutch army has a 25% lack of new soldiers and they even have a name for this: it is the 'Uruzgan effect'.

This is amazingly good news: Now the advice can be lowered to killing something like the 15 to 20 reach and if the Afghanis can reach that level of killed Dutch soldiers they can reap a few of the next benefits:

-- A 50% of lack in new Dutch soldiers could be realistic.
-- This 50% lack would bring hefty pressures on the Dutch army in order to get the Uruzgan running a few years longer.
-- That NATO creep named Jaap de Hoop Scheffer would loose credibility.

And so on and so on, here in Holland they cannot pump up the army with giving big bags of money to new soldiers like they do in the USA. In the USA all that black and white trailer thrash people go to the US military because they cannot find normal jobs for a normal salary. This whole US military is mostly made up of trailer thrash people...

So my dear Afghanis: As far as I can see reality, best is to go and kill Dutch soldiers at this moment. (Of course other actions against other NATO members are also important but as a strategy for this calendar year killing Dutch looks like the most wise: Good Luck with it!)

Title: Here you see Jaap with his friend Dubya... 

Till updates. 

(11 April 2008) There are some food riots in some countries and that is a good thing. Until now the food riots only go against the local governments so the food rioters still do not understand they have to kill Americans...

Time will bring wisdom.

By the way, just a few years back I proposed a so called 'labor standard' for the valuation of currencies and in case this kind of standard would have been implemented we would not have such weird food prices and no riots.
But the fatbag obese Americans never listen to reasonable proposals, they only understand the art of filling death coffins.

I am not going to place long lists of reasons as to why there should a need to kill more Americans, I only publish one:

A lot of American investors think it is wise to 'invest' in commodities so when that M3 money starts to ram around you instantly know: This is a major million people killer.

Therefore my proposition is simple and efficient: Kill more Americans...

In the past I always had a strong habit upon selecting the hardest targets only yet given the present conditions civilian dead US fatbags are very welcome:

Want to have some food in your stomach? Just kill Americans in large enough numbers!

Till updates my beloved reader. Have a nice life or try to get one via killing fatbags in large enough numbers!

(09 April 2008) Today the International Monetary Fund made another blunder, it is not that they don't answer my emails on the real reserves of the US commercial banks, it is not that they think that total write downs in relation to the fine works of Alan Greenspan will reach at most one trillion US$ where any idiot can see it will be something in between 2 to 3 trillion.

This time they are not wrong on the big picture but tell crap on details.

What is the case? According to the IMF Dutch housing prices are overvalued with 30%. (That would leave my own country in a situation comparable to the slimy inhabitants of the USA).

The IMF simply does not understand how taxes are collected here in Holland: Here in Holland the taxes on income are only taken after the interest you pay on your home mortgage is withdrawn from your gross income. In the surrounding countries home owners have to pay for the interest after they are taxed by the government.

This gives Dutch folks the nice benefit: They can buy foreign real estate with 'before government taxes income' while the stupid foreigners can only fight back with 'after government money left'.

Oh oh that stupid IMF: not only they do not understand the big picture of international macro economics, they also lack a microscope to zoom in on important details...

When you study the 'median income to median house price', rather likely the UK will hit the wall. But the UK is a staunch friend of the USA so the IMF has 'better things to do'. 

Till updates.   

(06 April 2008) So it brings some relief to my mind that I am on strike against delivering stupid market updates; how can I comment on a weird DOW value of 12,608.77? I refrain from that because I also don't comment on my toilet paper...

Having said that we explain why in fact the US economy looks a lot like the economy of a third world country. Here we go:

On the television on the Discovery Channel there is a program named 'Dirty Jobs'. When you, just like me, have nothing better to do you start looking at it. Of course the Dirty Job program is not a rigid scientific statistical approach but it makes you wonder why there is constantly this lack of mechanization... People are used as machines and labor conditions are rampant.

How come this?

It is very easy to explain: In the USA they think it is wise to set the minimum wage at something like 6US$ per hour. That is below 4 € per hour and as a comparison we have the next from my own country:

--In my country it are the 18 to 19 year olds that have this minimal wage,
--In my country when you are 23 years or older you have at a minimum 8 Euro or above 12 US$.
--In my country you also have 8% holiday gift upon your earned money and healthcare is below one 100 € per month whatever illness you have.
--In my country you have something like 3 to 4 weeks holiday in a year and your working week is at most 40 hours.
--In my country you also have a lot of government beneficiaries when you are on minimum wage; when the rent on your house is 400 € you will have above 100 € support from the government.

On the individual level poverty is not a choice but a lack of getting out of it, on the government level poverty can be a choice: especially when you are the 'largest' economy in the world it is a choice: Keeping minimum wages so absurd low is the same as saying child labor is just 'unavoidable'.

As a whole this present statistical pallet is very easy to explain: Wealth and income are simply too skewed in the USA, I do not know the details exactly so I do not know if 80% of wealth is kept by 20% of Americans or that it is 90% of wealth is kept by 10% of Americans. I do not know...

All I know that compared to my country I would not invest in America until they have figured out their problems. But they need a few nukes and not a few 9/11 repeatings to figure out their problems; we only see idiots like McCain, Hillary and Obama fighting for the seat of ruling 50% of the world defense budget (mostly borrowed money by the way).

Till updates. 

(05 April 2008) I have to do the more or less obligatatory US market wrap update, so here it is:

Since the DOW closed this week at 12,608.77 any idiot can see it is at least 1500 too high. Therefore I go on a strike: only after the DOW reaches reality I will make future wrap ups. That's it.

Till updates.

(04 April 2008, temporary update) This temporary update is for the European Central Bank or the ECB:

Before the last two meetings of your 'policy stuff' I explained that you need to raise the rates. Two times on a row you did not do that and now inflation is starting to get in because some of you have shit in their brains.

Facts are that due to the high Euro value the trade surplus has turned into a (small) trade deficit. Yet against the USA we still have a solid surplus.
Why not reap the benefits of a strong currency?

A strong currency has lots of benefits: It keeps producers lifting productivity so we could avoid the 20 to 30% of obesity in our working population. A strong currency gives good buying opportunities of commodities. A strong currency has benefits this and has benefits that.

But you slimy creatures at the ECB constantly fail to raise the stuff you rule and it makes we wonder why. Are you truly a hostage to the stuff the Federal Reserve is doing? 

Why not live in freedom my dear ECB and raise by at least 25 basis points in your next so called 'meeting'? Live in freedom while we know that the finest of European industrial pearls have lived out Word War II...

Get your weird ass together and raise while we can... (It is only pasta at my local Aldi layout, a few months back it was 35 cents now it is 95 cents so I am on the edge of something horrible like asking for the execution of the European Central banker named Claude Trichet).

Lets leave this update with that (Oops, I forgot: the Dutch military had their fourth roadside bomb against them inside just seven days! Great work my dear Afghanis!!!!!)

Till updates my dear reader, have a nice life...   

(03 April 2008) What is the classical definition of a so called 'puppet regime'? That is rather simple: a so called 'puppet regime' is a country that is hold up via outside military powers. History tells us that puppet regimes do not last, for example the former USSR had a puppet regime in Afghanistan and when that puppet regime collapsed we in the West just shrugged our shoulders saying "It was a USSR puppet regime only". We accepted the demise of the Afghan Najizbullah 'president' as just the way things go with puppet regimes.

In the present years we have puppet regimes in Afghanistan and Iraq, both regimes only live by foreign military rule. If the foreign military rule would not be there, the regimes would collapse and so a normal evolution could be seen.

In order to give sound proof to the fact that Iraq is indeed nothing more but a puppet regime (remark that upon the dependence of foreign military might these regimes cannot help the populace they are supposed to rule), I only give some quotes from a file of the ass press, here we go (source):

WASHINGTON (AP) -- Iraq is looking at a potential boon in oil revenue this year, as the U.S. spends some $153 million a month in the country on fuel alone. But U.S. officials say it will take some time before Baghdad builds the capacity to manage the revenue. 

Comment: So in the sixths year of war it will take 'some time' for Baghdad to manage the revenue? It looks like a classical definition of a puppet regime... 

But, as always with the Americans there is more. Two relatively stupid US senators also have something to say. Lets look at the products of their brains, quote:

"We believe that it has been overwhelmingly U.S. taxpayer money that has funded Iraq reconstruction over the last five years, despite Iraq earning billions of dollars in oil revenue over that time period that have ended up in non-Iraqi banks," Levin and Warner wrote in a letter to the head of the Government Accountability Office.

"At the same time, our conversations with both Iraqis and Americans during our frequent visits to Iraq, as well as official government and unofficial media reports, have convinced us that the Iraqi government is not doing nearly enough to provide essential services and improve the quality of life of its citizens," they said.

Comment: In the first place: free access to Iraqi oil comes with a cost. In the second place the whole war is funded via borrowed money just like the so called 'profits' of the US financial institutions. In the third place the US vice president has declared 'deficits do not matter'. In the fourth place the US guy Warner has a whole of earmarks defense money going to his home state via so called 'tax money' that is in fact borrowed money.
I do not understand why the Warner guy does not support the sublime Cheney guy insights... Deficits don't matter.....

Lets leave it with that, till updates.    

(02 April 2008) Today it was in the local news that the prophet Muhammed fucking a nine year old girl inside a Mosque cartoons will not get published on the 20th of April this month.

That is good news because I would like to keep on staging financial attacks while this international banking system is as fragile as it is and there is no need whatsoever to declare the 20th of April a so called Military Bloody Day...;)

Of course I could go into a rage about why it is that stupid to buy banking stock from for example the Swiss UBS or the USA Lehman Brothers, yet I refrain from rage because we have a beautifully Year on Year statistic for the US military. Here it is, just click on the pic to get to the source:

Title: This is the kiss for US general Petraus.
     

And to all those financial idiots that think 'now the bottom has been reached' I can only say: We have seen about 10% of the write offs that are impending, me not worry: 140 billion of write downs until now is a joke and stays a joke.

Lets leave it with that; the DOW climbing 300 today just is not is what it looks like.  And there is no need to declare the 20th of April a so called Military Bloody Day.....:)

Till updates.

(01 April 2008) To the Afghanis: Two roadside bombs against the Dutch forces within one day! Great job, congratulations!

On the financial front we have the great rescue operation of the entire US financial system under leadership of the great Dubya! It seems to be the biggest overhaul of US finances since the great depression from 1929 and it might not be too little but it is definitely too late. Here is the laughable stuff from these idiots.

Title: Three idiots lined up... As you see the middle guy has a high blood pressure.
    

Remember some old stuff from the former US Secretary of Defense prior to the Iraqi invasion? It was like 'We go in, we replace the government, we go out'.

In this there is a striking resemblance to the US Federal Reserve money auctions: it only dives deeper and deeper...

At last: The possibility of writing down one ore more trillions has reached the shores of the US populace via a Media report as found on the Drudge report, it contains some good observations but nowhere there is solid reasoning as why it would be only one trillion US$ in write downs. Here is the Bloomberg stuff (who, just by the way, never answer one of my emails):

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aHCnscodO1s0  

Oh oh, the Bloomberg weasels; you could write an entire 1600 page book on them but I will not do that. All I say is:

Till updates.  

(31 March 2008) Correction upon the 21 March update:

I did not know it on 21 March but the planning upon the 20th April promised cartoons are as next:

--The Prophet will walk to a mosque hand in hand with a nine year old girl,
--On the mosque a swastika is depicted,
--The guy that publishes this kind of crap has bodyguards paid by the Dutch government.
--Rumors say that the Prophet already has an erection while walking to the mosque.
--Inside the mosque (with the swastika on it) the Prophet will fuck the nine year old girl, how graphic this is going to be is unknown to me. 

Lets be real: The Danish cartoons are nothing compared to this.

So how should al Qaida International react upon this news?

They need to keep their calm and strike with at least 50 and at most 100 dead Dutch civilians. Most perfect date would be the 20th of April and if not; keep your cool...

Keep your cool but for me as the writer of this website we could observe perfect stuff... To you as a reader what exactly is 'perfect stuff'.

Well perfect stuff was observed just after the Spanish elections from a few years back, I had all the perfect statistics to bone upon while at the same time we had hysterical terror experts explaining that influencing the Spanish was 'utterly hypothesis'.  According to my view on reality we had a nice 11% change in voting stuff so why not reward the Dutch society with the responsibilities they have reaped up (the guy named Jaap the Hoop Scheffer is the political leader of the NATO forces, he is Dutch just like me...)    

(29 March 2008) Today we take a look at the three US presidential hopefuls, it is only a look because a comprehensive study of their mental capabilities would take years because they have to 'relate' to the US populace while at the same time try to be 'smart' in leading the nation. This equates to asking a heroin addict to 'lead' the DEA.

Here we go:

1) McCain is the leading Republican contestor, he is known for being a Vietnam prisoner of war and as such is against stuff like Guantanamo Bay (or however you spell that weird Cuban international prison).

On McCain I can proof he is dumb to the bone:

In the past McCain asked for many more soldiers in Iraq, he constantly asked for 200+ thousand soldiers or more. Me in the advisory role of the Iraqi resistance knew that it was utterly impossible to cough up more white and black trailer thrash with the given enlistment bonuses of only 70 thousand US$.
Yet McCain kept on calling for over 200K extra soldiers for over six months, so no one in the US military was capable of communicating that these were fantasies...

So, only on the Iraqi detail: McCain asked for a sevenfold compared to what was real.

2) Hillary Clinton.

She uses her female powers to get elected (when you vote for me you have the first female president in the USA). A lot of her followers buy that crap but is she suitable to command 50% of the world defense budget while we have two wars going on in Iraq and Afghanistan?

She cannot even control the sexual desires of her own husband so how is this nutty going to control 50% of world defense spending?

For example when you ask a platoon to vote for their next leader they hardly come up with drill sergeant number one but they prefer weasel nr 13. Weasel nr 13 is very similar to the average US financial 'drill sergeant': The platoon can do whatever it likes and weasel nr 13 takes the heat from the ranks above.

No no we cannot have four more years in letting the US military getting away with it: They have to fight terror attacks but all they do the last seven years is pumping it up.

3) The Obama guy:

It looks like the most promising guy but he has many faults in his thinking. For example he thinks that you can use the US strategic reserve of oil to bring down oil prices on the international markets. (Here is some Reuters stuff on that stupid detail). Obama thinks he can use the strategic reserve as some Central Bank...

Conclusion: We face three idiots where Obama is the lesser of idiots compared to McCain or that Clinton thingaling.

End of this update.

(28 March 2008) Ok ok I have to make the obligatory US markets wrap up so here we go:

This was a boring week because no matter how negative the news was, the DOW Jones stayed above the 12 thousand threshold. Therefore we analyze why this could be, where is the money coming from that constantly pump up the DOW?

Today I received the following news: Of all outstanding derivatives former investment bank Bear Stearn Cos had about 10% of it or just 13 thousand billions (or about one US gross domestic product size). The friendly take over bank JP Morgan Chase has another 50% so the new conglomerate JP Chase Bear Morgan Cos Stanley has about six times the US gross domestic product as sold derivatives contracts.
Of course the puts and the calls cancel out one another if we were in a normal market situation.
But we have also given sound proof to the fact that the whole US financial sector is nothing but a so called Ponzi financial unit (that means they have to borrow money in order to pay for the interest obligations, here is a Bloomberg file on how this works on a small scale).
Of course lots of US financial institutions have done the same easy to understand math and bought more puts compared to calls.
Regulators have complained for a few years that there is no sufficient book keeping on sold derivatives so advanced statistics are simply not possible because you only have a big pile of sold contracts.... (Just like with the mortgages, nothing new.)

Therefore the whole 'six times the US GDP gamble' can easily be disrupted via a few percent of the underlying assets going into 'the wrong direction'.

Yet the only thing JP Chase Bear Morgan Cos Stanley can do in pumping up vital under laying assets (pumping up the stock markets) is via selling that off balance stuff that still has value: put options.

Weighing all in all; the assets of the US Federal Reserve cannot take a hit of this size. In the future at some point these weird rescue operations will end. There is no denying this, let me only put a link to an easy to understand Washington Post file about the 'changing role' of the FED.

Lets leave it with that, till updates & have a nice life. 

(27 March 2008) After a long wait we now have combined reserves of the US commercial banks standing at a negative of -61788 millions. So the combined stuff is now 'officially' 61billion in the red.

In the next link look at the third column that gives the 'non borrowed reserves' of the US commercial banks. In the seventh column you can find the auction money stuff and where you can find details of the FED auctioning US Federal bonds instead of US$ is still unknown to me. Link:

http://www.federalreserve.gov/releases/h3/Current/ 

As you see, the combined 'non borrowed reserves' have gone negative from -17174 million just two weeks ago to -61788 now while the FED also states the next (source) quote:

The negative level of non borrowed reserves is an arithmetic result of the fact that TAF borrowings are larger than total reserves. 

Comment: Now the combined US commercial are sinking deeper from 60 to 80 trillion in borrowed stuff, their non borrowed stuff has declined 61788 - 17174 = 44614 millions. So the FED accepting worthless collateral of 20 billion gives rise to 44.6 billion less bank reserves in just two weeks...
The arithmetic of the FED is a little bit weird don't you think?

That's it, till updates. 

(20 March 2008) In the US stock market update for this week we take a look at how bad news is perfectly spun to be good news that rallies the markets. The two largest US mortgage lenders are Freddie Mac and Fanny Mae, they are so called government supported (or sponsored) enterprises. These two companies were 'upgraded' by 'analysts'. What does that mean? Well the US government took the next action: Instead of 30% of 'reserves' (regularly core capital) they now only need 20% of this stuff to cover for mortgages that go wrong.

Freddie Mac for example had an estimated 37.9 billion US$ of reserves at the end of 2007 and has a mortgage portfolio of (estimated) 1.8 trillion or 1800 billion US$. The estimated reserves of 37.9 were 3.5 billion above the 30% threshold so 30% = 37.9 - 3.5 = 34.4 and hence 20% = 22.9 billion in lower threshold reserves are the new standard.

To put it simply:
Under the old regulation rules we had one US$ in reserve for every 52 US$ of outstanding mortgages and now it will be at most one US$ for every 79 US$ of outstanding mortgages...
That is far beyond 2% where as a comparison banks have to have at least 8% in reserves.

My own calculations indicate that median house prices will fall at least 30 to at most 50% from the top value reached mid 2006, you do not have to be an accountant to see Fannie Mac and the older Freddie Mac are doomed. 

Here is the from that government agency that 'regulates' the stuff.
And this is how bloomberg spins this into good news (source), quote:

March 20 (Bloomberg) -- U.S. stocks rallied, capping the first weekly advance in a month, after an analyst said more mortgage purchases by Fannie Mae and Freddie Mac will help stabilize the home-loan market and Merrill Lynch & Co. advised clients to buy General Electric Co. 

And together with a bit more of that fake news Wall Street rallied a few hundred points... As Russ Winter once said: We are living in a financial world where elephants can fly. So far for the market wrap up. 

__________________________ 

In order to show you how much the US Federal Reserve is in disarray (this is the third time I observe such a thing) we take a look at the H3 report. I should have been out 30 minutes ago but they just reposted the one from last week...

http://www.federalreserve.gov/releases/h3/Current/ 

At previous times it was posted in time (22.30 hours local time every Thursday) but you could easily see it was full of faults. This time they simply repost the old one, not often you see a central bank in such a disarray.

Till updates.

(18 March 2008, second temporary update) It is not confirmed by more sources so lets say it is a rumor just like Bear Stern Cos was, but the source is reliable and I only put the quote and give no comment. Quote:

0.52%. That’s the number you need to know, not the 75 basis point cut in the Fed Funds target to 2.25%. 0.52% is the rate at today’s 4 week Treasury bill auction. 

Till updates.

(18 March 2008, temporary update) Today the Federal Reserve lowered with 75 basis points and of course further declines on Wall Street are postponed by a few days. And now the US$ is the second lowest rating currency.

Let me keep this update short: I hope that the ECB will answer with a 25 basis point rise so we will have less inflation and avoid that stupid real negative interest rates. Given the demographics it is far more important that the populace keeps on saving and consuming is only second or third to that... Following the lead of the USA is unwise; better have a strong currency and if the US$ wants to go the old Italian lire path just let them do that.

Till updates.

(17 March 2008, second temporary update) Rumors say that the FED will start pumping up the reserves of the US commercial banks. What are the facts?

--Under the TAF rules the US central banks valuate the offered collateral, under the rescue plan the clearing banks of the primary dealers will inform the NY Federal Bank of the value of the offered collateral...
--Under the TAF rules foreign banks could only get 50% in auction money of the offered collateral, now Deutsche Bank and Banque Paribas can tell the NY folks what the true value of the offered collateral is and get a 100% return on that value...

So far the facts, and now I have found out that Deutsche Bank is a clearing bank (I did not know that) now I understand why so called 'analysts' like that Mayo shithead told disinformation like "Total mortgages are 10 trillion US$" many months ago.

Lets wait and see, may be the FED will start pumping up reserves or may be not. May be they will come to their senses or may be I have a flaw in my logic.

And look at the bright side: May be via Deutsche Bank and Banque Paribas we can dump some of that shit that is parked in Europe for at least half a year on the balances of the bank where it belongs: The US Federal Reserve... After all they brought us into this credit crunch shit, the USA is to blame first and the UK second and after that ECB's Trichet...

Till updates.

(17 March 2008, temporary update) Today the US Federal Reserve launched a plan to save the 20 largest US banks from collapsing thus preventing the rather foreseeable meltdown of the US financial system. Here if the FED statement on that detail.

The only remaining question is: Why is Bear Stern Cos sold for 2 US$ a share and not simply included in that plan? Would the Bear be the only one with complete rubbish on her off balance Basel one assets? But then why gave the FED a guarantee of 30 billion to overtaker JP Morgan?

I can only say I am puzzled, why save in potential the 20 largest but let the old Bear being eaten up by JPM? Do you know?

__________________________

Now we have this large rescue operation at hand, what can we learn from that? Now foreign banks can ask their stuff back from the Americans without being afraid to trigger a massive meltdown of the US financial sector...

__________________________

Today we also had TICS data, they measure the streams of capital to and from the USA. Lets start with the conclusion from Dec 2007 (source), quote:

Monthly net TIC flows were positive $60.4 billion. Of this, net foreign private flows were positive $8.4 billion, and net foreign official flows were positive $52.1 billion. 

And today the Jan 2008 figures came out (source), quote:

Monthly net TIC flows were positive $37.4 billion. Of this, net foreign private flows were negative $38.2 billion, and net foreign official flows were positive $75.5 billion. 

Comment: One sparrow doesn't make it a Summer but finally private stuff flows the other way. The fact that official flows grew is easy to understand: because the dollar is falling central banks are forced at adjust their portfolio's in US holdings, that is comparable of index trading in stocks, for example:
A pension fund is obliged to follow a stock index and a known bad company issues more stock, in that case the pension fund is forced to buy some of that stock because by obligation they have to follow the index.
Conclusion: TICS data are only positive due to artificial sources.

__________________________

At last: Update in the Nightmare files, here is the link and I think the 20 bank rescue plan will fail because when you do a bit of calculations it is not serious money at all. Only serious money will prevent a financial meltdown.

Till updates.

(16 March 2008) In order to understand how a lousy job the local business channel RTL7 here in Holland is doing we just take a look at some simple facts:

---About two weeks ago they stated the the US Federal financial details were something 'to be jealous upon'.

This is an idiot remark because together with the tidal wave of bankruptcies that will hit the commercial US financial sector, the Federal financials will go down under too. Already in the year 2004 you could foresee that US Federal bonds would loose the AAA status one way or the other. Here is another fact:

---The February 2008 US Federal deficit was $175.56 bln US$ (source)

So what explains all this idiotery? Well RTL7 (or RTLZ) looks too much at the NSBC or the CNN channel and try to imitate them. Therefore they invite folks from the bank Theodor Gillisen or ask advise from Aegon or the Dutch Postbank or whatever, but they never ever ask insight from academics  but only from folks who have vested interests in keeping the news as it is.

Facts are that you only need a tidy bit of academic insight to calculate that the entire US economy needs another 4 trillion, or 4000 billion US$, in order to stay 'profitable'. And what will the RTLZ high paid journalists do? They will ask shampoo producing CEO's about the 'economic outlooks' for this year and even beyond...
They will constantly loose themselves in irrelevant details and will only ask 'nice questions'. 

Till updates, have a nice life or try to get one!

(14 March 2008) US market wrap up for this week:

This was a week of consolidation of the market decline, on Monday the US Federal Reserve tried to spoil it by promising to take about 200 billion of worthless paper from the balances of the US commercial banks (AAA rated mortgage paper is allowed as collateral) and in return give AAA rated highly liquid US Federal bond paper... The DOW Jones climbed 400 points on the news and nobody wondered why the FED can issue bonds because that is the task of the Treasury... (More on that below.) We see: beside the climbing of the leverages of the last years we also have a climb towards liquidity.

Yesterday it were only rumors but today it was confirmed: Investment bank Bear Stearns Cos will lead the way into the easy to foresee collapse of the US financial system. Just a few other banks saw the rain coming and Bear Stearns declared "Over the last 24 hours a strong decline in liquidity was there".
It is not known at date how big this decline is.

All in all: Luckily the DOW below 12 thousand just like last week, but all in all I hoped to be at 11.5 thousand points right now so the FED made indeed a 'smart move'.

End of the market wrap up.

Now a bit more about why the US Federal Reserve should have US bonds on her balances. You can find the details of that in the SOMA files but all in all it is very simple: When the US treasury needs money they can issue bonds to the public (thus raising the official debt level) or for example go to the FED: the FED buys a few billions of US Federal bonds and since the government now only has an obligation on herself the official debt level is not changed... (This is not fraud, this is US law and non GAAP accounting, there is no problem this is all anchored in law.) Also; the SOMA files contain the collateral for the money in circulation (that is very normal by the way).

But there are lots of more places where the US government has sold Federal bonds to herself, a few trillions are also found in the Social Security funds. Very handy because even a lot of Republican senators think the Social Security funds are well funded because at any given time you can sell these Federal bonds on the very liquid markets...  Nice fairy tale or not? 

Till updates. 

(12 March 2008, temporary update) Once more I wonder why the local journalists from the Radio Tele Luxembourg (RTL7) can be so utterly stupid... They often tell us that the US government financial stuff is something to 'be jealous' upon and so any idiot can see they have never studied the wonderful concept of 'hidden debt'.

Yet a few days ago these RTL7 weirdo's reported on the Carlyle Capital Corporation (CCC) stuff and guess what??? The RTL7 weirdo's came up with a leverage of 31 for just one company listed at our beloved stock exchange the AEX.

Why they present this as some exception I do not know, my easy to understand calculations indicate that the entire US financial sector needs 2 to 3 trillion more borrowed money in the year 2008 in order to stay 'profitable'.

There is some rudimentary support on this from marketwatch.com:

FBR's Miller estimates that $11 trillion of outstanding U.S. mortgage debt is supported with roughly $587 billion of equity. That's a leverage ratio of 19 to one. 

Comment: When will shitheads like we find them at RTL7 tell a bit of truth at the populace? Answer: Only after the kill because they are shitheads by definition.

From the marketwatch article we also have the next, quote:

Rates on 30-year fixed mortgages usually follow the movement of 10-year Treasury bonds, but this relationship has broken down as de-leveraging in the financial system takes hold. 

Comment: Wanna bet the weirdo RTL7 journo's will not report on the breaking down of the leverage stuff exactly in line with the CNN weirdo's? 

In case you want to read my source file, go at your own risk (aspx files from nasdaq.com have destroyed my computer many times in the last few weeks). Here is the marketwatch.com file:

Tip: Try to get the code after 'aspx.?guid=' into your browser but do not forget to get some good clone software in order to restore your computer when needed...

Have a nice life, or try to get one like for example the developers of aspx have... 

(10 March 2008, temporary update) We all know what bank reserve are: that is some kind of value that has to be kept and guarded and cannot be used in order to do normal banking business like lending out money.

And so we wonder; why is the US Federal Reserve accepting 'non borrowed' value from the bank balances in order to exchange this for temporary loans to those banks? They say it is for 'providing liquidity' but the auction money simply can't be used for normal banking business because they have to be part of the reserves...

Do you get it? There is some flaw in the logic.

By the way, here is the file from the latest money auction:
http://www.federalreserve.gov/newsevents/press/monetary/20080310a.htm 
And it says: fifty billion of new auction money (in exchange for bank reserves) hence the total reserves of the US commercial banks is now about forty billion US$ in the negative. I don't get it; the Americans say that this money auctions are 'very smart' so it looks logical that we are being Enronized on this. After all the FED allowed the Americans to sell mortgage crap to foreigners and you can wonder why they did that...

And I think I have to send a few more emails to the International Monetary Fund because I still have no answer on my email from a few weeks back.

Till updates.

(07 March 2008) Not often it is observed that the Americans do actually something smart, but the next is: Every time I visit nasdaq.com my Windows program breaks down and has to be installed again. On the one hand it is annoying and on the other hand it is actually a bit funny. Also the firewall and anti spy and virus software does not work much longer after visiting nasdaq.com.
It isn't much of a problem: I have a perfect crack from a clone program that restores my perfect crack from the Windows program so I can use my illegal website software for updating this website...;)

Lets get serious; The US market wrap up:

This week we finally saw some good falling action on the US stock markets, after a long wait the DOW Jones is finally below 12 thousand. Year to date the DOW declined over 10% and why it goes at the snail speed I don't know...
As a comparison our Dutch stock market the AEX has declined over 15% and here in Holland we have a business channel named RTL7. And today after the non farm payroll decline of 63 thousand the DOW Jones went up and as usual the stupid journalists from RTL7 asked 'But who are the buyers???' And in utter bewilderment they ask it again so it is proven once more: This world has no shortage of stupid people!
Oh oh stupid RTL7 journo's; it is computer program trade that does this kind of stuff, the SEC allows this kind of market manipulation because it is only used to pump the markets up... 

So far this market update.

But the RTL7 journo's are not always stupid; today they had very funny news. A fund that is traded on the AEX named Carlyle Capital Corporation (CCC) had it's stock trading stopped because some banks asked for it's bankruptcy. Details say that in June last year it had 670 million in capital when it entered the AEX and in no time they borrowed money until they had 21 billion US$ (so a leverage of about 30). And what did they do? CCC bought only Fannie Mae and Freddie Mac stuff...
The funny thing is: CCC is owned by the most rich families in the USA and they are looking at a nice 15 billion in value vaporized.

Next and last item: For many months already the Israelis try to turn the Gaza strip into a Warsaw ghetto light version. They withhold food, fuel, medicine and all kinds of stuff you need to survive. Why they want it to be Warsaw ghetto light I don't understand exactly because all I know is that they have a minor dispute with the democratic elected Palestine government.
The Israelis kill Palestines in relatively large numbers, why this is I do not understand exactly because on the Israeli side there are only a few wounded.

Yesterday a lone gunman shot eight students at a religious school, compared to the hundreds and hundreds of dead Palestines it is just peanuts. Just peanuts, yet the entire Israel is in a state of shock and only lamentating 'But these 14 to 16 year old children are innocent'. Again I do not grasp it: In a few years time all of these students would have entered the IDF and hence: kill Palestines in Warsaw ghetto light numbers. Again I do not understand it: exactly why would these potential soldiers be 'innocents'?

A few days ago here in Holland a horrible case of child abuse surfaced; the courthouse details are ugly but there was some Dutch father who more or less on a daily basis did beat his sons with a baseball bat. If for example in the future these sons get children themselves, it would be reasonable that the authorities (and family of course also) would monitor them. This only to prevent stuff like that from happening again.

We all know details like the Warsaw ghetto, yet a people like that is allowed to run a nation and there is no proper monitoring. When they kill Palestines in the hundreds and thousands they only get applause from the Western societies with the USA in front.

Again: I do not understand...

Till updates, have a nice life or try to get one. 

(05 March 2008) Who says central banks are boring? They are not, in fact they are hot! Because now we have proofed that the US economy has over 50 trillion of debt on herself and now we have proof that for many years on a row debt always growth faster compared with the gross domestic product, we can take a look at the hip G 19 release of the US Federal Reserve.

What is the case? 

We all know that the superior debt driven US economy was grounded a little bit in Q4 2007, I do not recall the exact numbers but GDP growth was below 1% on an annualized basis as far as I know reality.

To proof that the mountain of debt will kill itself we only quote from the G 19 release (source):

Consumer credit increased at an annual rate of 4-1/2 percent in the fourth quarter of 2007 and rose 5-1/2 percent over the year as a
whole. In December, consumer credit increased at an annual rate of 2 percent. 

Comment: Consumer credit for this fat bags obese society is still above GDP growth so I guess we will have to wait a few months longer before reality sets in. And please do not come at my door stating that increased retail sales are just a reflection of inflation while helicopter Ben will do all that is needed in bringing rates down to 'preserve growth'. 

Please get real: I will have my 7000 reading on the DOW one way or the other.

Till updates, have a nice life or try to get one. 

(04 March 2008) Only a boring update made in the NightmareOnWallStreet files, here is the tale of king Atsivistscheisse. And, for the rest, I can say to the combined European defense forces: cut the use of the Microsoft windows systems as soon as you can. You, just like me, already had our doubts back in 2001 but I can tell you:

When you want your deep secrets constantly popping up in Washington keep on using that worthless Windows XP and that Vista stuff. I will not turn to details but cut that crap (or face the consequences).

Hey my dear European military folks: Want to have a reality check? Just ask political NATO leader Jaap de Hoop Scheffer if windows is safe to use...

Have your check & till updates.

(01 March 2008) Ok ok, with large disgust I have to write the US market wrap up:

This month the US stock markets only declined a lousy 3% so this is pure shit.

End of the market wrap up.

In another development I can say that cyber blasting against me is very high, I can only hang out at the internet for at most 10 to 20 seconds or otherwise all firewalls or spy detecting programs are hijacked...

I don't know how to react; I wanted the impending US presidential elections to be free from outside influences but right now my emotions say: Why not turn it into Spanish elections? After all, my calculations indicate that a civil blast of just 120 to 130 dead US civilians will give victory to McCain while on the other hand that Obama thing will guarantee withdrawal from Iraq (but likely not Afghanistan). 

Lets turn it into a Salomon verdict: We chop the US presidential baby in half and give one half to McCain and the other to Obama. If the computer attacks against me continue, I have to consult the Iraqis about who they like more.
After consultation (as usual written in some upbeat of filled US military coffins) I will reconsider if US election will be free or not.

That's it, till updates.

(22 Feb 2008) Ok, funny US market wrap up: As on Wednesday and today on Friday US stocks were climbing. Not on the back of any economic news but simply on the back of computer trading programs. Trading programs work best in a thin market so the brave US investors can sit back and let the programs do the work and the investors can concentrate on what the do best:

Eating one more hamburger and grow more obese... Here is the DOW graph:

End of the market wrap up.

We have a new update in the Nightmare files where I explain that in fact we are over 78 billion of combined US commercial bank reserves in the red, when you eat too much hamburgers you will never understand such a nice detail...

Till updates & please more hamburgers, the more the better it is because the USA still has her brightest days to come: The days when we have 100% of the population obese...

(15 Feb 2008) Ok ok, the US market wrap up: How is the decline to a DOW level of 7000 going? Well rather bad this week; we had three days of climbing stocks, one day of lower and today was rather flat.

But there were two chunks of very good news:

Chunk one: One of the bond insurers was downgrades six nods and when one sheep is over the hill the rest usually follows.

Chunk two: Yesterday I could not prove it but today I can: Total reserves of the US commercial banks is at least 78009 million in the negative and declining at a speed of 2 billion US$ a workday.
My gut feeling says that total bank reserves will act just like the housing prices and therefore in some weeks or months it will decline steeper.

So I think I will make it to the 7000 DOW target, there is no reason why not.

__________________________

In another development I still have no answer from the International Monetary Fund on my email, those guys are always the first to slaughter government spending from developing nations when things have gone wrong. But now it is the USA they keep their coward mouths shut. Slime is what they are. Utter pure stinking slime.

__________________________

Lets end the week on a positive note, here are some comics around the financial downturns in the USA and all those idiots that bought those US crap. Didn't I already say in 2004 to keep away from US housing stuff? Well idiots who do not listen will get burned and that is exactly what they deserve: how could you be so stupid as to trust the Americans when it comes to finance? How could you?

__________________________

And in case you did not read the funny 'you walk away' update (here it is once more), the Financial Times has a lovely article about banks doing the same on a far larger scale. Here is the beauty.

Till updates. 

(14 Feb 2008) Over the last two weeks the combined reserves of the US commercial banks have declined another 20 billion or 2 billion every working day.
Here is the update in the NightmareOnWallstreet file, please remark that the FED takes half the pain so only 10 billion decline in the 'official' commercial bank reserves...

Till updates.

(14 Feb 2008, temporary update) Why is the pattern always the same? Every time I use my right of free speech and every time I throw in some big stuff, why do I always have these nasty and weird computer problems?

There is just too much of what I call 'Gestapo resistance' in the system; these are folks that are too cowardly to ring my door bell and instead they attack my computer...

Well, since my computer is still running I only cut and paste the email that I made to the International Monetary Fund or the IMF. Here it is:

Now can those computer weirdo's please leave me alone? If you are not able of understanding that a nation that picks up at present debt at the next speed:

--One GDP debt every 2,5 years, or
--Every year 40% of GDP more debt while we have only long term 3% GDP growth,

is a nation that will not live much longer.

You can have a mighty arsenal of weapons but you don't fool me. 

Till updates & have a nice life or try to get one! 

(08 Feb 2008) Ok, it seems confirmed that a fifth undersea internet fiber cable has been cut in the Mid East but for the time being I cannot comment on that detail. (Ok ok, I never expected it to stop at only three cables but lets wait and see if it will rollover five or stops at this rather pleasant number...)

Before we do the US market wrap up I want to thank some anonymous analyst from a bank not named here fore sending the info I needed. Thanks for that and sorry I came a bit hard down on you because I activated some superiors of you but don't forget: You started insulting me and if you have some career damage I am sorry.
There is always a bigger ego & your bank could make lots of millions if you understand my insights instead of insulting me...:(

We go to the US market wrap up:

1) No significant losses on Wall Street this week but volatility is sharply up and that is good news because it makes options more expensive.
2) There was lots of commotion about bond insurers that needed to be saved, like expected stuff fell apart because 'too expensive'. That is also good news.
3) The US markets are holding up relatively good; over the month of January decline was only 5 to 6% while my Dutch based AEX index declined 15%. My compliments go to the US computer programs that are very good in propping stuff up, once you understand the size of computer programs trading stocks and forex the charts are far more easy to understand.

So that's it for the market wrap up, don't forget that in the year 2008 in theory the entire US financial sector needs about 2500 billion more debt (there is no such amount out there of course) so we will see the one financial company after the other go down... Until now there is nothing that can stop my 2500 billion baby, only the computer trading programs are a good line of first defense... And again: My compliments.

Till updates. 

(07 Feb 2008, temporary update) Today I was utterly disappointed by the ECB not raising rates, we have M3 money growth above 11% and we have YoY consumer inflation at 3.2% and rising and these fuckheads do not raise... Well it looks like we are on the path to stagflation since the M3 money growth will guarantee the inflation and the too low 4% rate will guarantee the stagnation (like in Japan for some decades right now)...

Oh, are there some weirdo European central bankers that know it better?

Well you fuckheads, why not read this old  Financial 2 update where I explain to some sovereign funds not to pump in silly amounts like 3, 5 or 8 billion US$ into US commercial banks. Remark that this update was published on 13 Jan 2008.
Now the fuckheaded European central bankers go to the h3 release from the US Federal Reserve and they look in the column 'non borrowed (3)'. In the 'non borrowed' column you find the combined reserves of the US commercial banks.

Aren't the combined reserves negative right now? And if the foreigners would have waited a few months longer, would they not have gotten far better deals?

So you weirdo European central bankers, if you think you know it better than me, why don't you surprise me? Till updates.

(01 Feb 2008) Wall Street market wrap up:

This week, helped by the Federal Reserve rate cuts, the DOW ended about 5% higher so this was a horrible week. On the other hand, as anyone idiot can see: now the rates are so low that there is only little ammo left at the FED.

Also this week it became known that a so called bond insurer was downgraded from AAA to AA. To my amazement in the USA municipals, cities, states, Federal Agencies etc can buy an AAA status... You simply don't believe that at first sight but you must never forget we are dealing with the Americans, here is the proof from Nasdaq dot com, quote:

Bond insurers agree to pay principal and interest when due in a timely manner in the event of a default -- a $2.4 trillion business that offers a credit- rating boost to municipalities and other issuers that don't have AAA ratings. Without those top ratings, insurers' business models may be imperiled. 

Comment: The insurer takes payments over when the bond issuer defaults, so there is a giant collection of risk at the insurer and in fact bond issuers have AAA rating.
It looks like a foolish thing to do: the more organizations you have that are 'too big to fall' the deeper problems you will face. Don't forget: average lifespan of a company is only 25 years in the Western world.

__________

The OECD officials stated more or less the next: Bernanke must know something about the US economy we do not know. So one more organization that does not do it's homework properly...
Do these dumb OECD officials know that, just an example, combined on balance reserves of the US commercial banks dived in the red this week? Very likely not so they are just another bunch of dumbo's like there are so many already.
May be dumbo is not the right word, most people have too much trust because when dealing with the Americans you must always check and recheck (and very often it is found they are lying, it is their second nature for reasons not completely understood right now).

So far this boring weekly market wrap up.

(31 Jan 2008) It was a bit of a waiting but it is now officially in:

Combined reserves of the US commercial banks is minus nine billion..

This is in line with expectations and may be my reader wants to know: How come that still no bank is declared broke?

That is a good question, in a normal world things would be so but modern banks also have large so called off balance assets (often total off balance assets are heavy in the deep, rumors indicate it is about 30% of total top asset value but I cannot prove that of course since off  balance is off balance). Well in those off balance things they still have some positive value to be found and that makes that the Federal Reserve does not interfere... The fact that an entire off balance scheme is deeply in the red is not regulated... That's the way it works over there.

In case you want to see this historical moment for yourself: go to
http://www.federalreserve.gov/releases/h3/Current/ and scroll down to the column 'non borrowed (3)', there are the reserves listed. The column 'term auction credit' is also highly interesting; banks can anonymously take part in those auctions to get a few billions more on their sheets (while pumping some worthless so called collateral from their off balance sheets to the Federal Reserve balance where it pops up as 'assets').

Do you understand the giant proportions of this all?

But I have to admit; the Federal Reserve fights brave, may be some four star Pentagon general should be stationed over there as an observer (learn how to fight smart instead of stupid). Yet, as most US central bankers must know, you cannot win this.

Title: Thus finally Alan Greenspan is one of my best friends...

At last the nightmare files are updated with some nice graphics. Here is the entry.

Till updates.

(28 Jan 2008, temporary update) Ha ha, this is funny: Are the Iraqis staging financial attacks too? Read this AFP file on a big blaze at the Iraqi Central Bank... Ha, that would be real funny!

For the rest I have a small correction to make: The Federal Reserve H3 release is updated once a week but new info is only added every two weeks (while I thought it was completely updated every week).
So we have to wait another three days before we know if the combined US commercial banks have a negative reserve... (Well only the seasonal adjusted reserves are not in the red yet.) 

After a few hours of thinking (and smiling softly) I have decided to place the email I did send to the Baghdad Multi National Forces (major Stephen Lamb to be precise).

Here is the email, quote:

Comment: This burning of the Iraqi Central Bank is just so beautiful because the Mark 77 is a fire bomb... Further nice detail: The email was posted five days ago & that one is also charming.
At last: The Iraqi government can ask itself if it still is wise policy to neglect my writings, for example we still have no law that forbids selling oil to the USA for a 100 years (no I am not crazy, I am a scientist and if the Iraqi law says 98 years you won't hear much complaints from me).

Till updates, have a nice life or try to get one.

(25 Jan 2008) This is the fourth weekly market wrap up; how is the NightmareOnWallStreet keeping up???

This was a horrible week for my beloved nightmare because Federal Reserve central banker lowered rates with a staggering 75 basis points or 0.75%. Not only the FED fund rate but also those that bring down mortgage rates in the long run.

It was clear we had a hefty slap in the face this week, in order to understand how hefty the FED attack carpet bombing attack was just look at this quote (from nasdaq.com of course):

By Kate Gibson

U.S. stocks on Friday faltered, with the nerves of investors frayed and their expectations reduced for next week's Federal Reserve meeting, which already weighed in with an emergency rate cut earlier this week. 

Despite the drop, the Dow Jones Industrial Average (DJI) and S&P 500 Index ( SPX) eked out slight gains for the week, the Dow gaining 0.9% and the S&P advancing 0.4%, while the Nasdaq Composite Index (RIXF) finished with a weekly drop of 0.6%. 

Comment: Do you see how rough it was for me this week? Both the DOW Jones and the broad based S&P 500 ended the week on a positive note and there was only a bit of help from the Nasdaq that ended lower.
Stuff is easy to understand: Bernanke versus Reinko is 2:1.

I will not deny it: this week Bernanke has won.

__________ 

In other developments I have gained at lot: For example now I understand a bit more how large the influence of computer based trading is, for example our Dutch AEX was down 20% and the DOW Jones only 10% and it is indeed validated that computer based trading is the main culprit in explaining this weird difference that I am trying to understand for over four years.
Now I understand the size of computer trades I also understand a lot more about the behavior on normal trading days.

See yah in the next market wrap up! Till updates. 

(24 Jan 2008, temporary update) Weird weird weird, for the whole day I am waiting for the US Federal Reserve H3 release because very likely today it will be official:

Total reserves of the combined US commercial banks is negative...

I am waiting for the 'seasonal adjusted' figures to be negative too because the non seasonal figures were already negative. By the way: Why should commercial bank reserves need seasonal adjustment anyway?

Well according to the FED these reports are published every Thursday at 4.30 hours local New York time so 10.30 at my local time. They are now over time exactly 31 minutes and have only adjusted the previous 200 million of combined reserves to 199 million. But the 23 Jan figure is still missing (by the way, the  climb of 600 points on the DOW on the 75 basis point Bernanke panic day  (two days ago) was done by computer programs and it was not human trading & lets not forget banks have lots of stock on their balances).

Title: This is how it works over there: 600 DOW points done with computer trading... Highly efficient isn't it?
 

That's it for now, I am waiting only waiting to get the official green light of stating combined US commercial bank reserves are negative 'seasonally adjusted'.

Till updates.

(23 Jan 2008, temporary update) Today I want to start with thanking Trichet on his stance, just tell it like it is to those lawmakers Jean! Well I think you have earned it: All asking for your execution or your killing are withdrawn.

In the mean time I urge the ECB members to bring down M3 money growth below the so called 'law of fools' threshold. That means:

M3 money growth = GDP growth + ECB accepted consumer inflation.

Furthermore on inflation: There are only some consumer/producer inflation numbers in use, try to craft a few that also include bond/stock/housing markets. I know that is hard to do and we have to avoid big brother stuff, but it would be handy if you could trace a small statistical segment of the money you spit out to study where it goes in society. But don't forget: The big brother dangers are large but with some serious law that forbids use of that information in the courthouses individual freedom can be guaranteed.

The problem is simple to understand: In my wallet I have a 5€ bank note with the serial number V07370598622 but all my electronic actions are made from Euro's without a serial number. To put it in Central Bank speak:

We have to find a balance between the upside benefits of better statistics to the downside risk of less privacy.

That's it for today.

(22 Jan 2008) Today the USA Federal Reserve lowered the rates with a staggering 75 basis points and we only wonder why. Because we all know central bank policy always takes months to set in the real economy.

So it is not done on behalf of the real economy, so what is it then? Is it about unnerving the stock markets? In their ridiculous statement the FED said that it was also because some consumers and businesses had a bit more trouble in getting more debt... That sounds ridiculous, why worry about a handful consumers?

No very likely it is the fact that the entire US banking system has only 200 million of real reserves left. Don't believe me? Go to the next file and look at the column non-borrowed (3):

http://www.federalreserve.gov/releases/h3/Current/ 

So in six weeks time the US commercial banks lowered  43794 to 200 million & believe me my dear reader: This party is only getting started.

Facts are facts: I did not find the 200 million of real bank assets myself, it was Russ Winter (what's in a name) in this file. And I can tell you one thing: If more Americans would be like Russ, I would not have much problems with that country.

Till updates my dear reader.

(21 Jan 2008) Ok ok I have been busy lately in trying to ram a bit more sense in the financial reporting in general and placing emphasizes on the total of debt on the US economy.

I hope this link works because it contains 123 counts when you search that website on the phrase 'Reinko' (just by sheer coincidence that is my name also). Just click on a few links to see what and how I am doing over there.

Long term goal is of course the destruction of the US military and when I smell some dead meat it is nothing but logical that above mentioned websites get a 123 count.

Furthermore I only highlight that the Iraqis should keep the pace of attacks on the oil robbers at such a pace that they are forced to travel in convoys. In the meantime it would be handy if all those 'Awakening groups' would do a second thinking and study history just as it is: Who brought the decade long economical sanctions to Iraq? Was it Saddam or was it the USA? Just answer the question please...

That's it for today, till updates.  

(20 Jan 2008) Update on the latest Military Bloody Day: The day Dubya visited Egypt.

We only had 3 reported dead US military slime and this is very low. I was expecting something in the 6 to 10 range and with a bit of luck may be double digit fun.

Well I just take the statistic just like it is although it was disappointment we had no reported killings from the Anbar province... And from the statistical point of view I was a bit late of declaring this one and from the financial point of view we had great successes on the US financial markets so it was a 'mixed week' last week.

The Palestines picked up the date far better and of course the IDF responded with a relatively large number of killed children (always an accident and never a declared policy of course). But facts are facts and a lot of Israelis must have thrived by the sight of those wounded children... Because if they do not thrive on stuff like that they would have made peace a long time ago, but like I argued in the past: They have taken a too deep look into the German SS soul and they still copy it.
Well that is their problem and not mine.

My problem is to destroy the US military and weighing all in all we had a good week last week, the interest beast will very likely destroy the US economy in the year 2008 and that will destroy the US military and that is what I am after for many years.

Please my dear reader, please think I have some mental thing because the longer the US debt problem builds itself up the harder the crash will be... Just 50+ trillion and the clock is ticking... Just 200+ a month of unpaid interest fees while the money markets are only focused on the 60+ trade deficit.....

With a big smile on my face I have to declare the 'till updates' phrase. 

(18 Jan 2008, temporary market wrap up) This is the third weekly market wrap up, lots went as expected but there was one US Bank reporting only something like 1.5 billion loss in Q4 2007... But since also the Federal Reserve has calculated that the whole US financial sector needs something like 14.9% more debt on it's total of 15,000 billion (thus over 2000 billion US$ more debt is needed) I expect much more reported losses and down writings. Hundreds and hundreds ob billions more.

Here are the weekly figures from Nasdaq, quote (source):

By Kate Gibson

A U.S. stock rally dissipated Friday, with equities selling off for a fourth day straight, as new concerns about bond insurers overrode solid results from International Business Machines Corp. and General Electric Co. Also, President Bush called further attention to the economic troubles roiling the globe. 

Given that the week included a spree of quarterly reports from the troubled financial sector, it was "pre-ordained to disappoint. We might as well have run around with a target on our back," said Art Hogan, chief market strategist at Jefferies & Co. 

"The subject matter is disturbing; when we're reminded we need more fiscal policy, it unfortunately shows us the magnitude of the problems we're in," said Hogan. 

After a short-lived triple-digit rise, the Dow Jones Industrial Average (DJI) lost more than 100 points, then retraced a bit, closing down 59.9 points to 12, 099.3, giving it a weekly loss of 507 points, or 4%. 

Comment: This was a good week, the 12500 points threshold was smacked with ease. Slowly but surely the average Wall Street trader gets a little bit more insight in the actual matter at hand: This all will lead into long lasting recession at least and in the meantime the interest on all loans will grow and grow.

__________

Total debt on the US economy: 50+ trillion US$ so at the 5% interest level they need only 2500 billion US$ / year just to stabilize this debt. For every US citizen this is 170 thousand of debt and over 8000 US$ / year for the interest only.

So the fiscal stimulus as proposed by the White House simply will not work because figures like 800 to 1200 US$ for every (poor?) taxpayer is just not enough. Given the present debt levels it is impossible that it works, it will not work because the USA has what I name the 'obesity effect'. That means you have to pump in an awful lot of dollars to get one extra dollar government revenue. It is a self destructing policy so to speak.

By the way, here is a nice Reuters story telling more on the shadow banking layer.

Till updates.

(14 Jan 2008) Today Wall Street rallied sharp on the good news from IBM that reported profits up to 28.9 billion US$ compared to an analysts forecast of 27.8 billion... So 1.1 billion more in mostly overseas markets drove the DOW 1.36% higher and the Nasdaq 1.57%...

Oh oh, those dear Wall Street idiots and what fun I will have when the US financial sector starts reporting her Q4 stuff. Here is a funny quote (source):

Citigroup, Merrill Lynch and Bank of America are expected to announce an aggregate $40 billion in Q4 writedowns, amounting nearly to 0.5% of GDP. 

Comment: In the first place 40 billion is not even one third % of GDP while the US financial sector needs a rough 2500 billion more debt in 2008 so if they cannot pick up that amount we will see at least over 10% of US GDP writedowns totaling over 1400 billion. (In this scenario I expect foreigners to loan the other 1100 billion US$ needed...). 

So Wall Street folks: Can't you see I can be very positive too?

Till updates my deer Wall Street traders (by the way is the dear hunting season already open???). 

(14 Jan 2008) Ha ha, this is funny: Right now on the television is a docudrama that evolves around the theme 'the day the dollar crashes'. It is on channel 2 by the broadcast named VPRO.

Yet, the particular scenario offered does not make much sense, I think that the most likely scenario is a wave of financial bankruptcies in the USA driven by the 2500 billion US$ new debt they need in 2008 (inside the financial sector). And that as that process goes on we see sharp day to day declines in the value of the US$ and sharp day to day stock/bond markets decline.

Only when panic strikes we can see a crash so how great is the likelihood of a crash? That depends on in how far people understand the financial situation in the USA and on that detail I am not very positive.

No, for the time being I foresee suffocation of the dollar and not a one day crash to a value of a few Euro cents. Till updates. 

(13Jan2008) Yesterday there was just so much news that made me laugh broadly that I have to give away three prizes, one is for the most stupid question on military stuff and the others are for the most stupid analysis concerning financial markets and the most stupid Citi bank mega deal.

Nominated are:

Military; Four star general Petraeus (leader of the Iraqi stuff)
Financial 1; Standard & Poors (leader of ratings like 'AAA rating')
Financial 2; Chinese & Kuwaiti 'investors' that loan Citi bank 14 billion

Motivation:

Military; The most stupid question made by a senior US military commander was the next (source):

"In this year, EFPs have gone up, actually, over the last 10 days by a factor of two or three, and frankly we're trying to determine why that might be," Petraeus said. 

Seldom we have seen such a stupid question, may be it has a little little minor thing to do with Dubya visiting the Middle East? How can a guy that is hold up so much as the savior of Iraq miss such a simple insight?

So David, you have just won the prize for the most stupid question ever in this entire war against Iraq. Congratulations!

And David Petraeus, just by the way, how come that the double or tripling during the last 10 days is not reflected in reported US military deaths? A bit of cooking the books just like the USA financial system is doing lately?

I guess David just forgot the law of leadership: In the long run armies get as smart as their leaders are... And Dubya is now for seven years on a row the commander in chief...

Financial 1; In the past I had a short email exchange with David Wyss the chief economist at Standard & Poors about the questionable AAA ratings of US Federal bonds. Here is the entry from the NightmareOnWallStreet sheet.

Well just by coincidence I know that the US economy has over 50 trillion of debt upon herself and this mountain of debt is growing with over 9% a year lately. To put it simple: at a 5% interest rate level they need over 18% of their gross domestic product to pay for the interest.
That is above the total of profits the US economy takes in.

Furthermore the financial sector of the USA needs an estimated 2.5 trillion or 2500 billion more debt in the year 2008 to prevent it from collapsing.

When you know stuff like that you suddenly understand the behavior of all players: from central bankers to US journalists not asking the right questions.

Of course US government bond is junk status, there simply is no way they can pay it off with real M1 money.

Here is what Standard & Poors made of it (source):

S&P noted that the US public sector uses a far smaller share of national income relative to other 'AAA' rated countries like the UK, Germany and France, which implies greater revenue flexibility. This coupled with the US being the world's most used currency -- a privileged position that bas not been materially impacted by by recent depreciation and global re-balancing. 

Comment: Beside the mountain of debt in the private sector, the US government has three pillars to bring the 'official debt' down:

Pillar one: Emergency spending, examples: war in Iraq/Afghanistan and hurricane Katrina.
Pillar two: Lending against the social security funds, in the funds are only 'AAA rated' bonds and the government revenue was used for other things (thus lowering the deficit).
Pillar three: Federal Agency bonds, these bonds are issued via Federal agencies but have no backing of the Federal government. Thus once more: the official deficit is artificially lowered.

So S&P = Arthur Anderson (the former Enron bookkeeper) only on a far bigger scale...

Congratulations David Wyss! You have won the prize for the most imbecile, debile financial propaganda there is.

Financial 2; The Chinese and the Kuwaitis simply do not understand how easy it is to calculate that the US financial sectors indeed need 2500 billion US$ so at this point in time it is very stupid to invest any significant numbers because with a few months of waiting you get far better deals.

Please my dear Chinese and Kuwaitis, go to the flow of funds the one last column and look at the bottoms 2 numbers and calculate the 2500 billion for yourself please.

The Chinese and Kuwaitis have won the prize for the most stupid mega deal in the year 2008. Congratulations!

Here is the financial times Media file on the 14 billion deal, it has to be noticed that 14 billion is just 0.6% of new debt needed by the US financial sector in the year 2008...

End of this temporary update, have a nice life or try to get one! 

Title: Trichet needs to get killed because he is fooling us ...

(26 Dec 2007) In the NightmareOnWallStreet series is written: Poking fun at Alan Greenspan part 0001. Here it is. Till updates.

(26 Dec 2007) Today we take a look at small debt: US consumer credit card debt...

According to this six page file from newsweek dot com it amounts to something like 900 billion; so it is peanuts compared to the stuff I usually study lately.

When you write it out, 900 billion is 900.000.000.000 US$ and since we have about 300 million (slimy) Americans, per capita citizen this is:

900.000.000.000 / 300.000.000 = 900.000 / 300 = 3.000 US$ per US citizen.

Or just 12 thousand for the average four member family.

Rates on credit cards are high, therefore most house owners take a credit card on their house (that is called a HELOC or home equity line of credit, a kind of second mortgage only you have it as a card in your wallet).

Weighing all in all, on all levels of the US economy (from individual consumers up to the entire financial sector and even the entire economy) it is a Ponzi scheme. That means on all levels of the US economy there is more debt needed to pay for the interest on the outstanding debt.

All we have to do is wait until the inevitable point of crash is there, all we have to do is wait but I am expecting it in the year 2008. It's going to be the biggest crash ever, but that detail I already understood in the year 2004...

Till updates my dear reader.

(21 Dec 2007) Yesterday I finally decided to type a few data from the Z1 release from the Federal Reserve in my crack of the (American) statistical program named SPSS.

I started doing some analysis of the debt data and from the scientific point of view it was very rewarding; I have lots of deep questions to think about the coming time.

But let me not hinder you with deep questions, lets make a short and simple to understand so called 'executive summary' from my analysis so far.

Executive summary (that even enemy Dubya can understand):

1) Whatever line of debt you study (let it be Federal debt, Federal Agency bonds, household mortgages, home equity lines of loans and so on and so on) always the debt growth faster than the gross domestic product.
So after seven years we have solid proof: The tax cuts simply do not work.

2) Overall during the last seven years, debt grew 2% quarter on quarter. So year on year it is 1.02^4 = 8.2%. The entire USA financial sector picked up debt at a quarterly rate of 2.2% thus year on year it is 1.022^4 = 9.1%.
So yearly debt growth is something like 2 or 3 times gross domestic product growth.

3) In the third quarter of 2007 the American financial sector as a whole picked up (on an annualized basis) over 16.6% of their entire debt of 14.9 trillion.
That means if economic details stay the same, the US financial sector picks up 2.5 trillion more debt over the next 12 months.

4) The extra debt needed for the financial sector only equals the entire revenue that the US government took in last year: also 2.5 trillion.

5) Well I could go on much more longer, but weighing all in all a default of the entire US economy is foreseen within the timeframe for a new president. We will have firebrand sales of vital parts of the US economy (like now already is happening with the selling out of the bank sector) and most of all: America can no longer afford her beloved military.

End of the executive summary that even dumbhead enemy Dubya can understand.

Till updates, by the way: here is the Z1 release that validates my future explorations...

(20 Dec 2007) This is funny: The US Federal Reserve has a new 'flow of funds' sheet out in the Z1 release (here it is). And at the bottom of that file is a link with 'contact us' so I just had to click it & I wrote:

When you add all financial sector and non financial sector debt together you get 46 trillion US$ (this aside from the Federal, State and Agency debt). How is the US economy going to pay the roughly 2.5 trillion US$ that is needed for the interest?
I mean; 2.5 trillion is over 17% of the gross domestic product and this problem has to be addressed because otherwise the integrity of the Federal Reserve is at stake.

Now my dear reader; Want to bet on a million US$ that they will not answer me?

Till updates & live well and think well. 

(17 Dec 2007, second update) It was very irritating but today's TICS data were rather high. So I have to swallow that one and I will not deny it: Today the Americans won and there are still a lot of dumb people who think investing in the USA is a safe thing to do...

Since I feel irritated I strike back: See the 17 Dec entry at the NightmareOnWallStreet files where I show the audience that indeed the entire US financial sector is Ponzi as hell. Ha you American fuckheads; Do you run your nation on the greenback? Well, lets do just that. Till updates.

(17 Dec 2007) I hope that my readers got the point from my previous update: When interest rates are kept too low for too long (as was done by our central banks in the USA and Europe), the markets will take over.

We have seen that in America: When the FED started tightening the long term commercial rates stayed low so the housing / stock / bond bubble kept on growing.
And now we see it in Europe where banks charge each other something like 4.95% while the 'official' rate is 4.00%.

I only want to repeat that it would be wise to kill or execute European central banker Jean Trichet; these idiots slander our economy so it is better to kill them...

In the meantime I observed the first bank that has rigid plans to make profit of the impending crash in America; it is ING/Postbank. The guy that runs the options on currencies spoke words like 'In America every body is running around with six credit cards with a full years salary of debt on it so that will explode'.
I would have put it more diplomatic: Total debt on the entire US economy is so large that for an interest level of just 5% you need over 17% of the gross domestic product. Since 17% is well beyond the after tax level profit of that economy they are basically broke and we expect a default on the entire economy.

Yeah yeah, a nice default will do & of course now we know the 17% number; how can US government bonds still have AAA ranking? It just has to be far below AAA, how far exactly I do not know but it must be very far...

If I remember it correctly, today we will have the TICS data (the Treasury International Capital System data) out so lets see if there are still idiots willing to invest in the US economy. Lets see if there are still idiots left...

Till updates my dear reader.   

Till updates.

(14 Dec 2007) Forward, we have to think forward!

So I am thinking forward to the year 2010 or 2011 when there will be left only two banks in the USA. We have by then:

The Federal Consumer Ponzi Bank of America &
Rollover Forever United Bank of America.

The US Senate has just approved the 'minus five' bill, that means that from now on rates on loans are minus five percent. The US Senate has done so to revive and revitalize the US economy. And the RFU has asked me to put up some ideas for advertising. So I am just a little bit brainstorming:

Wow man, for the first time in my life I am considering moving to America forever! And on board of the board of the RFU is a familiar figure found: Alan Greenspan!

According to Alan these negative rates were the best invention since fiat money was introduced under the Nixon regime. Because now people no longer do weird stuff like saving money but instead bring strength to the US economy. And now with negative rates the banks create happy customers who never run out of money...
Happy customer = Happy bank 

Till updates my dear reader. 

(13 Dec 2007) Today we make fun of that fool Alan Greenspan, what is the case? Well Alan is not capable of calculation or estimating how large the bubbles in the US economy are. Not even the most easy to calculate bubble; that one in the housing markets (those in stocks and bonds are far more difficult to estimate).

Here is the Wall Street Journal article & here is the quote from it: 

The value of equities traded on the world's major stock exchanges has risen to more than $50 trillion, double what it was in 2002. Sharply rising home prices erupted into major housing bubbles world-wide, Japan and Germany (for differing reasons) being the only principal exceptions. The Economist's surveys document the remarkable convergence of more than 20 individual nations' house price rises during the past decade. U.S. price gains, at their peak, were no more than average. 

Comment: With total and utter bewilderment I look at the last words, they were no more than average... So Alan does not know that house prices should only be a certain multiple of median income. He is a fool that he not uses some 'rules of thumb' in that detail & it is once more clear that Alan never ever truly has grasped the details of the responsibilities that come with fiat money.
Lets not forget: House prices peaked under his watch because Bernanke is not that long at the helm of the Federal Reserve.

Till updates, have a nice life or try to get one.

__________________________ 

(11 Dec 2007) Today we wonder about how stupid Americans are, better first read below at 27 Nov how you can rather easy calculate the bubble size in the entire US housing market. Now ok ok, that calculation contains a bit of propaganda because it is reasonable to filter inflation out and therefore use 1.07^¹⁰ instead of 1.10^¹⁰ thus giving a 50% bubble size in the US housing market. (By the way, one of the founders of the Standard & Poors Case Schilling housing index also predicts a possible 50% decline.)

Now to my amazement when I read this Washington Post file about so called piggyback (house) loans I came across the next, quote (source):

Freddie Mac has the potential to influence lending practices by setting conditions for the loans it accepts. But company executives said yesterday that Freddie Mac's power was eroding as investors entered the market. 

Amid a loosening of industry standards, Freddie Mac could not afford to sit back and let the market pass it by, the executives said. 

"I think what happened over time is, we found that our own caution was making us less and less relevant, and we weren't sure, quite frankly, that our competitors, you know, on the street were being crazy," Piszel, the chief financial officer, said. 

"Could we have run for the hills and said we're not going to do any of that?" Piszel asked. "What if things didn't go down? We would basically be just taking our whole future and giving it away."

Comment: The above proofs that this Piszel guy does not understand elementary economics. You just don't believe how stupid they are and it gets all the more funny if you realize that forced sales of homes is mostly triggered via declining house value...
No no, there is nothing that can stop this housing baby... 

Till updates. 

(08 Dec 2007) Email email email and lots of placing comment below financial related articles on our beloved internet. It is constantly the same message as you find on the right in the 'Food for thought' files but it is a bit sharpened up:

At this point in time I can proof that the US economy as a whole needs over 17% of it's gross domestic product to pay for the yearly interest fee...

I also tried to put some influence on the 'Jim Cramer cycle' of weird thinking but I am far from sure if that one did hit the 'Jim Cramer target'. Also a bit of posting at websites frequently visited by hedge fund folks; just constantly the same message of '17% of the GDP needed for just the interest on the debt'. 

With that I left the commercial US parts alone and my attention was drawn to the US system of central banks and I selected the statistical parts of the 12th member of that system: The Federal Reserve Bank of San Francisco (the FRBSF).

Here is the content of my email at the statistical parts of the FRBSF, quote:

To: My fellow statisticians from FRBSF
Fr: Drs. R. Venema.

My dear and beloved folks, with interest I have studied the so called 'flow of funds' in the Z1 release.

I have arrived at the conclusion that together with the debt not mentioned in the flow of funds release, the US economy has a debt of over 50 trillion US$.

Can you confirm this please?

Furthermore, if we make an easy to understand calculation, we choose an appropriate level of interest lets say 5%. And since 5% of 50 trillion US$ equals 2.5 trillion US$ we must ask our selves: Are US government bonds truly AAA status?

Because 2.5 trillion is over 17% of the US gross domestic product we see with ease:

It cannot be AAA status.

Could you shed a light on my easy to understand calculations?

Greetings from a fellow statistian; Reinko Venema.

So my dear Jim Cramer & my dear Federal Reserve employees: The talk lately is of a recession yes or no but should the question not be; Total default of the US economy yes or no? Now? Where is your big Cramer mouth now?

Till updates, have a nice life or try to get one.  

(07 Dec 2007) Today we are going to do child math, no not around the impending largest economical crash (or better: the default of) the US economy.

No no. Yesterday one of my kids came to me and showed a sheet of paper with a few numbers on it. Can you make the next number dad? Here are the numbers:

1, 11, 21, 1211, .....

After a minute I surrendered because I just had no clue about how to use the numbers 1, 11 and 21 to produce 1211 (just like US stock traders have no clue how company profits should pay the total debt I just guess).

Now dad it is utterly simple: You must write down what you see! Look: 11 is not eleven but two one's so you write down 21.
And 21 is one two and one one so you get 1211. Ah, I understood what I had done wrong: I had used the wrong paradigm in understanding these 'numbers'.

But later when I was doing the dishes I suddenly understood: Just like the total US debt converges towards default of the entire US economy, these numbers converge too! So when the dishes and pans were all clean again I sat down and wrote it out:

1, 11, 21, 1211, 3112, 131221, 132231, 232221, 134211, 14131231,

14231241, 24132231, 14233221, 14233221, etc:

Do you see that 14233221 does not change anymore? The starting number 1 has found it's limit and that is 14233221 (and a whole lot of other starting numbers have this limit too).

Now, suppose you start with a very large number; what would happen?

Well; take 99 nine's on a row:

999999...999 then you get:

999, 39, 1913, 191321, 19131231, 19231241, 1914132231, 1914232241,

1924133231, 1914332231, 1914332231 etc.

For the math loving folks around us: How many of these limit numbers are there? I don't have the slightest clue yet but until now my highest found limit is:

191817161514132211110

Remark: The tail says 11110 meaning 11 one's and 1 zero.
I don't see a way to construct an even larger limit but I don't feel like crafting a formal proof for that. No, I think you have to expand you digit base to get larger numbers, in our usual 10 digit base this likely is the top.

For children it is a big surprise to see that this process stops somewhere down the line, give it a try because the younger they are when they see stuff like this the better they are later in exposing central bankers telling crap to the populace.

Till updates. 

(03 Dec 2007) When I reactivated the NightmareOnWallStreet on 12 Nov I informed my dear readers that I had plenty of ammo. In this update you will not find the mother of all bombs nor the (Russian made) father of all bombs. No, you will find the grand father of all housing market bombs and grand father has just returned from the grave and he is mad as hell. He is mad as hell and with a big bull horn before his mouth he shouts at his grand children: Why do you force me to burn down the building!

Oh oh oh, that is some mean old grand father. Brr, even I am scared...:(

Till updates my dear reader. 

(02 Dec 2007) And another update in the NightmareOnWallStreet series, it is about M3 money supply and although not very difficult it is rather technical. So if you want to know what M3 money is, read the update.

(01 Dec 2007) I did some emailing with Standard & Poors chief economist David Wyss and he validates my insights as far as I know:

Interest rates of 5% on a total economical debt of 46 trillion equals at 15 to 16% of the US gross domestic product. Since 15 to 16% is beyond the total combined profits of the US economy, they are broke...

See the email exchange in this update of the NightmareOnWallStreet file.

Of course we will see many rallies in the last month of the year on Wall Street because those folks are nothing but a bunch of weirdo's. In the end I will have my victory, there is nothing that can stop that...

With a little smile on my evil face I salute you my dear reader & till updates.

(29 Nov 2007) When I returned online again a few weeks ago it was for two reasons:
--Publish the changed tactics for Iraq &
--Publish the new strategy for Afghanistan for the year 2008.

In Iraq everything goes as smoothly as can be and now we have a new Osama tape (please read this breitbart file first before proceeding) it is time to publish the very short Afghanistan strategy.

Here we go:

Osama calls on the European people to quit Afghanistan and for months I know the best way of swaying stuff the right way. It is very simple:

Try to kill at least 26 from the army that has political leadership in the NATO in the next year.

That is all there is: try to kill at least 26 of those soldiers and the public opinion will be swayed against further occupation and 'helping' the Afghan landscape & people.
There is a downside on this: Uruzgan is also an important transportation hub inside Afghanistan but I do not know the details. So it is up for the local commanders: Try to make it to the 26 number (or beyond) but if transport and logistics become too problematic, do not follow the above advice.

My dear Afghanis, please do not worry about my personal safety related to the above advice given, I know the law and I know how the locals think: There will be no juridical case against me. (Because if they would bring a court house case against me, the above advice will hit the local newspapers making it only more likely the advice will be followed up. The Dutch, often they are so breathtaking stupid...)

Well, originally I planned an update explaining to economists that we not need at most 2% inflation but at most 2% deflation, it is a very nice theory but I think I better wait some time before publishing that one.

Till updates & love you all.

(28 Nov 2007, second temporary update) Flip flip flip, I tried to email some Standard & Poors employee with the question why they do not downgrade the US bonds from AAA to far below that level but now my email program does not work.

Well, here is the text of that email, quote:

That's it, boring stuff isn't it? Greetings & till updates. 

(28 Nov 2007, temporary update) Economical news of the day:

--US existing home sales fell for the eight consecutive month;
--US durable goods fell for the third consecutive month and, quote;
--In a speech Wednesday, Fed Vice Chairman Donald Kohn said the central bank can be "nimble" and can't hold the economy hostage to teach speculators lessons. 

Comment: A normal stock market would worry about such 'nimble' words, furthermore the beige book indicates that already a 'downturn' has set in (well in reality the situation is far more worse than as projected in the beige book).
Didn't I say it yesterday? Irrational reasoning and behavior is observed and this is validated by the fact that the DOW Jones is over 300 points up.
I only smile, what a nice trading day have the folks on Wall Street; lets hope the underlying economy is as just as strong so P/E ratio's can decline even now we are 300 points up...
Oh oh those weirdo shitheads, those weirdo shitheads.

A last detail: This morning European M3 money growth came out and it was over 12%. I only repeat that we need to kill European central banker Jean Trichet. This can be done by all sorts of means:

potato or butchers knife
the axe (my favorite model is the 600 gram kitchen axe)
pistols, guns & sniper rifles
poison or injecting toilet cleaner in a large enough amount
screwdriver (through the eye or the ear)
baseball bat or a metal bar
car accident a la princess Diana
throw him from a building or before a train
drowning or hanging
car bomb Lebanese style
give or sell him to the Iraqis
etc etc.

You know my dear reader, such high money growth just indicates that the rates are far too low but will the ECB do something about it? I have my doubts, just like they do not warn for the terrible things that will happen in the USA... 

Till updates.

(27 Nov 2007) Best economical news of the day: According to the S&P housing index there is decline of housing value at an annualized speed of 4.5%.

Lets do some easy to understand calculations to show what this means:

Total US housing value (excluded business and government buildings) = 23.3 trillion US$. 4.5% of this is 23.3*0.045 = 1.05 trillion / year or 2.9 billion / day...

__________________________

But, as always with America, there is more: Median wages have not climbed in the last 10 year (there was only inflation correction). On average housing value grew over 10% a year so since the median did not climb it is very easy to calculate the bubble size:

1.10^10 = 2.59 so an increase of 159%.

Therefore the bubble size = 259/159 = 61%.
And 61 % of 23.3 trillion = 14.4 trillion so that is more or less in the size of the entire GDP...

You know my dear reader the above is easy to understand: There will be a long and deep economical resession in the USA. That is easy to understand, yet the behavior of those Wall Street weirdo's is the part that cannot be understood. These folks are crazy, right now on this trading day the DOW stands 0.80% in the plus... Oh oh the fools; truly sung loose from reality.

Also funny is the next quote as I found it on the nasdaq.com, quote:

Chicago Fed President Evans said the potential U.S. GDP growth is now "slightly above 2.5%", according to Reuters. 

Comment: Well 2.5% GDP growth is just 0.365 trillion a year (I use 14.6 trillion as the US GDP) so the housing decline is three times the GDP growth & what me worry...;) One thing is sure: The central bankers of the Federal Reserve system are very stupid but honest people or smart criminals because they understand the above easy to make calculations.
But if you study the notes (the minutes) of meetings of these central bankers than you see they loose themselves in utterly irrelevant details. And this is a trait that is rather common inside a Ponzi financial unit: Irrational behavior and reasoning.

It is just a matter of time before the DOW will hit the 7000 mark again, it is just a matter of time.

__________________________

Another easy to understand calculation: US home owners withdrew 654 billion $ (just 7% of dispensable income so what's the problem?) from their housing value (S&P source, see page six), that is about 4.5% of last years GPD and if we adjust the economical growth from 2006 with this 4.5% we seen once more:
They have all gone crazy in the USA because the adjusted growth was negative...

Sincerely yours & till updates; Reinko Venema.

(25 Nov 2007) Not all days are filled with war and/or threatening stupid central bankers. No, today I wrote the first two files for a feast meal. Here is the index, we have Greenspan ice and Shock and awe cake in the 'dessert desert'.
Rest of the meal will follow later.

Till updates.

(24 Nov 2007) It is about high time I need to speak some ugly words towards the European central banker Trichet.

So here we go:

My dear Trichet, yesterday the €/$ pair breached above 1.4950 during the Asian session and what did you do? You made more or less the statement that 'brutal moves' were not welcome!

My dear Trichet, may I ask you the following question? Here we go:

What do you have in between your ears and behind your eyes? To make it simple for you, you can choose form:

1) A healthy brain with knowledge of the US Federal Reserve Z1 release in it, or
2) The same as the above but without the Z1 release, or
3) Instead of a brain I always use two kilo's of dog shit.

These are your options my dear Trichet because you are one of those central bankers that let M3 money supply run out of hand at a tremendous speed and as far as I know reality you deserve a neck shot (but a lethal injection would be fine also).

My dear Trichet, of course I keep my eye on what the European exporters say but I will never waste European pearls like for example Daimler Benz who reported some problems yesterday. But you, you fuckhead, why do you waste our entire economy with your weird M3 money policy? Did you never understand that when you control the M3 supply there are some responsibilities coming with that?
Why do you catcopy that weirdo Greenspan? Now?

And what has our honorable Trichet to say upon the law of fools that says:

M3 money supply - GDP growth = Bubble growth.

Now you fuckhead? And again: Now you fuckhead? You complain about 'brutal moves' while you were the one that gave rise to these easy to understand moves? You are a guy without brains and so therefore I have to jump to the conclusion that indeed you use two kilo's of dog shit instead of a healthy brain...

My dear Daimler Benz & other European pearls of industry: Prepare for at least (and likely more) of 1.5600 on the €/$ pair. I am very sorry but if Trichet is going for a destruction of the European economy I think it is better to call you towards the fighting you have to do. Good luck with it! 

(22 Nov 2007) You know my dear reader, never ever in my wildest dreams I would have thought that it is possible to destroy America's military might by clicking around on the website of the Federal Reserve.
Yet facts are facts and the yearly needed interest on the total of US debt equals a rough 20% of their GDP so their economy is doomed. And so the story has gained a few years in just a few days, of course it will take a long time before the '20% of GDP' knowledge sets in because every journalist that tell stuff like that will be hanged from a tree immediately. But in the end the money will vote with it's feet and I think that from now on the monthly TICS data get funnier by the month.

By the way, of course Western journalists will avoid the debt problem but for example Palestine, Iraqi and Afghani or whatever what journalists could spread the seeds of US military defeat...

You know I have doubted a few times the last years the speed at witch this story evolves, ok ok the Iraqis and Afghanis have grown in military might (yes even the Israelis are complaining about the Hamas getting more efficient by the day) but it was just too slow. Of course I knew that the demolishment of the largest military power ever would be a task of giant proportions, but the Z1 release from the Federal Reserve is a very potent weapon. It even dwarfs a nuke, because a successful nuke explosion inside the US homelands would not break her completely in the economical sense. But revelation of the content and it's meanings (of the Z1 release) to investors will destroy the US economy rather efficient.

And so it is confirmed: Knowledge is power. And therefore I have to thank the Afghanis for following a part of the strategy for this year: Don't attack schools (and even allow the girls to go to school; trust me on that one my beloved Mujahedin).

For the Iraqis I can say: I can now repeat one of my oldest advices dating back to the Summer of 2003 (so over four years ago!): Keep attacks at such a level that the slimy Americans are forced to drive around in convoys. That's all, for the rest time has to do it's work.
That will not mean the policy of declared Military Bloody Days will fade away because for example the Americans block all kinds of chloride transports that are needed for drinking water and so the cholera spreads around. The Americans are to blame for that one, but lets put a date on that later.

I am a happy man: victory is not some vague vague light on the horizon any longer, it is a clear and sharply shining star at the sky. Till updates my dear reader. 

(21 Nov 2007) Oops, I made a 50 trillion fault in my estimation of total US debt according to the so called Z1 release but there really is not a problem.

Why is there no problem? Now, use your own brains and check that in this Z1 file total on book debt equals 46.6193 trillion US$. (Don't forget we also have two decades of so called 'emergency spending' not included in this figure.)

Now since it is debt you need to pay interest, lets say it's on average 5% and 5% of 46.6193 trillion equals something like 2.3 trillion and that still equals a rough 19 to 20 percent of the US gross domestic product.

This simply means that for stabilizing the 'on book' debt (that means paying the interest), the Americans need 19 to 20 percent of their GDP.

So although I was wrong a hefty 50 trillions there is no real problem: The US economy is still a so called Ponzi finance unit. (Meaning it will crash as soon as other economies know that America is pested by my best friend Ponzi...)

Have a nice trading day tomorrow my dear DOW/Nasdaq/S&P folks, have a nice trading day now the US$ runs at 1.4842 at the moment of writing. Oh oh you stupid weirdo's, when I am through with America she will be lean again...

Till updates my dear readers. 

(20 Nov 2007) It occurred to me that somehow access to the beloved Z1 release was hindered in some cases you were that stupid to try to access this beloved Z1 from my website.

So I had to do some 'import stuff' and from now on you can access the total US debt via this file that will not be hindered for a long time I hope. Since the file goes back to 1973 (that is 2007 - 1973 = a rough four decades of knowledge) there is no reason for me to update on that particular file.

Federal Reserve facts are just FED facts: The interest needed to pay down US debt would amount to 40% of the entire GDP so what we worry?

What me worry? Now for next week? Now?

Well in fact my worries run deep: If there is only one day we will have a positive day on the DOW Jones and we will have to do the ugly thing.

So my dear Dow Jones traders: For the entire week we see only losses and in case you really want to fight it out you could perform differently.

This is what you could do my beloved Down Jones, and you have the ammo why not behave differently? Why not?  

(19 Nov 2007) For over one and a half year I was eager to make the next update, so lets do it and give some marching orders to the Lebanon based Hezbollah.

My dear Hezbollah, years ago the Lebanese people were under the occupation of the Israelis. At a certain point in time the Israelis did withdraw from Lebanon and all those 'Western experts' predicted havoc and more civil war.

Yet it never materialized and somehow Lebanon grew into prosperity...

My dear and beloved Hezbollah, I know you have greatly contributed to reality and made shambles of all those 'Western experts' insights & today I have a very complicated and difficult task for you: 

Feed the Shia part of Iraq with enough information and insights in order to prevent civil war when we have withdrawal of the slimy US forces.

If you help me I will help you & that is an easy to understand axiom.

__________________________

For those slimy US forces I only have to say: Always you complain that for example Taliban stuff is mingling and merging with civilians and so when you apply air force it is just so regrettable civilians die...

Well this CNN file indicates that you were handing out toys and children got killed so why do you not fight war properly and leave killed children out? Now? Why do you intermingle to the result of killed children? I only wonder...

Till updates.

(16 Nov 2007) I am a happy man, today I found the holy grail. Do you want to know what it is? Let me keep it very simple:

--Grab a pocket calculator and go to this US Federal Reserve file, add up all the numbers on the bottom line and arrive at total US debt = 94.6 trillion US$
--Think of a reasonable interest rate for this debt, for example 5%.
--Calculate 5% of 90 trillion, answer = 4.5 trillion US$ a year.

Take into account that the US gross domestic product is only something like 12 billion a year, calculate 4.5/12 = 37.5% and realize that the Americans need 37.5% of their GDP for only stabilizing their debt...

I am in a good mood today and now I finally understand why vice president Dick Cheney stated years ago that 'deficits don't matter' and this is correct: Total debt is so large that it will never ever be paid off...

I am in a very good mood today, lets crack the system my dear reader. Lets crack the system, lets pull the plug. And make my dreams come true: 

Defeat of the US military!

Till updates.

Title: We were soldiers from a broke country.

(16 Nov, second temporary update) See the NightmareOnWallStreet file; I have calculated that over a 10 year period of time the US mortgages grew 11.1% a year leading to  a total of 187% mortgage growth over this 10 year period.
Beside mortgages the Americans also have something named HELOC (re)finance, that works just like a credit card but the rates are lower. I haven't found any reliable total figures for that one... Till updates.

(16 Nov 2007) Tijdelijke opdatum terwijl wij op de TICS data wachten:

Recept voor yoghurt vruchtenijs:

Laatst kwam ik een buurvrouw tegen en die zei tegen mij: Ik maak nooit ijs meer want een dag later is het zo hard! Nou, dan zeg ik gewoon: 'Waarom dwing je me nou om je een been te breken? (schreeuwen is vaak beter).

Nou, als die huisvrouwen hun eigen professie niet aankunnen (net als die centrale bankiers) dan doen we het maar gewoon zelf:

Groenspanijs:

Nodig grondstoffen:

-400 ml mandarijen (evt uit blik, gebruik dan ook de siroop)
-500 ml volle yoghurt
-400 ml slagroom
-vruchtensiroop tot 'zoet genoeg' (die van de Lidl is echt uitstekend en kost maar 1,09 Euro)

Werkwijze: Pureer de mandarijnen met blender of staafmixer, flikker de rest erbij en vruchtensiroop tot 'zoet genoeg'. Het is handig als je je schaal en ingredienten van tevoren een poosje in de vriezer zet dan is het lekker koud.
Let op: Ik moest het elke 20 minuten uit de vriezer halen en doorroeren anders kreeg ik water kristallen! Na een uurtje of vier is het wel klaar, vriezer natuurlijk wel op maximaal zetten. Dit ijs is een dag later nog wel zacht en niet zo hard geworden, ik heb wel vruchten uit blik gebruikt dus het kan evt aan de extra mandarijnen siroop liggen.
Smakelijk eten, nou waar blijven die TICS data?????

Trouwens, wat je ook kunt doen: Keihard tegen je buren schreeuwen: Waarom dwing je me nou om je kind te slaan? (Die doet het ook altijd goed maar je moet wel voorkomen dat ze naar de politie gaan want als je die pennelikkers eenmaal aan je deur hebt dan is het gewoon niet leuk meer en is je hele dag verpest!)

Na een uurtje wachten zijn de TICS data binnen: 56 biljoen in de plus, dus er zijn nog veel niet Ameikaantjes die niet snappen wat daar gaat gebeuren. Nwet flow was minus 15 billioen en dat kan wel wat meer... Toch bleef de dollar aardig overeind, maar een paar pips eraf.
Maar ook journalisten snappen er vaak geen bal van, zo zag ik laatst een journo aan één of andere centrale bankier (ik weet niet meer van welke staat) een vraag stellen over hoe erg het negatieve spaar ratio nu eigenlijk was.
Tot mijn verbazing gaat die centrale bankier een kletsverhaal ophangen en noemt een voorbeeld van waar het eigenlijk niet zo erg was en in plaats van dat die journalist nou doorvraagt en informeert op welk percentage van de bevolking dat kletsverhaal eigenlijk van toepassing is zegt ie 'Thank you'.
Nou ja, het is ook meer dan 1000 dagen wachten geweest voordat €/$ de 1.4500 aantikte terwijl het in 2004 allang duidelijk was dat dat eraan zat te komen.

Even een plaatje erin om de verveling wat te verdrijven:

End of this temporary update, tot opdatums.

(15 Nov 2007, second update) The FED did set an additional 47 billion US$ in the markets and in return accepted over 20 billion mortgage backed securities... Don't believe me? Here is the Nasdaq file with the details.
Oh oh stupid Bernanke, why do you try to catch the falling knife?
After my easy to understand calculations we have a rough 20 billion a day decline in the total housing market stuff so your stupid move is only enough to tank 2.35 days you fool.

No no Bernanke (or Bern), now I have activated the NightmareOnWallStreet for the second time there will be no one standing between me and my 20 billion baby. Nothing can come between me and my baby, you dumping 47 billion? I only wait 2.35 days & what is your next move you Bern baby Bern? Till updates my dear Burnanke.

(15 Nov 2007) Wow, that is good news coming from Iraq: we had daisy chain of shaped explosives near the so called Green Zone. Quote (source):

U.S. authorities said penetrators were used in an attack Wednesday against a U.S. Stryker vehicle near an entrance to the Green Zone, killing an American soldier and wounding five others. Iraqi police said two Iraqi civilians also were killed.

It was the first major attack against a U.S. military vehicle in that area in the last four or five months, Simmons said.

He said the vehicle was struck by "an array" of penetrators. The attack occurred in one of the most heavily protected areas of the capital, raising questions how the explosives could have been planted without collusion from Iraqi police or soldiers. 

Comment: Not much comment is needed, I am back online so it is rather obvious some significant things would or could happen. I am glad that given the new policy we now have in place, there was help from the Iraqi police and or new army.
But don't forget priority one of the changed policy: bringing security to the whole of Iraq, somehow we must end that lawlessness.

Last detail of this update: Last OPEC's meeting was in line with my humble request to put (at least) 5 billion US$ a year in the bank accounts of the Iraqi Crescent, what can I say? I can only hope and so I am hoping for the best.

The NightmareOnWallStreet file is also updated.

Till updates.  

(14 Nov 2007) Today I investigated a bit more around the total US housing market value and with some tricks I coughed up a good estimation of 34.8 trillion US$ for household houses only. (See this update.) According to Mr. Shiller (from the S&P Case Shiller housing index) the decline will last for years (well I do not need Shiller for observing the obvious but I know there is a lot of emotional resistance under some of my readers who have gone short on brains.) See this Reuters thing.
So indeed it is confirmed: The decline in housing value is over ten times as big as the trade deficit and runs at approx 20 billion US$/day. So I was not outside reality when I activated the beloved NightmareOnWallStreet once more!
Wow man, I love this housing baby & I will nourish it and give it all my love and attention. Likely we will have TICS data tomorrow so we can se if there are still real (estate) idiots investing in the USA. 

Have a nice life or try to get one... Till updates.

(13 Nov 2007, second update) My dear Cyber Warriors I am having a real problem with one dot com & it is very simple: They refuse to pay me back some money I accidentally paid them. I paid them on the 4th of July and they have an amazing list of new demands needed to pay back only 30+ €.

So I would like to see how far you are with your SCSI/RAID weaponry, as far as I know one dot com is Danish based but given the name it is impossible it is not under US control/ownership. Good luck with it. Till updates. 

(13 Nov 2007) Why are Americans always so over enthusiastic about their economy? Here is a hedge fund keeper that estimates a 20 to 30% decline in the DOW value thus pushing stuff in the 9000 to 10000 range. That's very very optimistic, well we wait and see. Just wait and see. Till updates. 

(12 Nov 2007) According to some very simple calculations the speed at witch US housing market value is vaporizing is now equivalent to 60 - 70 US$ a day for every US citizen... As a comparison: this is over 10 times the trade deficit. Here are the easy to understand calculations.

Furthermore: I have activated the goodie good old NightmareOnWallStreet once more and new target on the €/$ pair is at least 1.56!

Till updates my dear reader. 

(11 Nov 2007) For months on a row I am on the search for a new job but I cannot find any satisfying job here, only in Amsterdam and Rotterdam is the stuff I want but I can't move over there because of the kids.

So today I searched for hedge funds because a lot of hedge fund work can be done from your home, to my surprise I found this next hedge fund where you have to declare that you are non American, not related to any US company, not related to any company working under US law, etc etc. Wow man, they hate Americans!
Don't believe me? Here is their entry page. 
Yippie yah, yippie yippie yeeh!

I emailed them and I hope they think that we will have something like an estimated 15+ trillion crash on the US housing market... That is what I hope!

Till updates my beloved reader & I hope my words for the OPEC from yesterday (see below) will do their work. Of course we have to throw in the delicate S&P housing index once more, my dear reader don't you think that housing index will decline to at least 160????? That is what hedge funds do: They go for mispricings (meaning under or over valuation of large things). 

Title: This is the 10 year S&P housing index for the entire USA, have fun you bunch of WallStreet weirdo's because it will retreat to 160 at least!
  

(10 Nov 2007) Today I was touched by this CNN report on Iraqi parents abandoning their children, well I will not glide into a verbal ramming against the Americans who have brought Iraq in the state it is right now.

No I want some serious help for the Iraqi Red Crescent and I want this help from the OPEC members and the size of the help is five billion US dollars more a year. Five billion a year may sound a lot but it is peanuts compared what the Americans pump in and under perform with...

In return OPEC is allowed to find the so called equilibrium price of oil and they can start withdraw oil to the London and New York markets until we have reached 120$ a barrel. It is important to take your time and the oil withdrawn should go to other countries according to my developed so called 'labor standard' for money. (I will not repeat the entire labor standard discussion here only remark that it is reasonable that whatever you are on this world and you are poor, it is reasonable that you work the same amounts of minutes for a kilo of bread for example.)

Dear OPEC folks, lets go back to the past: Were the Americans not very successful into implementing all kinds of global economical havoc in case oil prices would climb above 30 $ / barrel? And with a little smile on my evil face I have to admit that indeed I am very surprised too that the world economy is still rather vital now we approach the 100 $ / barrel level.

OPEC folks should not be concerned about the impending crash in America, of course they will blame you first but the next S&P housing index only says they did it all to themselves (remark by the way that a 10 year climb to 260+ indicates a year on year average of 2.6^0.1 = 1.10 so over 10 percent housing value growth over a 10 year time period... The idiots did it all to themselves because housing prices should be correlated to median individual income.
And OPEC, if you think you can fool your audience that long you need a little punishment. I hope that OPEC thinks I have laid down a reasonable proposal at their feet, you can pick it up or you can proceed bringing tropical diseases like cholera to Iraq. Plafond of London & New York markets is 120 $ / barrel and you can choose the timeline for yourself.

Of course we close this days update with that wonderful Standard & Poor's index of total USA housing market value:

Title: This is the 10 year S&P housing index for the entire USA, have fun you bunch of WallStreet weirdo's because it will retreat to 160 at least!
  

Till updates my dear reader. Till updates.

(09 Nov 2007 second update) My dear Iraqis, I am sorry you did not hear from me a long long time. But I never forgot you, how could I? How could I?
Of course I followed the news from your country, of course I did. But only now when we often have only single digit civil death toll in Baghdad a day it is time to come back. So it has taken a long long time since 19 Oct last year but civil death toll has lowered significantly.

Let me keep this update as short as possible and I would like to announce a very important policy shift because I cannot take all those dead civilians any longer, they just hurt me so much in my brain. Just so much.

So here it is:

• First priority will be bringing more security to the whole of Iraq, the other priorities serve the first one.

• Second priority is (of course) killing those slimy Americans in large enough numbers especially in times of (for example) American elections.

• Third priority about killing police and new born Iraqi army: The old axiom of 'the higher your rank the more likely it is you get killed' is replaced by: Only high ranking officers and from the lower ranks only those who do weird stuff like arresting Iraqis who have attacked those slimy Americans.

So that's the policy. By the way, may I thank al Sadr for his withdrawal and cleaning up the ranks of the Mahdi militia? And I hope that the Sunni's have succeeded in cleaning up their ranks from extremists who for example cut of index fingers from smoking teenagers.

End of the second update, love you all & as usual: till updates.  

(09 Nov 2007) So after a few months of  being away, I am back!

Well Lets check how fast the next knowledge will get in the stupid heads of the DOW, Nasdaq and S&P500 weirdo's (by the way, my estimation is that this US housing index will sink as low as 160 so any idiot that still invests in the USA is a real (estate) idiot):

Title: This is the 10 year S&P housing index for the entire USA, have fun you bunch of WallStreet weirdo's because it will retreat to 160!
 

Lets see if we can update, by the way my computer is almost broken so when I don't update for some time there is likely nothing at hand..... See yah!

Till updates. 

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