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Treasury seeks "unprecedented borrowing"

Thursday, October 30, 2008, 5:19 PM

I nominate this for understatement of the year:

Ryan Says Treasury to Need `Unprecedented' Financing
"This year's financing needs will be unprecedented,'' said Anthony Ryan, the Treasury's acting undersecretary for domestic finance, at a Securities Industry and Financial Markets Association conference in New York, where he was a last-minute substitute for Treasury Secretary Henry Paulson.

"Unprecedented" hardly does this justice; we need a more superlative word.  "Ginormous" comes to mind.

Perhaps the Germans have a single word that means "future destroying" that we could use. » Read more

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The Fed cuts rates to 1.00% - the war on savers continues

Wednesday, October 29, 2008, 2:42 PM

Fed cuts rates half-point, leaves door open for more

WASHINGTON (MarketWatch) - The Federal Reserve on Wednesday slashed overnight interest rates by a half-point to 1.0%, and signaled that downside risks to growth remain, indicating even more rate cuts could come.

In its statement, the Federal Open Market Committee said the pace of growth has slowed "markedly" and the extraordinary financial market stress could put the economy at greater risk.
The Fed said that inflation was no longer a threat and that the central bank will cut rates as needed to boost the economy.

No real surprise here, but I will make a comment or two. The Fed, representing status quo interests, is desperately trying to recreate the exponential expansion of credit and debt that marked the last 2 decades (but really picked up steam from 2000 onwards). » Read more

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IEA says world's oilfields declining faster than expected

Tuesday, October 28, 2008, 10:13 PM

I know that the whole issue of Peak Oil seems to be on the back burner, given the financial crisis. Many think that oil demand will be knocked far enough back that even if Peak Oil were happening right now we'd have several years respite before it becomes a significant problem due to demand destruction.

So I've been patiently waiting for any estimates that would allow us to compare world oil production declines to demand destruction to see where we are in the oil sweepstakes race.

On the demand side, I've seen estimates that world oil demand will fall off as much as 4%-5% this next year.

Now for the supply side. » Read more

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New Martenson Report Ready

Tuesday, October 28, 2008, 10:12 PM

LINK:  Market Predictions and Outlook Update

In this report I will review the advice and predictions I made on May 27th of 2008 (exactly 5 months ago) in a report entitled Charting a Course Through the Recession
In striving to be accurate, fair, and complete, and in the spirit of
constant improvement, it’s important to review where we went right and
where we went wrong.  I’m pleased to say that many of my predictions were right on target.  I
didn’t anticipate such an aggressive dollar advance, but now I see this
trend continuing for just a bit longer before resuming its descent.  I am continuing to recommend some of
the same prudent actions as always.  Stay out of debt, keep cash close
by, get some money out of the dollar (gold), and know your neighbors. 
And stay tuned for future reports.

Note:  This report is for subscribers only. » Read more

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Pompous Prognosticators

Tuesday, October 28, 2008, 3:06 PM

This is a post from last April that I want to bring back to the forefront.


Below, I've liberally excerpted from an article I read a couple years back that always stuck with me.

Since our challenge today is to know whom to trust and which story to believe, I thought I'd bring this one
back to the forefront, because the parallels are so striking between the late 1920's and now.

Below is a graph of the Dow Jones during the years of the 1920's bubble, the stock market crash of 1929, and the onset of the Great Depression. The numbers in bubbles indicate when one or more quotes from a famous expert were captured.

I happen to believe that we are somewhere between points #8 and #18.

I get chills every time I re-read them... » Read more

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International instability

Monday, October 27, 2008, 9:06 PM

As bad as the US is, there are worse problems elsewhere.  This is why I think this credit crisis will not play out like any previously and why I think there's a better than even chance of a systemic banking crisis.

In times past when a country experienced a bubble or a banking crisis, there was always a country next door that hadn't where the savvy could hide out.  Where does one hide out today?

Europe on the brink of currency crisis meltdown

The financial crisis spreading like wildfire across the former Soviet bloc threatens to set off a second and more dangerous banking crisis in Western Europe, tipping the whole Continent into a fully-fledged economic slump.

Currency pegs are being tested to destruction on the fringes of Europe’s monetary union in a traumatic upheaval that recalls the collapse of the Exchange Rate Mechanism in 1992.

“This is the biggest currency crisis the world has ever seen,” said Neil Mellor, a strategist at Bank of New York Mellon.

Stephen Jen, currency chief at Morgan Stanley, says the emerging market crash is a vastly underestimated risk. It threatens to become “the second epicentre of the global financial crisis,” this time unfolding in Europe rather than America.

Austria’s bank exposure to emerging markets is equal to 85pc of GDP – with a heavy concentration in Hungary, Ukraine, and Serbia – all now queuing up (with Belarus) for rescue packages from the International Monetary Fund.

Exposure is 50pc of GDP for Switzerland, 25pc for Sweden, 24pc for the UK, and 23pc for Spain. The US figure is just 4pc. America is the staid old lady in this drama.

Those figures in the bottom two paragraphs are quite the eye-openers. Somehow Austria's bank system loaned out 85% of Austria's GDP to emerging markets that are even now resorting to emergency measures to stem the erosion of the their currencies against the dollar.  The problem, apparently, is that these countries were loaned vast amounts of money denominated in dollars.  The faster their currencies fall, the more it costs them to pay back their loans.  
Some of these currencies have fallen by 40% in a matter of weeks. » Read more

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Coming soon! The Crash Course on DVD!

Sunday, October 26, 2008, 10:25 PM


Chris Martenson fans,

Okay, okay! We got the message loud and clear that you want the Crash Course on DVD. In fact, in the few days since the Crash Course was completed, we’ve been inundated with requests for a DVD version. I’m writing today to describe our plans to release the Crash Course on DVD and to distribute that DVD through a grassroots community effort. Here's the deal: » Read more

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Trouble In The Real Economy

Saturday, October 25, 2008, 4:38 PM

While I was driving home today, the airwaves were filled with happy news of credit markets unfrozen and signs of renewed liquidity in the paper markets.  Specifically, NPR had a 10-minute piece that was nothing but one high level money manager after another saying things were better.

Lost in this "news" was any sense that our economy is something more than the flow of billions between and among various debt markets.  The implication was clear: Now that our ability to lend more freely has been fixed, we've turned the corner.  Whew!  

Glad that's behind us!

Unfortunately, it's not so easy.  In a debt-based market economy, there are two parties involved - a willing lender and a willing borrower.  It would seem that the willing lender part is being fixed, but what about the willing borrower?

Here, the signs are decidedly less favorable. » Read more

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Now Chris Martenson needs YOUR help!

Friday, October 24, 2008, 2:36 PM


Chris Martenson fans,

By now all of you know that the Crash Course is finally complete. Hats off to Chris, who has put over four years of his life into this herculean effort. Chris has not only amassed this data and created the Crash Course; he’s also committed himself to giving the Crash Course away for free to everyone.

We hope you’ve enjoyed the Crash Course. Now Chris needs your help spreading the word. Chris is passionate about getting the message of the Crash Course out to everyone. So much so that he’s decided to forego the obvious opportunity to sell this fine work for a fair price. Instead he plans to continue giving it away for the sake of public service.

We have no advertising or marketing budget whatsoever. To get the word out, we need to “go viral” with our message, so we desperately need your help to get the word out about the free Crash Course. Specifically, I’m asking everyone to help in the following ways: » Read more

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Alert - Global markets melt down.

Friday, October 24, 2008, 7:59 AM

Hang on, it's going to be a bumpy ride.

Last night global markets sold off more than 10% in a few spots in Asia (Korea & India) and are down between 7% and 8% in Europe.

Here in the US, our stock futures are "Lock Limit Down," meaning that automatic circuit breakers have tripped, preventing any further trading. » Read more