Tuesday, September 30, 2008

A Prayer for the Future

Our Congress can spend days on spending 100 Billion on education or the war in Iraq. But yet there is no question that 700 billion spent on stuff already deemed worthless by investors unwilling to buy it, will save our bacon.

Two weeks ago there was no problem. Today we have experts from nowhere that positively state "This will solve the problem."

I question their training. Two mixed drinks and a hooker on your lap might make you a Congressman but don't make us pay for it. 700 billion dollars would buy an awful lot of infrastructure that is dearly needed by every city in the country.

We can print the money and pass the debt on to our kids, and in my opinion only a pervert could do something that rotten.

Let's face the music and take our lumps like men. We need to take responsibility for our past actions and bite the bullet. We screwed up, let this mess collapse and we can rebuild anew. We can fix it by doing nothing, don't pass it on to the next generation.

Copyright 2008 All rights reserved

Monday, September 29, 2008

Crash Defined

A crash is pretty much just a redistribution of wealth, from the rich to the poor. The very rich stand to lose 90 percent of their wealth. With the poor, 90 percent of nothing is still nothing.

The bail out is a tax on everyone in the country ranging from $5,000 to $20,000 depending on the fool talking. For a family of 4 that’s $20,000 to $80,000. If you consider that 3/4ths of the population pay little tax, this is going to be a very heavy wagon to pull.

If we do absolutely nothing to fix the mess, there will be a blood bath. The top 10% of the population get their lunch in Spades. After that, Mr. Rich guy is going to be looking for a job.

This doesn’t mean that we silver foxes walk away Scott free. We are going to get burned badly. That would have happened after the bail out failed anyway. We can’t print our way out of this mess, but can't we let the idle rich implode into nothingness?

If the government wants to do something, let the house of cards collapse. Then print money to keep people in food and shelter; this is a transfer payment I understand (plus it is a government responsibility). There should be no bail out support for the super rich. Paulson kiss your absurd 700 million dollars goodbye.

This event if understood for what it is, is a great redistribution of wealth. With the government buying failed assets; it doesn’t make them worth any more. What good does it do for the government to own them? Private industry has a loss, let them eat it!

We have survived one House of Representatives vote, we need to make sure that they understand, that we understand that printing money won’t solve the problem. This cannot be pushed into the future. The money is not there even if it was an option.

If you have a moment click on THIS LINK and express your concerns to your Congressman. Do we give the rich their money back? ---Or do we say “Suffer with the rest of us!” Vote now, and write your Representative a letter. I really think that we are being listened to, take the time to give your Representative your view; we are not billionaires, just voters.

Remember one thing, for government to pay the bills, we the people have to earn it. There are no quotes around the word earn. This next election could be all about, “Toss the Bums Out.” We don’t need a President as much as we need Congressmen that have some testosterone.

Please do me a favor and click on the link and give your Congressman you view, we can’t print our way out of this mess.

Copyright 2008 All rights reserved

Sunday, September 28, 2008

Bailout Mystery--It's the Retirement Funds

All of a sudden we need 700 billion to save us from impending doom? Everyone up on the Hill in Washington understands what is going on. You’d think that they would explain what changed their minds to make them go along with this bailout. Plus you'd like to think that they would inform us of the problem. All you hear is that this will put confidence back into the financial system. People will be able to borrow again. The last I heard, it’s hard to force someone to borrow money if they don’t want to. It’s a little like that saying, ”You can lead a horse to water, but you can’t make him drink it.”

We know two things. This action is going to restore confidence and the perceived problem is simple enough for a Congressman to comprehend. The impending calamity has to be big, simple to understand and easy to project the outcome of impending doom without creating a general argument.

Our government is already insuring the banks and anything else on Wall Street that sneezes. The housing market, they bought it. But there is one thing that hasn’t been touched and it fits the description above, Retirement Funds.

From my understanding, retirement funds can project out what will be drawn from the fund and can buy complex financial securities that guarantee the desired cash flow for future redemptions. This way they keep fully invested. This model could have a severe break down if the complex financial securities lock up and cease to be fungible (can’t be sold). In this situation, the fund would be forced to sell stocks to raise cash for retiree redemptions. I would suggest that Ben and Paul have been getting calls from retirement income funds advising them that the present situation is in an extremely bad way. It seems to follow that many of these funds could have been burned holding hedge funds to boot.

Here is a link to an earlier post of mine from last year with some background on mutual funds. It gives more information on the holdings of these funds and the redemption criteria.

Maybe the government is about to supply the needed liquidity for the retirement funds to cash out a lot of their bad paper. The Fed is probably hoping that the people cashing out will be putting the money into a FDIC insured bank, which is good for the economy. This increases the money supply and helps keeps interest rates absurdly low.

Why the panic in Congress? We probably have a full blown RETIREMENT FUND RUN IN PROGRESS. A lot of Silver Foxes could be quietly withdrawing their retirement funds to safer places. I think this is Ben and Paul’s little secret. If a retirement fund fails, it could start a major panic of redemptions. And if you read the link, you know that the funds own 23% of our stock market. A sell order of that magnitude could be “Game over” for stocks.

This could be an interesting week.

Copyright 2008 All rights reserved

Friday, September 26, 2008

Squirrel Economics 101

Imagine a group of squirrels saving nuts for winter and depositing them in a bank (one nut one credit in their account). Let’s imagine that a truck pulls up and helps themselves to 80 percent of the nuts. The bank now has a problem. It can’t cover all of the deposits. But notice, if there isn’t a run on the bank, there is no real problem. Squirrels are depositing and withdrawing nuts with no problem.

In this little example even if there was some form of bank insurance, what ever it was, it could not replace the nuts (their winter food supply). The amount left for all of the squirrels is pretty much set to the 20% remaining plus net deposits made until winter. In this case, there is no inflation (you cannot print the squirrels food supply). The squirrel has no idea of the life or death consequences of what the bank has done until winter arrives (retirement).

The real estate market is the truck that pulled up to our personal savings and looted the bank. In this case, we have government insurance to “make us whole again.” The money taken was spent. Notice that every dollar deposited had to be worked for (a squirrel nut).

Labor created some product. By not consuming this nut and saving it, you were putting this towards retirement consumption. The money from the boom (real estate loans) was spent on many lavish toys and is forever gone. Now we have financial institutions with only 20% of capital left. In actuality, there is only 20% of product produced left (the nuts). The rest has been consumed. It is rather academic whether or not the government prints more money to make us w(hole) again.

We have a choice, leave the banks with the 20% which will buy the 20% of produced product left or we print enough money to restore everyone’s bank balance.

I am sure this little analogy could get me shot again or could be picked apart easily. I present it as an illustration of how money relieves us from the bother of having to barter for services and goods. Once you accept the convenience of money vs bartering, the concept of just printing it, is the equivalent to stealing.

So if you are a squirrel, “It’s grab your NUTS and RUN!

Copyright 2008 All rights reserved

Monday, September 22, 2008

The Bail out Simplified

Here's my guess of what is being told Congressmen

Worst case Scenario:

If we do nothing and let the market take its course, people with debt would pretty much have 90 percent of it forgiven and those with savings would lose a big portion of it. The debtor would get title to their home for almost nothing and their debts written off. The unemployed would still be giving their house back to the state for unpaid taxes. The banks drop dead and the economy attempts to rise from the ashes. With 11 trillion in debt the government collapses.

Bail Out Scenario:

Debtors would still have to pay their bills on the books and our savings would only be diluted 50% for now and probably the full 90% when the whole thing unravels. A person with a retirement plan or bank savings, would recover half for the present. Government stays intact. Benefits paid out drop to zip. Social Security and health care reduced drastically.

In my opinion, this bail out is an attempt to preserve the current debt structure (what’s left of it). Government figures that it is better to buy the crap that is already spoiled and try to harvest what can be saved. This is what is being fed to Congress and it might not be the whole picture. Most of the interest only loans haven’t even started to reset. So the bail out could balloon drastically.

My view: We could come out OK by doing nothing. I’m just guessing that maybe 75% of our problem debt is foreign held. So everyone gets their house paid off and debts forgiven; that’s a good thing. The banks don’t collapse but the dollar goes to hell. That’s really not a problem; the rest of the world takes the proverbial “hand basket to hell” group charter. Look for inflation at 15%. Even with severe inflation, our government could afford to cover limited Social Security and some retirement benefits. Joe 6 pack makes out like a bandit and the "Real Rich" join the "Not so Rich" (call it tough love). The real loser here could be the stock market; it still stands to lose 60 to 90% either way.

The one thing I like about doing nothing is that it gets rid of the 75 trillion dollar derivatives market. That turkey is a bill that will never be paid. Let’s try to keep it that way.

As a footnote, I could be off by a country mile. This is what blogs are all about, we try to anticipate the future not report about the past.

Copyright 2008 All rights reserved

Sunday, September 21, 2008

Wall Street to Close

Paulson and Bernanke can pull the strings and control the banking and financial markets, but they really can’t do much with the stock market without destroying it. Even in a poker game, change the rules in the middle of a big hand, the game is pretty much over after that, you're going to lose.

Foreign investors will be repatriating their funds back to the homeland next week. We were nice enough to insure everyone. It’s called the “Leave no foreign investor behind" plan. The international value of the dollar (the soon to be American Peso) is in question right now. The Treasury auction this Tuesday could be an eye opener. One percent interest when you’ve just written a blank check (backed by the full faith and credit of a printing press) seems a little paltry.

Cash is being sucked out of the country. It might be possible for Congress to save our FDIC insured accounts and maybe the private 401K retirement plans. But we can’t be the lender of last resort for the whole planet. The rest of the world has to take a big hit in order for us to survive. Here’s hoping that Congress drags their feet on this bailout (give the foreign banks some time to collapse).

Over the last 6 months, we have been watching mutual fund runs, bank runs and hedge fund runs. They have all been controlled by Ben and Hank with massive cash infusions. Wall Street is a different animal, it can't be controlled in the same manner.

This week, look for a serious drop in the DJIA of 4,000 to 6,000 points and the close of the stock market for a week or two. Never happen? Well it happened in 1914 for 4 months. Several things are at play and things are snowballing at a fast rate. Major market-makers for the exchanges might be real scarce. Most people have sensed something is seriously wrong with the markets and are heading for the exits (even the President said so). With the automated computer trading system in place, this could be very fast and furious,--sleep late and wake up broke.

Monday morning at the brokerage houses you’ll hear; “Sell everything; I didn’t sleep a wink the whole weekend.” It will be a group effort. The weekend to weekend adventures of Bumbling-Ben and Monkey-Wrench-Hank have stressed everyone passed the breaking point. If it isn't in your wallet, Ben gets to spend it!

Copyright 2008 All rights reserved

Friday, September 19, 2008

Interest Rates are the Key

A government spokesman today said something that made everything click together. The statement went something like, “We don’t have to sell this stuff, we can wait until it matures and get the full value.”

With mutual funds and retirement plans, they both buy long term bonds that could mature 15-30 years out say paying 3% interest. If a fund has a lot of redemptions, the problem arises of raising cash. Selling bonds in an illiquid market is not easy. The standard procedure is to discount the face to make it attractive to investors. A 100K 2038 bond yielding 3% if discounted 50% would be sold for 50K and pay 6% interest. In 2038 you would get the full 100K. So if a fund needs money today, they discount the bond until they get a buyer. That is not happening.

The bonds are not being dumped on the market. I could be wrong, but what if the Fed is buying them and redeeming them possibly in full, to “put liquidity” back into the market? Our Government is going to hold them and get the full value when they mature.

The thing to realize here is that if this stuff was allowed to be dumped on the market, the yield on 30 years bonds might jump to 20%. That is not happening. The Fed is “saving” us. Isn't inflation at about 10%? Nah, it must be my imagination.

The neat thing about interest rates, the current price of a bond is very easy to determine, if you know the rate the bond pays, and the current interest rate. Divide the smaller interest rate by the larger one and multiply that by the face amount of the bond. That would be the current sale price on a 30 year bond. The closer the bond is to the redemption date the more they approach the face value. So if you are holding 3 month T-Bills this won’t even bother you. Waiting 30 years for your cash back is a lot of water under the bridge.

Step back for one moment and look at the national debt. Figure it is somewhere between 6 and 10 trillion dollars. What would be the interest payment on the national debt if long term rates went to 20%? Do you get the feeling that high interest rates could be the punishment that the Fed is trying to avoid at all costs? Could we afford to pay 500 billion to one trillion in interest each year on the debt? Even your Congressman can understand the math here.

I remember people saying “Housing prices will always go up.” I haven’t heard that in a while. Have you heard this one,”When capital is scarce, interest rates rise.” Could it be the problem isn’t really liquidity? Maybe interest rates are way too low. How could that be????

Common sense dictates that there is no reason to put money in a retirement fund if it’s losing money or if the banks don’t pay any real interest. Why not just spend it? People could turn to gold as an investment option. The government might have to once again make gold illegal to own.

I guess, we all need to tune into the Ben and Paul show on Monday to see what we bought over the weekend.

Copyright 2008 All rights reserved

Government Yells "FIRE" in Crowded Movie Theater

Stock market is going ballistic. It might just be time to head for the exits.

Wednesday, September 17, 2008

FDIC Assurance Insurance, a Failure

Federal Deposit Insurance is flawed. The original purpose of the insurance was to keep people from making a run on a bank or banks. It was to give people confidence in the system. Their savings would always be there and were safe. If you update that statement to the present day world, the word “safe” needs quotes around it.

Well, the system works for the United States and anyone else in the world that wants to open up an account in a US bank. The depositor is insured for 100K. The reason our interest rates are falling, is that the rest of the world wants our bank insurance (if you buy T-Bills there is no 100K limit).

In the 1930’s the collapse of the banking system reduced the money supply and interest rates rose. Remember too, the dollar was pegged to gold so a high interest rate for the time would have been about 4 to 5 percent. The wealth of the nation dropped 80 percent. A run on the banks dries up liquidity. The result, less money in circulation.

In today’s world your money is insured but that is really quite misleading. The banks are not collapsing because of runs. This time it is a lack of liquidity from very poor investments. The bank depositor will get his dollars back, but their redeemed funds will purchase a lot less than when they were first deposited.

With FDIC insurance, the bank money in circulation is guaranteed to remain the same. The depositor will be made “whole.” If this plays out the same as the 1930’s, a 100 dollar bill will lose 80% of its purchasing power. In this case there is no run on the bank but the effect is the same except for one thing you are not waiting in line. More money is printed to replace the money lost. The guy in 1930 lucky enough to draw his funds out of the bank had real buying power. It’s not going to work that way for us. FDIC insurance a socialistic approach to modern banking, enjoy the haircut!

The one place that the contraction cannot be controlled is in the investment markets. Look for the collapse of the stock market. This could contract drastically. The thing to understand here is perceived value. If you need cash fast, perceived value is the price you can sell it for. It does not represent the true utility of the instrument. IBM at $10 dollars a share has the same ownership value as the same share selling at $130.

In normal times a stock going to one dollar indicates a stock in BK. In distressed times, it would more often suggest not much market interest for the product or a hell of a lot of shorting. There will be some money to be made here. This time however, the aspect of the FDIC keeping depositors whole will make bargain basement priced stocks a hedge against inflation.

Here is your program guide for the DJIA market for tomorrow, it could prove interesting

Dow 2000 anyone???

Copyright 2008 All rights reserved

Tuesday, September 16, 2008

House of Cards is Falling

The Fed has loaned money where no banker would venture. They have bought the rights to something that has already been paid for once.

Is it 70 billion dollars per week now. It looks like we are the lender of last resort for the whole damn world. Big money is moving out of town and out of country.

Two percent interest and 10 percent inflation. Sounds like the big boys are so paralyzed that they are about to wet their pants. There certainly isn’t a shortage of available cash, if there was, interest rates would have to move up.

Sackerson and I have been trading off on this; Low interest rates vs. High interest rates.

Doesn’t seem like much of a problem with low interest rates. My contention is that no one at the passbook level knows the score. They are all broke and don’t know it--nothing has been marked to market yet. If it had been, it would be pure carnage.

You can argue that everyone is “insured” at the banks. But they are only printing money to replace spent money—that’s called inflation. One money market fund yesterday froze withdrawals because the fund value dropped below the par of one dollar. Is your fund insured by AIG?----- HMMM?????

Nobody is lining up at the banks, everyone is insured. 10-30 percent future inflation and you get 2% interest to boot (what a deal). Gold and silver sure look nice and shiny now. Your money is safe; the government is printing about 70 billion a week now.

The world has lost a lot of money on bad investments. This idea that only the financial institutions lost money not the depositors is ridiculous. Somebody paid hard cash for all of this bad paper that is floating around. The money is gone but the Fed wants to keep our institutions functioning. Institutions don’t lose money only the depositors lose money. There is no math involved in that statement.

What happens next? There are several thousand banks world wide that are in bad shape. It’s very peculiar that there haven’t been any big bank failures in Europe. Maybe they just got bailed out with the AIG loan.

Ask yourself one question. You move 70 billion dollars from nowhere to somewhere to fix a financial problem and no one even had to vote on it? Congress is out of the loop. Hell, the Fed could fix the California budget with just 8 billion. They would be supplying payroll money; not buying what has already been sold and deemed worthless.

Denninger’s post today suggests that maybe the hedge funds are running interference on all of this and making a bundle on the sideline. No argument with it, but it kind of demonstrates that several different players may be doing different things at the same time. Nobody said you couldn't make money on the Feds stupidity.

The idea that things get better from here is a real pipe dream. Look for the government to change the rules on investing. The market is collapsing. There was never any argument over the whole mess being a financial house of cards. The funny thing, is that there still isn't, and that isn't very funny.

Copyright 2008 All rights reserved

Monday, September 15, 2008

Who's Money Was It?

The market got sick today,down 500 points. It's about to get a lot worse.

AIG needs 40 billion dollars for cash flow. Kind of makes you wonder where you would get that amount of money or why you would need that much. That is twice what our three major car companies are worth in stock value.

A tremendous amount of money has vaporized and who has lost it is still a question. I submit that we know who lost it and it wasn't Joe Six Pack (Joe's never saved a dime in his life).

The Fed is going to meet tomorrow to discuss lowering the Fed Funds rate. Could be a real waste of time. Look for world interest rates to jump up to 10 to 15 percent in the very near future.

Previously bought 30 year Treasury Bonds could be discounted drastically to raise cash. Could be a real buying opportunity.

Cash is king. Notice how little of it is around. Those companies that don't have it, are biting the dust. The money that has been lost, has been lost by people with savings. So far, only banks and financial institutions have lost money. Just wait till you get your retirement bank statement at the end of the quarter. You'll notice the money they lost, was your money.

Copyright 2008 All rights reserved

Saturday, September 13, 2008

The Mortgage Based Securities Fire Sale

Today's Wall Street Journal (Saturday September 13 page B8 and B9), under legal notices there is a rather large group of Mortgage Pass Through Certificates up for auction. Here's a snapshot of the first 30 of 132 for September 17th auction. Most of it is 30 and 40 year paper written in 2006. Double click for a bigger view.

September 15, 95 issues valued at 286 million

September 16, 53 issues valued at 118 Million

September 17, 132 issues valued at 526 Million

September 18, 21 issues valued at 70 Million

You can Google a CUSIP Number and get more info. Here is a Link that describes how they put these things together. Notice the date on the link is Oct 24, 2006. The package in the link was about 1.5 Billion. So each of the listings above is a portion of an original package. Investors were waiting in line to buy these. This particular package was made up of 1775 loans with 71 percent originating in California. These are probably loans that are about to reset---talk about bad timing.

I don't know how the auction handles bidding. I would guess that there is a minimum bid set for each security. I don't see many bottom feeders wanting to jump into this auction.

As I have pointed out before, people that need to raise cash, sell the good stuff first hoping the bad stuff improves with age. You get stuck in the end. This is stuff begging to be buried in kitty litter. You'd think that someone would mention which investment firm is in a desperate selling mood. Maybe we ought to ask Senator Schumer.

Copyright 2008 All rights reserved

Wednesday, September 10, 2008

Where is the Garbage?

Most of Fannie’s and Freddie’s loans were of the 80/20% variety or 80% with PMI. The biggest loan that they could have written in California would have been 417K. The 20% down or second would have been 104K. Out here the last 2 years, 521K wouldn’t even get you a house with indoor plumbing. Most of the stuff in this area was going for 600K to 1.2 million at the peak. So there are a lot of interest only loans that Fannie and Freddie couldn’t touch that were sold to "someone."

Add all of the real non GSE loans together and try to give it a name, it won’t be Freddie or Fannie. There is a lot of stuff floating in this swamp; HELOC’s, second trust deeds, interest only loans and other stuff with a bad fish smell. Billions of dollars worth of real estate in foreclosure are managed by local banks for owners unknown, that can’t even follow through on a short sale.

For a joke, assume 9 out of 10 banks in California are insolvent (Ben might snarf his coffee on that one). The FDIC is in no position to fiddle with foreclosures. The Feds look at the banks balance sheet and if it doesn’t pass, they’re toast, the bank will close.

Until the other day, the Fed had no structure in place to process foreclosed real estate loans. What's stopping them from transferring bad home loans at a failed bank to Freddie and Fannie? This is pure conjecture on my part. The Fed could use the GSE’s infrastructure to unwind the bad real estate loans held by failed banks. Guarantee the junk, throw it out and if it comes back, nothing lost, the Fed was already stuck holding the bag. This could add liquidity to the market, oh goodie!

One thing is very apparent. A tremendous number of loans have been written that have nothing to do with Freddie and Fannie. This doesn't even include outright fraud which could double the size of this mess. But yet only 11 banks have failed? Common sense suggests that this is absurd. Two of the biggest real estate conduits have been taken over??? And the banks had no part in it? Then there was Bear Sterns and Countrywide; they are long gone and forgotton. All of these institutions were upright solid pillars of the community one day and bankrupt the next. Do you get the idea that we are being supplied with "very selective" information?

The government guarantee has taken the risk out of mortgage securities. Fannie and Freddie are going to be force fed new loans to “stimulate” the housing market. That’s probably why they were taken over in the first place; they stopped buying the real crap (if the GSE’s don’t buy it, the Fed gets to eat it when they close the banks).

The Fed confiscated Freddie and Fannie and everyone that had a short position got paid 6 dollars a share. Of course if you owned the stock, it was your 6 dollars that got kissed good-bye. After an event like that, why own any bank stock? The rest of the world probably feels the same way towards U S real estate paper. This is their second chance to get out. It didn’t take a hurricane to create this mess, but just look at the damage.

The smell of garbage is real. August 8th I blogged about how Freddie and Fannie faced bankruptcy in the distant future. Now Bloomberg runs an article saying how obvious it was. I contend it wasn't a damn bit obvious until last Friday, plus the article has very little real anchorage in fact. The GSE's have a problem that is in the future. The Banks have a garbage problem that encompasses 70 to 90 percent of the banking complex TODAY. This crap is on their books and it isn't going away. Fannie and Freddie are country bumpkins compared to this crowd named "Slick" and "Double Dip." The banking system is on the verge of imminent collapse.

Of course there is no reason to start a panic; it would just make things worse sooner. The real problem is, foreigners are liberating their capital back to the motherland. (How can that be?)

Here's hoping that your medical plan allows for "Mind expanding drugs." You'll need something to cheer you up as things get worse.

Copyright 2008 All rights reserved

Saturday, September 06, 2008

The Gilding of Freddie and Fannie

The Federal Reserve is going to save Freddie and Fannie? It’s a little like taking your wife in for a brain transplant. She'll argue that it's not really that necessary. Do you get the idea that Bernanke is up to something?

It seems quite suspicious that Fannie and Freddie are really that bad off. They might hold some bad paper, but they probably don’t hold a large amount of crap (second trust deed and interest only loans). This seems more like a ploy to prime the pump for financing housing loans. A government guarantee of Freddie and Fannie gives their paper, grade A investment quality. It's called gilding the lily. Two years from now, this could be reflected upon as an incredibly stupid idea (if the housing market loses another 20 percent of value, the taxpayer could be caught holding the bag, not Freddie and Fannie).

The Bernanke-Paulson Car-Wash-Fund-Raiser for Freddie and Fannie is a last ditch effort at getting funding back into the housing market to keep prices from further deteriorating. So far the antics of this dynamic duo seems to have had little effect. Their dropping of the Fed Funds rate did little to keep the mortgage rates down. Home loans are at about 7% and creeping up. There are no home buyers.

The banks right now, are still Bernanke’s real problem along with other financial institutions like the hedge funds. Most FDIC insured banks that need cash, raise interest rates. The depositor gets a better deal than T-bills (ING bank is now offering 4% interest). If the bank goes belly up, the Fed gets to pick up the tab. It’s a win, win for the bank. With all of the junk written out here in Kalifornia, you would think that most of the banks in this state, would be on the Feds watch list. This money wasn't pulled out of thin air.

The next two weeks could prove very interesting. Interest rates should continue their trek upward. The Asian stock markets appear to be collapsing and it could spread to our markets. What seems to be very apparent, is a continuing contraction of the money supply. Throw in one or two hurricanes and a bank closure or two, that should keep the election off of page one.

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