To all; the largest banks in the country are getting hammered again today and are trading at multi year lows. Bank of America is receiving another $10 Billion band aid and Citi is back to where it was a month ago when it was “saved”. JP Morgan announced 7 cents per share earnings [FANTASY] a few days earlier than the expected report, I think the advance timing has to do with getting the release out before a new set of overseers from the Obama administration may or may not allow “fantasy” earnings. If every bank in the country is and has been reporting massive losses, and JP Morgan was the leader in “cutting edge” toxic investments AND was THE most leveraged of all, then they are sitting on hundreds of $ billions if not $ trillions in losses!
This credit crunch has progressively moved to more and more important institutions, 2 of the last 3 are now “fessing up” and imploding. It is only a matter of time before JP Morgan is attacked and thus the Fed. So we have the last three big U.S. institutions under scrutiny and attack and the Dollar rallies. Like I said earlier this week, huh? Can you say manipulation? It is also notable that an emergency Basel meeting has been called because THEY KNOW. They know that these banks are about to blow and something drastic needs to be done, and fast. Basel meetings are always scheduled far in advance, this time IS different.
There is also the Mexico, Russia etc. oil producing nation problem that must be addressed, crude prices MUST go higher or we will witness several sovereign failures that will lead to a domino cascade of bankruptcies. The rubber is hitting the road and hard, right now. All of the past manipulations have caused “unintended consequences” that are just now beginning to kick in full force. The perfect storm of financial collapse has been lining up for years now and appears to have assembled across the board from individuals, companies, states, and countries. All we need now is some 1st grader to appear on CNBC and say “but Mr. Kudlow, 2+2=4, they taught me this in school, why is everyone saying it is 5?”. The delusion of crap is about to be obliterated, and with it the illusion of paper wealth.
Watch the banks, the Treasury market, and the Dollar, these are going to gap down or even fail bigtime while physical metal will become unattainable and go to levels where only central banks can reach. It is this reason that I think Silver will outperform Gold, the masses will only be able to afford Silver. I will write about this subject next week. For now, hold on tight as it will be amazing what can happen in a one month period of time. Perceptions will be swept away and reality will bite hard. Regards, Bill H.