Oldtent Archives 2007 - 2008

Dear Comrades In Golden Arms,

Things are now “Out of Control.”

This international financial crisis is now out of control as the world asks if the USA has two presidents, one president or no president at all.

It would appear that Paulson is in financial control with Bernanke as his second.

I warned you by personal email long before the statement was proven totally correct that “This is it.” That was followed by “This is it, and it is now.” Many people laughed it off.

This is it, and it is now.
Now it is out of control.
Now we enter the Collapse of Confidence period.
Then we begin the Weimar Experience.

It has all hit the fan, and still the absolute majority have no clue. The OTC derivative dealers broke the system into millions of pieces of glass. This broken glass cannot be put back together.
It is heart rending to see a picture of GM autoworkers holding a prayer meeting for their retirement funds. The retirement money was never funded. It is a lost hope. This is another responsibility the government has undertaken that is going to go wild.

Those of you still in freeze frame are headed for lines around your bank. Your bank will likely be acquired by another bank that also is in deep trouble.

The US dollar, like a leaderless company, will lose its respect and therefore value.

In order of importance the following MUST be done unless you want to be one of the suffering masses that will be all too visible this winter:

1. You must have your assets held anywhere they are in true custodial-ship accounts. That type of account at a bank or broker states clearly that the assets held there are not on the balance sheet of the host financial entity. Those assets are clearly segregated in your name. This must be reviewed by counsel to be sure you have what you think you have. Don’t cheap out. All you have is depending on the validity of true custodial-ship accounts.

You cannot know all the banks are broke, however I feel ALL banks are broke because finance is an intertwined system that if visible would look like a spider’s web. Problems on the top will materialize all along the web. Therefore the singular most important step you must take is the establishment of a true custodial-ship account.

Do not assume you have this type of account unless a competent attorney reviews the account papers.

2. I am extremely concerned about those of you who persist in holding certificates for gold rather than holding the actual metal either delivered to you or held for you in a true custodial-ship type account. The scams out there in gold are plentiful. The only way to avoid these scams absolutely is to have your gold in your own possession.

Every other means of holding gold is steps away from perfection. Some will be ok, but many will not.

3. Why would anyone fail to either take paper certificates or order their financial agent to make direct registration book entry at the transfer agent? In most cases you only have until year-end to accomplish this strategy.

4. Withdraw from ETFs.

5. If you carelessly keep large assets with your broker you are as mad as a hatter. The FDIC DOES NOT have the money to guarantee all they are undertaking. Withdraw excess money constantly from any net broker. If you are so stubborn that you think you can trade to insure yourself when your funds are not making money while still getting your money that counts you are nuts. Admit to yourself you are nothing more than a gambling addict in a downward spiral.

6. Leave no gold or coins with any coin dealer.

7. If you can withdraw from your corporate retirement plan do it.

8. Withdraw from credit unions.

9. Withdraw from all money market instruments.

10. This is it.

11. It is now.

12. It is out of control NOW.

The next two months are going to be shocking, but nothing compared to what you will have to experience in 2009.

Respectfully yours,
Jim

Price = Time ^ 2 = Time Squared

So .. given arbitrary Price at time ( day, week, month, decade, century .. )

the Square Root of the Price “seems to be related to Cycle ( time) Length” and seems to be independent of the ” Time Unit ”

2_p .. { Time Unit }

See DeCoding_Ferrera - 4 .. because much of the following is similar

From: Daniel Ferrera Sent: Tuesday, June 26, 2001 11:10 AM Answer:

http://www.sacredscience.com/ferrera/FerreraForecast.htm

The 1X1 angle coming down from the 5/22/01 top would drop at the rate of 1.987 points per day (Root of 1316 = 36.276 - 1 = 35.276, re-square = 1244.44. 1316- 1244.44 = 71.55 divided by 36-days = 1.987/day).

July 12th is 51 days from May 22nd. Multiplying 51 x 1.987 = 101.36.

Therefore the 1 X 1 crosses (1316 - 101.36) = 1214.63 on July 12th.

The 60-deg angle would cross at 1180.88 (1.987 divided by 45 = 0.04415 price/deg ratio multiplied by 60-deg = 2.649 points/day X 51days = 135.116 points subtracted from 1316 = 1180.88).

This is a price angle that the market must regain to put it back in a more positive position.

The 67.5 degree angle crosses at 1163.99 on July 12th. This would be the next support line if 1170.84 does not hold because1164.73 is 180-deg to 1530.09 and 1165.84 is 135-deg to 1397.88 (Sun adjusted price) so we have 3 hits in this price area.

DeCoding the above :

$SPX&p=D&st=2001-03-01&en=2001-07-12

a = 1316 = High Price on 22-May-01 .. NOT Stated “ ( This is where the Local Downtrend started ) ”

b = SQRT( a ) = SQRT( 1316 ) = 36.277 .. [ Time = Square Root of Price ]

c = 36 … for some reason 36.277 is rounded down to 36

“ So we look for market turns every 36 days. ”

Determine Number of Cycles between Date of a and Target Date

d = 51 = Days between Dates 22-May-01 and 12-Jul-01( The Target Date )

e = d / c = 51 / 36 = 1.41666 .. [ NOTE: curiously near SQRT( 2 ) = 1.41421356.. ]

e = 1 .. … for some reason 1.41666 is rounded down to 1

f = b – e = 36.277 – 1 = 35.277 .. .. .. [ Decrease Time by e = 1 Cycle ]

g = f ^ 2 = 35.277 ^ 2 = 1244.467 .. [ Price = { ( Time = f ) ^ 2 } ]

Define the 1 x 1 Line ( angle ) to be the line

starting at 1316 ( = a ) on 22-May-01 and

passing through 1244.467 on ( 22-May -01 + 36 Days ) =

h = g – a = 1244.467 - 1316 = - 71.758 … [ Delta Price ]

x = 48 = Days between Dates 4-Apr-01 and 22-May-01( Low to High )

y = 51 = Days between Dates 22-May-01 and 12-Jul-01( The Target Date )

m = h / c = - 71.758 / 36 = - 1.99327778 .. [ Price Change per day along the 1 x 1 Line ]

y = 51 = Days between Dates 22-May-01 and 12-Jul-01( The Target Date )

n = y m = 51 m = - 101.657

So .. price On The 1 x 1 Line on 12-Jul-01 is

p = a + n = 1316 + ( - 101.657 ) = 1316 - 101.657 = 1214.343

m = Price Change per 45 °

q = m / 45 = ( - 1.99327778 ) / 45 = - 0.04429506 .. [ = Price Change per Degree ]

So .. Dropping along the 60 ° Down Line implies a 12-Jul-01 Price =

r = a + y ( 60 q ) = 1180.457 .. .. ( Ferrera indicates number = 1180.88)

So .. Dropping along the 67.5 ° Down Line implies a 12-Jul-01 Price =

s = a + y ( 67.5 q ) = 1163.514 .. .. ( Ferrera indicates number = 1163.99 )

2_p .. {DeCoding_Ferrera – 5 } { I did not get the exact same number Ferrera got }

{ The 1 x 1 Line Defines All other Lines }

“So we look for market turns every 33 days”.  Thanks.  now I have some inkling why my holdings of stocks in PMs, copper, uranium, molybdenum, and natural gas have kept going progressively down since the  spring of 2006. It seems that if  they are turning direction every 33 days, they seem since spring 2006 to always go down more on each 33-day turn than they go up in the next 33 day turn, resulting in a steady net downtrend.  Good analysis here that helps me understand how our family investments are being decimated.   [G].   Cheers.  Equiz.

http://stockcharts.com/h-sc/ui?s=$GOLD:$WTIC&p=M&yr=20&mn=0&dy=0&id=p12261687231&a=124516195

See DeCoding_Ferrera - 3

From: Daniel Ferrera Sent: Tuesday, June 26, 2001 11:10 AM Answer:

http://www.sacredscience.com/ferrera/FerreraForecast.htm

Using the angle projection technique from 4/4/01 (This is where the up-trend started), we get the following:

The root of 1092 = 33.045. So we look for market turns every 33 days.

July 12th is 99 days from April 4th ( 3 x 33 = 99).

The 1 X 1 angle would cross the price of (root of 1092 = 33.045 + 3 = 36.045 re-square = 1299.27) 1299.27.

We now have a range of (1299.27 - 1092) = 207.27 points.

Divide by 8 gives 25.909 per 8th. The 3/8ths angle support line crosses (3 x 25.909 = 77.727 + 1092 = 1169.73.

If you do not understand why I added 3 to the root it was because every 33 days,

we move 180-deg in price on the Square of Nine because the root of 1092 = 33.

July 12th is 99 days from April 4th, which is the 3rd cycle of 33 days or 540-deg on the Square of Nine, i.e. (180+180+180 = 540).

DeCoding the above :

To Define the 1x1 Line ( and by default the “ angle { = 45 ° } ” )

{ If the 1x1 Line is known Then all Other Lines are Known }

a = 1092 = Low Price on 4-Apr-01 “ ( This is where the uptrend started ) ”

b = SQRT( a ) = SQRT( 1092 ) = 33.045 .. [ b = Time = { Square Root of ( Price = a ) } ]

c = 33 … for some reason 33.045 is rounded down to 33 ..

“ So we look for market turns every 33 days. ”

Determine Number of Cycles between Date of a and Target Date

d = 99 = Days between Dates 4-Apr-01 and 12-Jul-01( The Target Date )

e = d / c = 99 / 33 = 3 .. [ 3 Cycles of 33 days = 3 cycles of 180 ° ]

f = b + e = 33.045 + 3 = 36.045 .. [ increase Time by e = 3 Cycles ]

g = f ^ 2 = 36.045 ^ 2 = 1299.242 .. [ Price = { ( Time = f ) ^ 2 } ]

Define the 1 x 1 Line ( and by default angle ) to be the line

starting at 1092 ( = a ) on 4-Apr-01 and

passing thru 1299.242 ( = g ) on 12-Jul-01

h = g – a = 1299.242 – 1092 = 207.242 … [ Delta Price ]

i = h / 8 = 25.905 .. [ = Delta Price / 8 ]

j = 3 i = 77.715 .. [ = 3 Delta Price / 8 ]

k = 5 i = 129.525 .. [ = 5 Delta Price / 8 ]

The 5/8-ths Line has price 129.525 + 1092 = 1221.525 on 12-Jul-01

The 3/8-ths Line has price 77.715 + 1092 = 1169.715 on 12-Jul-01

$SPX&p=D&st=2001-03-01&en=2001-07-12

2_p .. {DeCoding_Ferrera - 4}

But the problem, I think, for the gold market, is that there are still a lot of people, and institutions, and so-called “funds” (insurance funds, pension funds, hedge funds, teachers funds, public employee funds etc.), and also a fair number of  market analysts who do not yet see gold as a currency.  Many such people, and it seems Avner Mandelman too, judging from his article that I posted earlier today, view gold simply as an “asset”  not a “currency”. 

If my memory is correct, I think Jim Sinclair labels gold as a currency, but his declaration that it is a currency, and not just another “asset” or “material”  does not necessarily make  it a “currency” in the eyes of of the deep-pocketed institutional  traders who are involved in  global currency trading. 

I think we are too early to have gold recognized as a currency.  In my opinion, if that recognition had happened by now then the current price of gold would be much higher already than it was at the close on Friday..

Just my thoughts on a quiet Saturday evening.  Equiz.

events.startcast.com/events/199/B0003/code/eventframe.asp

I like the 24hgold site!…..For those who are interested in a wealth of information….It can also be found on Jim Puplava’s page….along with Goldtent, under Internet Discussions.

http://www.financialsense.com/metals/main.html

All the best.——–aggie.

Interesting Video. Absolute Sucker play, needing a new bunch of dilutions

Don’t see how their so called ‘business plan’ could or would work.

Oh yeah, & it’s been a name changer OB stock and ‘finding itself’ seems for years now.

“Constitution Mining Corp., a development stage company, engages in the research and development, market analysis, and planning activities primarily for nickel deposits in the Nordic region. It holds a 100% interest in a mineral, and oil and gas property located in St. Francis County, Arkansas. The company was founded in 2000. It was formerly known as Crafty Admiral Enterprises, Ltd. and changed its name to Nordic Nickel, Ltd. in March 2007. Further, the company changed its name to Constitution Mining Corp. in November 2007. Constitution Mining Corp. is based in Tempe, Arizona.”

is that right??????  i can sell my green box  ( 500 silver eagles ) on ebay for over  $10,000 !!!  wow !

Downey Seized, Sold to U.S. Bancorp as Mortgage Fallout Spreads
By Ari Levy and Finbarr Flynn

Nov. 22 (Bloomberg) — Seizure and sale of Downey Financial Corp. and two smaller lenders may cost the FDIC more than $2 billion as foreclosures rise and home prices extend declines in the worst housing slump since the Great Depression.

U.S. Bancorp acquired Downey and smaller PFF Bank & Trust, California thrifts crippled by bad mortgages, yesterday in a deal brokered by the Federal Deposit Insurance Corp. Community Bank of Loganville, Georgia, was also closed and its $611.4 million of deposits taken over by Bank of Essex in Tappahannock, Virginia.

Regulators this year have closed the most banks since 1993 as mortgage defaults and tightening credit froze markets. The collapse of IndyMac Bancorp Inc. was among the biggest in history, costing the FDIC $8.9 billion. The agency expects Downey’s demise to deplete its Deposit Insurance Fund by $1.4 billion, with PFF costing $700 million and Community $240 million.

“The restructuring or consolidation of the U.S. banking industry has probably just begun,” said Neil Katkov, senior vice president of Celent, a Boston-based financial research firm. “There’s a whole world of potential mergers and acquisitions that will continue to emerge like these one.”

Downey Financial, based in Newport Beach, California, lost about $680 million on mortgages in the past five quarters. The lender is the last of the five biggest sellers of option adjustable-rate mortgages to fail or be sold.

Those loans, which let borrowers defer part of the monthly payment and add it to the principal, leave banks vulnerable to defaults when housing prices fall because the size of the mortgage can rise beyond the value of the property.

‘More Trouble’

“We’ll probably see more regional and community banks get into trouble,” Katkov said.

Loans no longer collecting interest surged to 15.7 percent of assets from 2.9 percent a year ago, Downey said Oct. 22, in reporting an $81.1 million third-quarter loss. At the end of the previous period, Downey held $6.9 billion in option ARMs.

Housing prices in California declined by 41 percent in September, the 12th straight monthly fall, the California Association of Realtors said in October. In its annual housing forecast, the group said home prices in the state will drop another 6 percent next year.

“With the deterioration in the economy and especially the California economy, it suggests even more losses are coming” in Downey’s portfolio, James Barth, former chief economist at the Office of Thrift Supervision and professor of finance at Auburn University in Alabama, said in an interview before the takeover was announced.

California

For Minneapolis-based U.S. Bancorp, the takeovers add approximately $12.8 billion of assets and $11.3 billion of liabilities, the bank said in a statement. The lender’s share of deposits and network in southern California markets more than doubles, with 170 Downey branches in California and five in Arizona, along with 38 PFF Bank California outlets.

Bank of Essex will buy about $84.4 million of failed Community Bank’s $681 million in assets, with the FDIC retaining the rest for later disposition. It paid a premium of $3.2 million to assume the deposits, the FDIC said. Community Bank’s four offices will open Nov. 24 as Bank of Essex branches.

The FDIC oversees 8,451 institutions with $13.3 trillion in assets, and insures deposits of as much as $250,000 per depositor per bank and the same amount for retirement accounts. The agency has proposed doubling premiums charged to banks for coverage to replenish its reserves amid agency forecasts that bank failures through 2013 will cost almost $40 billion.

‘Problem’ Banks

The FDIC in August said 117 banks were classified as “problem” in the second quarter, a 30 percent jump from the first quarter. The agency, which doesn’t name “problem” lenders, will update its assessment on Nov. 25 while reporting on the industry’s third-quarter financial results.

“Earnings will again be substantially below the prior year,” FDIC Chairman Sheila Bair said yesterday in a Baltimore speech. “But despite the problems facing our economy, the vast majority of banks remain well-capitalized, profitable, and in sound condition.”

Washington Mutual, the biggest savings and loan, sold its assets to JPMorgan Chase & Co. Sept. 25 after customers drained $16.7 billion in deposits in less than two weeks. Wachovia Corp., the sixth-biggest bank, was pushed by regulators to sell itself to Wells Fargo & Co. for $11.7 billion or face collapse.

The Treasury bought preferred shares in nine banks: Wells Fargo, JPMorgan, Citigroup Inc., Bank of America Corp., Merrill Lynch & Co., Morgan Stanley, Goldman Sachs Group Inc., Bank of New York Mellon Corp. and State Street Corp.

Option-ARMs

Separately, Hartford Financial Services Group Inc. and Genworth Financial Inc., two of the world’s biggest life insurers, are planning to acquire savings and loans. Lincoln National Corp. and Aegon NV, owner of Transamerica Corp., are seeking status as saving-and-loan holding companies. The insurers are taking the step to improve their chances of tapping the U.S. rescue package.

Downey was fourth biggest seller of option-ARMs, ahead of IndyMac and behind Wachovia, Washington Mutual and Countrywide Financial Corp., now part of Bank of America Corp.

Downey named Charles Rinehart chief executive officer on Sept. 22 to help orchestrate a rebound. Rinehart, 61, assumed the duties of Thomas Prince, who was interim CEO since July when Daniel Rosenthal stepped down.

Co-founder Maurice L. McAlister quit as chairman the same day Rosenthal — his son-in-law — lost his job. His daughter Cheryl E. Olson retired as vice chairman in December 2007. McAlister had helped run the bank for 50 years after establishing the business with Gerald H. McQuarrie, who died in 1992, according to the company.

Downey Savings and Loan opened its doors in 1957 with an office in Downey, California, in Los Angeles County.

NEW YORK (Reuters) - The troubles at E*Trade Financial Corp  have worsened and now hinge on whether it can secure U.S. government funds that would bring some relief to its book of bad mortgage loans.

Shares of the discount brokerage tumbled below $1 to its lowest price ever this week, indicating that investors think chances are slim it will secure the $800 million it applied for under the Troubled Asset Relief Program (TARP) rescue program.

Competitors, including Charles Schwab Corp and TD Ameritrade Holding Corp, have said they are loath to bid for the smaller and now very cheap company, but have made no secret they covet E*Trade’s brokerage business, which has kept it afloat despite the drag of its mortgage business.

Roger Freeman, a Barclays Capital analyst attending a business update hosted by Schwab this week, said E*Trade’s existence “depends on whether it gets the TARP.”

E*Trade’s survival probably hinges more on whether its customers continue to drive growth, according to analysts. But after a string of quarterly losses, the TARP funding is vital for the near term. But there are serious doubts the company will qualify alongside larger banks whose collapse could further shake a weakened U.S. economy.

“The way the stock is trading now, it appears as though a lot of investors don’t expect them to get the TARP funding,” said one analyst, who did not want to be named due to E*Trade’s delicate situation. E*Trade Bank offers credit cards, savings and checking accounts, and mortgage and home equity loans and hash about $28 billion in deposits.

About 5 percent, or $1.4 billion, of the customer deposits are not insured by the Federal Deposit Insurance Corp, according to the company.

The purpose of the government’s TARP program is to capitalize struggling financial institutions so they can resume lending. Some analysts said it is unlikely that E*Trade, in crisis mode, will be able to lend.

“Inherently, it seems to go against the spirit of the TARP program,” the analyst said of E*Trade’s application.

The company’s argument for public funds focuses on the fact that TARP is partly intended to support those institutions that facilitate liquidity in the market.

E*Trade has said it is confident it will secure the funding and expects to make an announcement later this month. The company has $665 million in cash available to increase the capital of its banking arm if necessary.

Last month, E*Trade’s daily trading and new client accounts both jumped from September, due largely to the volatile market selloff. “Customers have been consistently supportive of our business,” said company spokeswoman Pam Erickson.

WORST-CASE SCENARIO

Overall, discount brokers are enjoying a spike in trading revenues, but they face the worst-case prospect of a lengthy bear market during which individual investors could exit in droves.

“Despite the reasonably healthy trends in the core brokerage franchise, we believe continued credit headwinds, a lack of earnings visibility and a limited capital cushion for common shareholders gives us no reason to become more constructive on E*Trade shares at current levels,” Credit Suisse analyst Howard Chen wrote to clients this week.

The analyst added that because few details on the TARP application have been provided, he has not factored that into earnings estimates.

Shares fell 7 cents to 87 cents on Nasdaq on Friday.

The company spokeswoman declined to comment on the stock price.

E*Trade has absorbed a series of price and ratings downgrades since the last quarterly update, when it boosted its provision for loan losses by 62 percent and warned that charges in its home equity portfolio would be higher than expected.

The company had $26.4 billion in total loans — including consumer, mortgages and home equity — on its books at the end of September, with about 3 percent, or about $792 million, considered “nonperforming”.

TELEBANC ACQUISITION

E*Trade, a high flyer in the 1990s technology boom, entered the mortgage business with its 2000 acquisition of Internet bank Telebanc.

The deal helped E*Trade weather the tech-market crash that followed, but also hurt when the mortgage market started to crack last year.

As recently as July, 2007, E*Trade shares were worth more than the stock of both Schwab and Ameritrade. But they plunged as the mortgage portfolio soured, and now the larger rivals are eyeing the healthy segments of E*Trade’s business.

If E*Trade fails, some 4.4 million retail accounts would be exposed, opening the door to a possible government-sponsored takeover intended to protect clients, analysts said.

“We have an interest in the brokerage accounts of any of our competitors in the brokerage business,” Schwab Chief Executive Walter Bettinger said this week. But he added: “We do not have any interest in taking on a complex balance sheet issue, a complex set of loans or securities that will require … massive work-outs, writedowns and impairments.”

E*Trade had $119.4 billion in total assets at the end of October, of which $16.4 billion was brokerage-related cash.

E*Trade has “a very good brokerage operation,” Toronto-Dominion Bank (TD.TO: Quote, Profile, Research, Stock Buzz) CEO Ed Clark — who also sits on Ameritrade’s board — said in an interview this week.

“But they are associated with very bad assets, and so we’re not interested to take asset risk in order to buy E*Trade.”

we all know so well–but gold is first of all a currency and only secondarily a commodity-he’s entitled to his opinion-gold should go up to $1200-$1500 within a month or two–then all world exchanges will be closed while world governments figure out how they will create new currencies.

11-22-DONLAN WRITES:
Is there a limit to investors’ willingness to buy the security of Treasury securities?

We all are looking for it. Lengthening maturities may sharpen everyone’s eyesight.

We don’t know how long investors will be as willing to swallow tiny Treasury yields as they were willing to swallow high-priced oil. We do know that we won’t like it when they finally stop and the bubble in bills and bonds bursts at last.

Any reasonable investor faced with the current market circumstances must cast a wistful eye at gold. The magical metal is usually the last refuge of fearful people — not Treasury paper paying negligible interest.

But current market circumstances include a perplexing lack of faith in gold, which is off nearly a third from its record high, set in March.

The message is creepy: If gold is too expensive, what’s cheap?