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The Great Panic of 2008 - Don Harrold


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#1 Steve Netwriter

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Posted 02 July 2008 - 10:50 PM

The Great Panic of 2008


Fiat: What starts becoming worth less eventually becomes worthless.

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#2 DrBubb

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Posted 05 July 2008 - 03:49 PM

I have time to look at this now
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#3 Errol

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Posted 05 July 2008 - 03:55 PM

The intonation in his voice and the crescendo etc. remind me of Bill Murray's final scene in 'Scrooged'.


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#4 hotairmail

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Posted 05 July 2008 - 04:53 PM

An earlier great panic...someone stocking tinned food as an inflation hedge...

http://archive.times...s-1974-11-29-02
I'm not listening to any more nutters.

There are massive and growing deflationary forces on produced goods arising from China resulting in excessively loose monetary policy in the West. We are destined to continue suffering deflation of the general price level in manufactures and serial bubbles and busts in stocks, commodities and property until the average Chinese has the purchasing power of a Westerner.
Be prepared for currency volatility and trade wars.

There is an elephant in the room pretending to be a black swan. Can you see it?

#5 DrBubb

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Posted 05 July 2008 - 05:03 PM

Hmm.

He makes a comparison to the Panic of 1907, and runs some interesting numbers;
$1 Trillion, how many homes would have to default and be lost to wipe out so much money?

(what I posted there):
"The Money ($1 Trillion) was wasted ! How:

+ Buying "stuff we don't need from China, etc.
+ Mal-investment in "Stranded" suburban homes, that at $140 oil are not worth owning.

Cheap money, speculation on housing, and misplaced confidence in the ability to maintain low oil prices, caused American to waste enormous money. Now they will pay for it in reduced living standards."
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#6 hotairmail

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Posted 05 July 2008 - 05:08 PM

QUOTE (DrBubb @ Jul 5 2008, 06:03 PM) <{POST_SNAPBACK}>
Hmm.

He makes a comparison to the Panic of 1907, and runs some interesting numbers;

$1 Trillion, how many homes would have to default and be lost to wipe out so much money?


Yes. It seems ridiculous doesn't it? I think Mr Mortgage made a similar observation a while back.

One explanation is obviously that mark to market accounting for the loss in tradable value of bonds backed by mortgages is to blame.

Another is that I read somewhere that by using bond insurance they were able to book profits for the life of bonds up front.

This means in the case of excess default they have to write off not just the value of the bonds on their books but also any profits they had booked in previous years.
I'm not listening to any more nutters.

There are massive and growing deflationary forces on produced goods arising from China resulting in excessively loose monetary policy in the West. We are destined to continue suffering deflation of the general price level in manufactures and serial bubbles and busts in stocks, commodities and property until the average Chinese has the purchasing power of a Westerner.
Be prepared for currency volatility and trade wars.

There is an elephant in the room pretending to be a black swan. Can you see it?

#7 DrBubb

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Posted 05 July 2008 - 05:35 PM

Peter Schiff's comments are interesting here, at mid-year 2008

1/
Peter Schiff Back on CNBC : July 1, 2008


2/
Some excerpts from the Barron's article, awkwardly read:
Gloom and Doom?
Nah; Just for the U.S / Peter Schiff
writes in Barrons:


3/
Peter Schiff on Bulls & Bears : June 28, 2008
http://www.youtube.com/watch?v=YIDSpIIbAnk&NR=1

Wow ! watch that Bulls & Bears sequence !
I wouldnt give those clowns a penny to manage. It is an indictment of the system that such fools
are allowed to manage money. They understanding NOTHING ABOUT CYCLES, and so spend years
operating on the wrong side of a market, hoping anf betting on things like recoveries in financials.

I hope they put their own money into these hopeless bets, then they will get what they deserve.
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#8 All Seeing Pie

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Posted 05 July 2008 - 07:07 PM

QUOTE (DrBubb @ Jul 5 2008, 12:35 PM) <{POST_SNAPBACK}>
....
3/
Peter Schiff on Bulls & Bears : June 28, 2008


Wow ! watch that Bulls & Bears sequence !
I wouldnt give those clowns a penny to manage. It is an indictment of the system that such fools
are allowed to manage money. They understanding NOTHING ABOUT CYCLES, and so spend years
operating on the wrong side of a market, hoping anf betting on things like recoveries in financials.

I hope they put their own money into these hopeless bets, then they will get what they deserve.

I watch Bulls and Bears purely for entertainment purposes! A whole host of highly paid 'experts' sprouting rubbish like buy GM and how now is the time to invest in real estate.

#9 Silent reader

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Posted 05 July 2008 - 07:50 PM

QUOTE (hotairmail @ Jul 5 2008, 05:53 PM) <{POST_SNAPBACK}>
An earlier great panic...someone stocking tinned food as an inflation hedge...

http://archive.times...s-1974-11-29-02


Nothing wrong with that in my opinion, I'm currently running down a larder at the moment and I’m not intending to "Really" go out food shopping until late august, yes of course there will be outlay on perishable items (Milk eggs meats etc) but after summer I should hopefully reap a nice harvest from "the veggie patch" ready for consumption/storage, couple this with the current "savings" from not having to go out and purchase on a weekly large scale (also allowing for more PM's to be acquired) I'll probably rebuild the store around early October in time for Xmas and winter.

I'll admit that this is the first "running down" I've done, as I have to consider the importance of "stock rotation" and not to end up wasting it.

Great link btw !!!!!

Quite an experience to live in fear, isn't it? ..................... That's what it is to be a slave.

We all have one thing in common… everyone dies, but not everyone gets to live. REVEL in your time !

#10 Silent reader

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Posted 05 July 2008 - 08:09 PM

QUOTE (DrBubb @ Jul 5 2008, 06:35 PM) <{POST_SNAPBACK}>
3/
Peter Schiff on Bulls & Bears : June 28, 2008


Wow ! watch that Bulls & Bears sequence !
I wouldnt give those clowns a penny to manage. It is an indictment of the system that such fools
are allowed to manage money. They understanding NOTHING ABOUT CYCLES, and so spend years
operating on the wrong side of a market, hoping anf betting on things like recoveries in financials.

I hope they put their own money into these hopeless bets, then they will get what they deserve.



That was great to watch, I have to admit that I do enjoy listening to Mr Schiff, would be nice to see how these predictions fair at the end of the year.
Quite an experience to live in fear, isn't it? ..................... That's what it is to be a slave.

We all have one thing in common… everyone dies, but not everyone gets to live. REVEL in your time !

#11 Steve Netwriter

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Posted 06 July 2008 - 01:28 AM

QUOTE (DrBubb @ Jul 6 2008, 06:35 AM) <{POST_SNAPBACK}>
Peter Schiff's comments are interesting here, at mid-year 2008

3/
Peter Schiff on Bulls & Bears : June 28, 2008


Brilliant biggrin.gif biggrin.gif biggrin.gif


Fiat: What starts becoming worth less eventually becomes worthless.

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#12 Ker

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Posted 06 July 2008 - 02:12 AM

QUOTE (hotairmail @ Jul 5 2008, 05:53 PM) <{POST_SNAPBACK}>
An earlier great panic...someone stocking tinned food as an inflation hedge...

http://archive.times...s-1974-11-29-02


wow! if that happend in 74, what happend in 79!!

#13 DrBubb

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Posted 06 July 2008 - 01:06 PM


THE PANIC OF 1907: Lessons Learned from the Market's Perfect Storm by Robert F Bruner
An inside look at the financial crisis of 1907 - what happened, why it mattered, and what we've learned. Intended as a warning, the Financial Times recently described the book as uncannily like reading a description of the market events of the last few weeks.

== ==

An Insightful Look at a Financial Perfect Storm, November 27, 2007
By Craig L. Howe "www.craighowe.com - Home of th... (Darien, CT United States) - See all my reviews


Shortly before 10:00 on the morning of November 14, 2007 Charles T. Barney walked into his second-story Park Avenue, took the pistol containing three bullets kept there for protection and fired one bullet into his head.

Up to that moment, he was a man of the Gilded Age. The son of a prosperous Cleveland merchant, he married into the Whitney family, was a director of 33 companies and had served as the top officer of the Knickerbocker Trust Company up until a few short weeks prior.

He had been asked to resign. The reason: early the previous month, he, along with several other New York City trust companies had funded an attempt to corner the market in the stock of a copper mining company. The attempt had failed. As word of his involvement spread, his investors and depositors panicked and started a run on his bank that would eventually lead to its closing.

The country had lost confidence in its financial system. It would take leadership, largely from one man, J. P. Morgan, to restore it.

Robert F. Bruner and Sean D. Carr take the reader day-to-day through this crisis. Beginning with the famed San Francisco earthquake and culminating with Barney's suicide, they draw seven lessons that are, perhaps more instructive today, than they would have been in 1907. They are:

1. Complexity makes it difficult to know what is happening and establish linkages that enable the crisis to spread.
2. Economic expansion creates rising demands for capital and liquidity. The mistakes that accompany those rising demands must eventually be corrected.
3. In the late stages of an economic expansion borrowers and creditors overreach in their application of debt. This lowers the financial system's safety margin.
4. Prominent public and private figures provided adverse leadership. Their policies raise uncertainty, lower confidence and elevate risk.

5. Random events shake the economy and financial system.
6. Greed becomes fear.
7. Well-intended responses prove inadequate to the crisis' challenge.

This book drips with insight. Well-written, easy-to-read, it should be read by banker, traders and students of business and economics. It is a rare dissection of how and why a panic unfolds.

/see: http://www.amazon.co...howViewpoints=1
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#14 DrBubb

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Posted 06 July 2008 - 02:49 PM

THE FORMULA...

"The point of the capital markets is to equilibrate the supply and demand of capital by adjusting the price, or cost, of capital. Like any other market, there can never be a sustained excess of supply or demand, so long as prices are freely allowed to adjust. And like any other market, to the extent that there appears to be "excess" demand or supply on a sustained basis, we can rest assured that something is interfering with the pricing mechanism. The authors fail to explore that interference.

In my opinion, it was (as it almost always is) excess "money-creation" by the banking system, which, in turn, artificially reduced the price of capital (kept interest rates too low and stock/asset prices too high), which, in turn, caused intermediaries and entrepreneurs to over-estimate the available supply of capital, creating a false sense of "buoyant growth", which, in turn, caused them to make what appears, after the fact, to have been bad (or speculative or even stupid) investments, given the real state of the economy at the time. "

From P.Graham review: http://www.amazon.co...mp;pageNumber=2
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#15 Steve Netwriter

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Posted 10 July 2008 - 12:49 AM

OK, I thought I'd check out the latest Don Harrold video.

Did Jim Cramer Really Say THAT??? NO WAY!


Yep, her recommends a segment from Jim Cramer. Worth a listen biggrin.gif

Fiat: What starts becoming worth less eventually becomes worthless.

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#16 Steve Netwriter

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Posted 10 July 2008 - 12:51 AM

Another example:

The Real Problem


http://scanwinners.com/ $74.99/month !

Fiat: What starts becoming worth less eventually becomes worthless.

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#17 DrBubb

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Posted 13 July 2008 - 11:57 PM

The Game is over : An Interview by Mike Whitney with Michael Hudson on the Economy." June 20th, 2008
/see: http://michael-hudso...20GameOver.html
"Today�s plunging real estate and stock market prices are not a self-correcting ebb and flow in which downturns set in motion automatic stabilizers that produce recovery. Each U.S. recovery since World War II has started out from a higher level of debt. The result is like driving a car with the brakes pressed more and more tightly. Alan Greenspan at the Federal Reserve flooded the banking system with enough credit to enable debts to be carried by borrowing against the rising price of homes and office buildings, corporate stocks and bonds. In effect, the interest charge was simply added onto the debt balance. But now prices are falling, leaving families, companies and many Wall Street firms with negative equity. Asset-price inflation fueled by the Federal Reserve � is giving way to debt deflation.

Today, the prospects are dim for paying off debts out of further price gains for homes and real estate. Speculators have pulled out of the market � and as late as 2006 they accounted for about a sixth of new purchases. The United States and other countries have reached the point where interest and amortization payments are absorbing the entire economic surplus of so many individuals, so many companies and so many government bodies that new construction, investment and employment are grinding to a halt. Families, real estate investors and companies are obliged to use their disposable income to pay their creditors. This leaves them without enough money to sustain the living standards of recent years � and they no longer can wipe out their debts by declaring bankruptcy as in times past, because Congress has passed the harsh bankruptcy law that credit-card and bank lobbies paid them to pass.

This means that there won�t be a rebound, and it will take longer than 2009 to recover."

Or:
iTulip Interview - March 15th, 2007
Eric Janszen interviews Dr. Michael Hudson on the FIRE economy, the dollar, asset inflation and deflation, and the economic growth ratchet.
Part I : http://michael-hudso...0315iTulip1.flv
Part II : http://michael-hudso...0315iTulip2.flv
(Flash format)
also: http://michael-hudson.com/


= 2/
2008 - God's Final Witness

From now until the latter part of 2008, many prophecies are going to begin to be fulfilled, especially the Seven Thunders of the Book of Revelation, which the apostle John saw but was restricted from recording. Those thunders are revealed in this book, as well as detailed accounts of the final three and one-half years of man's self-rule on earth, which are recorded in the account of the Seventh Seal of Revelation.

Some of these prophecies concern the demise of the United States over the next year, which will be followed by man's final world war. This last war will be the result of clashing religions and the governments they sway. Billions will die! This time will far exceed even the very worst times in all human history.

http://the-end.com/2...CFRSb1Qod02kHTA
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#18 Steve Netwriter

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Posted 26 July 2008 - 05:49 AM

Another Don classic from 24th July:

Don Harrold - It Ain't Funny Anymore


On the housing bill.

Rough quote:

"Your house is on fire"

"Fire, fire, fire......"

"Quick pour some petrol on the fire"

"Burn it to the ground"

"The only people left standing will be the people who own the land".

Fiat: What starts becoming worth less eventually becomes worthless.

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#19 enrieb

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Posted 26 July 2008 - 08:37 PM

I like Don Harrold, he's the anti-cramer. This one from the 23 July is really good.


"Bigfoot ain't real"



#20 Commander T

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Posted 26 July 2008 - 08:57 PM

Interesting point at the end - So JP Morgan can never go under?


^ My words do not constitute financial advice, please do your own research.

 

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