There is every possibility that next week beginning from 24-Jan-2010 may see sharp plunge in the stocks and bond prices on the back of 5% plunge in Wall Street last week, notably over 200 points loss on Friday. The stocks were defying correction in spite of all negative data feeding through the market for over several months. The President Obama’s plan for banking overhaul has ignited this correction. Not that the President is wrong, but his presentation and timing is a bit off. One can not afford to make market rattling bland statements without making available enough details to let policy views known. Billions of dollars could be lost as result. The Author’s prediction in December that the correction may start in third week of January and take almost 80% money out of the market on or before 21 Jan 2010 came out bang on target. In this article, the author forewarns the crash and also provide tools to help the investors. Read more….
Maturity Mismatch – Another Banking Crisis in offing
The Author of brilliant book “Sub Prime Resolved” forecasts the looming banking crisis, several times larger than the last year, when almost all banks will come under severe squeeze due to interest rate rise. Almost all banks have granted 30 years Fixed Rate Mortgage to the borrowers while borrowing short term from Fed and Interbank market at near zero interest rate. The long term assets should be financed by long term liabilities, but the banks and mortgage lenders in United States have done otherwise. Trillions of dollars would be lost, several banks could go bust and the present financial crisis will deteriorate into major crisis in USA. The derivative markets too will have huge losses. Blood, blood, blood everywhere. The Author has offered solution to the US government in the form of book ” SUB PRIME RESOLVED” and also wrote to President Obama in recent past, offering him total solution. He went on to the extent that if he could not pull USA out of recession in 9 months, President Obama could sign “Death Warrant” against him with his and his family’s written consent. However, President Obama has no time to even deliberate with the Author. He bothers more about Health Care reform when the biggest banking crisis is simmering right below his Presidential Chair in the White House… Read more
Falling from the Cliff – US and Global Markets
The Author discusses in this article the present status of economy and stock market. According to Author, the markets have reached the crescendo. The markets may stay stable or rise by another 400 to 600 points due to January effect, after which the calamitous collapse may begin. We are almost near to apocalypse. Serious meltdown is about to begin soon. Beware..
Rating & Mating Game – US abuse of Rating agencies
Rating agencies are rated very high in investor’s world because their actions cause rise or fall in bonds prices. Secretly they all hate them – but they can not be eloquent. Often, these agencies are being abused by the Authorities to serve their political agenda. US despite 12 trillions of debt is rated AAA and China with $ 2.3 trillions of forex reserve is rated A+, Read this article for more insights..
Bonds,CDs and Bank Deposits build First Wealth..SR 04 of How to invest..
This is continuation of series “How to Invest into anything?” This part SR04 deals with relatively simpler products like Bank Deposits. However, the important part of this article is to teach the investors how to invest even into bank deposits. The author shows implications of many important process, and also explains in very simple terms what an Individual investor should do in such circumstances. He also explains how the Investor reduces his wealth by using plastic money, and how he can become prosperous by intelligent savings. The author also shows how to use Recurring Deposit to build real wealth with common sense planning. Meanwhile, please read more
Citi Saved, Nation Destroyed
The Author critically evaluates latest myth surrounding the US government’s guarantee of $306 billions issued to Citigroup and cash funding of $ 45 billions under TARP. The Citigroup CEO Mr. Pandit’s statement that the Citigroup was having the best quarter since 2007 was an act of deceiving the Senators, President Obama and American Tax Payers. According to Author, a clever game of creative accounting was played out at the highest level. Instead of making Citigroup absorb the losses in its own book, the creative genius were at work to ensure that the Citi was spared and the nation (USA) was obviously destroyed. How as it achieved – Read the full article.
Warren Buffet – An Investor turns Moneylender
No one questions Warren Buffet. He is next only to Lord Jesus that the people begin to believe. However, he too is not infallible. He is human and makes mistakes. The wuthor critically examines how venerable Warren Buffet was taken for a ride by a few opportunists in the Fed and Treasury, and how did he compromise on the security aspects of his massive $ 8 billion of investment in Goldman Sachs and General Electric. The edge is cathing on Mr. Buffet. He is 78 and want to see the return in short term before he gets the final call. In this anxiety, he has begun to make a few mistakes. They are costly ones. Read more…..
Defrosting the Liquidity Freeze
The Author implies that if some standard or dogma does not work out for a long time, then it is time to abandone that standard. We carry hundreds of old beliefs that low interest rates promote the growth, GDP but ask Japan, did it work for them for 14 years in spite of having near Zero interest rate? Ask United States – did it work for them either for over 7 years during which Alan Greenspan brought down the interest rates on its knees without yielding any tangible result. Low interest rates fostered the derivative trades and toxic investment products that neither seller nor buyer understood. Author not only evaluates the reasons but also provides uncoventional solution to the present problem, Read the article which is written in very simple English without any jargons, in convincing and logical manner. Offer your comments, howsoever small, if you really liked the article. Other articels are found on the side bar. if you wish to download, use the download box for well formatted PDF files.
Retiring President’s Parting Gift to Paulson
This article is written just after tentative agreement reached between Congress and the President. It squarely deals with the potential fall out in the market and the streets. it also shows how irresponsibly a person like Paulson having 36 days of political life (unless renewed) to spend $700 billion by legalizing the illegal and parallel economy created by the banks and brokers