[Money-matters] Money Update OCT 15 2008

Thu Oct 16 03:09:48 UTC 2008

_/*Marc's Notes:*/_
The market gave back most of its 900 point gain from Monday and cratered 
700 plus today on top of the 70 point loss Tues.
Needless to say this is not a good sign. The excitement of Monday gave 
way to fear today.
As we indicated yesterday, do not be fooled by the rally. The 
institutions use these rallies to suck in JOE INVESTOR so they can 
unload their stocks to you.
The big boys have been selling. These BEAR TRAP rallies are common in 
BEAR markets. They suck in every last dollar with a HOPE bounce, such as 
we had Monday.
Like we said, the bailout wont work. Since housing prices are the 
underlying problem, until they stop falling, the problems will GET 
WORSE, no matter how much they throw at it.
The problem involves trillions, not billions. And as housing falls 
further, they will need MORE trillions.
Now they realize also consumers wont be spending as much. We told you 
there was money laying in the corner of the room, and for you to go pick 
it up by selling the retailers.
Now everyone is catching on to what I've been telling you for months. 
The retail sales will be worse then DISMAL and retailers will get KILLED.
Expect a RASH of bankruptcies and new cries for more bailouts from big 
retailers. And kiss goodbye to our auto companies. They WILL get bailed 
out or free loans or whatever.
The real fear here is WHEN will the dollar start crashing?   Because 
when it does, it will probably go FAST and you will not have time to 
prepare.
 I hope it doesn't, but the economics of all this free money does not 
bode well for anything else BUT an eventual dollar crash. Let us hope it 
is not what I think it might be.

As for what the FEDS will eventually realize is that housing must stop 
falling. But it cant. They will try and buy up mortgages and stop 
foreclosures. But that self defeats its own correction. If housing is 
not allowed to fall to its natural level, and they try and prop it up, 
then buyers wont step up or qualify for the high prices. ( Remember, in 
economics, the higher the price, the fewer people buy). So if they try 
and keep housing prices HIGH, there will be fewer buyers then if they 
let them crash. If they let them crash, banks lose more money, more 
foreclosures as more people go underwater, and the spiral continues. 
EITHER WAY they lose. So propping up houses with foreclosure or bail out 
programs will prolong the contraction, keep buyers OUT of the market, 
and housing will NOT recover. EITHER WAY is a no win scenario.
But you watch them  TRY and keep housing prices up and people in their 
homes. A predictable attempt. Mark my words. They will realize this is 
the next way to go. ( Although that wont work as we indicated).
Eventually houses must come down to meet income levels, no matter how 
you slice it, and that is at least 20 % lower, maybe up to 50 % lower.
Don't believe me? ( Again ?  You must know now _/not to bet against my 
predictions/_ !). Anyone want to bet me again?  Didn't think so!
In any case, as I said in the spring, the bounce in real estate everyone 
was talking about was the classic "Hope 5" wave, and now it is ended.
Now the real fall begins.    My call on future house prices????       
"You aint seen nuthin' yet"! 
 I am expecting another _/*15 to 50 % */_reduction in house prices in 
the next year or 2. Just watch.
All those people that bought all those foreclosures and got such a "good 
deal"?  See how much of a good deal they got a year from now when houses 
get cut in thirds again.

_/*Markets:*/_
Looking dire and another CRASH may be setting up, this one even nastier. 
The FEDS may try more ANNOUNCEMENTS but as you can see they are losing 
effectiveness.
There next nuclear announcements will be a bigger house bailout and 
foreclosure moratorium ( See above, it will only make matters worse) and 
then an all out declaration that the FEDS will use tax money to buy 
stocks. ( Its already happening in the bank stocks, right ?)
They will make all the classic mistakes as we spiral downward.
Expect bounces up along the way. Use rallies to SELL regular stocks. A 
7500 Dow, followed by a 6000, then 5000 then finally 2500 is possible, 
but not all at once.
1000 point crash day is in our future.

_/*Holdings:*/_
Gold in either physical or ETF. Gold stocks are going down with gold 
going up as all stocks are being sold. Only GLD or physical gold is 
immune to the "stock" sell off.
Contrary funds. They are going up by leaps and bounds as the market 
tanks.  ADD   ADD   ADD for protection.
Dividend payers-  HOLD      reinvest dividends to get lower stock prices 
but do not add positions. The Great liquidation is taking place.
Foreign currencies. Bouncing but hedges against a falling dollar.
RRPIX interest rate fund-   ADD   in equal amounts with   SHY       TIP 
      VIPSX.  ( T BILL FUNDS).
UNWPX  Precious metal fund- Ok to add small amounts, but no large buys. 
It IS a stock after all. It shouldnt be hit as bad over the long haul as 
it represents gold and other metals.
CGMFX    Do not add
Swiss annuities- ADD anytime for privacy and overseas hedge. Hold in 
Swiss Francs.
Bank CD 's   For most of your safe money. Preservation is the key right now.
Regular stocks your broker sold you? ( including mutual funds?) Prepare 
to lose EVEN more as I have been warning. You could lose 75 % or more if 
the market continues its crash.
Most people SELL everything when they lose 70 to 80 %. Don't be one of 
those or you will selling when EVERYONE is selling.

_/*Advanced traders:*/_  GO PICK UP THE MONEY IN THE CORNER.. Housing    
Retailers     All are cratering. Our shorts on  TIFFANY   SEARS  
NORDSTROMS   JC PENNEY, you name it, they are doubling, tripling, 
quadrupling.  Seek out the ultra short ETFS in all sectors.  Take 
profits on crashes, add on rallies.

Final warning:  Dont be talked into nor believe to "hold for the long 
term" . Its obviously not working since the year 2000. (Dow was over 
11,000). How much more "long" is in your "term"?
If you just sit there and hope, YOU WILL GET SLAUGHTERED. Go to cash if 
you don't want to be in this market.

_/*Tomorrows show:*/_
Another update on the markets and call in all hour.
Thursday at noon.
All for now
Marc

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