[Money-matters] Money Matters Update March 6 2009

Fri Mar 6 12:27:03 UTC 2009

Marc's Notes:

As indicated in last email, 6000 DOW was entered and is now in play. 6500
was the next level of support and now IT is in play. The markets look anemic
and worsening. Small one day rallies are followed by more selling. The FEDS
"ANNOUNCMENTS" are finally having little effect. I maintain a RED ALERT
level on the markets and now warn you a 1000 point or more crash day is
probably coming soon. Investors are reaching levels on their portfolios
where they " HAVE TO SELL' to recover at least something, but we are not
there yet.

(Listeners of Money Matters should be well protected however if you followed
our warnings).

The markets look absolutely DIRE and if there ever was a time a major crash
was setting up to occur it is now. A "CAPITULATION" event is nearing with
perhaps 2 or 3 "CAPITULTATION" sell offs in the months to come. We can
probably look for the first HUGE crash in the near future. I repeat, the
market level is at RED ALERT.

Those that doubted my "you ain't seen nuthin yet" mantra are now "seeing
somethin' now" aren't you?

Next test levels are 6100, then 5900, the 5500 mark being a major support.
DOW 2500 is now possible with a DOW 1500 level in the FALL also beginning to
look do-able.
This market is DANGEROUS and if you think it is over, you are about to lose
even more money. (Yes that is possible !)

Could the market rally? 
Of course. Calling market movements' short term is foolhardy, but
indications are that fundamentally there is little good news to bring back
investor confidence. 
"POP" rallies and technical short covering rallies are to be expected but
long term the direction is probably DOWN. 
A slow grind over this next year and beyond.
"Sucker" rallies will occur. This is Mr. Markets ruse. To suck in every last
dollar then trash them in an attempt to complete its destruction. 
It is still happening. Just today on CNBC I saw the same fool that called
the "bottom" at 7500 a few months back rant and rave he thought we would
start higher soon.
His reasoning? 
Cheap stock valuations and lots of money in cash waiting to be deployed back
INTO the market.
My answer?  Once a fool, always a fool.
There may be a lot of cash on the sidelines, but there is still a lot of
cash IN PLAY in the market to be taken by Mr. Market.
Cheap stock valuations? 
Hardly. P/E ratios and earnings are based on trailing earnings and/ or
future expectations. YEAH, they are reliable! NOT!
For stocks to be cheap historically based on earnings now, I am looking at
DOW 3000 or so. IF earnings tank more, a healthy PE of 4 or 5  with dividend
payments of about the same amount could bring the market to 1000. OUCH !  We
will see.

What you are seeing:
Recession or Depression- This is academic. Who really cares. The fact
remains you are witnessing a "balance sheet" reversion, not a credit induced
correction.
Huh? 
In other words, most "recessions" are caused by credit contraction brought
on by a meddling Federal Reserve raising interest rates to slow inflation,
which was brought on by the same Federal Reserve LOWERING rates to encourage
or "solve" a problem. (sound familiar?) .
These types of corrections cause setbacks and can be improved somewhat by
lowering rates again. Hence the business cycle is borne.
BUT THIS TIME, (and this TYPE of recession , depression ) is brought on by
the an ever increasing DEBT load reaching its breaking point. 
Consumers and business's AND countries are tapped out. They can take on NO
MORE DEBT. Even if they did "get the banks lending again', you cannot push
on a string. The consumer CANNOT AFFORD to take on more debt, so confidence
and the ability to borrow MORE isn't there.

His BALANCE SHEET must be repaired and THAT can only happen by NOT
BORROWING< NOT SPENDING< AND PAYING DOWN OR DEFAULTING ON THE DEBT. 
PERIOD. 
You will NOT SEE any improvement, and it is foolhardy to think it so. By
getting the banks "lending again" you can reinflate the bubble.
The BUBBLE WONT REINFLATE. You either PAY OFF THE DEBT  by working and NOT
SPENDING ( called saving, remember that?)    OR   defaulting (not paying )
on the debt.  
YOU ARE SEEING BOTH RIGHT NOW !   And THAT'S how we got here!   Easy as pie
eh?

What to expect:
MARK TO MARKET rules will be lifted and replaced with MARK TO MAKE BELIEVE.
( Show # 60 March 19th). What this means is whereby banks and the like have
to value their assets at what they will bring currently in the market, THAT
rule will be changed to MARK TO MAKE BELIEVE, meaning now they can put
lipstick on a pig and say the assets are worth whatever they THINK they are
worth. 
Like I said: "MARK TO MAKE BELIEVE".  This will lower the reserves (cash)
that the banks have to hold and make their balance sheets LOOK BETTER. 
Will they BE BETTER?  
Absolutely not. But they will LOOK BETTER and the firms won't have to raise
so much cash. Expect something along these "accounting" rules to be changed.
The markets will rally on this news. How much? Hard to tell, but probably a
strong multiple hundred points or more in the following days. Remember that
term. "MARK TO MARKET" and watch for it.

You may now also see the possibly of FED INTERVENTION into the markets,
actually buying stocks. IF things get REALLY BAD, this is a remote
possibility.
For now, a MAJOR 1000 pointer sell off would not surprise me. HEDGE  HEDGE
HEDGE or be at NO RISK in the vehicles we have been recommending.
The FEDS may try to "juice" the market if the sell off continues. A "Market
Holiday" is also possible if the slide continues.

The Upcoming Problem:
There are many, but here is the jest. 
Losses on pensions, banks, companies, investors and more are reflecting a
9000 DOW level of 2 months ago.
We have seen a 2000 point sell off in just the last month or so. THESE
LOSSES ARE YET TO BE POSTED and will show up in the news media soon. You
will see huge pension funds like CALPIRS and others that will announce
losses on their total holdings of 50 % and more. The banks losses will mount
as well as losses throughout the country and the cries for help will be
deafening.
The Pension Benefit Guarantee Corporation (PBGC) that insures some large
pensions will be stressed to breaking and the FEDS will give them money.
Hundreds of pension plans will be screaming for compensation as will
hundreds of thousands of retirement plans, insurers, companies- you name it.

WHEN THE LOSSES OF THE LAST 2 MONTHS FINALLY GET PLUGGED INTO BALANCE SHEETS
IT WILL REVEAL DEVASTATION BEYOND BELIEF.
I am sorry to say it again. "You ain't seen NUTHIN" YET!!"'

More banks, insurers, companies, cities, states will faint over dead when
they add up the recent 2000 point sell off and demand "something be done!".
This will tempt the Government to throw even MORE MONEY at the problem, as
if they haven't thrown enough already. Listen carefully to me once again.

IT WONT BE ENOUGH!

The losses are piling up and increasing the speed of the spiral downwards.
We are witnessing 35 years or more of DEBT now demanding payment and it is
sucking in everything of value in its search for satisfaction and payment.

IT WONT BE ENOUGH!

The "other " Upcoming Problem:
Gold is sniffing this problem- How can the Government PAY for all this. We
know the answer to that.  They cant. They will borrow it or print it. Both
are actually the same thing.
The world is incredibly still loaning our deadbeat uncle "Uncle Sam" money,
but that is desire to do so is waning. Gold is signaling investors are
searching out protection from all this debt and rising, as with silver. Oil
is also a cousin in it's birddog ability but more dependent on spending. As
the world tires of loaning "Uncle Deadbeat Sam" money, interest rates will
rise as they are now. US TREASURIES will fall, and investor will no longer
take a lousy half a percent or ZERO percent interest on treasuries as they
are now. When we see interest rates start to rise quickly, the jig may be
up. Watch interest rates for your clues. 

The "Other -Other" Problem:
Uh oh! Guess whose back.. Mr. Inflation has peeked his head out. 2 recent
indicators surged up and could be indicating what is coming. All this
printed money chasing too few goods and prices may start to rise again. The
rock and hard place we've been warning about. THIS would put a HALT to
further bailouts and money creation if Mr. Inflation yawns and comes out to
feed. Stay tuned. THIS could be a REAL problem if indeed it is awakening
this soon in the game.

More Bailouts:
The housing plan (s) were increased on a massive scale as I said they would
be since last fall. (told ya!). Here's the inside scoop. 
Come closer-  shhh!  Here is my little secret.................

Told tell anyone but there will be ANOTHER !  YES SIR!   

You can count on MORE FREE MONEY TO DEADBEATS as the losses mount. Remember,
by keeping people in their houses, the BANKS DON'T GET THEM BACK! The truth
of the matter is BANKS DON'T WANT THEM BACK AS THEY GO DOWN!  They want YOU
to take the hit. Then when they hit bottom, THEN THEY WILL TAKE THEM BACK,
but for now, they are not dumb. Let's figure a way to keep the people in the
losing asset!  
Hummm., didn't think of that one did you? And if you don't default, they
don't have to write down the loss..................YET. 
So it saves their balance sheets some pain.   And of course the government (
YOU ) will pay for it.
Estimates for our newest bailout is 70 billion. BAH!     You know what their
past record is of forecasting budgets. Try 700 billion. And then....

IT WONT BE ENOUGH!

And More Bailouts:
Bond insurers, the auto companies, states, more banks, credit card
companies, big manufacturers, farmers, growers, states, insurance companies
( AND YES- AIG AGAIN!) 
You name it, the "OBAMA NATION"  or "OBAMINATION" is about to explode. And
don't forget about "National Health Care". OH MY!   Can you say the word
"quadrillion?"
Maybe not yet, but you will..    yes .. you will..

Holdings:
No change but I will reiterate past recommendations again.

For now, and for the last 2 years, you should have most of your money in
what I call "NO RISK" models.  Bank CDS     FDIC INSURED  T BILL FUNDS
Continue to hold or add. There will be a time to bail but it is not here
yet.

Gold and Silver in possession and in funds and stocks. SLV is moving again,
up from about 10 where we said "GET IN"  back in December. We suggested
large holders SELL some when it hit 14 and change and wait for the pullback
which took place. You can establish new positions anytime. Physical gold and
silver has a longer wait now for delivery but still ADD.
UNWPX is a fund to play this. DGP is a leveraged 2 times fund and is more
dangerous but will make more if gold goes up.

Oil- Moving now and will follow inflation which is now heating up. DXO
USO  moving nicely, Also USL is another you can look at.

Dividend Payers-  Reducing but not cutting dividend altogether. (except 2 on
our list so far and we sold those and you should have to) . A lot of these
are energy stocks and that will soar with inflation. HOLD     ( I was asked
when I will update the Dividend Payers list- We JUST DID but the markets are
moving so fast I have to again- It will be available on the new website).

Hedging- Hold contrary stocks and funds as suggested to offset these stocks
and any stocks you have elsewhere. BEARX for those who have it. It is now
loaded, so if you don't own it already, use others like DOG  SKK SCC  etc .
There are many. These are "contrary or bear"  funds. They usually move
opposite the market and are screaming upwards right now.

Foreign currencies- You should have SOLD all FXE ( or Euro ) positions per
our email  3 months ago. Europe is in turmoil. If a smaller European country
pulls out of the Euro for financial reasons, there is a chance it will be in
serious trouble- SELL all Euro positions.    Continue to hold YEN    AUSSIE
and CANADIAN positions.

Swiss Annuities; HOLD ADD      

Retailer shorts- SCREAMING UPWARDS    RIDE SALLY RIDE.   Take profits all
the way down to DOW 2500. Go on vacation~

Interest rates funds: RRPIX    ADD    protect against a falling dollar.
Slowly rising from the ashes.

New Position- TBT  - Shorts US treasuries 20 year.  We may ease into this
over time. This protects against a falling US dollar like RRPIX but is a 2
times fund.  Moves quicker and is more volatile. This fund will move DOWN if
the US dollar rallies, which it may. This is a long term protection hold for
a small percentage of funds.

Upcoming Shows:
March 12th-  Obama vs. FDR-       And of course market action- what else is
new/   NOON
March 19th   Mark to Make Believe'         and of course MARKET ACTION ( if
we still have one)

Consults:
Moving along nicely with John T's help.
Kudos to Jen for doing a nice job of handling the volumes of emails.
Caught like a deer in the headlights?  Need to talk or a shoulder to cry on?
Email me. I will make ROOM FOR YOU!

All for now, markets look to open down in 2 hours.      Again..

Marc

Where I buy some of my gold:   <http://www.KFOK.ORG.> "Possession Gold" 10%-
Standard Gold Eagles, Buffalos, Kruggerands, Silver Maples. Gold Pandas
Generic Rounds. Peace Dollars or Morgans. You may contact:
 <http://www.KFOK.ORG.> Monex Deposit    David Feldberg  x 2216
4910 Birch St., Newport  Beach  Ca  92660
1 (800) 949 4653  (GOLD)   ext 2216   Refer to Marc Cuniberti and Money
Matters for best pricing/service. Take delivery and store in a safe place.
You may have 25 % of this amount in silver and the remaining 75% in gold.
Buy only generic 1 ounce rounds or ounce bars, no collectibles. You may buy
any 99 % pure gold or silver assets but pay no more then a few dollars over
spot. Again, buy NO Collectibles, No Margin account, No Commodity accounts.
Take delivery of standard coins only.

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