[Money-matters] FW: [Money Matters Newsletter] Dow Nosedives 1000 points! Important Update Money Matters. May 8, 2010

Sun May 9 00:37:35 UTC 2010

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From: Money Management Radio [mailto:marc at moneymanagementradio.com] 
Sent: Saturday, May 08, 2010 5:27 PM
To: bayareaprocess at att.net
Subject: [Money Matters Newsletter] Dow Nosedives 1000 points! Important
Update Money Matters. May 8, 2010

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Money Matters Newsletter: Dow Nosedives 1000 points! Important Update Money
Matters. May 8, 2010

Marc's Notes: 
The market plunged close to 1000 points (DOW) on Thursday and left no doubt
what I have been trumpeting. This market is a very dangerous place. The
plunge is being investigated but the answer needs no close inspection by me.

It was a culmination of Wall Street losing control in an environment that is
as close to "dire" as you can get.
Huge amounts of money are being thrown at the banks for free from the
Federal Government to "liquefy" the system. In short, the banks made
billions on home mortgages, insuring home mortgages, packaging home
mortgages, betting on AND against home mortgages, using almost interest free
money from your government. The government was asleep at the switch and
turned the other way as home prices exploded upward. The social agenda
trumped politics (what else is new) so while everyone was making money, no
one cared to look. Congress insisted banks loan to low income families to
satisfy minority interests. Banks were actually punished for NOT LOANING to
low income buyers so they HAD TO in order to get federal money and stay
afloat.

Washington ignored warnings that a bubble was forming. The banks paid off
Congress and their friends so they would look the other way. They showered
politicians with money to allow the charade to go on. Countries and
investors and banks and everyone bought into the hype that housing never
goes down. 

The rating companies rated all of it AAA. NO RISK. Idiotic home buyers
either couldn't read the contracts or didn't understand the terms.
Appraisers, realtors, loan agents, insurance agents and everyone else sucked
off the housing gravy train. No one bothered to heed the warnings. The sign
were AS CLEAR AS DAY that a dangerous and familiar asset bubble was forming.

Countries and nations everywhere printed money like rain and showered their
respective public with minimum wage, health care, union demands, sick leave,
free housing, food stamps, unemployment benefits, welfare, over staffed
government jobs, pensions, bureaucracies, office of this, office of that,
regulations, paperwork: you name it, the governments printed the money to
pay for it.

Simple Math:  Printing = borrowing = debt.

Worldwide massive debt amounted to literally trillions. 

BORROWED, BORROWED, BORROWED.

Debt exploded worldwide fed by social agendas, ignorant politicians, retired
school teachers turned congressmen and women, spurred on by nutcases like
Bernanke, Greenspan, Keynesian economists, Pelosi, Feinstein, Waters, Dodd,
Franks, Obama, Bush and power mad politicians everywhere. 

Basic economic sense or historic precedent was absent. Entitlement mad
unions and citizens clamored for more and voted out anyone who dared to take
away their free lunch.  
The banks suckered millions into the "I DESERVE THE GOOD LIFE" mentality and
the public bought it on credit, just like the banks wanted. The "Compassion
Con" replaced common sense and anyone trying to rein in this foolishness was
either called racist or uncompassionate. 

But nature can only take so much and the idiocy was revealed and the bubble
starting imploding. Housing was the catalyst followed by a wholesale
collapse of everything paper money debt based. 

Governments of the world refused to acknowledge their foolishness and
applied more debt to try and solve a debt problem. Instead of reining in
spending, they spent more. More calls for "compassion" were heard from the
same liberal groups calling for even more spending and therefore more debt.

Instead of paying for our debt, they spent more, borrowed more then ever, in
amounts inconceivable and incomprehensible. First homeowners were bailed
out, then companies, then the banking system, now entire countries need
bailing out. The IMF is the last one in line. 

Who will bail out them? 

Meanwhile Obama passes a trillion dollar economic anchor to our children in
the health care bill, extends unemployment benefits 3 times, bails out even
more companies, throws money overseas to help other countries, installs more
massive regulations on business (Check this link out:
http://money.cnn.com/2010/05/05/smallbusiness/1099_health_care_tax_change/)
and looks to increase spending even more.

Obama, supposedly an American has said: "A some point, you don't need to
make any more money".
Incredible. 

Does this man not know what country he is in? 
The right to make money and have no one tell you how much is enough IS
AMERICA. It's what MADE AMERICA.
Redistribution of money by a central government is called SOCIALISM.

I now believe this man is dangerous. 

Government is getting massive and intruding into all of our lives. Into our
health records, bank records, internet access, jobs, schools, homes, sex
lives, politics, friendships, right to travel, right to work, right to
borrow, right to go broke, right to get rich. 

Intruding into our basic lives on almost all levels. 

It decides who gets money and who doesn't. Who gets bailed out and who
doesn't, what insurance I have to buy, what wages I have to pay, what paper
work I have to file, what neighbors I have to tolerate, who gets a home
loan, who doesn't. What religion I can profess and where I can profess it.

Goodbye US CONSTITUTION.

Meanwhile, the market runs historically UP in the last year spurred on by
stimulus money which is more debt. He talks of creating jobs but that is an
oxymoron. 

DEMAND creates jobs, not borrowing more money. You can pay people to dig
holes and increase GDP and "create" his type of job, but in reality he
spends much needed money to dig a hole and fill it. Then we have a filled
hole and a bigger debt bill later. 

Greece, a microcosm of the problem follows GM lead and can't pay its bills
from overspending. They can't print money like we can as they have a common
currency called the EURO.  Now other nations have to agree to help. That
causes problems we now see in Greece and the match then hits the tinder and
the markets tank. Rumors swirl about wrong buttons being pushed or this or
that, but the reality is the system, computer run, generates the fastest
sell off in history. 

500 points in 5 minutes. 

Everyone scratches their head and I remind them we were promised that would
never happen after the 1987 stock crash. It was attributed to a similar
computer based system. 

We now realize the system is even MORE DANGEROUS then ever. Many investors
were burned yesterday as stock prices were in fairyland. Millions of shares
were exchanged and we now find out at prices nowhere near reality. 

Many investors will not recover their losses but if any of the banks or
large firms suffered losses you can bet the government will bail them out. 

Back on the farm CNBC and the major news media again tell you not to panic,
not to sell. 

Why do you think that is? 

Because they hold stocks too. And they don't want YOU bringing the markets
down.

Meanwhile I am listening to another show on the radio with the same name of
my show.
I started MONEY MATTERS in 2006 yet I can only find their audio back to
2007. Hummm. go figure. 

Anyway, these guys are discussing 70 % stocks and bonds, 30% money market
funds. PLEEAASSE.. 

That's about as diversified as my cat. 

What about offshore accounts, foreign currencies, contrary funds, gold,
silver, and the host of other things you should do to protect yourself.
These guys discuss bonds like you should own them. 

Are you kidding me? Bonds are debt. What do we have a lot of right now? 

DEBT.

Why would I want to own bananas in a bumper crop of bananas?

 ANSWER: YOU WOULDN'T!  

Over supply means lower prices. And what happened this week? BONDS GOT
HAMMERED, except US GOVT bonds which is the ONLY bond you should own.

These guys also apparently sell insurance products. Does that mean
ANNUITIES?
I guess. 

I recall no investor I have met with that owned one and liked it. Why?
Because American US ANNUTIES are, in my opinion, as close to criminal fraud
without being illegal as you can get. I would NEVER, NEVER, NEVER buy nor
own an American insurance company annuity. These are one of ways insurance
companies made billions if not trillions. 

And for them to mention Money Market funds? 

Don't these guys know money markets funds ARE NOT INSURED by the US Govt.
unless they are US Govt. MONEY MARKET FUNDS? 

And don't they know the recent change in money market fund rules allow them
to NOT PAY YOU your funds in times of market turmoil if they choose not to?

LINK: 

http://www.sec.gov/rules/final/2010/ic-29132.pdf

And what did we just have? 

MARKET TURMOIL! I don't know about you but in times of turmoil I might want
my money. Maybe these guys should call their show "Turnip Truck Matters".

BONDS:

I spoke to many investors in 2007 and 2008 who owned Fannie Mae bonds or
private corporate bonds or GM bonds. I told them SELL, SELL , SELL. Many of
you did. Some did not. What happened? Bonds got HAMMERED! Except US GOVT
bonds. Some of those that did not heed my advice lost almost all of their
money in these bonds.
I do not hold ANY BONDS or BOND FUNDS except FAX and FAM which are mostly
foreign bond funds of foreign governments and don't hold much of these!
I have a SELL out on all US COMPANY BONDS.

WHATS NEXT:

Greece will get its bailout but it won't solve anything. Greece won't be
able to pay it back nor cut back its social program significantly without
major social strife. The interest on the loan alone will be too much strain
on its already strained balance sheet. Speculators and investors and the
bond traders will hammer Greek bonds again soon and probably continue their
assault on the next in line to fail, Portugal, Ireland, Italy and Spain,
only they are much larger. This is the start of the European Contagion and
the threat is it spreads and crosses the Atlantic and infects the US DOLLAR.
Keep in mind the Greek bailout IS a bailout of not only Greece but the BANKS
THAT HOLD GREEK DEBT.
This "hidden" agenda of the Central Banks of the World is really just a
continuation of a bank bailout as the big mega banks hold BILLIONS in Greek
debt. If Greece was allowed to fail, the bank rout would probably be "on"
again and another wave of misery would soon take hold world wide. Not that
it won't reignite anyway. It probably will as it "wont be enough", but the
bailout may calm the markets albeit temporarily.
I mentioned this EURO issue might be "THE" event that touched off the new
wave of selling in the markets. I may have been right. The sentiment
definitely has changed and many investors are surely wondering what the hell
happened in that 1000 point plunge. Like I said, we have many investors "on
the trigger" this time around who weren't going to ride the markets down
again like they did in 2009, so the next plunge could be frightening and IT
WAS!  Look out! Sentiment has shifted and many investors may be realizing
this market may NOT BE THE PLACE for their retirement funds.
I agree.

Take heed. Did you see how fast that happened? I keep telling you. These
things can happen fast and before you expect it. Many people tell me they
will sell when the market turns down. REALLY?  How many of you did? How many
of you were caught off guard last week? 

Read past newsletters for what to do. Please !  Get prepared or the next one
could be 2000 points or 3000 points or who knows! The US DOLLAR is rallying
right now but look at Greece to see our future. 

Get gold, silver, money OFFSHORE, bank savings accounts, foreign currency
funds, dividend payers, contrary funds.

Special Note: The plunge triggered STOPS at ridiculous levels . Some
investors got 1 penney for stocks worth 40 dollars due to the computer
issue. The exchange is only going to make good on about HALF those rip off
stops. Seeing what happened, I am suggesting you UP YOUR STOPS to 10 % lower
then where we are now and remove some of your stops entirely. The system
obviously is flawed when investors are getting stopped out and getting paid
a penny for their shares. You will have to watch your stock prices manually
and execute your sell orders on your own. Sorry, but that's the world we now
live in. Don't blame me, I am trying to protect you.

Want to meet and discuss your positions? I have a few slots late May and a
few in June.
Schedule it on the website. They will go FAST now that the market has
accelerated. 
Case in point: The next 3 weeks filled within 24 hours of the 1000 point
crash.

All for now, I will keep you posted and issue more newsletters more
frequently like I do when markets accelerate. 

But one more time.  DON'T SIT THERE! DO SOMETHING! PREPARE or you will have
no one to blame but yourself. This thing is a powder keg in a room full of
matches filled with drunken fools smoking pot. 

It's only a matter of time.

Marc
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