THE ECONOMY: Street Talk over at money news.newsmax.com is our prime source for an update on the current credit situation/crisis. Their coverage is well sourced, succinct, and to the point.
September 12, in “El-Erian: U.S. Bank System Capital Insufficient” PIMCO is the worlds largest bond fund and Mohamed El-Erian is a co-chief executive there. It is from this position that he states that the current credit crunch brought about by huge mortgage-related losses is beyond the capital resources of U.S. banks. Also, the banks are having to deal with higher funding costs which worsens the economy-wide credit crunch
September 15, in “Wall Street Model Broke by Credit Crisis“: In noting that Wall Streets future is “changing by the minute” the article predicts an environment of lower leverage and a reduced desire for risk. The article continues, offering the possibility that only the largest banks have the capital and deposit base necessary to deal with the credit crisis.
September 15: “Gross: Credit Crunch Worsening” Bill Gross, the chief investment officer of PIMCO, said that after the bankruptcy filing of Lehman Brothers, the global credit crunch is “continuing to get worse”. He goes on to say that that the rescue plan for the banking system needs capital instead of liquidity.
GEO-POLITICAL ALERT: There are some within the preparedness community that believe a true, long-lasting, and “game changing” crisis in the U.S. will probably be the result of economic forces such as currency destruction or debt-based insolvency. We are in general agreement here but …there’s something stirring at the edge of the light of the fire: the possible conflict between Israel and Iran.
About the middle of last week, the position of the U.S. regarding providing bunker-busting bombs to Israel was one of refusal as the U.S. feared that Israel would use these weapons to attack Iran’s nuclear facilities.
On September 14 of last week, things changed. World Net Daily (worldnetdaily.com) in an article entitled “Let them eat yellow cake”, noted that “ Experts responsible for monitoring Iran’s nuclear program have discovered enough enriched uranium to make six atom bombs is missing from the country’s main production facility at Isfahan, according to the Telegraph in London.”
At almost the same time on the 14th, Newsfront (newsmax.com) stated that “The Pentagon has approved the sale of 1,000 bunker-busting smart bombs to Israel…” despite U.S. concerns.
On September 15, Yahoo! News (news.yahoo.com) reported: “Iran stalls probe into alleged atom bomb research: IAEA”. Here, Yahoo! noted “ In its last report in May, the IAEA said that Iran appeared to be withholding information needed to explain intelligence that it had linked projects to process uranium, test high explosives and modify a missile cone in a way suitable for a nuclear warhead.”
Perhaps the events above are just a coincidence. Then again, perhaps oil is just a commodity.
ANARCHY?: On 9/13/08, The Daily Express (express.co.uk) reported in a headline “Home Office Predicts Anarchy In Leaked Memo” the essence of its article. The prediction was described as resulting from worsening economic conditions in the UK. “Violent attacks”, smuggling, racial extremism, and a possible increase in “the pool of those susceptible to radicalization” are a part of what is described in the “disturbing portrait of spiraling social anarchy”.
Bad economic times don’t seem to come alone.
WHAT TO DO?: Some might say that today’s U. S. financial/credit crisis is the result of government incompetence and private sector corruption/greed or it just might be that there’s a heaping helping of both incompetence and corruption/greed in both camps.
It would appear that a constant questioning of both government and private sector pronouncements are a wise course for the prudent home. Take responsibility for you and your family’s welfare.
Keep your eyes on the horizon.
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