1. What is the track record of the predictor?

2. What’s his forum: both the place he‘s speaking from and his audience?
In the Leo Lewis (Asia Business Correspondent) article in the business.timesonline.co.uk of 2/22/10 – sourced from lifeaftertheoilcrash.net – entitled “Buy farmland and gold,’ advises Dr. Doom”, we get Marc Faber. He is “…the notoriously bearish market pundit, who predicted the 1987 stock market crash…” and he’s speaking “… in Tokyo at a gathering of 700 pension and sovereign wealth fund managers.”
Here’s some of what the article and Mr. Faber had to say:

• “Speaking today, Dr. Faber said that investors, who control billions of dollars of assets, should start considering the effects of more disruptive events than market volatility. “The next war will be a dirty war,” he told fund managers. “What are you  going to do when your mobile phone gets shuts down or the internet stops working or the city water supplies get poisoned?”

• “He also said that they should consider holding part of their wealth in the form of precious metals “because they can be carried.”

• “At the heart of Dr. Faber’s argument is a fundamentally gloomy view on the U.S. economy and its capacity to service a growing mountain of debt.”

• “His belief, fund managers were told, is that the U.S. is going to go bankrupt.”

Micro: From a number of sources (i.e., drudge.com and survivable.com) earlier this week, we got information that says: “Citigroup Warns Customers It May Refuse To Allow Withdrawals”. This specific article is the one we’ll reference. It is by John Carney, posted on business insider.com on 2/19/10.
Here’s some of what it says:

• “… we heard that Citigroup was telling customers it has the right to prevent withdrawals from checking accounts for seven days.” This information was presented  “… on statements received by customers all over the country.”, and said in part: “ While we do not currently exercise this right and have not exercised it in the past, we are required by law to notify you of this change.”

• “It seems that this is something of an error. The seven day notice policy only applies to customers in Texas, Ira Stoll reports at the Future of Capitalism. It was accidentally included on customer statements nationwide.”

• “UPDATE: According to Stoll, Citi issued a statement saying that it had been required to make this change by federal regulations–and it no longer sounds like it’s limited to Texas.”
• 
  “UPDATE: Citibank has now released the following statement by way of explanation: … ,we have never exercised this right and have no plans to do so in the future.”

PH Comment: That banking institutions would have the foregoing power to prevent withdrawals at their discretion should provide the prudent home with at least a couple of considerations: have your money in at least two banking institutions to increase the chances of being able make a withdrawal from one, and have an emergency “cash stash” around the house (in at least two fireproof places and checked with a counterfeit detector pen) to enable your home to function in an emergency.

If there’s a real emergency, such as one without electricity, cash may be the only thing that works.

Until next time: keep your eyes on the horizon as the weathers moving fast.

Marc Faber is the publisher of the Gloom & Doom Report (and a Swiss fund manager) and he opines that the recent moves by the U.S. Treasury will only temporarily bring confidence back to the market leaving the longer term prospects looking much worse.

The global economy won’t fare any better for a while and the Western world and governments are trying to ignite credit growth, but their efforts will probably not succeed.

CNN.com on 10/23/08 notes in its short piece “Banks hit high on Fed borrowing” that commercial banks, suffering from the credit crunch, borrowed a record $105.8 billion/day from the Fed’s emergency lending window eclipsing last weeks rate of $99.7 billion/day.

RGE Monitor (rgemonitor.com) of 10/23/08 presents an interview from Bloomberg with Nouriel Roubini, NYU Professor, in which he states that the financial crisis has reached the point of sheer panic, producing …”massive dumping of assets” and “hundreds of hedge funds are going to go bust.” Professor Roubini continues noting that systemic risks are increasing in size and we’re seeing the start of a run on a large portion of the hedge funds which may encourage policy makers to shut down markets for up to a couple of weeks in the near future.

THE ECONOMY-’WELCOME’: We’d like to welcome the Sec. of The treasury, the “Head of the Fed“, the “Private Wealth Managers” from the big banks, and most of economic gurus from the “Stealth and Wealth” funds interviewed on business TV, et al,: welcome!

Our party’s been running for about six months at least down here at the “Where the Rubber Meets the Road” Lounge. There’s a few jugs of screw-cap wine left along with some Velveta and crackers over by the punch bowl (where the lady with the walker’s adding another “sweetening” of ‘grain‘); help yourself.

We’re glad you could finally find some time with your busy schedules and demanding jobs (some of us haven’t worked for sixteen months) to stop by and tell us how it was that the recession just started. You see, in between comparing tattoos, we’ve been exchanging info on job possibilities (networking I think you’d call it), new bus schedules, the length of the lines at several of the local food banks, and got to wondering what it was that finally threw us into a recession?

We really wouldn’t understand? Well, you’re probably right there but if we start to go into a depression, could you maybe give us a heads-up so that we could line up some tent space at our local nature preserve?

GEO-POLITICS: “ Pakistan Stares Into the Abyss”. This Staff article over at Energy Bulletin on 10/23/08 indicates that Pakistan may be going through its worst crisis in history. A burgeoning conflict between the Pakistani government and the Islamic militants along the Afghan border in conjunction with general economic degradation has forced the country to call on the IMF to avoid financial collapse. Pakistan, the only Muslim nation with nuclear weapons, is described as being “on the edge.”

FOOD: Energy Bulletin of 10/23/08 in its Food & Agriculture section article “Why we can’t pump faster” points out that “…easily extractable phosphate may have hit The Overshoot Point (TOP). And we have no new conventional sources. And phosphate essentially feeds the world..”

Until next week, keep your eyes on the horizon.