WATCH THIS
YouTube - The Last Days of Lehman Brothers Excerpt


NOW READ TWICE...
Derivatives Scam Slides Into The Sunshine



THEN THIS...
20 Reasons: Debt Bomb Is Going To Explode http://www.marketwatch.com/story/our-debt-time-bomb-is-ready-to-go-ka-boom-2010-02-02?dist=beforebell>- Tick, tick, tick, the clock moves on. One or all of these pointswill result in a detonation of everything we hold near and dear.


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http://www.thedailycrux.com/content/3989/Porter_Stansberry/eml


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I told you so.....
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New probe into leaked e-mails finds some of the nation's leading scientists hid and manipulated key climate data



Money Market Funds Can Now Prevent Redemptions
Tuesday, 02 Feb 2010 10:23 AM
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By: Dan Weil
Be careful how much cash you put in your money market fund.The Securities and Exchange Commission has passed a new rule that allows the funds to prohibit redemptions in times of duress.A fund can now prevent people from taking their money out if three conditions are fulfilled:• The fund’s share price falls below the fund’s stable net asset value per share.• The fund’s board of directors approves liquidation of the fund.• The fund notifies the SEC of its decision to liquidate and suspend redemptions.The new rules are part of an SEC effort to strengthen money market funds in the wake of the 2008 financial crisis. In September, 2008 the Reserve Primary Fund became only the third fund in history to break the buck – reduce its share price below $1.Investors in the fund then tried to exit en masse, and the fund suspended redemptions. Some investors are still trying to get their money back.“We understand that suspending redemptions may impose hardships on investors who rely on their ability to redeem shares,” the SEC wrote in explaining the rule. “Accordingly, our proposal is limited to permitting suspension of this statutory protection only in extraordinary circumstances.” The pundits at ZeroHedge.com are aghast at the new rule.“The next time there is a market crash, and you try to withdraw what you thought was ‘absolutely’ safe money, a back office person will get back to you saying, ‘Sorry, your money is now frozen. Bank runs have become illegal,’” they wrote.The SEC’s approval of the new rule explains why money market rates are near zero, the Zero Hedge analysts say.“At this point, should there be another meltdown, money market investors will not, repeat not, be able to withdraw their money purely on the whim of (SEC Chairman) Mary Schapiro.” © Moneynews. All rights reserved.



Jim Sinclair’s Commentary
Another excellent article from Zero Hedge.
The Next Leg Of The Housing Crisis In Five Simple Charts
Everything that the government has done so far, with a few minor detours, has been almost exclusively focused on maintaining home prices high, by tweaking either the supply or the demand side of the housing equation. As the bulk of consumer net wealth is concentrated in the housing sector, and a wealthy and confident consumer, much more so than the banking system, is critical to the recovery of America’s economy, the Administration will do everything in its power to achieve its goal of artificially manipulating the housing market, thereby not causing an incremental loss of wealth to those still stuck with overpriced houses, while the real intersection of actual supply and demand curves would indicate a materially lower equilibrium price. This is ironic, as proper price discovery is critical for a true recovery, since Americans realize all too well that buying a house at prevailing levels in advance of the second down-leg in housing is senseless, the continued pursuit of such flawed policies by the Fed and President Obama merely pulls the market ever further away from its equilibrium, thereby making the anticipated second dip so much more likely and not that far off in the distant future. Below are 5 simple charts the highlight just how precarious the housing situation in the U.S. is, and how likely the second, and probably much more fierce, leg down in the markets is going to be.
A bearish report by CIBC 1 captures precisely the highly unstable system that U.S. housing has become, and deconstructs it along the five key axes of weakness which while individually may be controllable to a degree, combined represent a recipe for disaster. CIBC’s main sources of concern arise from:
Short-lived remedies; used by the administration to prevent further price deterioration (tax-credits);
Shadow Inventory; in reality when accounting for the surging shadow inventory which very few dare talk about, the total number of available units
double to over 8 million, representing a record high 16 months of supply.
Strategic defaults; the amount of households with negative equity is roughly 10 million or about 20%, in 2009 25% of all foreclosures were strategic; as populist anger against banks accelerates look for strategic defaults to keep rising
Quantitative Easing expiring; This needs no introduction: the sole reason why mortgage rates have been as low as they have, has been due to the Fed’s constant manipulation of the MBS market via the $1.4 trillion MBS/Agency QE purchase program. With this program set to expire in 2 months, rates are set to explode.
House Prices are already entering a double dip; Previously we discussed the Case Shiller NSA home price index number which indicated that a double dip in prices has already commenced. A positive feedback loop will only lead to further deterioration here
Analyzing CIBC’s factors one by one:
Short-lived remedies
During the past year in which the program has been in effect, sales of existing homes have climbed by 15%, while new home sales have actually dropped by 5%. In fact, the usually stable sales ratio between the two has more than tripled, recently hitting a record high 18 (Chart 1). But after being extended once by the Obama Administration, this tax credit will expire at the end of April—putting downward pressure on demand for existing home sales. That prospect will make it more difficult to clear out the next wave of foreclosures, prompting another down leg in US house prices.
More…