National Australia Banks Decision Will Shock Wall Street, Analyst Says
Saturday, 26. July 2008, 04:10:21
Robert Gottliebsen writing in Business Speculator July 25, 2008, relates that NAB Will Shock Wall Street: "The National Australia Bank's, NAB, decision to write off 90 per cent of its US conduit loans will have dramatic repercussions around the world. Wall Street will be deeply shocked when they understand the repercussions of what NAB has done.
It is clear global banks have nowhere near provided for their exposures to US housing loans which in the words of John Stewart are experiencing a “meltdown”.
We are now way beyond sub-prime. NAB says that it is suffering a 55 per cent loss on American housing loans – an event that has never happened in the history of a developed country in recent memory.
This is an unprecedented event and means that the cost of bailing out the US financial system is now far beyond the highest estimates. A US recession is now locked in, but more alarmingly, 55 per cent loan losses point to the possibility of a depression.
It means the cost of bailing out housing exposures to the two mortgage insurers will be so great that it will leave no room to bail out anything else and there are several US banks that are now in big trouble.
NAB says that the dislocation in the residential market is separate from the corporate market, but the flow on is inevitable".
Kondratieff Winter arrived today, July 25, 2008
Real estate is now only worth 45%: the analyst is saying that NAB "has come clean" and is telling it "like it is": US real estate is now worth only 45%. What will the real estate be worth six months from now? 35%?
This is a deflationary hurricane of immediate impact -- American real estate just got a 55% haircut ... That's right 55% off the top, now, today!
The world today, July 25, 2008, has passed through Peak Currency: The National Australia Bank's, NAB, decision to write off 90 per cent of its US conduit loans was a watershed event that means we have passed through Peak Currency: all currencies are now in a death spiral lower with the US Dollar.
The Australian Dollar, FXA, fell; it will not be achieving parity; and it is no longer a yen carry trade interest rate differentially favored investment destination.
The Canadian Dollar, FXC, is in a bearish pattern and it fell like a rock today as Bloomberg's Jamie McGee reports that Canada's Dollar Poised for Weekly Decline on Oil, Sales Data.
We are going to be seeing disinvestment from traditional long the Aussie and short the Yen based on risk aversion to debt; and we are going to be seeing disinvestment from long the Loonie and short the Yen due to risk aversion to stagflation.
Thus the Yen Carry Trade, EUR/JPY, FXE:FXY, will be unwinding from its chart value of 1.702.
The world currencies have tanked and are now sinking; gold has risen supreme over stocks, bonds and all currencies; the on going chart of gold, GLD, compared to stocks, VTI, and Treasuries, TLT, and world currencies, DBV, which is seen here, shows that since May, 1, 2008 when institutional investors went long commodity futures, mutual funds, and indexed ETFs such as RJI, DBA, GLD and USO, gold has risen in value. Then on May 19, when the TAF, TSLF, and PDCF rally ended, gold rose more; and then during June 2008, as the yen carry trade unwound as investors took flight from stocks due to the announcement of the Bank of Japan May Meeting, gold rose still higher.
Clerly, the investment demand for gold, GLD, is rising.
For the common investor and all investors for that matter, gold is the now the sole means of maintaining wealth: even if it, for a time falls lower, now that the gold currencies, the Euro, FXE, the Aussie, FXA, and the Loonie, FXC, are failing.
Speculators may be borrowing from the Bank of Japan to go long gold in the futures market, or invest in gold ETFs such as GLD and IAU.
Those with access to the 0.5% Bank of Japan lending window will now be going short the markets to garner wealth; which will only increase the Deflationary Hurricanes that Mike Mish Sheldon references.
My investment recommendation remains unchanged: I recommend that one dollar cost average a buy in gold within the next ten days with a diversified investment in gold at BullionVault.com, GoldMoney, and in a gold ETF, in a trust account, in Switzerland.
Kondratieff and those of Long Wave theory, hold that economics and politics are intertwined, interwoven and interconnected: the two must always be presented together.
Democratic candidate Obama calls for the Western World Global Government to rise, to address global issues of security and prosperity
Associated Press reports that Angela Merkel says Obama's Speech sent a positive signal. His speech called for greater cooperation of the type presented in The Declaration of EU US, which is the Leaders framework agreement, for Western World initiatives in threats to security and prosperity poised by international terrorism and a noncoopeative Iran.
The Obama For President organization relates that Barack Obama called on Germany to send a clear message to Iran to abandon its nuclear ambitions: Speaking to an enthusiasitic Berlin crowd on Thursday, Obama urged renewed U.S.-Europe solidarity on a host of issues, from the war on terror to global warming to the threat of a nuclear Iran.
The time has come to “answer the call for a new dawn in the Middle East,” Obama said. “My country must stand with yours and with Europe in sending a direct message to Iran that it must abandon its nuclear ambitions.”
The presumptive Democratic nominee for U.S. president delivered his speech within sight of the Brandenburg Gate, where 21 years ago President Ronald Reagan publicly called on Soviet leader Mikhail Gorbachev to “tear down” the Berlin Wall.
“The greatest danger of all is to allow new walls to divide us from one another. The walls between old allies on either side of the Atlantic cannot stand,” he said. “The walls between races and tribes, natives and immigrants, Christians and Muslims and Jews cannot stand. These now are the walls we must tear down.”
Obama’s choice of location was the subject of some controversy, with German Chancellor Angela Merkel making it known that she was uncomfortable giving a reception more suited to a U.S. president than to a presidential candidate.
Obama ended up giving his speech at some distance from the symbolic Brandenburg Gate, at the 1864 Victory Column. That podium was moved to its current spot in 1939 by Hitler, to enlarge the avenue to make way for massive marches.
It is clear global banks have nowhere near provided for their exposures to US housing loans which in the words of John Stewart are experiencing a “meltdown”.
We are now way beyond sub-prime. NAB says that it is suffering a 55 per cent loss on American housing loans – an event that has never happened in the history of a developed country in recent memory.
This is an unprecedented event and means that the cost of bailing out the US financial system is now far beyond the highest estimates. A US recession is now locked in, but more alarmingly, 55 per cent loan losses point to the possibility of a depression.
It means the cost of bailing out housing exposures to the two mortgage insurers will be so great that it will leave no room to bail out anything else and there are several US banks that are now in big trouble.
NAB says that the dislocation in the residential market is separate from the corporate market, but the flow on is inevitable".
Kondratieff Winter arrived today, July 25, 2008
Real estate is now only worth 45%: the analyst is saying that NAB "has come clean" and is telling it "like it is": US real estate is now worth only 45%. What will the real estate be worth six months from now? 35%?
This is a deflationary hurricane of immediate impact -- American real estate just got a 55% haircut ... That's right 55% off the top, now, today!
The world today, July 25, 2008, has passed through Peak Currency: The National Australia Bank's, NAB, decision to write off 90 per cent of its US conduit loans was a watershed event that means we have passed through Peak Currency: all currencies are now in a death spiral lower with the US Dollar.
The Australian Dollar, FXA, fell; it will not be achieving parity; and it is no longer a yen carry trade interest rate differentially favored investment destination.
The Canadian Dollar, FXC, is in a bearish pattern and it fell like a rock today as Bloomberg's Jamie McGee reports that Canada's Dollar Poised for Weekly Decline on Oil, Sales Data.
We are going to be seeing disinvestment from traditional long the Aussie and short the Yen based on risk aversion to debt; and we are going to be seeing disinvestment from long the Loonie and short the Yen due to risk aversion to stagflation.
Thus the Yen Carry Trade, EUR/JPY, FXE:FXY, will be unwinding from its chart value of 1.702.
The world currencies have tanked and are now sinking; gold has risen supreme over stocks, bonds and all currencies; the on going chart of gold, GLD, compared to stocks, VTI, and Treasuries, TLT, and world currencies, DBV, which is seen here, shows that since May, 1, 2008 when institutional investors went long commodity futures, mutual funds, and indexed ETFs such as RJI, DBA, GLD and USO, gold has risen in value. Then on May 19, when the TAF, TSLF, and PDCF rally ended, gold rose more; and then during June 2008, as the yen carry trade unwound as investors took flight from stocks due to the announcement of the Bank of Japan May Meeting, gold rose still higher.
Clerly, the investment demand for gold, GLD, is rising.
For the common investor and all investors for that matter, gold is the now the sole means of maintaining wealth: even if it, for a time falls lower, now that the gold currencies, the Euro, FXE, the Aussie, FXA, and the Loonie, FXC, are failing.
Speculators may be borrowing from the Bank of Japan to go long gold in the futures market, or invest in gold ETFs such as GLD and IAU.
Those with access to the 0.5% Bank of Japan lending window will now be going short the markets to garner wealth; which will only increase the Deflationary Hurricanes that Mike Mish Sheldon references.
My investment recommendation remains unchanged: I recommend that one dollar cost average a buy in gold within the next ten days with a diversified investment in gold at BullionVault.com, GoldMoney, and in a gold ETF, in a trust account, in Switzerland.
Kondratieff and those of Long Wave theory, hold that economics and politics are intertwined, interwoven and interconnected: the two must always be presented together.
Democratic candidate Obama calls for the Western World Global Government to rise, to address global issues of security and prosperity
Associated Press reports that Angela Merkel says Obama's Speech sent a positive signal. His speech called for greater cooperation of the type presented in The Declaration of EU US, which is the Leaders framework agreement, for Western World initiatives in threats to security and prosperity poised by international terrorism and a noncoopeative Iran.
The Obama For President organization relates that Barack Obama called on Germany to send a clear message to Iran to abandon its nuclear ambitions: Speaking to an enthusiasitic Berlin crowd on Thursday, Obama urged renewed U.S.-Europe solidarity on a host of issues, from the war on terror to global warming to the threat of a nuclear Iran.
The time has come to “answer the call for a new dawn in the Middle East,” Obama said. “My country must stand with yours and with Europe in sending a direct message to Iran that it must abandon its nuclear ambitions.”
The presumptive Democratic nominee for U.S. president delivered his speech within sight of the Brandenburg Gate, where 21 years ago President Ronald Reagan publicly called on Soviet leader Mikhail Gorbachev to “tear down” the Berlin Wall.
“The greatest danger of all is to allow new walls to divide us from one another. The walls between old allies on either side of the Atlantic cannot stand,” he said. “The walls between races and tribes, natives and immigrants, Christians and Muslims and Jews cannot stand. These now are the walls we must tear down.”
Obama’s choice of location was the subject of some controversy, with German Chancellor Angela Merkel making it known that she was uncomfortable giving a reception more suited to a U.S. president than to a presidential candidate.
Obama ended up giving his speech at some distance from the symbolic Brandenburg Gate, at the 1864 Victory Column. That podium was moved to its current spot in 1939 by Hitler, to enlarge the avenue to make way for massive marches.
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