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The GoldBugg Report – March 03 , 2009

March 3, 2009

WORLD FINANCIAL REPORT ON RADIO FEB 27 2009 SHOW

February 28^th, 2009

Memo to All Retail Dealers

February 2009 is now in the “Record Books”, so let’s look at what we can see as “Historic Milestones” and how some of these will affect our future.

The US 2009 Federal Budget released this week. A whopping 1.75 Trillion Dollars Deficit. (That’s a New Record!!!)

US 4^th Quarter GDP Down 6.2% (That’s a New Record!!!)

US Car manufactures to receive 40 Billion in Government Bail Out Aide (That’s a New Record!!!!) We thought they were only looking for 22 Billion when they flew their private jets to Washington, just a couple of months ago. Oh well! What’s 18 Billion among US taxpayers??? Figures released this past week showed that the exceptional management skills of the upper echelon of the Big 3 are losing 83 million a Day. At this rate they will burn through this 40 Billion in 482 Days. (That’s June 2010) Then WHAT???

The White House, The Treasury and The Fed showed their true colors. – They will and are doing anything to deceive the US Tax Payers, and the rest of the world, including telling us lies to our face. (Face to Face) We are talking about “Nationalization of Banks.” Last week in our Memo of Feb. 20^th we touched on this topic. We have in several of our past Memos also cautioned about CitiBank Group. This week statements were made Monday through Thursday by various Government Departments. (President Obama, Mr. Bernanke, Mr. Geitner, etc) that the Government does not want to interfere in the Private Banking Sector, and has no intention or desire to “Nationalize” any US Banks.

Well folks that’s all just one BIG LIE. As of Friday Feb 27^th, 2009 the US

Government now owns 36% of Citi. This was accomplished by the conversion

of Government Owned Preferred Shares to Common Stock (a $3.25 per share)

resulting in an immediate paper loss of $2.35 per share for US Taxpayers and a

74% dilution of existing common shareholders. We are told by the

Government that this is not the same as “Nationalization.” We are all so

enamored with their wizardry and economic savvy that we will believe

everything they tell us. (This definitely belongs in the “Record Book”)

The Dow Jones closed the month at 7062.93 down .302.74 for the week and below the 7200 level we discussed in our Feb. 20^th Memo. 7062.93 is just a above the key support of 7061 so next week will be “interesting” to say the least. There really is not much out there to encourage a rebound save a manipulated short term Bear Market Rally. It really looks like further deterioration is going to take place especially if the market breaks down below that key psychological level of 7000.

Currently we are at 1997 Levels on the Dow and the S+P (That’s a New Record!!!!)

Watch out for News on AIG. If the US Government does not provide additional support to the tune of 20 to 30 Billion, AIG will be history. The problem will be how any move they make will negatively impact all Shareholders, Mutual funds, and Hedge Funds who hold the common stock in their portfolios (This will be a New Record)

So let’s see how we faired for the Month of February

Closing Prices for all Metals were down from the Feb. 20^th prices due to short term profit taking and liquidations in the futures markets to generate cash to meet margin calls in the Dow.

This correction should be short lived, but will provide opportunity for those who wish to take advantage, to acquire at these lower levels, prior to the next upturn.

Here are the Short Term Resistance and Support Levels

Platinum Palladium

Support 1065/1045/1005 190/178/163

Resistance 1080/1120/1155 198/208/218

Please maintain Strong Equity [we suggest 35 to 40%) when acquiring New product in these levels] as volatility should continue during these tumultuous times.

Trading Department – Precious Metals International

GOLD

-Aden Sisters-gold: More Strength on the Way. Gold could jump to the $1200 level as its next target. Read more here-http://news.goldseek.com/AdenResearch/1235417719.php

-Marc Faber says Fed responsible for global crisis, gold prices to exceed Dow Jones index. Read more here-http://www.bi-me.com/main.php?id=31904&t;=1&c;=62&cg;=4&mset;

-Gold has given up some of last’s weeks very large gains. With gold up some 9% so far in 2009, some correction and consolidation may be necessary prior to overcoming resistance at $1,000/oz.

The inverse correlation between stock markets and precious metals was seen again last week as gold and silver surged by over 6% last week while most major stock markets were down by some 6% (S&P; 500 was down by 6.8%). This inverse correlation looks set to continue for the foreseeable future and as has happened in other stock bear markets/ gold bull markets, the Dow/Gold ratio looks set to retest lows seen in 1933 and 1980.

-As can be seen in the above chart featured in this week’s Economist, the Dow/Gold Ratio has been falling sharply since 2000 when the Dow Jones was over 13,000 and gold at some $260/oz. Since then gold has risen to nearly $1,000/oz and the Dow Jones has fallen to 7365. Thus the ratio is now just above 7:1. One ounce of gold can buy seven units of the DJIA.

Given that the financial and economic conditions today are far worse than in 1980 and arguably as bad as they were in the early 1930’s (as warned of by Soros and Volcker over the weekend), it seems extremely likely that the Dow/Gold ratio will again reach a low in this cycle around the 1:1 or 2:1 level.

This would mean that gold could reach it’s inflation adjusted high in 1980 of $2,400/oz and the Dow Jones fall to as low as 2,400 or 4,800. Given the degree of money printing and credit creation we believe that soon deflation will abate and will be superceded by virulent inflationary pressures. This could lead to a Dow/Gold ratio of 1:1 or 2:1 at higher levels (the DJIA at 5000 and gold at $5000/oz or the DJIA at 6000 and gold at $3,000/oz). Gold.ie

-Much mainstream media coverage of gold remains uninformed and lukewarm to negative despite the appalling financial and economic conditions challenging us. This is a sign that gold remains in the early to middle stages of its bull market. Talk of “gold fever” or a “gold rush” in the gold market is very misguided as only a tiny fraction of retail investors have any allocation to gold whatsoever let alone being overweight gold.

There are no accurate statistics but I would confidently estimate that less than 2% of retail investors have any allocation to gold whatsoever. The “man in the street” barely knows what the price of gold is in dollars, let alone in sterling or euros. The majority of retail investors (and indeed financial advisors) know little or nothing about why one should invest in gold, nor indeed how one would invest in gold.

Gold is featured in the non specialist financial media once in a blue moon (every few months at best) and when it is covered it is nearly always covered in a negative or at least lukewarm fashion. Factually incorrect statements such as “most analysts warn that gold could be overvalued and there could be a painful correction on the way” are commonplace. The fact is that the majority of analysts are bullish on gold as can be seen in the Reuters Precious Metals Poll and the Bloomberg Gold Survey (both of which we take part in).

Most analysts and experts in the precious metal markets remain positive towards gold due to the unprecedented global financial and economic meltdown we are now suffering. Many of the analysts who are negative are in fact product sellers, stockbrokers and other vested interests who have always been negative on gold and will likely always be so as they simply do not understand and have not bothered to inform themselves about the market.

We will have a gold bubble and a gold mania in the coming years. There is no fever like gold fever. However, we are a long way from there yet and gold will have to reach its inflation adjusted 1980 high of $2,400/oz in 1980 before it can be classes as overvalued. It is currently less than half the value that it was in 1980. There cannot be a bubble in an asset class unless it rises to all time inflation adjusted highs and often times asset bubbles result in prices of multiples of their previous record highs.

In January 1980, just before the Federal Reserve avoided an inflationary catastrophe, the gold price peaked at $875. That is $2,430 in today’s dollars. But the pools of speculative capital are much larger now than in 1980. A true gold bubble could well leave this benchmark far behind.

And if the dollar collapses as some fear and the US suffers virulent stagflation or hyperinflation then we will rise way above the 1980 inflation adjusted high. Gold rose by more than 2,400% (from $35 to $850 or up X 24 times) in the 1970’s. Should a similar bubble form now gold would have to rise from a low of $250 in 2000 to over $6,000/oz.

The Nasdaq rose some 1600% from some 300 in 1990 to over 5000 in 2000 (up X 16 times). Should a similar bubble form now, gold would have to rise from a low of $250 in 2000 to over $4,000/oz. Even the Dow Jones went from 1900 in late 1987 (after crash) to over 14,000 (up X 7 times). Should a similar bubble form now, gold would have to rise from a low of $250 in 2000 to over $1,750/oz.

To take an even longer term and classic, archetypal example of a bubble, we only need to look to the South Sea Bubble which saw a nearly 10 fold increase in less than a year (a real proper mania). Should a similar bubble form now, gold would have to rise from a low of $250 in 2000 to over $2,500/oz (which coincidentally is gold’s inflation adjusted high of 28 years ago).

Gold has no fever, rush or mania yet with little or no retail participation and most of the media covering gold semi annually. More importantly returns have been slow and steady as seen in the performance table above. Always good to keep a historical perspective especially in these unprecedented and very challenging financial and economic times. Gold.ie-Read more here-

http://news.goldseek.com/GoldSeek/1235138206.php

-Gold Most Favored Investment This Year, World Gold Council Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601012&sid;=aJSqfjl4bjF8&refer;=commodities

-Gold, Silver Dealers Report Strongest-Ever Coin, Bar Demand. Read more here-http://messages.finance.yahoo.com/ETFs_(A_to_Z)/ETFs_I/threadview?m=tm&bn;=29797&tid;=24402∣=24402&tof;=12&frt;=2

-Gold coin shortage as demand soars. The rush by retail investors into bullion coins is creating shortages as mints across the world struggle to meet the surge in demand, dealers and mint officials say. The scarcity is lifting coin premiums to as much as 5 per cent above the spot gold price, a level reached briefly after the collapse of Lehman Brothers last September, when coin shortages also surfaced.

“There is demand for double or triple what the US mint is able to produce,” said Michael Kramer, president of MTB in New York, one of the four US gold dealers authorised to purchase bullion coins directly from the government’s mint. The US Mint has sold 193,500 ounces of its popular American Eagle gold coin in the first seven weeks of this year, the same amount it shipped during the whole of 2007 and about the same as in the first six months of last year.

“The demand is extraordinary. All the coins we got on Monday are gone today [Tuesday] and we will not be able to take any order until the following week,” Mr Kramer said. “It is the same with other mints.” Read more here-http://www.ft.com/cms/s/0/666b7ff0-036c-11de-b405-000077b07658.html or http://www.gata.org/node/7203

-Rand Refinery Ltd., the world’s largest gold refinery, increased coin output to the highest in about 23 years as demand for South African Krugerrands rose. The Johannesburg refinery last month doubled weekly production to 20,000 ounces of blank coins for minting by the State’s SA Mint as Kruger coins, Johan Botha, head of precious metals sales, said by phone from the city today.

Gold, the best-performing metal in 2008, is trading near its March 17 record of $1,032.70 an ounce as investors seek safer bets than equities and currencies. Goldman Sachs Group Inc. raised its three-month gold forecast by 43 percent to $1,000 an ounce this month. “Demand for our blanks is higher than we’ve seen since 1986,” Fourie said. “In the early 1980s gold then was a novelty and people wanted to own physical gold.”

Rand Refinery has manufactured, marketed and delivered more than 46 million ounces of Krugerrands since the gold coin was introduced in 1967, according to the company’s Web site.

“Record stock market lows are translating into record highs for gold and Krugerrands,” Alan Demby, chairman of the South African Gold Coin Exchange, said in an e-mailed statement last week. Investors are “piling into Krugerrands and Nelson Mandela gold medallions,” he said. Bloomberg

-Finance Minister Giulio Tremonti supports a proposal to use the Bank of Italy’s gold reserves to guarantee loans, MF reported, citing comments made by the president of the finance committee in parliament.

Gianfranco Conte, who heads the commission in the Chamber of Deputies, is close to Tremonti and yesterday called on Central Bank Governor Mario Draghi to address parliament on the issue to help “ease credit,” the newspaper said. Bloomberg

-Gold: an investment you hope won’t pay off. Read more here-http://www.reuters.com/article/ousiv/idUSTRE51N0RW20090224

-Gold to keep rising, base metals to lag BMO. Read more here- http://uk.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUKN2334883620090223?pageNumber=2&virtualBrandChannel;=0&sp;=true

-Jim Cramer is going for gold. He explains why gold is not too high. Watch video here-http://www.thestreet.com/_yahoo/video/10465560/cramer-going-for-the-gold.html?cm_ven=YAHOOV&cm;_cat=FREE&cm;_ite=NA&s;=1

-Gold market surplus to widen in 09. The VM Group looks at what lies ahead for the gold market this year in its Yellow Book. Read more here-

http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=79138&sn;=Detail view yellow book here-http://www.virtualmetals.co.uk/pdf/FYB0209.pdf

-Gold hedging slows but gold ETFs have grown more so far in 2009 than in whole of 2008. VM group report shows global gold hedging in Q4 08 fell 1.5 Moz (45t) to 15.5 Moz (483t). ETF offtake at 10.3 Moz (321t) in 2009 already higher than in all of 2008. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=79191&sn;=Detail

-Gold’s purchasing power. The overall conclusion is that gold is a significantly better store of value than paper currencies. While the purchasing power of gold is up four times, the purchasing power of major currencies is down 5-10 times, except for the Swiss Franc and the Japanese Yen, whose depreciation is significantly less. Read more and view charts here-

http://www.dollardaze.org/blog/?post_id=00583

-Gold Premiums Rise Again Despite Record Prices. Read more here-http://news.goldseek.com/GoldSeek/1235484585.php

-South African gold output lowest for 86 years. South Africa’s Chamber of Mines reports a 13.6% decline in annual gold output in 2008 the lowest since a strike-hit 1922. Read more here-

http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=79052&sn;=Detail

-Sharia compliant gold security to be launched in Dubai. A gold backed ETF-type security which complies with Islamic Sharia investment principles is to launched in Dubai next week. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=79038&sn;=Detail

-Gold ETFs the World’s best-performing securities. Retail-style gold bullion ETFs this week hit record levels, holding 45m ounces of gold, more than China and India combined. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=79200&sn;=Detail

-Ex-Treasury official confirms gold suppression scheme. Read more here-http://www.gata.org/node/7197

-Swiss Populist Party wants gold recalled from U.S. Read more here-http://www.gata.org/node/7189

SILVER

Gold to silver ratio at 80 to 1 with gold at $1,100 the silver price would be $13.75
Gold to silver ratio at 70 to 1 with gold at $1,100 the silver price would be $15.71
Gold to silver ratio at 60 to 1 with gold at $1,100 the silver price would be $18.33

Gold to silver ratio at 50 to 1 with gold at $1,100 the silver price would be $22.00
Gold to silver ratio at 15 to 1 with gold at $1,100 the silver price would be $73.33

-Ted Butler on Silver; Past, Present, Future Phoenix Silver Summit Speech. Read more here-http://news.silverseek.com/TedButler/1235407708.php

-James Turk-Silver Is Again Outperforming Gold. Read more here-http://www.kitco.com/ind/Turk/turk_feb232009.html

-Factors in place to keep silver bull running for 3 years-BMO. Silver’s recent outperformance suggests that the market may be starting to see it as it sees gold-as ultimate money. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page32?oid=78926&sn;=Detail

-Silver and Gold Short Term Top. Read more here-http://www.silverbrothers.com/022409.html

-Silver outshines gold for investors. Read more here-http://money.ninemsn.com.au/article.aspx?id=756803

DEFINITIONS-QUOTES-QUICK HITS

-The Austrian School of economics (also known as the “Vienna School” or the “Psychological School”) is a heterodox school of economics. It emphasizes the spontaneous organizing power of the price mechanism, holds that the complexity of subjective human choices makes mathematical modelling of the evolving market extremely difficult (or impossible) and therefore advocates a laissez faire approach to the economy.

Austrian School economists advocate the enforcement of voluntary contractual agreements between economic agents, but otherwise the smallest imposition of coercive force (especially government-imposed) on commercial transactions. Although often controversial, the Austrian School has been historically influential, dating back to the early 20th century. The Austrian School derives its name from its predominantly Austrian founders and early supporters, including Carl Menger, Eugen von Böhm-Bawerk and Ludwig von Mises.

Despite this name, supporters and proponents of the Austrian School can come from any part of the world, and there are now few Austrian School economists of Austrian nationality. Prominent Austrian School economists of the 20th century include Joseph Schumpeter, Nobel Laureate Friedrich Hayek, Henry Hazlitt and Murray Rothbard. The Austrian School now lies somewhat outside the mainstream, and currently contributes relatively little to mainstream economic thought. Read more here-http://en.wikipedia.org/wiki/Austrian_School_of_Economics

-”Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again.” Sir Josiah Stamp 1880-1941 former Director, Bank of England

-For those who have yet to cross over to the world of precious metals ownership we do not feel it is too late as we see long term price appreciation having a long way to go. If we see similar appreciation over the next four months we could see Gold approach $1,500.00 and Silver in the $25.00 range which would put the Silver/Gold ratio at 60/1. Precious Metals International

-Indeed there are interesting parallels with the mid 1970’s and today. Gold rose from $35/oz to $200/oz or nearly 6 times. Then gold prices fell from $200/oz to $100/oz in 1976 prior to surging by more than 800% from $100/oz to over $800/oz in the latter part of the 1970’s.

Gold fell from $1,030/oz in March 2008 to a low of just above $700/oz in late 2008. If gold were to repeat the performance of the mid to late 1970’s then it could rise to over $5,000/oz (8x $700/oz = $5,600/oz) in the coming years. Thus besides essential safe haven diversification attributes, gold also has significant potential for real and substantial capital gains that could help investors recoup some of the significant losses they have suffered in property and equity markets in recent years. Gold.ie-Read more here-http://news.goldseek.com/GoldSeek/1235483570.php

-CLSA’s equity strategist Christopher Wood confidently insists that the gold price will more than triple to reach $3,500/oz in 2010. Read more here-

http://ftalphaville.ft.com/blog/2009/02/23/52800/whats-coming-next-from-the-man-who-saw-it-coming/

-As governments print more money to pull the global economy out of a recession, Hans Goetti, CIO of LGT Bank in Liechtenstein tells CNBC that gold may spike to $3,000 a troy ounce as a result. Watch more here-http://www.cnbc.com/id/15840232/?video=1043867279&play;=1

-”People have been buying gold on economic Armageddon, so to see Obama and Bernanke paint a rosier picture, I’m not surprised to see gold come down a little bit,” said Matt Zeman, of LaSalle Futures Group in Chicago. Casey Daily Resource

-Investors have been buying gold this year as a store of value, driving the price up 9.3% and investment in the SPDR Gold Trust to a record 1,029 metric tons last week. Sales of 1-ounce American Eagle gold coins more than quadrupled to 92,000 in January, according to the U.S. Mint. Still, a decline in prices may be an opportunity to buy, some investors said.

“Those who’ve not yet bought gold as insurance against economic chaos have their opportunity to do so now and we would strongly urge that,” Dennis Gartman, an economist and editor of the Gartman Letter in Suffolk, Virginia, told his clients this week. Casey Daily Resource

-The sell-off in gold occurred partly in reaction to a congressional appearance by Federal Reserve Chairman Ben Bernanke coupled with back-and-fill movement that often occurs in a market that has seen considerable bullish enthusiasm, said Dave Meger of Alaron Trading.

Additionally, Meger said, the gold market underwent the kind of retracement that often occurs after a surge such as the one that took April gold to the $1,000 level Friday for the first time since July. “There was a significant amount of demand from small retail investors over the last several days,” he said. “As gold hit $1,000, it started becoming the talk of the town once again. That created an explosive rally. “A bit of a retracement off of that level is normal market trading.” Casey Daily Resource

-”Gold and other precious metals should continue to receive inflows of investment due to their ongoing outperformance of other asset classes,” said Tom Pawlicki, an analyst at MF Global Ltd. in Chicago. “Support will continue to come from disappointment in efforts to stem the financial crisis, and the weakness in the stock market that has resulted.” Casey Daily Resource

-”That $1,000 level stopped gold,” said Frank Lesh, of FuturePath Trading in Chicago. “Gold is overbought. This isn’t the end of the bull run. You’d rather see a slower, steadier build.”

“Gold is about the only commodity that’s going higher,” Lesh said. “There’s a lack of confidence in paper assets. Right now, the gold ETF is getting a lot of capital that would normally go to a bank or equities. There’s a perception that gold is going to hold its value.” Casey Daily Resource

-”Gold is pushing its record highs from last year, resistance will be formidable, but whether it does it in the next few weeks or in a few months, gold is clearly headed higher, much higher. $1,200 and higher gold is now a possibility in the short-term. Pullbacks will see continued strong investment demand, both from institutional and retail investors.

At the rapid rate global paper currencies are being diluted, the destruction of trust and integrity within the financial and banking system and destabilizing consequences such actions will promote, gold and silver are going to attract record amounts of capital seeking wealth preservation.” Peter Spina, of Goldforecaster.com

-Fannie Mae, the mortgage-finance company seized by regulators in September, asked the U.S. Treasury for $15.2 billion in assistance after a sixth consecutive quarterly loss drove its net worth below zero.

A wider fourth-quarter net loss of $25.2 billion, or $4.47 a share, pushed the company to make its first draw from a $200 billion federal lifeline, Washington-based Fannie said in a filing today with the Securities and Exchange Commission. Credit quality deteriorated and debt costs soared, forcing the company to record higher expenses and write down the value of its assets. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=akgfBZuPt29Q

-Moody’s May Lower $402 Billion of Subprime-Loan Debt. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=agQpgFBepZFw

-Chancellor of the Exchequer Alistair Darling took a step closer to nationalizing U.K. banks, boosting his control of Royal Bank of Scotland Group Plc and pressing former Chief Executive Fred Goodwin to give up his pension. The Treasury will allow its stake in RBS to climb up to 84 percent in return for guaranteeing 325 billion pounds ($462 billion) in toxic assets. Read more here-http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=a_1cNIMZjc7I

-China is taking advantage of the economic downturn to go on a major shopping spree, investing in energy and other natural resources that could give it an economic advantage it has never had before.

Some economic analysts say they believe that China’s investments pose a threat to competitors like the United States. In the last move, Beijing said last Friday that one of its big state-owned banks, the China Development Bank, would lend the Brazilian oil giant Petrobras $10 billion in exchange for a long-term commitment to send oil to China. Read more here-

http://www.nytimes.com/2009/02/21/business/worldbusiness/21yuan.html

-Clinton wraps Asia trip by asking China to buy US debt. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=apSqGtcNsqSY&refer;=worldwide or

http://www.breitbart.com/article.php?id=CNG.42a44b0f5d9cf5c9762e80574e79a3d5.831&show;_article=1

-Bernanke Sees 2010 Recovery ‘Only If’ Banks Stabilize. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=apuPjf3aW_H8&refer;=home

-John Bogle Says Recession May Last Another Two Years. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=a1ks4UgzX1oQ

-’Dow Theory’ Says Worst Isn’t Over for U.S. Stocks as YRC Falls. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid;=aMvcBJYDRy4k&refer;=home

-Dividends Falling Means S&P; 500 Is Still Expensive. The fastest reduction in U.S. dividends since 1955 is depriving investors of the only thing that gave stocks an advantage over government bonds in the last century.

U.S. equities returned 6 percent a year on average since 1900, inflation-adjusted data compiled by the London Business School and Credit Suisse Group AG show. Take away dividends and the annual gain drops to 1.7 percent, compared with 2.1 percent for long-term Treasury bonds, according to the data.

A total of 288 companies cut or suspended payouts last quarter, the most since Standard & Poor’s records began 54 years ago, when Dwight D. Eisenhower was president. While the S&P; 500 is trading at the lowest price relative to earnings since 1985 and all 10 Wall Street strategists tracked by Bloomberg forecast a rally this year, predictions based on dividends show shares are overvalued by as much as 46 percent. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid;=a0ppsUZhKieU&refer;=home

-Prechter Sees ‘Two More Years’ of U.S. Stock Bear Market. Watch video here-http://www.bloomberg.com/avp/avp.htm?N=av&T;=Prechter%20Sees%20%60Two%20More%20Years%27%20of%20U.S.%20Stock%20Bear%20Market&clipSRC;=mms://media2.bloomberg.com/cache/vqnWdbAyUyzI.asf or http://www.bloomberg.com/apps/news?pid=20601110&sid;=aPCwImB7U3Kg

-NYSE May Relax $1 Share Price Requirement to Prevent Delistings. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aAvFOhfgN4ME

-Federal Reserve Chairman Ben S. Bernanke said there may be a benefit in resurrecting a rule that restricts short-selling stocks when share prices are falling amid the current bear market.

“In the kind of environment we have seen more recently” the so-called uptick rule “might have had some benefit,” Bernanke said in testimony before the House Financial Services Committee today. The rule, scrapped by the U.S. Securities and Exchange Commission in 2007, barred investors from betting against a stock until it sells at a higher price than the preceding trade. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aGxThJ3_70z0&refer;=home

-GM Posts $30.9 Billion Loss as Wagoner Seeks New Aid. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=amy46Gg9ybgs

-General Motors Corp. Chief Executive Officer Rick Wagoner pressed his case for as much as $16.6 billion in U.S. aid to a White House auto task force in a session that ran almost six hours, according to a person familiar with the matter. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=a_SuDCJjYVnI

-4 ways to fix Detroit but none is easy. Force a merger? Fund a GM bankruptcy? Allow Chrysler to die? There are no good choices for Washington in dealing with the auto crisis. Read more here-http://money.cnn.com/2009/02/23/news/companies/federal_auto_options/index.htm

-Ken Rogoff says Fed needs to set inflation target of 6pc to help ease crisis. A leading US economist has called on the Federal Reserve to target an inflation rate of 5pc to 6pc over the next two years to erode the debt burden and slow the pace of job losses. Read more here-http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4701569/Ken-Rogoff-says-Fed-needs-to-set-inflation-target-of-6pc-to-help-ease-crisis.html

-U.S. Consumer Confidence Collapsed to Record Low. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aL6kjgG.mveU&refer;=home

-Europe Confidence at Record Low as Recession Deepens. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=a7B18hucKvz0&refer;=home

-U.S. Gov’t says ‘mass layoffs’ soared in January. Read more here-http://www.breitbart.com/article.php?id=D96INEM80&show;_article=1

-American Express Co., the largest U.S. credit-card company by purchases, is paying some cardholders $300 each to close accounts so the lender can reduce the risk of defaults as the recession deepens. Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid;=a32RTgL8bFSw&refer;=home

-Obama in Canada Finds Best Financial System Without Bad Banks. Read more here-http://www.bloomberg.com/apps/news?pid=20601082&sid;=aFwQUD5r.PzQ&refer;=canada

-Stanford Employees Yelled “Ponzi Scheme!” 3 Years Ago. Read more here-http://www.businessinsider.com/stanford-employees-alleged-ponzi-scheme-three-years-ago-2009-2

-90 year old Madoff victim back to work. Read more here-http://cosmos.bcst.yahoo.com/up/player/popup/index.php?cl=12126414

-CNBC’s Santelli incites traders in Chicago, calls for a ‘tea party’. Read more here-http://www.dailyfinance.com/2009/02/19/cnbcs-santelli-incites-traders-in-chicago-calls-for-a-tea-par/

-Hard times in Beverly Hills. Watch video here-http://www.cnn.com/video/#/video/us/2009/02/21/finnstrom.recess.90210.cnn?iref=videosearch

-Shiseido, Kao Beat Recession With Creams Priced as Much as Gold. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=a_kCGlkmTw80&refer;=home

RARE COLORED DIAMONDS

-The Rare Colored Diamonds Historical Value Tracker system is the perfect tool for investors to view the potential future value of a rare colored diamond based on the current market trend of a particular type of diamond. Track the potential future value of colored diamonds here-http://www.rarecoloreddiamonds.com/HistoricalValueTracker.html

-Penelope Cruz at the Oscars accessorized with a 69-carat cushion cut diamond necklace, a 21-carat starburst yellow diamond ring, and 11-carat diamond stud earrings from Chopard. The total value of the lady’s diamonds came to $3 million. Diamonds.net

-Rare colored diamond sales have been solid as a rock in recent months. In fact, the Wittelsbach blue diamond sold for $24.3 million at Christie’s in London on Dec. 11, 2008, setting a record price for any diamond or jewel sold at auction. The buyer was billionaire Laurence Graff. Christie’s Rahul Kadakia believes rare colored gems will remain at respectable price levels. “When it comes to colored diamonds, especially blues and pinks, those are rare in any market,” he says.

Says Lisa Hubbard of Sotheby’s, “Those appear to be holding their value, and they have not been subject to the ups and downs of the white diamond market.” Sotheby’s has also logged strong results in its recent colored diamond sales. An oval-shaped, vivid yellow diamond weighing 36.99 carats, internally flawless, sold at Sotheby’s New York in December 2008 for $71,870 per carat.

These gems are still the most sought after by famous private purveyors like the William Goldberg Diamond Corp. in New York, which has produced some of the most extraordinary colored diamonds in history, including the 30-carat, $50 million Blue Lili and the 5.11-carat, $20 million Red Shield, the largest red diamond ever graded by the Gemological Institute of America.

“I’ve heard different talk totally, about mines shutting down, like the Argyle mine in Australia,” says Barry Berg of the William Goldberg Diamond Corp., adding that he expects pink and blue diamonds to become ever scarcer. “It’s very hard to find a blue today, rough or polished,” he says. “Yellow is a little more available, but orange, I haven’t seen in ages.”

The Goldberg family business has seen prices for important stones remain strong. “We recently sold a 10-carat intense pink diamond for more than $8 million,” notes Eve Goldberg. “We also sold a bracelet with 58 carats of fancy colored diamonds, all over one carat, for close to $3 million.”

Clients have started to ask the Goldbergs whether they should consider buying diamonds as an investment and a shelter from plunging markets. Sotheby’s Hubbard is not surprised. Diamonds have an international market, and they are seen as a way to preserve wealth, she says. Read more here-http://www.forbes.com/2009/02/12/diamonds-jewelry-goldberg-lifestyle-collecting_0212_diamond_jewelry_print.html

COMMODITIES-OIL-NAT GAS

-Donald Coxe put his money on commodities just as they went bust. Now, he’s betting on inflation, China and India. Read more here-

http://www.theglobeandmail.com/partners/free/globeinvestor/investment/feb09/wrong.html

-Commodities Bouncing Back in 2009. Read and view chart here-http://www.321gold.com/editorials/holmes/holmes021909.html and http://www.321gold.com/editorials/holmes/holmes021909/1.jpg

-China prepares to buy foreign oil companies. Read more here-http://www.gata.org/node/7191

-Venezuela plans to boost oil output at least 12 percent in a joint venture with foreign investors that will cost more than twice what the government previously estimated, a confidential document shows.

The project would increase Venezuela’s daily output of 3 million barrels a day by 400,000 barrels a day within seven years, according to the document, which was obtained by Bloomberg News. The project would cost $18.4 billion, the report says, up from Energy and Oil Minister Rafael Ramirez’s June estimate of $8 billion.

The new estimate follows a 76 percent drop in oil prices from record highs in July and decisions by companies to delay exploration and drilling efforts from Canada to Kuwait amid the global credit squeeze. State-owned Petroleos de Venezuela SA wants the project and two others in the Orinoco oil belt to be the government’s first ventures with outsiders since President Hugo Chavez nationalized crude assets in 2007.

“It will be very tricky for companies, big or small, to get that level of funding,” said David Thomson, a Latin America energy analyst for Wood Mackenzie in Edinburgh. “Even if there wasn’t a credit crunch on, raising $10 billion to $20 billion for Venezuela wouldn’t be the easiest.”

Given past nationalization moves by Chavez, a self-avowed revolutionary socialist, Thomson said, “Banks aren’t going to touch it with a bargepole.” Read more here-

http://www.bloomberg.com/apps/news?pid=20601109&sid;=a8_6GQ9KdEQk&refer;=exclusive

-CFTC Probing United States Oil Fund in Crude Trades. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=alP0VeN7qr_I

-U.S. Gas Production Seen Sliding for 4 Years. Read more here-http://www.bloomberg.com/apps/news?pid=20601109&sid;=anyXBvUCQa_M&refer;=exclusive

U.S. BUDGET-SPENDING

-’09 budget spends $11,833 for every American. Drudgereport.com

-President Barack Obama’s budget director said on Thursday that without a shift in policies the U.S. deficit would reach $9 trillion over the next decade. White House budget chief Peter Orszag said the Obama administration’s budget outline reflects costs for the war in Iraq and other items that were previously not included in the budget.

“All told we are showing $2.7 trillion in costs in this budget that were excluded from previous budgets and I think that is a mark of the honesty and responsibility contained in this document,” he said. Reuters

-Obama Seeks $1 Trillion Tax Increase on High Earners, Companies. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=a.4tqh0vPi1k&refer;=home

-President Obama’s new budget blueprint estimates a stunning deficit of $1.75 trillion for the current fiscal year, which began five months ago, then lays out a wrenching change of course as he seeks to fund his own priorities while stanching the flow of red ink. Read more here-http://www.nytimes.com/2009/02/27/us/politics/27web-budget.html?ref=business or http://money.cnn.com/2009/02/26/news/economy/obama_budget_outline/index.htm?postversion=2009022614

-Analysis: Obama plans eclipsing New Deal spending. Read more here-http://www.breitbart.com/article.php?id=D96FI9CO0&show;_article=1

-Obama Pledges $634 Billion for Health Care, Says More Is Needed. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aB4axwgbnT2E

-Congress went on a pork-a-palooza, approving a massive spending bill with big bucks for Hawaiian canoe trips, research into pig smells, and tattoo removal all while the nation faces an economic crisis. Read more here-http://www.nypost.com/php/pfriendly/print.php?url=http://www.nypost.com/seven/02262009/news/politics/congress_porky_pols_pig_out_on_fine_wine_157027.htm

-Obama’s deficit goal: Hurdles ahead. Reducing the deficit in good times isn’t easy or popular. Doing it while trying to put out other fires will present quite a challenge. Read more here-

http://money.cnn.com/2009/02/23/news/economy/obama_promise_deficit/index.htm?cnn=yes or http://www.bloomberg.com/apps/news?pid=20601087&sid;=aB0FYEQkR4Es&refer;=home

VOLCKER SAYS U.S. ECONOMY MAY SUFFER FOR A LONG TIME-STRONG RESTRICTIONS ON HEDGE FUNDS

-The U.S. economy will suffer from the effects of the global financial crisis for “a long time” as a slowdown in demand spreads to other countries, former Federal Reserve Chairman Paul Volcker said. “We’re in the middle of a kind of massive economic crisis,” Volcker, who heads President Barack Obama’s Economic Recovery Advisory Board, said today at a Columbia University conference in New York. “We’re going to hear the reverberations about this for a long time.”

Volcker characterized the downturn that started in December 2007 as “not like a typical recession in the U.S. or elsewhere.” He also cautioned that U.S. government and central bank efforts to revive credit markets should only be temporary to alleviate the risk of inflation. Volcker said he is “shocked” by the international reach of the slowdown.

“The rest of the world has not held up,” making it harder for the U.S. to rely on strong export growth to emerge from its economic slump, he said. “Industrial production in most countries is going down faster than in the United States,” Volcker said.

The U.S. economy will contract 2 percent this year, making it the deepest annual slump since 1946, according to a Bloomberg News survey of economists taken this month. Gross domestic product shrank at a 3.8 percent annual pace in the last three months of 2008, the Commerce Department said in January.

Volcker also discussed rising prices, saying even “a little inflation is bad.” The cost of living in the U.S. rose last month for the first time in six months as the consumer price index rose 0.3 percent, the Labor Department said today in Washington. Bloomberg-Video here-http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/v1f0XHSKvGuc.asf

-Volcker Urges ‘Strong’ Restrictions on Hedge Funds. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aEPhoxeCfsvs&refer;=home or http://money.cnn.com/2009/02/26/news/economy/banks_volcker.reut/index.htm?postversion=2009022610

TALEB SAYS CRISIS IS HARDER TO END THAN DEPRESSION

-The financial crisis will be harder to end than the Great Depression and may force banks to be nationalized, “Black Swan” author Nassim Nicholas Taleb said. A more complex financial system makes the current problems, which cut global stock market value by 55 percent to $28 trillion since October 2007, worse than the contraction in the 1930s, Taleb said in a Bloomberg Television interview. Bonuses paid on Wall Street encouraged risk taking with no regard for losses, he added.

Rare and unforeseen events are known as “black swans,” after Taleb’s 2007 book, “The Black Swan: The Impact of the Highly Improbable.” The financial crisis isn’t one, he said.

“The black swan for me would be for us to emerge out of this unscathed and return to normalcy,” Taleb said. Compared with the Great Depression, this crisis is “very different, and it requires much more drastic action.”

Taleb’s book was published in May 2007, about three months before the credit crunch led banks to announce writedowns and credit losses that now total more than $1 trillion. As the founder of New York-based Empirica LLC, a hedge-fund firm he ran for six years before closing it in 2004, Taleb built a strategy based on options trading to bullet-proof investors from market slumps while profiting from rallies.

He now advises Universa Investments LP, a Santa Monica, California-based firm opened in 2007 by Mark Spitznagel, Taleb’s former trading partner, using some of the same strategies they had used since 1999. Taleb also is professor of risk engineering at New York University. Read more here-

http://www.bloomberg.com/apps/news?pid=20601087&sid;=a1U3n.FGDcpU&refer;=home

SOROS SEES NOT BOTTOM FOR WORLD FINANCIAL COLLAPSE

-Renowned investor George Soros said on Friday the world financial system has effectively disintegrated, adding that there is yet no prospect of a near-term resolution to the crisis. Soros said the turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union.

He said the bankruptcy of Lehman Brothers in September marked a turning point in the functioning of the market system. “We witnessed the collapse of the financial system,” Soros said at a Columbia University dinner. “It was placed on life support, and it’s still on life support. There’s no sign that we are anywhere near a bottom.”

His comments echoed those made earlier at the same conference by Paul Volcker, a former Federal Reserve chairman who is now a top adviser to President Barack Obama. Read more here-http://www.reuters.com/article/businessNews/idUSTRE51K0A920090221?feedType=RSS&feedName;=businessNews&rpc;=23&sp;=true

-Soros Says Financial Crisis Marks End of a Free-Market Model. Billionaire investor George Soros said the current economic crisis has its roots in the financial deregulation of the 1980s and marks the end of a free-market model that has since dominated capitalist countries.

Liberalization of the financial industry begun by the Reagan administration has led to a series of breakdowns forcing government intervention, Soros told economists and bankers last night at a private dinner at Columbia University in New York. The global recession, triggered by the collapse of the U.S. housing market, has “damaged the financial system itself,” he said.

Regulators are in part to blame because they “abrogated” their responsibilities, Soros, 78, said. The philosophy of “market-fundamentalism” was now under question as financial markets have proved to be inefficient and affected by biases rather than driven by all the available information, he said.

“We’re in a crisis I think that’s really the most serious since the 1930s and is different from all the other crises we have experienced in our lifetime,” Soros said. Read more here-

http://www.bloomberg.com/apps/news?pid=20601087&sid;=ay0FPxGdth_k&refer;=home

NAILL FERGUSON PREDICTS PROLONGED FINANCIAL HARDSHIP-CIVIL WAR BEFORE GREAT RECESSION ENDS

-Harvard author and financial crisis guru Niall Ferguson has landed with a thud in Ottawa, spreading messages that could make even the most confident policy makers squirm. The global crisis is far from over, has only just begun, and Canada is no exception, Mr. Ferguson said in an interview before delivering a presentation to public-policy think tank, Canada 2020.

Policy makers and forecasters who see a recovery next year are probably lying to boost public confidence, he said. And the crisis will eventually provoke political conflict, albeit not on the scale of a world war, but violent all the same. Read more here-http://www.theglobeandmail.com/servlet/story/RTGAM.20090223.wferguson0223/BNStory/crashandrecovery/?pageRequested=all&print;=true

U.S. PROBLEM BANK LIST HITS 250-BANKING NEWS

-Problem bank list tops 250. FDIC reports that number of troubled institutions soared during the fourth quarter to the highest level since 1994. The government’s closely watched listed of troubled banks grew during the fourth quarter to its highest level since 1994, regulators said Thursday.

The Federal Deposit Insurance Corp. reported that the number of firms on its so-called “problem bank” list grew to 252 during the last three months of 2008, compared with 171 banks making the list in the prior quarter. “There is no question that this is one of the most difficult periods we have encountered during the FDIC’s 75 years of operation,” agency Chairman Sheila Bair said Thursday.

Problem banks typically face difficulties with their finances, or are suffering through operations or management issues that pose a threat to their existence. The institutions that wind up on the list are considered the most likely to fail, although few of them actually reach that point. On average, just 13% of banks on the FDIC’s problem list have failed. Read more here-

http://money.cnn.com/2009/02/26/news/companies/fdic_banks/index.htm?postversion=2009022614

-Regulators close Oregon’s Silver Falls Bank. Firm becomes the 14th U.S. bank to fail this year, as the struggling economy and falling home prices take a toll on financial institutions. Read more here-http://money.cnn.com/2009/02/20/news/companies/oregon.bank.reut/index.htm

-Get ready for a wave of bank failures. In less than two months, regulators have seized 14 banks. Experts think many more banks will collapse before the financial crisis is over. Read more here-http://money.cnn.com/2009/02/20/news/companies/bank_failures/index.htm

-Bernanke Rejects ‘Anything Like’ Bank Nationalization. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=a4qVJ6vmPZ3I

-Gross Says Banks Need Credit, Not Nationalization. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aSVGILBa.kgM

-U.S. Banks Post First Loss since 1990 in Fourth Quarter. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aMztGISzhkDM

-Fed Urges Banks to Put Bailout Funds Into Loans, Not Dividends. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=anNhXj.NDVT8&refer;=home

-CNN’s Allan Chernoff explains Washington’s ’stress test’ for financial institutions to see if they can withstand the recession. Watch video here-

http://money.cnn.com/video/#/video/news/2009/02/26/news.chernoff.022609.cnnmoney

-U.S. Sets a 6-Month Deadline for New Bank Capital. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aZrnsIQYbIBU&refer;=home

-The granddaughter of the man who founded Bank of America in San Francisco in the early 1900s called the bank’s current condition “totally repulsive” and blasted the bank’s management for being “idiots.” Read and watch more here-http://cbs5.com/business/bank.of.america.2.942327.html

-U.S. Congressman Ron Paul’s Opening Statement and Questioning of Ben Bernanke Before the House Financial Services Committee this week. Watch more here-

http://news.goldseek.com/RonPaul/1235584997.php

-For all the $9.7 trillion pledged by the U.S. to combat the financial crisis, money markets show the world’s biggest banks see no recovery before 2010. The premium banks charge each other for short-term loans, the so-called Libor-OIS spread, rose above 1 percentage point last week for the first time since Jan. 9. Contracts traded in the forward market indicate the gauge, which measures banks reluctance to lend, will remain higher for the rest of the year than before Sept. 15, when the bankruptcy of Lehman Brothers Holdings Inc. froze credit markets.

“Libor-OIS remains a barometer of fears of bank insolvency,” former Federal Reserve Chairman Alan Greenspan said in an interview. “That fear has been substantially reduced since mid-October, but the decline has stalled well short of any semblance of normal markets.” The lack of lending between banks helped send the U.S. economy into a recession and may delay any recovery.

Turmoil in money markets stoked last year’s tumble in stocks and fueled demand for the relative safety of Treasuries, gold and Japanese yen. Since Lehman collapsed, the Standard & Poor’s 500 Index lost 35 percent, 10-year Treasury yields fell below 3 percent, gold topped $1,000 an ounce and the yen climbed 12 percent. “The fundamental outlook hasn’t changed,” said Jay Mueller, who manages about $3 billion of bonds at Wells Fargo Capital Management in Milwaukee. Read more here-

http://www.bloomberg.com/apps/news?pid=20601110&sid;=avRdLtxSSUwk

-Roubini Says Europe’s Banking Risks ‘More Severe.’ Read more here-http://www.bloomberg.com/apps/news?pid=20601085&sid;=aVCi5uDwQFhc&refer;=europe

REAL ESTATE-FORECLOSURES

-Home prices in 20 U.S. cities declined 18.5 percent in December from a year earlier, the fastest drop on record, as foreclosures climbed and sales sank. The decrease in the S&P;/Case-Shiller index was more than forecast and followed an 18.2 percent drop in November. The gauge has fallen every month since January 2007, and year-over-year records began in 2001. Separately, the Federal Housing Finance Board said prices in 2008 fell a record 8.2 percent.

Record foreclosures are contributing to declining property values and household wealth, crippling the consumer spending that makes up about 70 percent of the economy. The Obama administration has pledged to spend $275 billion to help stabilize the housing market, including $75 billion to bring down mortgage rates and encourage loan modifications.

“The massive inventory overhang in the market and the surge in foreclosures mean prices will continue to fall rapidly,” Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York, said today in a note to clients. “The administration’s rescue plan will, in time, slow the rate of decline, but it won’t happen immediately.” Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aIr7LleihO1E&refer;=home

-Sales of previously owned U.S. homes unexpectedly declined even as falling prices made them more affordable, signaling that the housing slump is further from a bottom than previously estimated.

Purchases fell 5.3 percent to an annual rate of 4.49 million, the fewest since 1997, the National Association of Realtors said today in Washington. The median price dropped 15 percent from a year ago to a six-year low of $170,300. Distressed properties accounted for 45 percent of all sales.

“This is actually a very disappointing set of numbers,” Ethan Harris, co-head of economic research at Barclays Capital Inc., said in a Bloomberg Television interview. “We’re still in this phase of the recession where it’s really kind of a dramatic pulling back” in purchases of big-ticket items, due to a “tremendous loss of confidence in the economy.” Read more here-

http://www.bloomberg.com/apps/news?pid=20601087&sid;=acdWmjTuKCCg&refer;=home

-New-Home Sales in U.S. Plunge to Record-Low 309,000. Sales of new homes in the U.S. plunged in January to a record low as soaring unemployment and mounting foreclosures drove buyers away.

Purchases dropped 10 percent to an annual pace of 309,000, the lowest level since data began in 1963, the Commerce Department said today in Washington. The median price decreased 13.5 percent, the most in almost four decades. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=ank_aa66.Mbg

-Luxury homeowners are falling behind on mortgage payments at the fastest pace in more than 15 years, a sign the U.S. financial crisis that began with the poorest Americans has reached the wealthiest. About 2.57 percent of prime borrowers who took out jumbo loans last year were at least 60 days delinquent, according to LPS Applied Analytics, a mortgage data service in Jacksonville, Florida.

They got to that level within 10 months, almost twice as quickly as 2007 borrowers and the fastest rate since at least 1992, when LPS Applied Analytics began tracking the market. The jump in late payments on jumbo loans, while still lower than the 20 percent delinquencies in subprime mortgages, signals that the borrowers with the most money and the best credit are hurting as the U.S. recession deepens in its second year. It also means these loans will be even more difficult to obtain and more expensive to pay off.

“The biggest influence in rising delinquencies is related squarely to the economy rather than poor underwriting,” said Keith Gumbinger, vice president of HSH Associates, a Pompton Plains, New Jersey-based mortgage research firm. “We are apparently all suffering to some degree. It’s certainly more severe for some but still, it’s pretty much widespread.” Read more here-http://www.bloomberg.com/apps/news?pid=20601213&sid;=ab4hyMC6aJf0&refer;=home

-Manhattan’s luxury real-estate market is rotting, as Wall Street layoffs and tight credit squeeze demand. Why prices could slip another 30%. Read more here-

http://online.barrons.com/article_print/SB123517384563737163.html?mod=googlenews_barrons

-California Home Sales Double as Prices Plummet 41%. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aCsmO5e6mSb8&refer;=home

-Shiller: House Prices Still Way Too High. Watch video here-http://finance.yahoo.com/tech-ticker/article/190712/Shiller-House-Prices-Still-Way-Too-High?tickers=^gspc,^dji,hd,kbh,tol,ctx,xhb

-Office Sales in U.S. Fall to Eight-Year Low, Real Capital Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=arbyl5N95jvQ

-Dubai Rents to fall as Much as 40% in High-End Areas. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aGFDbiICCoBQ

-Getting an expensive housing reality check. Read more here-http://www.nytimes.com/2009/02/22/nyregion/westchester/22houseswe.html

-On May 1, 2007, a very different economic era, Janet Faello put her former marital home on the market for $829,000. She and her husband were divorcing. It seemed like a good price for the house, a six-bedroom, three-and-a-half-bath ranch in Dix Hills. But it didn’t sell at that price, or at $750,000, where it landed six months later, or at $699,000, where it stands now.

“It’s not the Taj Mahal, but it’s a nice, well-maintained home,” said Ms. Faello, a 53-year-old massage therapist with two daughters in college who remains in the house, which she and her ex-husband still jointly own. Her ex-husband lives elsewhere. “I haven’t been entertained once with an offer, and I’m still not getting any bites.”

With the house unsold, Ms. Faello said she and her ex-husband are struggling to meet expenses. Taxes alone are $13,860 a year. “I’m not ashamed to say to you, I have had to borrow money from my father,” she said. “We each want to move on. We’re just hoping and praying things will turn around.” Read more here-

http://www.nytimes.com/2009/02/22/nyregion/long-island/22Rstuck.html

-Chinese Scoop Up SoCal Foreclosures. Read more here-http://www.nbclosangeles.com/around_town/real_estate/Chinese_Scoop_Up_SoCal_Foreclosures_Los_Angeles.html

-House of Cards: The Faces behind Foreclosures. Read more here-http://www.time.com/time/printout/0,8816,1881854,00.html

GEOPOLITICAL

-FBI Director Warns of Terror Attacks on U.S. Cities. Read more here-http://www.washingtonpost.com/wp-dyn/content/article/2009/02/23/AR2009022301850_pf.html

-U.S. Ready to Respond to N.Korea Missile. Admiral Keating Tells ABC News U.S. Prepared to Shoot Down Missile If Obama Gives OK. Read and watch more here-

http://abcnews.go.com/International/story?id=6965611&page;=1

-Iran hails military ties with Russia. Read more here-http://www.breitbart.com/article.php?id=D96FD6000&show;_article=1

-Iran Says Test of First Nuclear Power Plant Begins. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aML9A_9W9oLw

-Officials: US troops to exit Iraq by August 2010. Read more here-http://apnews.myway.com/article/20090224/D96I7EGO0.html

-Russia “will respond” to military moves in Arctic. Read more here-http://uk.reuters.com/article/gc07/idUKTRE51M3ES20090223

The GoldBugg Report – March 03 , 2009
Posted by Worldwide Precious Metals on Tuesday, March 3, 2009

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