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The Goldbugg Report – September 29, 2009

September 29, 2009

-Gold to reach $1,500 this fall?

-The record high of $50/oz (Silver) remains a viable price target in the coming years. Why?

-King World News interviews Ted Butler on the silver market.

GOLD

-Gold to reach $1,500 this fall? Post summer doldrums, we’re beginning to see a nice fall run up in the gold price according to seasoned bullion dealer, investor and newsletter writer Greg McCoach. He sees a number of factors culminating in ever-increasing prices going forward. Read more here-

http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=89689&sn;=Detail

-Gold is due a correction but then it will hit $1,400. Dominic Frisby-Read more here-http://www.moneyweek.com/investments/precious-metals-and-gems/gold-price-is-due-a-correction-but-then-it-will-hit-usd1400.aspx

-Demand for gold, which traded within 1 percent of a record last week, will rise on mounting concern that equity markets may decline, said William Rhind, ETF Securities Ltd.’s head of U.S. sales and marketing.

“Clients are getting nervous about the stock market and see the potential for a correction there,” Rhind, 30, said today by telephone from London. “That’s leading people to precious metals, and gold particularly, in a quality flight.”

Bullion has gained for eight straight years and jumped to a record in 2008 as financial turmoil boosted the metal’s appeal as an alternative asset. Speculative net-long holdings of gold futures rose last week to the highest level since at least 1993, the government has said. Before today, gold climbed 13 percent in the past year as the Standard & Poor’s 500 Index fell 11 percent.

“People see that the dollar is weakening and that the threat of inflation is here,” Rhind said. “These things are at the front of investors thinking right now and that translates into more interest for gold.” “Investors don’t want to hold the dollar, so that means they’re holding gold,” Rhind said. “We’d expect that to increase through the end of the year.” Read more here-

http://www.bloomberg.com/apps/news?pid=20601110&sid;=a2A6.76IUexQ

-What If Everyone in the World Wanted a 1-ounce Gold Coin? If we’re right about where the price of gold is headed, the general public will someday clamour to buy all things gold. While gold stocks will be where the real leverage is, the rush will start with gold itself. As a gold editor, I have a very natural question: is there enough to go around?

According to the U.S. Census Bureau, there are 6.783 billion earthlings. Meanwhile, CPM Group, a highly respected industry organization, estimates there are 4.8 billion ounces of above-ground gold in the world. And this includes jewellery, electronics, and dental.

So, even if everyone around the world volunteered to have their chain, cross, or tooth melted into a coin, we’re already short. Those towards the end of the line are out of luck. However, it’s worse than that. Of all the physical metal ever mined.

2.1 billion ounces, or 43%, is found in jewellery, decorative, and religious items.

Private stock gold already held by various private parties accounts for 1.1 billion ounces.

Official reserves (central banks, IMF, etc.) stand at 1 billion ounces.

Industrial use accounts for 530 million ounces.

Very little of this is likely to come available for purchase in coin form. After all, you’re not selling any of your gold, and neither are many banks or institutions. Most everyone is buying.

So for those who don’t yet have a gold coin (or you greedy investors who want more than one), this pretty much leaves us with mine production and scrap sources.

CPM forecasts that total new supply in 2009 will be around 122 million ounces. Only a small percentage of this is made into gold coins and bars, but if all of it were, it would amount to less than two one-hundredths of an ounce, or about half a gram, for every man, woman, and child on earth this year. A product of this dimension is about half the size of that small button on your shirt collar.

Since this supply is only available annually, it means 0.018% of the global population one in every 55 people could buy a one-ounce gold coin this year. Or, said differently, it would take 55 years before everybody had one, assuming the population never increased (it is) and supply never decreased (it is).

But it’s worse than that. Actual 2009 coin production will be around 5 million ounces (excluding medallions or “rounds”), leaving two one-hundredths of a gram of gold (or 0.3 of a grain) available this year for each of the planet’s inhabitants.

This is about half the size of the sesame seed that fell off your hamburger bun at dinner last night. It means that only 0.0007% of earth’s citizens or one in 1,356 can buy a one-ounce gold coin this year, and it would take 1,356 years for everyone to get one.

How’s that for a supply squeeze? But it’s worse than that. Demand continues rising. Gold is more frequently in the news, attracting more customers every day. Hedge funds, which never before considered gold, are now buying physical metal (Greenlight Capital actually sold $500 million of GLD and bought physical gold). Central banks are net buyers of gold for the first time in 22 years.

China is running TV ads encouraging its citizens to buy gold and silver. Last month Russia bought more gold than they actually produced. In a recent survey, 20 out of 22 fund managers bought physical gold for their personal investments. In other words, some investors are already scrambling to get it and in big quantities.

But it’s worse than that. Most of the ramifications of the money printing and dollar debasement haven’t even surfaced yet. How will the general public react when the dollar is crashing and standards of living are threatened? What will they do when milk and gas prices surge to twice what they are now?

How will the greater collective respond when they lose faith in government interventions? Where will they invest when they see gold and silver prices screaming upward and don’t want to be left behind? The panic into gold by the general public hasn’t begun yet. Available supply is scarce and will get smaller. There won’t be enough. Jeff Clark, Senior Editor, Casey’s Gold & Resource Report

-Gold & Silver: the Shining Stars. Gold, silver and gold shares are jumping up. Gold hit a record high this month and all three are in ‘break out’ mode. The time of truth is at hand and it won’t take much more strength to confirm that a stronger phase of the eight year old bull market has begun.

We have often talked about gold’s role in the monetary system. For many years it was tossed aside as a barbaric relic and the thinking was that it was old fashioned. Nixon reinforced this in the 1970s when he closed the gold window by taking the U. S. dollar off the gold standard. An energetic economy then became most important.

But in spite of the generally strong U.S. economy and the growing global economies since the 1970s, the dollar has been weakening. Gold has been moving up quietly this decade and your average person or investor is still essentially unaware of its strength, but that will likely soon change. Aden Sisters-Read more here-http://www.kitco.com/ind/Aden/aden_sep222009.html

or http://www.321gold.com/editorials/aden/aden092409.html

-One-thousand Federal Reserve Notes per troy ounce! This past week gold edged over $1000 to close at its highest levels ever witnessed. This much-maligned investment has nearly quadrupled since its secular bull’s humble beginnings in April 2001, a fantastic 297% gain compared to the S&P; 500’s pathetic 7% loss over this 8+ year span.

The bottom line is $1000 gold is certainly not the extreme the financial media is portraying. In the real inflation-adjusted terms that matter, gold is nowhere close to hitting new records. Using the watered-down CPI, gold’s all-time high is closer to $2350. And during and after the 1970s gold bull this metal spent the better part of 2 years continuously over $1000 in today’s dollars. This week’s $1000 is not excessive at all.

The bullish fundamental forces driving this gold bull remain very much alive and well. Until global gold supply growth exceeds demand growth, probably years away yet, the gold price has no choice but to continue climbing on balance. While $1000 is a sexy number exuding big psychological gravity, it is nothing special in a pure technical sense. It is just another temporary step on a long bullish journey. Adam Hamilton-Read more here-http://www.zealllc.com/2009/cpigold3.htm

-No investment ever goes straight up or straight down. During the last bull market in gold, the precious metal rose 2,329% from a low of $35 in 1970 to a high of $850 in 1980. However, during that time, there was a period of 18 months in which gold fell nearly 50% (see the chart below).

As you can see, from mid-1971 to December 1974, gold rose 471%. It then fell 50%, from December ’74 to August ’76. After that, it began its next leg up, exploding 750% higher from August ’76 to January 1980.

Now, in its current bull market (2001 to March 2008), gold rose over 300% from $250 to a little over $1,000. And just like in the mid-70s, it began showing signs of weakness after its first big rally up to $1,014 in March ’08. At one point, it even fell to $700, a 30% retraction.

Granted, it wasn’t a full 50% retraction like the one that occurred from 1974-76. But we are experiencing a financial crisis. And gold is the most common catastrophe insurance. If we were to go by the historic pattern of the gold market in the ‘70s, gold should experience upwards resistance for 19 months after its first peak today. Gold’s recent peak was $1,014 in March ’08 (roughly 14 months before the writing of this report).

If this bull market parallels the last one, then gold should renew its upward momentum in a very serious way starting in October 2009. And this next leg up should be a major one (the biggest gains came during the second rally in gold’s bull market in the ‘70s). Read more here-http://www.kitco.com/ind/Summers/sep232009.html

-Once we broke above and held the $850/ounce level in Gold we set the stage for much higher prices. There are NO long-term overhead price resistance points that currently exist. The “sky is the limit” in a sense. I believe we are closer to the beginning than the end of the current Gold bull market, at least in price.

A 7-fold rise in the Gold price would lift us to $1785/oz., which I think is the absolute minimum long-term secular high in the Gold price. I personally don’t think it is reasonable for Gold to top out before we reach the $2000/oz. level. And these are the worst case scenarios for the Gold price! Read more here-http://news.goldseek.com/GoldSeek/1253513280.php

-Clive Maund gold commentary. Read more here-http://news.goldseek.com/CliveMaund/1253513700.php

-IMF will sell up to 403.3 tonnes of gold could begin next week. The International Monetary Fund said it will sell one-eighth of the agency’s gold reserves-without disrupting the gold market beginning at the end of this month. Read more here-http://mineweb.co.za/mineweb/view/mineweb/en/page34?oid=89504&sn;=Detail

-China may purchase some of the 403.3 metric tons of gold being offered by the International Monetary Fund, Market News International reported, citing two unidentified government sources.

China will consider the purchase to diversify its reserves if the price is right and the potential return relatively high, the report said, citing one of the sources. There is no indication China is seeking to buy all of the gold on offer, the report said, citing no one.

The IMF board approved the sales, valued at about $13 billion, pledging to avoid disrupting the market with the transactions and saying it would “stand ready to sell gold directly to central banks,” according to a statement Sept. 18. An official at the People’s Bank of China declined to comment.

“It’s very possible that China buys from the IMF and it’s also possible the country buys all of it given its vast forex reserves and relatively low gold holdings,” Qu Mingyi, a gold dealer at the Bank of China Ltd., said from Shanghai. Buying by central banks would reduce the impact of the IMF sale on the market, Qu added. Read more here-

http://bloomberg.com/apps/news?pid=20602013&sid;=aklIw7I0Di8k or http://www.gata.org/node/7811

-Rumor: China Could Ban Gold Exports. The Chinese government has been promoting the accumulation of gold by its citizens, presumably to help the nation diversify away from a devaluing dollar. In a bid to hoard the metal, might they go as far as to ban the metal’s export? For whatever a rumour from China is worth, some speculate that this could happen. Read more here-http://www.businessinsider.com/might-china-ban-gold-exports-2009-9

-Finally the Gold price in US$ terms leads the globe, with a breakout above the $1000 mark, enough to capture world attention. Only the Gold price in the US$ is breaking out to new highs. The painful breakdown decline in the USDollar is the reason why. All currencies are damaged, but only the USDollar is in steep decline. The first phase is complete, a perverse rise from insolvent liquidations and contract satisfaction.

The second phase has begun. Foreigners have had a full year to remove the control levers, to tear down the required pillars, and to force the USDollar exchange rate to seek its true value. A shock will surely be felt, financially and politically and socially when the 30% to 50% decline comes. The 50% decline might come from a formal introduction of a new USDollar, worth half as much, but with a shiny pretty new bill to carry around. Unfortunately, the debt burden associated with the USDollar will also be carried around.

The point is that the gold price is now rising and breaking out ONLY in US$ terms. The sick hangover from the first phase has ended, as the nation enters a dangerous new phase. The Gold-Euro price and the Gold-Swiss price and the Gold-Pound price and the Gold-Canadian$ price are all struggling to rise above their February highs.

The four gold prices are shown in the same order. They might actually remain in a leveling pattern until the USDollar is finished with its powerful upcoming decline. That decline has only begun, as another 20% to 25% is assured. Jim Willie CB-Read more here-http://www.321gold.com/editorials/willie/willie091809.html

-Inflation fears and fiat currencies what they mean for gold. The recent move in gold suggests higher prices over the next few months as inflation fears linger. Read more here-

http://mineweb.co.za/mineweb/view/mineweb/en/page33?oid=89505&sn;=Detail

-Gold Rally has Legs: Mining Industry Leaders Agree. Some believe $1,000 will be the new base for the next major upside movement. Read more here-

http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=89627&sn;=Detail

-The simple commodity case for gold. Read and watch more here-http://www.gata.org/node/7814

-Gold’s big picture bullish; good upside silver potential. After some gold ETF redemptions, ETF holdings have started to climb again, which ScotiaMocatta considers a “potentially bullish development.” Read more here-http://mineweb.co.za/mineweb/view/mineweb/en/page33?oid=89507&sn;=Detail

-Indian gold purchases pick up as festive season gathers momentum. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=89629&sn;=Detail

-King World News interviews Ed Steer of GATA on the gold market. Listen here- http://www.gata.org/node/7805

-Fed admits hiding gold swap arrangements. Read more here-http://www.gata.org/node/7819

-GATA issues worldwide press release on Fed gold swaps. Read more here-http://www.gata.org/node/7820

-Sorry, gold bugs, but the facts just don’t add up. Read more here-http://www.theglobeandmail.com/report-on-business/commentary/sorry-gold-bugs-but-the-facts-just-dont-add-up/article1296703/

SILVER

Gold to silver ratio at 80 to 1 with gold at $1,400 the silver price would be $17.50

Gold to silver ratio at 70 to 1 with gold at $1,400 the silver price would be $20.00

Gold to silver ratio at 60 to 1 with gold at $1,400 the silver price would be $23.33

Gold to silver ratio at 50 to 1 with gold at $1,400 the silver price would be $28.00

Gold to silver ratio at 40 to 1 with gold at $1,400 the silver price would be $35.00

Gold to silver ratio at 30 to 1 with gold at $1,400 the silver price would be $46.67

Gold to silver ratio at 20 to 1 with gold at $1,400 the silver price would be $70.00

Gold to silver ratio at 15 to 1 with gold at $1,400 the silver price would be $93.33

-The performance of the gold/silver ratio over the past month has been stunning. From a high of 68.0 on August 19, the ratio closed last week in New York at 59.2, a remarkable 12.9% gain. In other words, the silver you own has outperformed, or appreciated, 12.9% more than your gold. This tremendous move in the ratio is clear from the following chart.

It is interesting to note that the ratio has had big declines before. Note how it fell from the end of 2003 into 2004 and then had another big decline two years later, although not to the same degree. In any case, we cannot say that this current decline is just an aberration or that it could not possibly drop any further.

The reality is that it just might. Maybe it will even drop on this current decline (and before any meaningful correction) to the green uptrend line on the above chart, currently about 54. James Turk-Read more here-http://www.fgmr.com/ratio-september-18-2009.html

-James Turk: There goes the Financial Times again. Read more here-http://www.gata.org/node/7807

-A short-term pull back in the price of silver in the next 4 to 8 weeks could well be on the cards after the sharp run-up seen since mid-July but, renewed demand late in the year and in the early parts of 2010, could see the metal challenging the $20/oz level.

This is the view of RBC Capital Markets, which says in its “review of all things silver” it retains its positive view on silver in the short to medium term because of: “Continued fundamental outlook for a weaker U.S. dollar, which we believe in turn will likely result in stronger precious metal prices (both gold and silver).” Read more here-

http://www.mineweb.com/mineweb/view/mineweb/en/page32?oid=89740&sn;=Detail

-Silver, PGMs to outperform gold as it hits well over $1,300/oz Melek. Commodities are riding high, gold is in it for the long term, and silver and PGMs should outperform gold in the latest scenario forecast by BMO Capital Markets. Read more here-http://www.mineweb.net/mineweb/view/mineweb/en/page31?oid=89666&sn;=Detail

-Silver Remains a Contrarian’s Dream with Negative or No Media Coverage and No Public Involvement. The silver market smells different and a short squeeze and spike to over $20/oz before year end remains possible especially as the big picture supply/demand fundamentals remain compelling.

The record high of $50/oz remains a viable price target in the coming years. As ever the analysts remain overwhelmingly bearish on silver and silver remains a true contrarian’s dream with little or no public involvement and negative or no media coverage. Goldcore

-Silver has become embroiled in the current hullabaloo around the gold price and commentators on both sides of the fence have predicted either that the price is going to rise rapidly or fall precipitously. The main reason for this divergence of view points is that silver is both an industrial and an investible metal. Read more here-

http://www.mineweb.com/mineweb/view/mineweb/en/page32?oid=89432&sn;=Detail

-Gold and Silver into the Next Decade. The strong implication of this chart is that gold and silver have a few years left to run higher. In this remaining time frame I expect gold to challenge the 1980s highs on an inflation adjusted basis.

Gold made new nominal highs at $1032 in March 2008 but that is well short of the inflation adjusted 1980 high of about $2500. Silver is unlikely to challenge its inflation adjusted high of $135 unless a mega-buyer like the Hunt brothers steps in again but the nominal high of $52 is certainly an objective. Read more here-http://www.321gold.com/editorials/watson/watson092309.html

-Gene Arensberg: Gold, silver stage at new heights. Read more here-http://www.gata.org/node/7817

-Gold and silver prices could come down in the short term VM Group. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=89748&sn;=Detail

-King World News interviews Ted Butler on the silver market. Listen here-http://www.gata.org/node/7806

-Ted Butler: Is CFTC warning the big silver shorts? Read more here-http://www.gata.org/node/7815 or http://news.silverseek.com/SilverSeek/1253546222.php or

http://news.silverseek.com/SilverSeek/1253632847.php

-Sprott pushes gold and silver as dollar’s reserve currency status under pressure. Read more here-http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=89649&sn;=Detail

CHARTS OF THE WEEK-QUOTES-QUICK HITS

-Chart of the week: The Option ARM Armageddon. The Option Arm Armageddon was supposed to strike in the spring of 2009. Across the country, option adjustable-rate mortgages

(ARMs) were set to detonate and start a new wave of foreclosures. But it never happened. We made it well past when this chart from Credit Suisse showed the option ARMs were supposed to begin to hit. And the crisis didn’t come.

Why not? Well, when interest rates dropped to historically low levels as the Fed fought the financial crisis, the wave of resets was held off. Unfortunately, low interest rates won’t last forever they’ll now likely strike next year and continue well into 2011. Many borrowers who now have the option of making payments so low that they don’t even cover the interest are seeing their original loan balance grow, even as their home values continue to fall or remain flat.

The chart below shows that the option ARM reset problem is comparable to the subprime problem, and will likely last for quite some time. Armageddon may have been forestalled but it hasn’t been overcome. Read more here-http://www.businessinsider.com/john-carney-chart-of-the-day-monthly-mortgage-rate-resets-2009-9

-”Option” mortgages to explode, officials warn. The federal government and states are girding themselves for the next foreclosure crisis in the country’s housing downturn: payment option adjustable rate mortgages that are beginning to reset.

“Payment option ARMs are about to explode,” Iowa Attorney General Tom Miller said after a Thursday meeting with members of President Barack Obama’s administration to discuss ways to combat mortgage scams. “That’s the next round of potential foreclosures in our country,” he said.

Option-ARMs are now considered among the riskiest offered during the recent housing boom and have left many borrowers owing more than their homes are worth. These “underwater” mortgages have been a driving force behind rising defaults and mounting foreclosures.

In Arizona, 128,000 of those mortgages will reset over the next year and many have started to adjust this month, the state’s attorney general, Terry Goddard, told Reuters after the meeting. “It’s the other shoe,” he said. “I can’t say it’s waiting to drop. It’s dropping now.” Read more here-http://www.reuters.com/article/wtUSInvestingNews/idUSTRE58G5U320090917

Source: www.chartoftheday.com

-Chart of the week: Investor Sentiment Rebound Could Be A Bearish Sign. 42% of individual investors are bullish right now, according to most recent sentiment data from the American Association of Individual Investors (AAII). While investor sentiment has changed dramatically since March, we’re still only moderately above the long-term average of 39%.

The problem is that professional investors are likely to be more optimistic than AAII’s investor sentiment, since they became optimistic earlier in the game this year. Overall bullish sentiment could thus be higher once you combine individual investors with these pros.

The market could be approaching a tricky stage whereby one has to gauge the potential for new bulls to be disappointed versus that for further bears or fence-sitters to capitulate. Given the uncertain times, even moderately above-average bullishness, shown below, could signal a short-term sentiment peak. Read more here-

http://www.businessinsider.com/chart-of-the-day-aall-measure-of-bullish-sentiment-2009-9

Source: chartoftheday.com

-The idea that political freedom can be preserved in the absence of economic freedom, and vice versa, is an illusion. Political freedom is the corollary of economic freedom. Ludwig von Mises-Bio here-http://en.wikipedia.org/wiki/Ludwig_von_Mises

-US May Face ‘Armageddon’ If China, Japan Don’t Buy Debt. The US is too dependent on Japan and China buying up the country’s debt and could face severe economic problems if that stops, Tiger Management founder and chairman Julian Robertson told CNBC.

“It’s almost Armageddon if the Japanese and Chinese don’t buy our debt,” Robertson said in an interview. “I don’t know where we could get the money. I think we’ve let ourselves get in a terrible situation and I think we ought to try and get out of it.”

Robertson said inflation is a big risk if foreign countries were to stop buying bonds. “If the Chinese and Japanese stop buying our bonds, we could easily see [inflation] go to 15 to 20 percent,” he said. “It’s not a question of the economy. It’s a question of who will lend us the money if they don’t. Imagine us getting ourselves in a situation where we’re totally dependent on those two countries. It’s crazy.” Read and watch more here-http://www.cnbc.com/id/33004753

-U.S. issues $7 trillion debt, supply to stabilize. The U.S. government will have issued $7 trillion in bonds by the time the current fiscal year ends next week, but it expects the debt deluge to stabilize by mid 2010, a Treasury official said on Wednesday.

Though markets and the economy are improving, efforts to provide a firm foundation for recovery will require increases to the U.S. Treasury’s conventional bonds going forward, as well as debt securities that are indexed to inflation.

However, this expansion may take place in an environment where investors consider leaving the safe-haven Treasury market for riskier assets, and debt issuance is likely to level off mid next year, said Treasury Acting Assistant Secretary for Financial Markets Karthik Ramanathan.

“In fiscal year 2009, which ends next week, Treasury will have issued $7 trillion in gross issuance that’s in a 12-month period,” Ramanathan told a financial markets conference in New York. “This issuance was necessary to meet nearly $1.7 trillion in net marketable borrowing needs, nearly $1 trillion more than what we raised last year,” he added. Read more here-

http://abcnews.go.com/Business/wireStory?id=8649840 or http://finance.yahoo.com/news/US-issues-7-trillion-debt-rb-118622363.html?x=0&.v=4

-Harry Browne’s famous “permanent portfolio,” described in a 1981 book authored with Terry Coxon titled Inflation-Proofing Your Investments. They hedged against the big four: inflation, deflation, recession and prosperity. In four equal portions, they suggested an S&P; 500 stock index fund for prosperity; 25% long-term bonds for deflation; 25% cash for a recession; and 25% gold bullion for hyperinflation or currency devaluation. Read more here-http://www.financialpost.com/opinion/story.html?id=30124c14-3ea0-49aa-a415-a4faed2fc360

-After recoveries of 45% or more in major stock markets since the Crash of 2008, investors may well wonder how it is they’re still not back to even. There are two reasons. One, broad markets are still below the highs reached before the crash. Two, the arithmetic of loss means a 50% loss followed by a 50% rise does not mean you’re back to even. You need a 100% gain to erase a 50% loss.

The math is more understandable in absolute dollars. If you invest $100 at a top and lose 57.7%, you have just $42.30 at the bottom. But any gains you enjoy subsequently are coming off a lower base. Thus, even a 100% gain of $42.30 brings you only up to $84.60 still $15.40 less than the $100 you started with. To get back to $100, you’d need a 136.4% gain.

Even the TSX composite still must rise 39.4% to get back to its former highs: something most people realize intuitively since the TSX passed 15,000 before the crash and is now just above 11,000. Read more here-http://www.financialpost.com/opinion/story.html?id=ad81cfd5-1aa8-4865-8050-4f84ccde5318

-Never before has the S&P; 500 rallied 60% from a low in such a short time frame as six months. And never before have we seen the S&P; 500 rally 60% over an interval in which there were 2.5 million job losses. What is normal is that we see more than two million jobs being created during a rally as large as this.

In fact, what is normal is for the market to rally 20% from the trough to the time the recession ends. By the time we are up 60%, the economy is typically well into the third year of recovery; we are not usually engaged in a debate as to what month the recession ended. In other words, we are witnessing a market event that is outside the distribution curve.

While some pundits will boil it down to abundant liquidity, a term they can seldom adequately defined. If it’s a case of an endless stream of cheap money, we are reminded of Japan where rates were microscopic for years and the Nikkei certainly did enjoy no fewer than four 50% rallies and over 420,000 rally points in a market that is still more than 70% lower today than it was two decades ago.

Liquidity and technicals can certainly touch off whippy tradable rallies, but they don’t take you all the way to a sustainable bull market. Only positive economic and balance sheet fundamentals can do that.

Another way to look at the situation is that when you hear and read about “liquidity” driving the market, it is usually a catch-all phrase for “we have no clue” but it sounds good. When we don’t have a reasonable explanation for what is driving prices our strategy is to watch from the sidelines. David Rosenberg

-David Rosenberg Says Stocks Overvalued After Six-Month Rise. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=a08smWhiqyWg

-Stocks Rally Will End Within Six Months, Tice Says. The biggest U.S. stocks rally since the Great Depression will end within six months because the economy isn’t improving fast enough, said David Tice, Federated Investors Inc.’s chief portfolio strategist for bear markets.

Tice said the Standard & Poor’s 500 Index will fall below 400 within 18 months, a level it hasn’t reached since 1992 and a 62 percent plunge from yesterday’s close. The investor said he has been “bloodied, but unbowed,” as the index climbed as much as 58 percent from a 12-year low in March, an advance that he called a “sucker’s rally” one month after it began.

“The economy is in really, really bad shape,” Tice said today in an interview with Bloomberg Television. The Federated Prudent Bear Fund that he founded returned 27 percent last year as the S&P; 500 plunged 38 percent, the most since 1937. “So many people are trying to be optimistic. We’ve gone from oversold to overbought.” Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=axKNYpAzP5yY

-Moody’s Economy service FreeLunch.com, using Standard & Poor’s Central Inquiry Office as the source, reports the average monthly P/E ratio of the S&P; 500 over the past four months at a whopping 133.66. When it comes to valuing stocks, the price/earnings (P/E) ratio is one of the oldest and most frequently used metrics.

To put things in perspective, the average monthly P/E ratio of the S&P; 500 from 1960 through 2008 was only 17.79. So, according to this data, the index is priced more than 650% above where it normally is based on as-reported earnings.

The conclusion: the stock market, despite the stubbornly persistent bear market rally we’ve seen over the past seven or so months, is significantly overvalued. In times like this, it’s okay for us to sit on the sidelines remaining patient and capitalize on the few opportunities we’re given. Chris Wood-Casey Research

-With second-quarter earnings largely in the books (over 99% of S&P; 500 companies have reported for Q2 2009), today’s chart provides some long-term perspective to the current earnings environment by focusing on 12-month, as reported S&P; 500 earnings.

Today’s chart illustrates how earnings declined over 92% since peaking in Q3 2007, which makes it easily the largest decline on record (the data goes back to 1936). On the positive side, S&P; 500 earnings have moved off their lows slightly. Read more here-http://www.chartoftheday.com/20090918.htm?T

Source: chartoftheday.com

-With inflation in tow, Dow 10,000 isn’t what you think. Read more here-http://www.marketwatch.com/story/story/print?guid=1AF9B2CB-D5D3-4D9A-B09C-4EF982FD6D4B

-Corporate insiders continue to increase the pace of their selling. Consider the latest data from the Vickers Weekly Insider Report, published by Argus Research. For the week ended last Friday, according to Vickers, insiders sold 6.31 shares for every one than they bought. The comparable ratio two months ago was 4.16-to-1, and at the March lows the ratio was 0.34-to-1. Read more here-http://www.marketwatch.com/story/story/print?guid=82C13AAD-FCEB-4564-9550-64F0FE5184CB

-The global economic downturn has probably hit bottom though the recovery will be “slow and painful,” said Paul Krugman, the Nobel Prize winning economist. “The end of the world appears to have been postponed,” Krugman, a professor at Princeton University, said at a seminar in Helsinki today.

The world economy “does not appear to be falling into an abyss but is still” in trouble. The outlook is “very fuzzy’ and a W-shaped recovery may become U-shaped, he said. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=ap6aPBj59zLc

-Edmunds.com just reported that U.S. motor vehicle sales so far in September are running at an 8.8 million annual rate a 28-year low and a 38% plunge from the incentive-induced 14.1 million tally in August.

If this is what autos do, imagine what housing does once the $8,000 first-time homebuyer tax credit expires (if it does) at the end of November (not to mention what the Fed does in terms of extending its mortgage purchase program beyond the December expiry too it has had a hand in financing 80% of all new mortgage issuance. But look at the good news at least we will be able to see what the economy can do without the walker. David Rosenberg

-U.S. consumers are cutting back, and where they are not cutting back, they are scaling down. This new cycle is all about “getting small” and it is deflationary. For yet another in the litany of signs pointing in the direction of social change towards thrift, have a look at what is transpiring at the upper echelons of the income strata Now Even Millionaires See the Benefits of Budgeting on page B5 of the Saturday NYT is a must read. Read here-http://www.nytimes.com/2009/09/19/your-money/19wealth.html

Not only are the rich trading down, but the article quotes a high net worth financial advisor who said “many of our clients are very happy to be sitting on bond portfolios and cash reserves.” And see the article on page 2 of the Sunday NYT Beauty Products Lose Some Appeal During Recession.

According to the NPD Research Group, total sales of department store beauty products are down 7% from year-ago levels. Women are apparently opting for the “natural look” “some people are selectively replacing higher-priced items with cheaper products from drug stores and discount stores.” David Rosenberg

-Card Defaults Surge to Record 11.49% in August, Moody’s Says. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aOUFvgV93LaI

-More “Fake Bonds” Turn Up In Italy. Seized U.S. Bonds for $116 Billion Are Fake, Prosecutor Says. U.S. Treasury bonds with a face value of $116 billion seized in Italy in August are fake and were destined for U.S. investors, according to the prosecutor running the probe. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=a07gaA0LT_ME

or http://www.businessinsider.com/another-fake-bonds-turns-up-in-italy-2009-9

-Americans won’t be rushing to put out the blaze the next time Wall Street burns. One year on from the near collapse of the financial system, Tom Leonard in New York finds it’s ordinary Americans who are picking up the bill. Read more here-http://www.telegraph.co.uk/finance/financetopics/financialcrisis/6201993/Americans-wont-be-rushing-to-put-out-the-blaze-the-next-time-Wall-Street-burns.html

-Gerald Celente Predicts Economic Armageddon by 2012. Watch here-http://www.youtube.com/watch?v=JhaEc_4zuFI&feature;=SeriesPlayList&p;=93188243F6D0495F

-Census: Recession had sweeping impact on US life. A broad survey of Americans has provided striking measures of the recession’s effect on life at home and at work: People are now stuck in traffic longer, less apt to move away and more inclined to put off marriage and buying a house. Read more here-

http://www.google.com/hostednews/ap/article/ALeqM5iCuYeWPyl7zqXPWi1Ck9mmYyAr7wD9AS7H900

-Years of saving would be needed to return household wealth to pre-recession levels, a report by the Bank of England suggests. If households saved 10% of their income, it would take nine years to bring wealth back up to the average of the last 20 years. Read more here-http://news.bbc.co.uk/2/hi/business/8266511.stm

-Study shows U.S. bank CEO pay dwarfs rest of world. You wouldn’t know it by his pay stubs, but Jiang Jianqing heads the world’s largest bank. Jiang, chairman of Industrial and Commercial Bank of China, made just $234,700 in 2008. That’s less than 2 percent of the $19.6 million awarded to Jamie Dimon, chief executive of the world’s fourth-largest bank, JPMorgan Chase & Co. Read more here-http://www.reuters.com/article/newsOne/idUSTRE58M2QU20090923

-Financial markets have grown too dependent on mathematicians who use models to anticipate price moves and need to start injecting “common sense” into the equation, said Paul Wilmott, a London-based author and quantitative finance instructor. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=aD4y2TBuy4gQ

-R. Allen Stanford, the Texas financier accused of leading a $7 billion fraud, will be defended by some of Houston’s most talented lawyers at taxpayer expense. Read more here-

http://www.bloomberg.com/apps/news?pid=20601110&sid;=a6r5hRvzg1Hs

WWW.RARECOLOREDDIAMONDS.COM

-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/HistoricalPriceTrackingsystem.html

-Watch BTV interview of Harold Seigel on colored diamonds and his website http://www.rarecoloreddiamonds.com/. Watch video here-http://www.rarecoloreddiamonds.com/watchnow.html

-People invest diamonds and diamond jewellery mainly for the emotional value that it represents. That is the first point. But at the same time, we have seen that over the recent crisis and severe recent crisis that, in fact, diamond has a lasting value and that as a wealth protection, it is an interesting alternative. Freddy Hanard, CEO of the Antwerp World Diamond Centre

-Diamonds aren’t forever, the pipes are running dry. According to Rio and BHP Billiton analysis, most existing mine resources for rough stones will be gone within 15 years. This is because new diamond discoveries are becoming increasingly rare. According to Rio, annual discoveries of kimberlite ”pipes” kimberlite is a host rock for diamonds have fallen (on a five-year moving average basis) to little more than 100.

And history shows that only one in 10 kimberlite pipes contain diamonds and only one in 100 of those are economic to mine. The lack of new discoveries since the mid-1980s means the world’s mine reserves of rough diamonds have fallen from 80 years’ supply to the 15 years that Rio now forecasts. Read more here-

http://www.smh.com.au/business/diamonds-arent-forever-the-pipes-are-running-dry-20090923-g2sp.html

-Annenberg Flawless Headlining Diamond and Jewellery Auction. Read more here-http://www.idexonline.com/portal_FullNews.asp?id=32972

-Christie’s plans for two auctions next month. Highlights of the New York Sale & The Annenberg Diamond auction. The spotlight of the Jewels: The New York Sale & The Annenberg Diamond auction is the perfect D colour 32.01 carats Flawless Annenberg Diamond, sourced from the collection of American philanthropist late Leonore “Lee” Annenberg.

The auction will also present an assortment of coloured and colourless diamonds. From the collection of Broadway actress Lillian Booth, a pair of ear pendants featuring an 8.04 carat fancy light pink diamond with pave-set diamond trim for one ear, and a 7.18 carat fancy blue diamond with pink pave-set diamond trim for the other (estimate: $1,000,000-1,500,000). Read more here-http://diamondworld.net/contentview.aspx?item=4218

-Smithsonian Offers Public Rare View of Hope Diamond. Read more here-http://www.washingtonpost.com/wp-dyn/content/article/2009/09/23/AR2009092302062_pf.html

U.S. DOLLAR

-Global rebalancing to weaken dollar, quietly. Twenty-four years ago today, major nations called for depreciation of the dollar to rebalance the global economy. Now, as another effort at rebalancing looms, the dollar will again bear the brunt though officials will try to ensure its fall is less dramatic this time. Read more here-

http://www.reuters.com/article/usDollarRpt/idUSLL68602920090922

-Russian Prime Minister Vladimir Putin on Friday said other currencies besides the dollar should be used as global reserves to reduce the risks posed by swelling U.S. debt. Putin, who spoke at an international investment forum in the Black Sea resort of Sochi, chided the United States for “an uncontrolled issue of dollars” and said the American currency’s dominance had been “one of the triggers” of the global crisis. Read more here-http://www.gata.org/node/7801

-HSBC bids farewell to dollar supremacy. The sun is setting on the US dollar as the ultra-loose monetary policy of the US Federal Reserve forces China and the vibrant economies of the emerging world to forge a new global currency order, according to a new report by HSBC. Read more here-http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6211858/HSBC-bids-farewell-to-dollar-supremacy.html

FDIC IS BROKE

-U.S. Debt Limit May Hamper Any FDIC Request for Treasury Rescue. A legal limit on U.S. debt may put pressure on the Federal Deposit Insurance Corp. to replenish its coffers by assessing fees on banks rather than borrowing.

The FDIC board is set to meet next week to decide how to refill funds depleted by 94 bank failures this year. The options include new assessments on banks, tapping a $100 billion line of credit with the Treasury Department, or borrowing money from banks or debt markets. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aonZB7NPmp1A

or http://www.nytimes.com/2009/09/22/business/22bailout.html?_r=2

-FDIC Is Broke, Taxpayers at Risk, Bair Muses. The FDIC’s insurance fund is going broke, and Sheila Bair is wondering aloud about how to replenish it. This means one thing for U.S. taxpayers: Watch your wallets. Read more here-http://www.bloomberg.com/apps/news?pid=20601039&sid;=aEKc7Yh8ogXw

-The hole in the FDIC. Read more here-http://news.goldseek.com/MillenniumWaveAdvisors/1253513460.php

TWO MORE U.S. BANKS FAIL-94 IN 2009

-Two Irwin Union bank subsidiaries in Kentucky and Indiana were closed by regulators Friday, bringing the total number of U.S. bank failures this year to 94 and punching an $850 million hole in the federal deposit insurance fund.

The Federal Deposit Insurance Corp. said that Irwin Union Bank and Trust Co. in Columbus, Ind., and Irwin Union Bank F.S.B. in Louisville, Ky., were each closed. Irwin Union Bank and Trust Co. had $2.7 billion in assets and $2.1 billion in deposits as of Aug. 31, the FDIC said. Irwin Union Bank F.S.B. had $493 million in assets and $441 million in deposits as of Aug. 31.

Hamilton, Ohio-based First Financial Bank has agreed to assume the failed banks’ deposits. First Financial Bank said in a statement that assumption of the Irwin Union Bank subsidiaries brings with it 27 banking centers in nine states. Read more here-http://www.marketwatch.com/story/story/print?guid=2FE88A00-8039-4DB4-97DE-92E397FE9680 or

http://www.bloomberg.com/apps/news?pid=newsarchive&sid;=aPtgVuIMrCnU or http://www.reuters.com/article/rbssBanks/idUSN18460420090918

7.4 MILLION HAVE LOST JOBS IN U.S. DURING RECESSION

-Over 7.4 million people have lost their job during the recession, sending the unemployment rate to a 26-year high of 9.7% in August. Foreboding? Yes. But the acceleration of job loss isn’t the only cause for concern.

The average duration of unemployment at 25 weeks is now the longest since the Department of Labor started tracking the data in 1948. By the end of August, nearly five million people had been unemployed for longer than six months.

Whether the economy is on the cusp of a V-shaped turnaround or not, any recovery in employment will likely be weak well into 2010. As shown in the chart, extended unemployment has peaked, on average, eight months after the previous ten recessions ended.

Washington has already bailed out several bankrupted state unemployment insurance funds, and in June of 2008 implemented the Emergency Unemployment Compensation program, extending coverage to individuals that exhausted their initial benefits. New weekly claims for UI benefits have slowed in recent weeks, but it’s clear that benefit payments will continue to burden the bloated federal budget.

When workers lose their income, they turn to the state for cash. When the state’s well is tapped dry, they rely on the federal government. But where does the federal government find its lender of last resort? Read more here-http://caseyresearch.com/displayCcs.php?e=true

-California, Nevada Reach Record Unemployment Levels. Unemployment rose in 27 U.S. states in August, with California and Nevada reaching record levels of joblessness. Rhode Island rounded out the list of states with the highest level of unemployment since data began in 1976, the Labor Department reported today in Washington. California’s unemployment rate reached 12.2 percent and Nevada’s climbed to 13.2 percent. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=aNfVuMdRsGgA

-Chart of the week: Layoff Massacres Persist. We’re still looking for a glimmer of hope on the employment front. There are green shoots of various size and scope everywhere, but seemingly not here.

Anyway, we didn’t find any in the BLS’s latest survey of mass layoffs defined as distinct events of 50 or more employees getting whacked at a single company. After some glints of hope in July, it just spiked right back up in August. Read more here-http://www.businessinsider.com/chart-of-the-day-mass-layoffs-total-events-2009-9

Source: chartoftheday.com

BRITAIN FACES ANOTHER FINANCIAL CRISIS

-Britain ‘facing immediate risk of full-blown financial crisis.’ Analysts at investment bank Nomura cautioned that the public finances are ‘plunging deeply into the red in a spectacular and frightening way’, leaving the UK far more vulnerable than the United States. They said international markets could refuse to buy Government debt, warning the ‘possibility of failed auctions is not trivial’.

Shadow Chancellor George Osborne described the report as a ‘wake-up call’ and warned Britain’s ‘international reputation’ was at stake. The alert came as Chancellor Alistair Darling was accused of planning to sweep £32billion of debt out of public view.

Former Treasury adviser David Heald claimed there was a £32billion gap between published government figures on debt and internal assessments. He told the magazine Accountancy Age that 87 per cent of public-private partnerships and private finance initiatives would be left off the Government’s books. Read more here-

http://www.dailymail.co.uk/news/article-1214309/Britain-facing-immediate-risk-financial-crisis.html#ixzz0Rs95bpXC

-Britain’s economy less stable than Peru. Britain has a less stable economy than Montenegro or Peru, as a result of the mountain of government debt raised to bail out the banks, according to the World Economic Forum.

The global think-tank ranked the UK 71st in the world for macro-economic stability in a report addressing the relative competitiveness of different countries. The slide in stability pushed the UK down one place to be ranked the 13th most competitive market in the world, after China, based on its institutions, infrastructure, health and primary education, among many other factors.

The report’s authors said: “A significant and growing weakness remains the UK’s macro-economic instability, with low national savings, an exploding public-sector deficit (related in large part to recent efforts to bail out the financial sector), and consequential public indebtedness.”

The soundness of British banks was ranked 126th in the world, after war-torn Burundi and only four places above Iceland. Read more here-

http://www.telegraph.co.uk/finance/economics/6157759/Britains-economy-less-stable-than-Peru.html

-U.K. Had Record Deficit in August as Tax Revenue Fell. Britain posted the biggest budget deficit for any August since modern records began in 1993 as the recession destroyed tax revenue and welfare costs soared. The 16.1 billion-pound ($26.3 billion) shortfall compared with a deficit of 9.9 billion pounds a year earlier, the Office for National Statistics said in London today. Read more here-http://www.bloomberg.com/apps/news?pid=20601068&sid;=a19rKWZ8GxFM

-King Says British Banks Got Within Hours of Collapse in 2008. Bank of England Governor Mervyn King said two British banks got within hours of a liquidity shortfall on Oct. 6, 2008, and the day after as the U.K. financial system came to the brink of collapse.

“Two of our major banks which had had difficulty in obtaining funding could raise money only for one week then only for one day, and then on that Monday and Tuesday it was not possible even for those two banks really to be confident they could get to the end of the day,” the BBC cited King as saying in an interview to be broadcast later today.

King was referring to Royal Bank of Scotland Group Plc and HBOS Plc, the BBC said. Prime Minister Gordon Brown’s government pledged to invest about 50 billion ($82 billion) pounds in the banking system on Oct. 8, 2008, to save it from meltdown in the aftermath of Lehman Brothers Holdings Inc.’s bankruptcy declared that September.

“It was, it is, probably the worst situation, as I say, we faced in peacetime,” Chancellor of the Exchequer Alistair Darling said, according to a press release from the BBC. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=afWmri7ru8QM

REAL ESTATE-MORTGAGES-FORECLOSURES-RENTS

-Moody’s bearish on housing recovery. Analysts say it will take more than 10 years to recapture peak home prices. Read more here-

http://www.marketwatch.com/story/story/print?guid=00A06319-CD78-447A-89AC-AB84C4086B25

-Sales of existing U.S. homes unexpectedly fell in August for the first time in four months, signalling the housing recovery will be slow to gain speed. Purchases dropped 2.7 percent to a 5.1 million annual rate, the second-highest level in the last 23 months, the National Association of Realtors said today in Washington. The median price dropped 12.5 percent from August 2008. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aXe9QqyAM40s

-Chart of the week: Shock Drop In Existing Home Sales. What housing comeback? After several months of an upward-sloping curve, the volume of existing home sales dropped more than expected in August. Even the normally sunny NAR warned of a fragile recovery if the government doesn’t subsidize home purchases by extending and expanding the first-time homebuyer tax credit. Read more here-http://www.businessinsider.com/chart-of-the-day-existing-home-sales-2009-9

Source: chartoftheday.com

-U.S. home prices rose 0.3 percent in July from the previous month, less than analysts’ estimates, in a sign that the housing recovery is tenuous. The house price index fell 4.2 percent for the 12 months ended in July, the smallest decline this year, the Federal Housing Finance Agency in Washington said today. Read more here-

http://www.bloomberg.com/apps/news?pid=20601087&sid;=acX5HcBP50mw

-Housing Crash to Resume on 7 Million Foreclosures, Amherst Says. The crash in U.S. home prices will probably resume because about 7 million properties that are likely to be seized by lenders have yet to hit the market, Amherst Securities Group LP analysts said.

The “huge shadow inventory,” reflecting mortgages already being foreclosed upon or now delinquent and likely to be, compares with 1.27 million in 2005, the analysts led by Laurie Goodman wrote today in a report. Assuming no other homes are on the market, it would take 1.35 years to sell the properties based on the current pace of existing-home sales, they said. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=aw6_gqc0EKKg

-High U.S. unemployment keeps pushing up the rate of mortgage delinquencies, which could in turn drive personal bankruptcies and home foreclosures, monthly data from the Equifax Inc credit bureau showed on Monday.

Among U.S. homeowners with mortgages, a record 7.58 percent were at least 30 days late on payments in August, up from 7.32 percent in July, according to the data obtained exclusively by Reuters.

August marked the fourth consecutive monthly increase in delinquencies, and the report showed an accelerating pace. By comparison, 4.89 percent of mortgages were 30 days past due in August 2008, while in August 2007, the rate was 3.44 percent, Equifax data showed.

The rate of subprime mortgage delinquencies now tops 41 percent, up from about 39 percent in each of the prior five months. The results, which correlate with consumer bankruptcy filings, suggest U.S. homeowners remain under financial stress despite signs of improving sentiment and fundamentals in the U.S. housing market. Read more here-

http://www.reuters.com/article/ousivMolt/idUSTRE58K29E20090921

-More than half of U.S. residential mortgages are being made by just three large banks. It is a stunning change, but is it good for the housing market, and to what extent will it boost profits over the long term for this elite trio: Wells Fargo, Bank of America and J.P. Morgan Chase? Read more here-http://online.wsj.com/article/SB125322329116020929.html

-Moody’s commercial real estate prices resume descent. Commercial real estate prices renewed steep declines and low transaction volume in July. The [Moody's/REAL Commercial Property Price Index] was down 5.1% from June after having declined by only 1% the prior month. It is now 30.8% below what it was a year earlier and 38.7% below the peak measured in October of 2007.

Overall market transaction volume continued the pattern of calendar 2009. “The market has averaged about 375 sales per month for the seven months in 2009,” said Moody”s Managing Director Nick Levidy. “Over the same time period in 2008, sales were averaging nearly 1,100 a month.” Read more here-http://blogs.reuters.com/rolfe-winkler/2009/09/21/moodys-cre-prices-resume-descent/

-Wells Fargo’s Ticking Time Bomb: Credit Default Swaps On Commercial Mortgages. Read more here-http://www.businessinsider.com/john-carney-wells-fargos-ticking-time-bomb-credit-default-swaps-on-commercial-mortgages-2009-9

-Rents on Priciest Retail Streets Fall Most Since 1985. Read more here-http://www.bloomberg.com/apps/news?pid=20601110&sid;=ae2ohbS0zRos

-Luxury hotel owners risk defaulting on their debt as the recession cuts occupancies and the credit crunch constrains refinancing. Loans secured by more than 1,500 hotels with a total outstanding balance of $24.5 billion may be in danger of default, according to Realpoint LLC, a credit rating company that tracks commercial mortgage-backed securities.

Some of the biggest loans, put on the company’s watch list because of late payments, decreasing occupancies or cash flow, were made to luxury properties where rooms can cost more than $850 a night. Read more here-http://www.bloomberg.com/apps/news?pid=email_en&sid;=a63JiZ2hVDwA

GEOPOLITICAL NEWS

-Al-Qaida predicts Obama’s fall by Muslim nation. Al-Qaida on Tuesday released a new 106-minute long video predicting President Barack Obama’s downfall at the hands of the Muslim world.

The Arabic-language video, entitled “The West and the Dark Tunnel,” is part of series of messages by the organization marking the eighth anniversary of the Sept. 11 attacks. Bin Laden released a short message of his own on Sept. 14. Read more here-http://news.yahoo.com/s/ap/20090922/ap_on_re_mi_ea/ml_al_qaida_video

-Ahmadinejad Criticizes U.S., Israel; UN Warns Iran. Read more here-http://www.bloomberg.com/apps/news?pid=20601087&sid;=abnG6dbC06.Y

-Ahmadinejad Says That No Enemy Dares to Attack Iran. Read more here-http://www.bloomberg.com/apps/news?pid=20601104&sid;=a1cI1acsVsRw or http://apnews.myway.com/article/20090922/D9ASA8GG0.html

-Amid Protests, Iran Leader Calls Holocaust a Lie. Read more here-http://www.nytimes.com/2009/09/19/world/middleeast/19iran.html?_r=1 or http://in.reuters.com/article/worldNews/idINIndia-42553620090918

-Iran regime ‘weaker than people think’: Netanyahu. Read more here-http://www.breitbart.com/article.php?id=CNG.a107751183efc761a95b7687cb8acd74.931&show;_article=1

-Iran says makes new model of nuclear centrifuges. Read more here-http://in.reuters.com/article/oilRpt/idINLM24002120090922

-National security adviser says Iran advancing in making medium-range missiles. Read more here-http://www.washingtontimes.com/news/2009/sep/20/exclusive-national-security-adviser-says-w-europe-/?feat=home_cube_position1

-Kremlin says Israel promised not to strike Iran. Read more here-http://www.reuters.com/article/topNews/idUSTRE58J0NQ20090920?feedType=RSS&feedName;=topNews

-McChrystal: More Forces or ‘Mission Failure’. Top U.S. Commander For Afghan War Calls Next 12 Months Decisive. Read more here-

http://www.washingtonpost.com/wp-dyn/content/article/2009/09/20/AR2009092002920_pf.html

-U.S. bomb plot probe shows greatest security fears. A suspected bomb plot under investigation in New York and Denver has the ingredients of a worst case scenario for U.S. security, experts say: an al Qaeda link, overseas training and free movement within U.S. borders.

Colorado airport shuttle driver Najibullah Zazi, who U.S. authorities say admitted to taking a bomb-making course at an al Qaeda training camp in Pakistan, is at the center of what they say could be a plot to blow up subways or other targets. Read more here-http://www.reuters.com/article/newsOne/idUSTRE58M4OA20090923 or

http://apnews.myway.com/article/20090922/D9ASABU00.html

-U.S. terror suspect indicted on bomb conspiracy charge. Read more here-http://www.cnn.com/2009/CRIME/09/24/terror.indictment/index.html or

http://www.bloomberg.com/apps/news?pid=20601110&sid;=aWkPMG4BoDLo

© 2010, Worldwide Precious Metals.
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The Goldbugg Report – September 29, 2009
Posted by Worldwide Precious Metals on Tuesday, September 29, 2009

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