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  1. #106
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    Brace Yourselves

    Watch out for a shockku by 20th June or before when a major bank makes its financial report. It is expected to disclose how much Tier 2 and Tier 3 assets (sub-standard assets) it owns, which could many times its capital.

    Look at Ambac Financial Corp. This is one of the largest bond insurer and USD 1 trillion of debt is at risk. If they go bust, many financial institutions' credit default swaps and bond insurances will be wiped out, triggering another shock to the financial system.

    To hide this problem, the Central Banks are pressing the price of gold down. Good for gold buyers - discount price.

    http://stockcharts.com/h-sc/ui?c=abk

    MBIA, Ambac Aaa Credit Ratings Again Under Threat at Moody's

    By Emma Moody

    June 4 (Bloomberg) -- The Aaa insurance ratings of MBIA Inc. and Ambac Financial Corp. are again under threat by Moody's Investors Service after the companies reported deepening losses from the mortgage-market slump.

    MBIA Insurance Corp.'s insurance financial strength rating may fall to the Aa range, although a drop to the A category is possible, Moody's said in a statement today. Ambac's Assurance Corp.'s ranking would probably be lowered to Aa, Moody's said in a separate statement….


    ......... http://www.bloomberg.com/apps/news?p...d=aDKkxN3u63NA

  2. #107
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    Ratings Of Ambac & MBIA Downgraded

    This is getting serious. They will need to raise capital to have access to loans at economical rates to keep their business alive.

    MBIA, Ambac Stripped of AAA Insurer Ratings By S&P

    June 5 (Bloomberg) -- MBIA Inc. and Ambac Financial Group Inc., the world's largest bond insurers, had their AAA insurance financial strength rankings cut by Standard & Poor's.

    The ratings were cut two levels to AA, New York-based S&P said in a statement today. S&P said it would keep the ratings under review pending ``clarification of ultimate potential losses as well as future business prospects, the outcome of strategic business decisions, and potential regulatory developments.' …

    -END-

  3. #108
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    Watch Jp Morgan

    With the downgrade of AMBAC and MBIA, credit default swaps amounting to USD 1.2 trillion.could be at risk. JP Morgan is the largest seller and buyer of CDS.

    See attached.

    It explains what a CDS is and the risks associated with it.
    Attached Files Attached Files

  4. #109
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    Govts Raiding Safe Deposit Boxes

    This is extremely serious and approaching the level of Roosevelt seizing the American's private gold holdings in 1933. It shows how desperate govts are these days to lay their hands on money.

    California:

    Not-So-Safe-Deposit Boxes: States Seize Citizens' Property to Balance Their Budgets.

    The 50 U.S. states are holding more than $32 billion worth of unclaimed property that they're supposed to safeguard for their citizens. But a "Good Morning America" investigation found some states aggressively seize property that isn't really unclaimed and then use the money -- your money -- to balance their budgets.

    San Francisco resident Carla Ruff's safe-deposit box was drilled, seized, and turned over to the state of California, marked "owner unknown."

    "I was appalled," Ruff said. "I felt violated."


    http://abcnews.go.com/GMA/Story?id=4832471&page=3

    .........

    London:

    Police have seized a potential £1 billion “treasure trove” of cash, drugs and guns in an unprecedented raid on concrete vaults holding 7,000 safety deposit boxes.

    More than 300 officers and staff were involved in simultaneous raids at three depots in London’s Park Lane, Hampstead and Edgware. Officers have secured the concrete and steel vaults and will take several weeks to remove each box, using angle grinders, to a secret location where they will be prized open with diamond-tipped drills.

    It is believed that a top tier of criminal masterminds may have rented out “the majority” of the boxes.


    .......... Safety-deposit-box-raids-yield-andpound1bn-of-drugs,-cash-and-guns

  5. #110
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    Quote Originally Posted by pywong
    This is extremely serious and approaching the level of Roosevelt seizing the American's private gold holdings in 1933. It shows how desperate govts are these days to lay their hands on money.

    [I]Not-So-Safe-Deposit Boxes: States Seize Citizens' Property to Balance Their Budgets.
    So PY, where will you hold your gold? wait...dont answer that

    Cheers, m
    The world needs more Canada

  6. #111
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    Quote Originally Posted by AllUrban
    So PY, where will you hold your gold? wait...dont answer that

    Cheers, m
    I think I have indicated a few locations for consideration
    Perth Mint
    Goldmoney
    Bullionvault
    safe deposit box.

    Do your own evaluation and decide accordingly. If you are accumulating money to buy, the most convenient is safe-deposit box.

  7. #112
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    Is This It?

    This one just came in from the Harry Schultz Letter. It is a Special Alert Flash Bulletin. If you are allergic to bad news, better skip. I would imagine the same advice applies to local stocks and mutual funds.

    The ?? represents the % you are comfortable with. The gold % could be as high as 85%, say. But it really depends on your asset mix.

    Here is what it says:

    As warned for many months, a major global upheaval is in progress spurred by the one-two punch of runaway inflation & a collapse of the derivatives/credit markets which will affect everyone. Many banks are at risk. Investors who continue to procrastinate or wait optimistically for storm clouds to dissipate, will in the main, see their assets deflate radically & at best risk losing much or most of their net buying power &/or capital. If not already done, we urge that you immediately reduce financial risk via 3 basic steps: exit the US$ (or hedge exposure to US$ assets of any kind via futures short selling &/or bank forward contracts), place approx. ?? of your assts into a mix of 90-day to 2-year govt bills/bonds (Swiss govt paper preferred, but any non-US$ 1st world govt paper OK), place almost ?? of your assets in gold (via a basket of gold futures &/or quality gold shares, with at least 15% in physical gold bars or coins). A small position in oil/food/commod stocks & special situations is justified.

  8. #113
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    Fannie, Freddie insolvent, Poole tells Bloomberg

    Another shoe dropped! This is the latest development relating to the subprime crisis. Fannie Mae and Freddie Mac are the govt-linked institutions giving out house mortgages. Their collapse will trigger a financial tsunami, meaning the govt cannot afford to let it go.

    Question is: Does the govt have the money to do the job? Printing more money will depreciate the USD and this will make the foreign holders of the USD more restless.

    (Reuters) - Mortgage lenders Fannie Mae and Freddie Mac are "insolvent" and may need a U.S. government bailout, former St. Louis Federal Reserve President William Poole was quoted as saying in an interview with Bloomberg.

    "Congress ought to recognize that these firms are insolvent, that it is allowing these firms to continue to exist as bastions of privilege, financed by the taxpayer," Poole was quoted as saying in an interview held on Wednesday.


    http://www.reuters.com/article/busin...e=businessNews

  9. #114
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    Bank Failure: IndyMac Bank seized by federal regulators

    July 12, 2008

    The federal government took control of Pasadena-based IndyMac Bank on Friday in what regulators called the second-largest bank failure in U.S. history.

  10. #115
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    See here Post 14 for new information on the crisis.

    http://www.usj.com.my/bulletin/uploa...d=1#post311933

  11. #116
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    Maybe The Trigger Point Is From Europe

    While we are engrossed with watching America, we have not been paying so much attention to Europe & Great Britain. The trigger point could come from there.

    Europe's Banks Facing Further EU120 Billion in Losses (Update2)

    By Ambereen Choudhury and Joyce Moullakis

    July 21 (Bloomberg) -- Banks in Europe are set to post further losses of 120 billion euros ($191 billion) on retail lending as they reel from credit and mortgage writedowns, according to New York-based management consultants Oliver Wyman.

    Losses from now to 2010 will ``rapidly increase'' especially in Britain, Spain and Ireland, according to the report, issued jointly today with Intrum Justitia, the Swedish debt collector.


    http://www.bloomberg.com/apps/news?p...g&refer=europe

  12. #117
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    Quote Originally Posted by pywong
    (Reuters) - Mortgage lenders Fannie Mae and Freddie Mac are "insolvent" and may need a U.S. government bailout, former St. Louis Federal Reserve President William Poole was quoted as saying in an interview with Bloomberg.

    "Congress ought to recognize that these firms are insolvent, that it is allowing these firms to continue to exist as bastions of privilege, financed by the taxpayer," Poole was quoted as saying in an interview held on Wednesday.


    http://www.reuters.com/article/busin...e=businessNews
    A bailout of the housing crisis may need up to USD 1 Trillion. Taking USD 100 dollar notes and stacking it, will reach 1,000 km into space. That is 8% of US GDP. 1 more nail in the coffin.


    Roubini: More Than $1 Trillion Needed to Solve Housing Crisis
    Posted Jul 22, 2008

    http://finance.yahoo.com/tech-ticker...,WM,WB,WFC,BAC

  13. #118
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    We are heading to Stagflation... another Depression

    After various discussion with pywong and also further research and readings on the coming recession, I would like to give everyone here on USJ.com my take and summary on the coming recession, as my contribution to this community.

    Here's what I personally think after much readings and considerations:

    We are headed for stagflation. It is a situation where high inflation
    occurs and economic growth is stagnant or negative.

    Inflation is occuring as our paper money (which is link to the USD)
    depreciates over time, and more due to the decrease of interest rates
    in US.

    Our current inflation is driven by cost, and depreciation of ringgit
    (Not demand driven)

    As inflation creeps up,
    wages are unable to chase up and that tightens
    our spending habits and capabilities. Everyone will hold back on
    purchase, big ticket spending, corporations will stop expanding due to
    lack of demand for services, reducing budgets causing stagnant/
    negative economic growth - aka recession.

    As cost goes up,
    in order to remain profitable corporation increase
    prices and reduce work force, which further increase inflation and
    unemployment. Which goes on reducing the buyers for the services/goods
    offered by the corporation. Inducing a spiraling effect that further
    worsen the situation.

    High prices and no growth. That's stagflation.

    This will continue until there is correct interventions in policies.

    Unemployment increases, businesses losses money. Property prices free
    fall. Raw materials prices can increase all the want, but there will
    be no buyers. Demand falls, therefore prices falls, as no one can
    afford them.

    Intervention:
    As inflation and recession is contradictory to each other. The only
    way to go is:

    First:
    Tackle inflation. Increase of lending interest to twice of the
    inflation rate, I pressume would be around 28%. Immediately stopping
    speculation and reducing inflation. Growth will be stagnant.

    Second:
    Once inflation is solved and prices creeps down, new growth projects
    to be launch to encourage development, consumption, to bring back
    growth and effectively get out of recession.

    This may take years and up to 10 years.

    The main cause:
    The insolvency of US banks and the bankrupt of USA will bring down the
    value of the USD comparable to toilet paper. So will the ringgit.
    Food, commodity prices soar sky high. We shall face hyperinflation.
    Where our fiat money can't buy anything as prices of goods - food -
    soar 100X !

    The impact:
    High unemployment. Soaring food prices. An age of Depression.

    Main issue about buying a house now:
    If you are unemployed, how will you service your loan especially with
    such high interest rates? You will be driven out from your house.
    Sleeping on the street and your house auctioned off.

    Best suggestion: Don't purchase any big item, rent at all means. Save
    money and purchase food and be ready in case you got laid-off.Or buy
    fully cash down. Don't buy cars now.
    Solution: If you have to buy a house now, go for fixed rate loan from
    insurance company at 6% such as AIA.

    My argument:
    It doesn't matter whether we export mainly to USA or not. But when USA
    goes into stagflation, Europe will follow suite, then China, then
    Asia. China can't sell their low cost labour products to anyone else.
    How could there be demand for growth? Oil demand reduces dramatically
    as no growth affecting the Middle EAst. Eventually Malaysia is also
    affected. Buying power and food prices will be main concern.

    Greatest myth: Asia economy has decoupled from US economy.

    We are living in a very perilous times.

    What we can do now?:
    Sell off and repay loans as much as possible. Reduce consumption and
    brace for recession. Stock up on food. Withdraw all your EPF money.
    Store your buying power in physical gold. Keep your job. Prudently run
    your business. Its no longer about investment, it about capital
    preservation right now.

    The key: Use common sense to protect yourself. Be PRUDENT.

    What if I got it all wrong?

    You loose nothing. You purchased your house at a higher price, so does
    everyone else. You have too much food in your house but you can still
    eat them and save money avoiding the inflation and price increase. You
    still have your job and your teh tarik. Your EPF money will still be
    safely parked in gold which becomes your investment vehicle. You save
    more money by not buying a car.

    BUT what if I got it all right?
    You have everything to lose.

    Think about it. In a situation where the negative consequences
    outweighs the positive, it is better to be safe rather than risking
    it.

    May God help us all.

    Regards,
    Lok

  14. #119
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    PYWong,

    1) If we were to buy gold coins from the banks, and should they go bust, where else can we sell the coins to?

    2) If we were to buy from, say, UOB, can we sell to other banks?

    3) In the even if the banks go bust, and I still have a home mortgage with them, the title of the property still charged to the bank, what happens next?

  15. #120
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    Smile buying gold, which one's the best for safe keeping our RM

    Which one you think is the best

    buying a gold coin from the bank or buying 916 gold from jewellers.

    i think buying a gold bar is too much is it?

    or will buying from a pawn shop be a better alternative?

    the current rates is rm85/gm is it going to be cheaper in the near future?

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