Gisele Bundchen, Wal-Mart and Bubbles!
What do Gisele Bundchen, Wal-Mart and bubbles have in common? We will explore that soon enough, but first, the two key players: the dollar and gold. Both await different fates brought about by Gisele Budchen, Wal-Mart and bubbles!
I thought we would start today with a few quotes that, though they were written in different times, are apropos for what is occurring today.
“The duty of government is to leave commerce to its own capital and credit as well as all other branches of business, protecting all in their legal pursuits, granting exclusive privileges to none.” Andrew Jackson
This quote comes from Mater Amschel Rothschild the founder of the Rothschild banking dynasty.
Give me control of a nations money supply, and I care not who makes it’s laws.
Finally, I would like to add my own.
“The Constitution of The United States of America is not a living document which outlines what the government can do for us, but rather, it is a static and binding document which clearly defines what the government can not do to us.” Goldbug
We are about to put these principles to the test as the U.S. monetary system comes unraveled. There are signs out there that are showing that the general populace is beginning to wake up. The health care town hall meetings are all over the news, but a story that shows the lack of confidence in the governments policies and the U.S. dollar has been swept under the rug. Bloomberg reported this regarding Gisele Bundchen’s latest contract.
When Bundchen, 27, signed a contract in August to represent Pantene hair products for Cincinnati-based Procter & Gamble Co., she demanded payment in euros, according to Veja, Brazil’s biggest weekly magazine. She’ll also get euros for the deal she reached last October with Dolce & Gabbana SpA in Milan to promote the Italian designer’s new fragrance, The One, Veja reported. Bundchen earned $33 million in the year through June, Forbes reported in July.
Contracts starting now are more attractive in euros because we don’t know what will happen to the dollar, Patricia Bundchen, the model’s twin sister and manager in Brazil, said in a telephone interview in September from Sao Paulo. She declined to discuss details of the arrangements last week, as did Anne Nelson, Bundchen’s agent in New York at IMG Models.
I guess there is a lot more to Gisele than just a pretty face. She and her sister are obviously aware of what is happening to the U.S. dollar. More power to her for seeing the writing on the wall!
What do Gisele Bundchen and Wal-Mart have in common?
Evidently neither of them trust the U.S. government’s stewardship over the dollar. Once we get a few more corporations to step up to the plate and make this decision, the U.S. dollar is going to take the elevator all the way to the basement.
July 29 (Bloomberg)
“Wal-Mart Stores Inc., the world’s biggest retailer, sold the first samurai bonds from a U.S. borrower since Lehman Brothers Holdings Inc. defaulted on its yen debt in September.
The Bentonville, Arkansas-based company sold 83.1 billion ($881 million) yen in five-year, 1.49 percent bonds priced to yield 55 basis points more than the yen swap rate, and 16.9 billion yen in five-year floating-rate notes priced to yield 60 basis points more than the six-month London interbank offered rate for yen, according to data compiled by Bloomberg.
It’s a terrific sale, said Masahiro Kami, a senior fund manager at Daiwa SB Investments Ltd. in Tokyo. The samurai market overcame another hurdle in its recovery. The sale will certainly affect the future samurai market positively.
Wal-Mart is the first U.S. company to sell samurai bonds since July 2008, when it became the first retailer to sell the securities since Sears, Roebuck and Co. in 1979, according to Bloomberg data. The market for samurai bonds, or yen-denominated notes sold in Japan by overseas borrowers, closed in the wake of Lehman’s default, the data show.
Money raised from the new securities will be for general corporate use, Wal-Mart spokesman John Simley, said in an e- mailed response to queries from Bloomberg yesterday, declining to provide further details.
The Bail Out Bubble!
First we had the dot com bubble, then the housing bubble and now we are full steam ahead into the bail out bubble. The bail out bubble will be far bigger and more damaging to the economy than all of the others combined! Gerald Celente, director of the Trends Research Institute spells it out.
As I have mentioned many times in the articles on this site, the dollar is headed to .72, 62, and then .50. The only question is how long will it take to seek it’s rightful level. There is no hope for the dollar under the current administration and that is truly sad. Don’t get me wrong, I don’t have it out for Democrats, just the ones that lean far to the left of what this country is all about. If the Republicans were in power now, we would still be headed in the same direction, the only difference, it would take longer to get there. Both parties are about control and the loss of our freedoms. We need to change this and soon!
As we move further into the bail out bubble, gold will react strongly to the upside. Gold is the only hedge you have against the Federal attack on your rights. As the government swallows up more of the nation’s GDP, the odds of recovery will fade in the rear view mirror and the dollar will quit circling the drain and finally go down it. Gold is real wealth, because it is not debt. It is real wealth because the government cannot debase it. As the bail out bubble matures, gold, and silver, will reach highs that even the wildest gold bug wold not have predicted.
Too big to fail is the mantra that will bring the government and the economy down, not necessarily in that order. I guess the following stories are the green shoots the media has been talking about.
Fannie Mae needs another $10.7B in federal aid
The mortgage insurer narrowed its quarterly loss to $14.8 billion, but it is still leaning on the Treasury Department to survive
By Tami Luhby, CNNMoney.com senior writer
August 6, 2009: 6:41 PM ETNEW YORK (CNNMoney.com) Fannie Mae, the government-controlled mortgage insurer, said Thursday that it needs another $10.7 billion from the Treasury Department to stay afloat.
The new infusion means the troubled company has drawn a total of $45.9 billion of its $200 billion lifeline this year. Fannie Mae and its sister firm, Freddie Mac (FRE, Fortune 500), were taken over by the federal government last September amid the global financial meltdown.
In one hopeful sign, Fannie Mae (FNM, Fortune 500) narrowed its quarterly loss to $14.8 billion, or $2.67 per diluted share, down from $23.2 billion, or $4.09 per share, in the previous quarter. The company lost $2.3 billion, or $2.54 per share, in the second quarter last year.
Credit losses from the housing crisis are still to blame for Fannie Mae’s dour results. The company racked up $18.8 billion in credit-related expenses during the latest quarter. However, the company reduced its provision for credit losses to $18.2 billion, from $20.3 billion in the first quarter, because of a slowdown in the increase of estimated defaults and losses per default.
The value of non-performing loans on its books increased to $171 billion as of June 30, compared with $144.9 billion on March 31 and $119.2 billion on December 31.
Non-Farm Payrolls and Its Statistical Quirks
Friday, August 7, 2009
When deciding how credible this mornings jobs reports is, you only have to look at one number. According to the Bureau of Labor Statistics, employment in the auto industry went UP by 28,000 last month. Nobody believes this, and I mean nobody, not even the biggest government boot licking financial reporters. Even the mainstream media cautioned that this could be a statistical quirk, the polite term in the numbers industry for lying. You should assume that finding one statistical quirk in a report is similar to finding one roach in your apartment. In both cases, there’s a lot more that you’re not seeing.
The headline number for the report was a loss of 247,000 jobs, which is bad enough as is. July was the 19th consecutive month for job losses. Since the recession has began in December 2007, the government admits that 6.7 million jobs have been lost. Goods-producing industries shed 128,000 jobs, and service-producing industries cut 119,000 jobs, including 44,000 in retail and 38,000 in professional and business services. Unemployment in retail (the largest individual private sector employer) seems to be accelerating. After the robust auto industry gains, health care was the biggest job gainer. Government also added about 7 thousand jobs, but this information was left out of the BLS press release even though it is always reported (when information that has always been available suddenly disappears watch out).
According to the government, the unemployment rate declined to 9.4% (actually 16.3% if you include discouraged workers and involuntary temp workers). You may ask how is it possible for there to be a significant job loss and for unemployment to improve at the same time (could it be another statistical quirk? It’s simple 422,000 people conveniently left the labor force. Even though the Obama, Bernanke, and Geithner and the BLS in its press release tell us that the economy is improving, large numbers of people are giving up looking for jobs because they think there is no chance of finding one. Somehow, I don’t think both of these contradictory views are possible. One of them seems to be a lie, pardon me, I meant statistical quirk.
If you listen carefully to what Obama and Bernanke have been saying for the last several months, you will notice that things are getting less worse is the gist of their statements. The Obama litany is: the financial meltdown has ended (which happened during the Bush administration, but he still takes credit for it), the rate of job loss is slowing, and the stock market is doing better. Bernanke also concentrates on the stock market is getting better theme (and I am sure this is not taking place without some government assistance). The recession is indeed getting less worse, although not as much as the government claims. There is also a huge gaping chasm between getting less worse and getting better. However, the government may be able to solve this problem in the future with bigger statistical quirks.
This from Investment Watch. AIG, once the world’s largest insurance firm whose derivatives unit still has more than $1 trillion of exposures that need to be unwound while keeping losses under control.
Warning: AIG collapse could trigger new crisis!
Saying derivatives are dangerous, Warren Buffett
By Daniel at 7 August, 2009, 10:21 pm
“Derivatives at the heart of the crisis, catastrophic losses are inevitable, financial system headed for oblivion, new world disorder, EU doomed, Credit Default Swaps at the heart of the problem, Plunge Protection Team history, coverups for globalization failures, Bloodbath for the Yen…”
“The heart of the current crisis is the quadrillion plus derivative market. Roughly half of these derivatives are listed on exchanges, but the other half are on the totally unregulated, totally opaque, poorly documented and mostly naked (no reserves or collateral given to secure performance) OTC derivatives market.”
“It is only fitting that the credit-default swaps lie at the heart of the problem, which the fraudster banks now face. When you look at what has been done by these reprobates in the past, this is a most fitting fate for them. First, they had President Reagan pass an Executive Order in 1988 forming the President’s Working Group on Financial Markets so they could manipulate markets 24’7 with the PPT. That was forced by the 1987 Stock Market Crash, an event orchestrated by the Illuminati to convince everyone that we had to have an interventional team to stop such extreme market gyrations.”
If and more appropriately, when AIG collapses, it’s massive derivatives will flow into the market and sharply drop in value. When that happens the public will begin to question the derivatives held by other banks. The total outstanding derivatives for the top 25 commercial banks is approximately $201.5 Trillion, while the total assets for the same top 25 banks is $7.7 Trillion. You do the math, that represents a train wreck for the global economy, not just the U.S. economy.
As the U.S. government cranks up quantitative easing in a vain attempt to stop the inevitable, the U.S. Economy will be a major casualty along with the U.S. Dollar. Debt problems have never been solved with more debt.
Take the time that is left to acquire gold coins, bullion and gold stcks before prices really start to move. Buy the dips and you should do very well in the coming months. The 4th quarter 2009 should be really interesting and I believe that the $1,000 per ounce level will be solidly behind us by the end of the year. October should be the start of the next big rise in gold. There is only so much spin and manipulation that can be swallowed before gold reacts to the devaluation of the dollar. (As always, do your own due diligence before buying or selling anything. I am just telling you what my take is on the market. This is not a solicitation to buy or sell anything.)
It’s amazing how much you can learn from Gisele Bundchen, Wal-Mart and bubbles.
Till next time, good luck and good trading!
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