** FLASH!! ** Massive Market Meltdown??

Gang,

Hope everyone is enjoying themselves today.

While I hate to the harbringer of gloom and doom, I would like for you to watch this short clip...







... and prepare yourselves.

According to Marketwatch.com, the long awaited or cheerfully overlooked Stock Market Crash of '08 might be taking place a little sooner than I, (or most other people) had anticipated:

U.S. stock futures point to major decline on re-open

Markets in Europe end day in bear market territory
By Steve Goldstein & Sarah Turner, MarketWatch

Last update: 12:46 p.m. EST Jan. 21, 2008

LONDON (MarketWatch) -- If futures contracts traded on a day when U.S. stocks weren't even due to open are anything near accurate, then markets will be in for a major decline on Tuesday, with concerns about bond insurers and the health of financial institutions dragging markets lower.

March contracts on the Dow Jones Industrial Average traded 522 points lower to 11,584 as of 11:30 a.m. Eastern.

Futures contract don't move in complete lockstep to the underlying indexes, but by comparison, the Dow industrials fell 382 points on Sept. 20, 2001, just days after the terrorist attack on the Twin Towers, and by 387 points on Aug. 9, 2007, shortly after the recent credit crunch first emerged.

S&P 500 futures fell 60 points to 1,265.00 and Nasdaq 100 futures fell 76 points to 1,773.25.

Chart of ST:SXXP

U.S. markets were closed Monday for the Martin Luther King holiday. Trading won't resume until Tuesday.

The futures declines are on the back of big drops in European and Asian stock markets.

From developing markets like Shanghai -- down over 5% -- to established ones in Paris -- down nearly 7% -- financial institutions around the world sold off. See Europe markets.

Karen Olney, a strategist at Merrill Lynch in London, said investors simply don't trust earnings forecasts any longer.

Monday's decline means that European stocks are trading at price-to-earnings levels about 27% below their long-run average, she said, having dropped to 11.4 times trailing earnings.

"That means the markets are pricing in 80% of the fall to recession-like earnings," she said, using 1990s as a comparison.

Stocks in Europe are trading over 20% below 2007 highs, which meets technical definitions of a move into a bear market.

Stay in cash, Morgan Stanley says

Strategists at Morgan Stanley told clients on Monday to stay in cash.

"Our themes continue to be: patience, earnings recession, U.S. recession spreading global, bear market regime, don't be lured into value stocks as most are likely to be value traps, much more monetary easing. We expect flat but volatile markets just as in the 1989-92 period -- a real whipsaw environment for the market," they said...

Doesn't sound good at all Ladies and Gents, although I think that our beloved Plunge Protection Team will intervene tomorrow just enough so it isn't a TOTAL wipeout.

But then again... the PPT can only do so much. Will they be able to save the Unsinkable Financial Markets?!?

According to writer Claud Maund, maybe not:

While the general public were having their vacuous minds stuffed with irrelevant trivia about the US primaries late last week, the gathering maelstrom in the stockmarkets was treated as a minor sideshow by the mainstream media. Like revellers at a giant outdoor fiesta or open air society wedding that is about to be trashed by a violent thunderstorm, they are going to find out just how fast things can change - and what really matters.

In The Tragedy of the US Stockmarket Part 1 posted on the 8th January we examined the overwhelming technical evidence pointing to an imminent breakdown by US stockmarkets. This breakdown occurred last week as the PPT (Plunge Protection Team) failed to successfully defend the critical support line at the lows of last August. The PPT are now in emergency session and panic has broken out behind the scenes in Washington, leading to the desperate measures announced by the administration on Friday. As this administration and the Federal Reserve no longer have a shred of credibility, the emergency measures just announced, which reek of desperation and panic, and any announced in the near future, are only likely to exacerbate the crisis...

Oh the drama!!

It should be noted that Big Ben Bernanke himself told the Markets that economic conditions were on the road to hell. THEY WERE WARNED AHEAD OF TIME, JUST LIKE THEY WERE WARNED IN THE 1920's.

Unfortunately, many investors who aren't in the know, or who don't have ears that can hear, didn't get the subtitle messages instructing smart money to get the HELL out of the markets before it was too late. In my case, I've been out of U.S. stocks since 2nd quarter 2007 because I knew that shit ain't all good.

Sadly, those who listened to the Permabulls are about to get their heads handed to them, if they haven't already been decapitated. I would strongly suggest that you TALK TO YOUR FINANCIAL ADVISER, AND CONSIDER OTHER OPTIONS BEFORE STOCKS GET SENT TO BEAR-HELL. Reality is about to catch up to the Unsinkable Stock Market.

Oh, and if I may be so bold, I would like to contradict the advice given by endangered investment house Morgan Stanley...

TO HELL WITH CASH!!!

The greenback, Ladies and Gentlemen, isn't worth the paper its printed on, believe me. Those who keep their money in cash are going to be robbed BLIND by ever-increasing inflation.

Consider that the Philippines, of all places, is recommending its own PESO over the once Almighty U.S. Dollar:

Monday, January 21, 2008

OPEN NOTEBOOK
By Random Jottings

OFWs told: Shun dollars for pesos

GUESS none of us ever thought that in our lifetime this sort of financial advice would be imparted by an authoritative voice to overseas Filipino workers. But here we go, folks!

In boldly predicting a bigger peso surge versus the dollar in the weeks ahead, the Trade Union Congress of the Philippines (TUCP) is calling on OFWs to forget about the dollar and consider placing their hard earned savings in peso accounts.

“We now see the dollar at P37 to P38 by early summer. We are thus renewing our guidance for overseas Filipino workers and their families here to continue to shun the dollar and keep their savings in pesos,” said TUCP spokesperson Alex Agui­lar whose influential organization is basing its counsel on falling US interest rates that are bound to set off more capital flight out of the greenback.

Aguilar also urged regulators to find ways to compel local banks to reduce their “oppressive and burdensome” remittance charges, in order to help lessen the powerful peso’s jolt on migrant workers and their families—a call that has also been made by Senator Loren Legarda through a Senate resolution she tabled four months ago.

Stated Aguilar: “We are now convinced that, amid the lingering subprime mortgage crisis, credit crunch and housing slump that threaten to drag the broader US economy down, the Federal Reserve will have no choice but to bring its key rate down to as low as 2.50 percent...”

So fellas, add the Philippines to the list of countries that consider our dollar the next step up from trash!

While I'm on the subject of the U.S. currency, I wanted to share with you my gameplan for this year.

In 2008, your author is going to do three things.

Stack money, Lay Low, and Chill.

Stack Money

Dear readers, the fact of the matter is that we are beginning to see the beginning of the end of the U.S. Debt ridden financial empire. The good times of fast money and cheap credit are done.

Unfortunately, this means that everyone in our society, man, woman, corporation, and government, is going to have to adjust to the new reality. On the bright side, government will soon have a greatly reduced appetite for destroying the most productive members of its society, namely Men and families. There will come a time, and soon, when Welfare spending on pork feminist programs will come to a screeching halt. One of these days, Fedgov will no longer be able to afford immoral and unconstitutional programs such as Child Support. And, States will no longer receive Federal dollars to rape Men financially. We will be in high demand as husbands and fathers once more.

Happy day!

The process of adjustment has already begun. In my personal life, I know two women who ran into a bit of a financial jam. One lost her house last year, the other two years ago. The solution for both of them was to move in with family members and share the ever inflating cost of living.

I predict the revival of the American family, as financially strapped and desperate Americans turn to one another in order to survive the maelstrom that is descending upon us.

Just like Ancient Rome, I also predict that stable marriages and families will soon become a top priority of the State. As I've argued many times, the married family is the most efficient and best economic unit [a][b] ever devised , just as a commodity backed currency is the most stable and secure form of money ever created [c][d].The Laws of Economics have not been repealed. The Universal Law will not be ignored.

The divorce industry and fiat money have led to this present day situation, by destroying the values and the economic systems that gave this country prosperity in the first place.

Financial author Ty Andros breaks it down in his vastly informative article Thrill Ride.

He writes:

The developed G7 economies have CEASED growing in REAL terms and now only grow in nominal ones. Rather than create wealth on the factory floor, wealth is now manufactured with "PAPER" and asset backed economies. This is what is driving the demise of their financial systems and the constant erosion of their living standards. The policies of wealth creation are now a memory, as socialism [e][f], central control of economic policies and nationalization (through higher corporate taxes, employee mandates and smothering micromanagement via regulations of what few wealth creating activities that still exist within the G7) continue to grow.

They call them capitalist-free economies but it is actually central government socialism masquerading as such, socialism is a wolf with sheep's clothing. Spreading an ever shrinking economic pie further and further, socialism is the definition of "Misery spread widely". Due to the misnaming of this socialism as capitalism, the constituents of the G7 have misdirected their anger at capitalism rather then their public servants who have destroyed the system which created the wealth they have enjoyed for generations.

The original G7 and its "something for nothing" constituencies are the mob at work robbing the hardiest among them (wealth creating entrepreneurs and business) and feeding them to the weakest (desperate middle classes who don't understand what is transpiring and the victims of their political classes who lack knowledge of history and the financial/banking industries). These people consume, and they eat whether they produce or not. Their moral fibers are of made of balsa wood and are the living definition of consuming more than they produce. The policies of insolvency on a society-wide scale, individual, municipal, state and federal, are a black hole of capital sucking the life out of their economies and futures and directing it into capital destructive policies and sectors. Government is increasing in these economies where it destroys the most: central government planning, taxes, the factory floor and in finance and banking. They rely on anyone but themselves and increasingly hold their governments UNaccountable.

The G7 is consuming more than they produce and exporting approximately 2 Trillion dollars of wealth on an annual basis. They are in the fall of their empires.

The emerging world is now where wealth is created, fresh from the memories of long socialist winters and command economies. Austrian economics and capitalism are in the springtime of their ascendance. A huge fight is unfolding as former "emerging world" servants of the G7 ascend to become future masters of the world economies and wealth. They are destined to do so as they are the only place creating wealth. There is a broad social trend at work in the emerging world and it is: "I will work 60 hours a week for a better life for myself and my family". This is the absolute antithesis of the "something for nothing" personality. These people produce or they don't eat, so their moral fibers are of hardy timber and they illustrate the definition of producing more than they consume. These peoples' close knowledge of "government as savior" know that to be the fallacy it is. Government is receding in these economies where it counts the most: central government planning, taxes, the factory floor and in finance and banking. They rely on no one but themselves but increasingly hold their governments accountable. They are producing more than they consume and accumulating capital and savings at a 2 trillion dollar a year pace. (See the "wealth of the world is rotating" in the Tedbits archives at www.TraderView.com)...

There is a lot of wisdom here, most of which is lost to most of our people. But, they shall soon learn the folly of feminism, socialism, Platonism, and other such misguided philosophies, the hard way.

And all of this guides me in my investment decisions:

Precious metals over Cash and Bonds, Real goods instead of credit, little to no debt instead of maxed out credit cards and insanely high mortgage payments, and, most importantly, a feminism-free woman who understands what it means to be a wife versus the 94.999% of Western Women for whom the words thrift, loyalty and devotion have no meaning whatever. If you are going to be with somebody, at least make sure you are with someone you can depend on when times get rough!

Yes friend, getting married is a risky investment these days. And, while I personally believe that American women and men will need to make "nice-nice" and get along in order to make it during upcoming financial hard times, Unless and Until immoral and unconstitutional laws that discriminate against men and families change, we are better of Going Our Own Way.

Cause nobody likes a Captain Save a Hoe!







Besides, women are independent these days... I believe they are quite capable of taking care of themselves regardless of the circumstances.





Let me hit you with one more article before I close shop for today. I apologize for being so long-winded.

Mr. Gary Dorsch writes in Fed Plays Russian Roulette with US Dollar - Stoking the Fires of Stagflation:

... On his arrival in Riyadh on January 15th, President Bush urged Saudi king Abdullah to put more crude oil on the world market, warning that soaring prices could cause an economic slowdown in the United States, and weaken the housing market. “High energy prices can damage consuming economies. When consumers have less purchasing power, it could cause the economy to slow down. I hope OPEC nations put more supply on the market. It would be helpful,” he said.


Saudi Arabia is the only member of OPEC with spare capacity - roughly 2.8 million barrels per day. Saudi Oil chief Ali al-Naimi said on Jan 15th, that Riyadh is ready to boost oil output if the market needed more oil to tame high prices. "Nobody would look with pleasure on a recession in the United States. Concerns about US economic growth are valid. But the price of oil is more than just the US economy. Global economies are growing despite oil prices ranging between $90 and $100 a barrel,” Naimi said. For instance, China's oil imports rose 12% last year to a record 3.26 mil bpd.

But al-Naimi also blamed speculators in London and New York for inflating the price of crude oil by $20 to $30 per barrel. “Twenty to thirty dollars is the outside influence on the price of oil. If you look at who's in the market, you'll find a lot financial institutions are speculating, using the market as a hedge.” Still, Naimi wouldn't say if Riyadh would agree to boost oil output at OPEC's Feb 1 meeting.


King Abdullah must walk a along a tightrope, balancing his military patron's request for more oil, against Iran's opposition to further increases in output, which could hurt Tehran's oil revenue. On Dec 5th, Iran's President Mahmoud Ahmadinejad scored a big victory, when he convinced king Abdullah to join the hawks of OPEC – Iran, Libya, and Venezuela, and hold the cartel's oil output steady at 27.25 million bpd. “Our position is that demand and supply are balanced and there is no need to increase oil to the market,” said Iranian Oil Minister Gholamhossein Nozari. Still, the key question is which way will Saudi oil policy lean at the upcoming Feb 1st meeting in Vienna, in favor of US Prez Bush or Iran's Ahmadinejad...

The author continues:

... Beijing warns US Treasury against further Fed rate cuts

Beijing also finds itself in a tough predicament, with $1.53 trillion of foreign exchange reserves over the past five years, mostly stockpiled in depreciating US dollars. However, Chinese leaders finally woke up to the folly of such a foolish investment policy. “The world's currency structure has changed,” declared Xu Jian, vice director of the People's Bank of China (PBoC) on Nov 7th.

“The US dollar is losing its status as the world reserve currency,” he warned. “We will favor stronger currencies over weaker ones, and will readjust accordingly,” added Cheng Siwei, vice chairman of China's National People's Congress. On Dec 27th, Hu Xiaolian, director of China's Foreign Exchange department, wrote, “If the US federal funds rate continues to fall, this will certainly have a harmful effect on the US dollar exchange rate and the international currency system,” he said...

Dorsch also notes that:

... Arab Oil kingdoms are Saviors of US$,

Japan is the largest holder of US Treasury debt, but has been a net seller of $46 billion, and South Korea has sold $19 billion over the past 12-months. To pick-up the slack, the Bush administration has relied heavily on the Arab Oil kingdoms, to recycle their bulging petro-dollar surpluses back into US Treasury debt. Since 9/11, America has assumed the financial costs of occupying Iraq, while the Arab oil kingdoms have experienced a staggering infusion of new wealth...

Read the rest of this story when you have time, as it is excellent.

The key point I would like for you to take away from this is that pressures, both internal and external, are driving the United States, the Western World, the Fiat monetary system, and indeed, all of our societies into dangerous, dark, and uncharted waters.

Anything can happen, and the Big Wipeout could come in the blink of an eye. Our economic ship is leaking from numerous holes, and there's no telling if S.S. US Economy is going to survive this voyage.

Therefore, I would humbly suggest that you check with your financial adviser if you haven't done so already, and make prudent preparations for your future. Also, if you are currently living the Men Going Their Own Way lifestyle, more power to you, for reasons I will explain later when I outline my Law Low and Chill sections of my 2008 gameplan.

Peace.