Discussion in 'Financial Cents' started by Jonas Parker, Oct 1, 2008.

  1. Jonas Parker

    Jonas Parker Hooligan

    (Some of these events, in and of themselves, may not indicate an imminent SHTF scenario, but several events occurring simultaneously probably would.) The events in RED have occurred. Events in BLUE are rumored from national news sources, but have not yet occurred.

    1. Economic Indicators
    --A sharp spike in the Federal Funds Rate
    --Large, sudden cuts in Fed interest rate
    --Massive financial-related repos occurring during over night hours or weekends
    --News of a failed Treasury auction, or news that Treasury rates have spiked
    --Overt talk of a US default by Asian or European bankers
    --Multiple simultaneous US bank failures in one weekl
    --Successive failures of large financial firms or banks with no indication of "bailouts"
    --Continuous mass layoffs by Wall Street firms
    --Any media-covered large Northern Rock style bank runs in the US (customers lined up on the streets)
    --A stock market drop of more than 1,200 points in one day
    --A large and sudden spike in inflation
    --Any suspension of US stock trading
    --Draconian new stock trading limits (for example any new "circuit breaker" rules, followed by news that the trading was halted because of the limits)
    --New restrictions on either precious metals purchasing or reporting requirements
    --New limits on moving funds outside the US
    --Any large derivatives trading collapses (because of disappearing counterparties or illiquidity)
    --News that hundreds of hedge funds are suspending redemptions
    --News that many Money Market funds are dropping below $1.00 Net Asset Value (NAV)
    --The US Dollar Index (USDI) dropping below 68 for more than one full week of trading, and gold spiking past $1,500 per ounce
    --Any sudden large interest rate moves (up or down) by the FOMC
    --News that any major western power is no longer accepting US Dollars in payment for key commodities
    --News that any major trading partners are no longer rolling over the majority of their US Treasury paper.
    --The Treasury starts to extensively monetize debt
    --The sudden resignation of either the Treasury Secretary and/or the Federal Reserve Chairman
    --Rolling blackouts become standard operating procedure
    --Gasoline rationing (for that matter, ANY "temporary" rationing)
    --Proposed plans that involves widespread "voluntary" compliance in order to reduce consumption (gasoline, meat, electricity, car pooling, etc.)
    --Government promises that if you accept reduced or late payments (contractors' bills, pensions, social security, etc.) now they'll make it up to you later (directly related, government checks regularly bounce or are refused by banks)
    --Offers to government employees for compensation in forms other than a paycheck/health benefits

    2. Political Indicators
    --News of an escalating political conflict between the Pentagon and Executive branch, accompanied by simultaneous high-level Pentagon firings
    --News of large number of resignations of “flag-rank officers” in the US Armed Services
    --News of large numbers of US Navy ships returning to their US home ports

    3. Social Indicators
    --Rioting in several metropolitan centers simultaneously

    4. War/Terrorism Indicators
    --Coordinated assassinations of high government officials
    --Coordinated attacks on government buildings and/or institutions
    --Rapidly escalating hostilities in Mid East, especially involving Israel and Iran
  2. Clyde

    Clyde Jet Set Tourer Administrator Founding Member

    I believe the LIBOR rate tripled in the last few days. I would say that might be an indicator and treasury starts to monetize debt. That will happen very shortly. The red flags are be raised much quicker.

    Perhaps it is time to start another war....
  3. Minuteman

    Minuteman Chaplain Moderator Founding Member

    Foriegn or domestic?

  4. Tango3

    Tango3 Aimless wanderer

    that's about all we export anymore isn't it( "ordinance"; fused, finned and in the rack )????
  5. BAT1

    BAT1 Cowboys know no fear

    Also Indications of martail law being implemented. Germany is trying to rewrite their Constiitution to allow military to patrol streets, naturally only in a humanitarian role. Right. They will weapons and live ammo, not water and food with them.
  6. Jonas Parker

    Jonas Parker Hooligan

    Another SHTF indicator!

    <st1:state w:st="on"><st1:place w:st="on"><st1:stockticker w:st="on">NEW</st1:stockticker> <st1:stockticker w:st="on">YORK</st1:stockticker></st1:place></st1:state> , September 30, 2008 -- The New York Stock Exchange will implement new circuit-breaker collar trigger levels for fourth-quarter 2008 effective Wednesday, October 1, 2008. Circuit-breaker points represent the thresholds at which trading is halted marketwide for single-day declines in the Dow Jones Industrial Average (DJIA). Circuit-breaker levels are set quarterly as 10, 20 and 30-percent of the DJIA average closing values of the previous month, rounded to the nearest 50 points.
    In fourth-quarter 2008, the 10, 20 and 30-percent decline levels, respectively, in the DJIA will be as follows:
    Level 1 Halt
    A 1,100-point drop in the DJIA before 2 p.m. will halt trading for one hour; for 30 minutes if between 2 p.m. and 2:30 p.m.; and have no effect if at 2:30 p.m. or later unless there is a level 2 halt.
    Level 2 Halt
    A 2,200-point drop in the DJIA before 1:00 p.m. will halt trading for two hours; for one hour if between 1:00 p.m. and 2:00 p.m.; and for the remainder of the day if at 2:00 p.m. or later.
    Level 3 Halt
    A 3,350-point drop will halt trading for the remainder of the day regardless of when the decline occurs.
    Circuit-breakers are calculated quarterly. The percentage levels were first implemented in April 1998 and are adjusted on the first trading day of each quarter. In 2008, those dates are Jan. 2, April 1, July 1 and Oct. 1.

    Contact: Mirtha Medina
    Phone: 212.656.6192
  7. BAT1

    BAT1 Cowboys know no fear

    The Dow is sliding bad, 9788 right now. Cramer said last night that you should take 20% of your stocks and cash out now. There will be no place to run, for the cash will be worthless. they needed to suspend the dow completly until Jan 1st two weeks ago. What idiots! My brother in Georgia just called. On CNN this morning, they announced that 4700 troops from Iraq will are going to stationed there starting this week. It is here, right in our face.
  8. homeshow

    homeshow Monkey++

    a depression is not the full on TSHTF. please reset to defcon 2. when the chinese or anyone else attacks or invades. call me for now i'm practicing my shooting, putting up provisions, and living my life every single day.
  9. Jonas Parker

    Jonas Parker Hooligan

    Homeshow: read this! You may wish to reconsider your previous post...

    More gold coins halted as investors seek haven
    By Moming Zhou, MarketWatch
    Last update: 1:38 p.m. EDT Oct. 7, 2008{4D7F54D5-60D6-44B2-AFAE-B4EA5C2F65CA}&siteid=YAHOOB

    NEW YORK (MarketWatch) -- Citing extraordinary demand, the U.S. has broadened its freeze on sales of gold bullion coins in another sign that retail investors who are priced out of the futures markets have been piling up their holdings of the metal as a hedge against market uncertainty.

    "Due to the extreme fluctuating market conditions for 2008, as well as current market conditions, gold and silver demand is unprecedented and the demand for platinum is unusually high," the U.S. Mint said in a memorandum released to its authorized purchasers.
    The Mint added that it's halting the production and sales of several gold and platinum coins while putting a few other coins under allocation sales. The move, announced late Monday, follows a halt on sales of two other coins in September and August.
    In times of economic and market turmoil, investors turn to gold as the ultimate tangible asset. Some gold dealers have reported unprecedented demand for coins and bars as the financial crisis around the world has intensified worries about a global slowdown.
    Coins for retail investors
    While the bulk of the 160,000-ton above-ground gold stock (about 5.1 billion ounces) is used in jewelry and the electronics industry, about 16% is held by investors for pure investment purposes, according to the World Gold Council. The gold investment market, however, is dominated by big institutions, which trade with one another directly in large orders through the opaque over-the-counter markets.
    Gold is also traded through futures contracts in New York, Tokyo and a few other places. Futures trading, however, requires quite a bit of capital. One futures contract on the Comex division of the New York Mercantile Exchange, for example, represents 100 ounces of gold, or about $88,000 in current prices.
    Gold coins provide an easier channel for retail investors, who can buy coins through dealers online, much like buying a book at Since the South African Krugerrand became available in 1967, bullion coins have become increasingly popular among retail investors.
    "Because of what's happened in the past and what I believe is happening now [the financial crisis], it is imperative you own some gold, some real gold, gold you can bite down on, gold that clanks," said Dan Ferris, writer for DailyWealth, an investment newsletter.
    The U.S. fabricated 22-karat American Eagle coins in 1986. The Mint introduced the American Buffalo gold coin, the first 24-karat gold coin in the U.S., in 2006. Twenty-four karat represents a gold purity of 0.9999.
    Mint halts coins
    The U.S. Mint said on Sept. 25 that it was temporarily suspending sales of American Buffalo gold 1-ounce bullion coins. "Demand has exceeded supply" for the coin and inventories "have been depleted," the Mint said in a memo sent in September.
    Before the Mint suspended sales of the Buffalo coin, it had sold 164,000 of the coins this year, up 54% from the same period a year ago, according to Michael White, a spokesman at the Mint.
    The Mint had to temporarily suspend sales of the 1-ounce American Eagle gold coins on Aug. 15. It then announced about a week later that sales of the Eagle coins would resume under an allocation program to designated dealers.
    In late Monday's memo, the Mint said the 1-ounce Eagle and Buffalo coins will remain on allocation. But once the remaining inventory of the Buffalo is depleted, no more coins will be produced this year.
    The Mint also announced that the inventories of the 1/2-ounce and 1/4-ounce Eagle have been depleted last week and no more coins will be produced this year.
    The 1/10-ounce Eagle, the smallest size among the Eagle coins, was also sold out. More coins will be produced based on current blank supplies, but "once that remaining inventory is depleted, no more coins will be produced for 2008," the Mint said.
    The Mint, the coin-producing division of the Treasury Department, also said the 1-ounce silver Eagle will be put under allocation, and inventories of all sizes of the platinum Eagle coins were depleted.
    "Tightness in the gold market is fairly normal in a time of financial stresses," said DailyWealth's Ferris. "We've seen high demand for gold coins because the news about banks is all bad."
    Amid the financial turmoil, gold prices have rallied. The December futures contract gained 5.5% in September on the Comex.
    In spot trading, the London gold-fixing price, used as a benchmark for prices of gold for immediate delivery, rose 6% last month. The London fixing stood at $876.75 an ounce Tuesday afternoon.
    Coin prices track the London gold-fixing prices, with a certain percentage of premiums, as production and distribution costs have to be added.
    ETFs or coins?
    But holding physical gold isn't the only choice retail investors have when they want to expand their portfolio to gold. The buying patterns of retail investors have shifted recently because more choices have been available, such as gold exchange-traded funds and gold certificates.
    "Coins and bars are seen as somewhat higher priced, less safe in terms of storage and transport and less liquid than the custodial alternatives," said Jon Nadler, senior analyst at Kitco Bullion Dealers.
    Indeed, investors are increasing their gold ETF holdings...

    ...Ferris, however, said he didn't recommend buying ETFs when times are really bad.
    "Sooner or later, it'll become clear the ETF is not gold. It's a stock," Ferris said. "When panicking investors need to liquidate securities portfolios, they'll sell the gold ETF with a mouse click. Once your gold is in your hands, you're less likely to sell into that panic."
    Moming Zhou is a MarketWatch reporter, based in San Francisco.
  10. Quantrill

    Quantrill Monkey++

    I think gold and silver are great, but I think stuff like canned goods, ammo, tools, and other essentials will also be worth their weight in gold if things get too out of hand. Golds real advantage is it is easier to move around than say a pallet of ammo.
  11. CBMS

    CBMS Looking for a safe place

    Canada Just slashed interest rates by .5 % down to 2.5%
  12. Jonas Parker

    Jonas Parker Hooligan

    And the Fed cut the interest rate from 2% to 1 1/2% (25% drop) overnight. That list is looking mighty red...
  13. Quantrill

    Quantrill Monkey++

    Achtung Amerikans!!!
  14. Byte

    Byte Monkey+++

    I see so red people... [nk]
  15. andy

    andy Monkey+++

    what does the intrest rate being slashed mean? i heard about it being slashed on the news but i don't fully understand what it implies.
  16. RouteClearance

    RouteClearance Monkey+++

    In a nutshell, inflation is about to get a lot worse.
  17. ghrit

    ghrit Bad company Administrator Founding Member

    "Slashed" is a media term that sorta makes it sound more dramatic. That said, the prime rate was reduced, which is supposed to encourage borrowing because the interest paid for loans is somewhat less. The Fed controls the prime rate (and thus the amount of credit running loose) which is the interest paid by banks to banks when large amounts of money is lent interbank. The rates paid by us consumers and other bottom feeders is higher to cover the expenses of servicing the loans. When the prime rate is reduced, reductions are supposed to filter thru the system so that lending by the banks (for mortgages and the like) also gets reduced rates.

    For a very simplistic (and a fanciful one at that) example, if the Fed were to cut the prime from 2pc to 1pc, the money paid by the borrowing banks for the loan would be half that paid previous to the reduction. Assuming the reduction was reflected thru, then a consumer who was paying 3 pc would pay only 2pc if the whole reduction was passed thru. The interest paid by the consumer would be reduced by only 1/3, not half. Funny how that works, eh?

    BOHICA still applies. At this point, someone would have to offer me a loan and pay me to take it. (Interesting thought!! Negative interest!!! Bet that would pull the high risk borrowers out of the woodwork.)


    and then
  18. andy

    andy Monkey+++

    ok, ok, so let see if i got this. the feds lower ("slash") the intrest rate which is suppost to ease people fears and/or encourage them to take out new loans. doesn't that just create more debt which was the problem to begin with? so these new loans or more appropriately the payments on these loans are suppost to stimulate, re-stimulate, or prop up the failing system. but for each person who takes out one of these new loans and can make the payments, there is one dumby who can't, and more than likely someone who could barely make them as it is but needed the loan for say there kids braces or there only mode of transportatin. now with the weekening dollar, which i imagin is tied in to this whole mess, these fringe people have to decide between milk, gas, or there new loan. so now they defualt on the loan (your kids got to eat and you got to get to work). so eventualy that car or house what have you is repod.ed. but what happens to the dept they promised to pay back to the bank? who has to pick up that slack? other banks, other tax payers? (ie. bailouts?) so have i missed something
  19. ghrit

    ghrit Bad company Administrator Founding Member

    You are on the right path. In theory, the bank has to absorb the defaults, you might say as a penalty for making a loan that was too high a risk. Who is the bank? Stockholders. Who are the stockholders? You, me, and anyone that has an IRA or 401k or retirement fund that happens to have some of that particular banks stock in it. If enough of that bank's loans go into default, the bank's income goes negative (a "loss" on the balance sheet). If the losses accumulate far enough, the bank can't pay its own bills and goes under (fails) unless there is an infusion from an outside source (say by another bank buying them up.) If no good guy comes along, that particular bank's owners lose the money they had as an owner. End of story. If a good guy comes along and squirts money into the MT vaults, said good guy has bailed them out, but there is a price to be paid for the bailout, and that is usually a dilution of the worth of the bank's stocks. A wound, but not fatal, if the stock funds are sufficiently diversified.

    NB: There is always a price to be paid for a bailout. The business world requires tit for tat, you cannot stay in business buying things that cost money or you go under yourself, and your stockholders will not look kindly on your continued operations if you give away the farm.
    [soap] Enter politics. No white knight is found to infuse the company with enough money to pay the bills, and the little guys are going to lose it all. Enough so that the dot gov feels compelled to save them from themselves. (This a whole 'nuther argument, since the dot gov evidently encouraged the risky behavior.) This is critical, this is where the rubber meets the road on this governmental wading in, and is the crux of the issue. The bailout funded by the government does nothing, exactly zero, directly for the debtor. The effect is to supply cash for the bank to continue operating even with income below outgo. And, as a new part owner, and particularly as a condition of the infusion of cash "agreement" the dot gov can dictate how the bank operates, and can tell it to continue operating with negative income. Now, who is the dot gov stockholder allowing the dot gov CEO to continue operating the corporate gov at a loss? Remember how the white knight diluted the stock of the bank that was bought out? [hissyfit]

    The dot gov is not a corporation that exists to make money, so it can allow things other than profit to motivate it's spending. Social issues (as some would call them, entitlements might be another word) really do have costs borne by the "stockholders" you, me and the rest of the citizenry. We, via our elected representatives, have now allowed the dot gov to dilute the value of our stocks as held in our bank accounts, IRAs, etc. Some might say that is a good thing, since now at least the stock won't go to zero.

    Disclaimer: I am NOT a finance guy. This how I see it from on top of this hill. YMMV

    Gawd, I hate this business.

  20. andy

    andy Monkey+++

    got it, thank you ghrit. [winkthumb]
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