Pithaly

boomp3.com Read more on this article...

Excellent rendition, smooth timing!

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My third custom video, merging an existing Korean (?) ballet by a disabled couple with "C'est La Vie" by Emerson Lake and Palmer.


Read more on this article...

>XAU, weekly chart



>XAU, daily chart Read more on this article...

Gold for April delivery fell $59, or 5.9 percent, to $945.30 an ounce on the Comex division of the New York Mercantile Exchange. That's the biggest percentage drop for a most-active contract since June 2006. Gold reached a record $1,033.90 on March 17.

In 1980, the price tumbled $50 a day from Jan. 22 to Jan. 24. On Jan. 21 that year, the metal climbed to $873, a record that lasted for almost 28 years.

If you haven’t bought gold or silver already you are completely insane. Read more on this article...

14th March 2008

It's known to technicians everywhere as a death cross, and it is happening on the Shanghai Composite Index. That's the index that has jumped by over 450% during the last two years--a sure sign of a speculative bubble.

A death cross is formed when the 50-day moving average of a stock falls below (crosses) the 200-day moving average. It indicates that there are currently more people selling than buying the stock. It is as bearish as it gets.

And it's not the first time the exchange has seen the "death cross," either.

As you can see, the death cross came twice on the index over the last five years, first in 2003 and later in 2004. Each time, of course, the index dropped dramatically, culminating in a 50% decline over all.

And while a third death cross hasn't actually completed yet, the Shanghai Composite continues to drop even as a Bernanke-inspired rally pushes the Dow higher. The index actually lost nearly 3% on the same day the Dow rallied 440 points.

http://seekingalpha.com/article/68518-why-it-s-not-too-late-to-short-china?source=side_bar_short_ideas Read more on this article...

I'll be damned. The Dow is up 105 currently and shows no sign of stopping. Commodities have been hammered, and oil has shown it's biggest drop in years! That's how fast things change. Gold, too, shows topping up signs now.

Look for $600 gold. Look for 85 in dollar index. Also look for 13,500 is Dow Jones Industrial Average in the next several months. It is called bear market short covering rallies.

That's how fast a view can change. I think it changed tonight. Read more on this article...

There’s no point in burying your head in the sand like an ostrich and waiting for a miraculous rebound. An active interest in the state of affairs is a must. The first thing you should do is take a long, hard look at your portfolio.

"Does it have more of established companies with proven track records, or does it consist more of stocks like Nagarjuna Fertilizers & Chemicals and Reliance Natural Resources (RNRL), which you bought because they were ‘momentum plays?’

Having done that, get rid of the momentum stocks. After all, with the momentum gone, it’s time for these stocks to go as well. The rule is simple: ‘Never hold on to something that you wouldn’t buy now’ . Never ‘hope’ or ‘pray’ . It is either a ‘buy’ or a ‘sell’.

So, it doesn’t matter at what price you bought such stocks — just dump them and collect whatever cash you can. If you have blue-chips in your portfolio like Reliance Communications, Bharti Airtel, Hindustan Unilever or ICICI Bank, to name but a few, you can actually choose not to sell them. In the long run of say, 3-5 years, there is a good chance that you will still earn a return higher than what a bank deposit can give you in the same time period."

http://economictimes.indiatimes.com/Investors_Guide/Cash_is_King_Tips_for_small_retail_investors_/articleshow/2872872.cms Read more on this article...

"We are now at the level where the president has to get involved. We are now at the point where we have to worry about the barter system. We have to start being concerned about whether trades clear in the system.

It's a crime that all of this could have been avoided. But it wasn't.

And now they have to accept that some very big banks are going to go bankrupt. If they don't get ahead of it, the banks that go under will be the biggest ones in the country.

That needs to be prevented.

I don't think they understand that.

I don't think they have the courage, the knowledge, or the conviction to do what they have to do." Read more on this article...

At first glance, you say "She cannot be a Wall street analyst!". She is, and a good one at that.

This is what she has to say today (17th March 2008):

"The problems at Bear Stearns may be unique, but U.S. financial stocks nonetheless have further downside of as much as 50%, according to Oppenheimer & Co. analyst Meredith Whitney."

“On the basis of book value, most banks do not appear expensive as they trade near price to book multiples of the 1990-1991 credit cycle,” she said in a note. “However on the basis of tangible book value, banks look expensive and are trading well above tangible book value.”

"Merrill Lynch, UBS and Citigroup will be the worst hit. Lehman brothers shares are already down 30 per cent in pre-opening trading."

Ms Whitney, Forbes’s second-highest-ranked stock picker for 2007, set off the biggest stock market decline in the US since August with a note on Citigroup.

The analyst who downgraded Citigroup, which led to a broad stock market sell-off in November, said she had received several death threats, the Times of London reported Saturday.

"Clients are not pleased with my call and I have had several death threats," she added. "But it was the most straightforward call I've made in my career and I am surprised my peer analysts have been resistant. It's so straightforward, it's indisputable." Read more on this article...

Around 2001, two environmental groups called Toxics link and Vatavaran based in Delhi, did a study on the contents of these chemical colours and published its results in a fact sheet on Holi. This research revealed that Holi colours come in three forms; pastes, dry colours and water colours.[1]

The pastes contain very toxic chemicals that can have severe health effects as follows:

Black contains lead oxide and can cause renal failure.
Green contains copper sulphate and can cause eye allergy, puffiness and temporary blindness.
Silver contains aluminium bromide which is carcinogenic.
Blue contains prussian blue which can lead to contact dermatitis.
Red contains mercury sulphate which is highly toxic and can cause skin cancer.[2]

The dry colours, commonly known as gulals, have two components – a colourant that is toxic and a base which could be either asbestos or silica, both of which cause health problems. Heavy metals contained in the colourants can cause asthma, skin diseases and temporary blindness.[3]

Wet colours, mostly use gentian violet as a colour concentrate which can cause skin discolouration and dermatitis.

These days, Holi colours are sold loosely, on the roads, by small traders who often do not know the source. Sometimes, the colours come in boxes that specifically mention For industrial use only.

http://en.wikipedia.org/wiki/Holi


Safe Holi colours:

Make your own colours!

The good news, however, is that it is possible to make simple natural colors in one’s own kitchen.

These simple recipes for making natural colours were also freely distributed as part of the Safe Festivals campaign, and children were taught how to make colours through lecture demonstrations in schools.

Here are a few things one can do at home:

* Mix haldi powder with besan for a lovely yellow.
* Slice a beetroot and soak in water for a deep pink.
* Boil Marigold or Tesu flowers in water for yellow colour. The other easy way to get a yellow liquid colour is to soak peels of pomegranate (Anar) overnight.
* For an orange red paste, henna leaves (mehndi) can be dried, powdered and mixed with water.

http://www.kalpavriksh.org/f1/f1.4/GAholi1 Read more on this article...

[Elaine: I amended this chart to show important banking moments. This is amazing. It shows clearly that our banking system is insolvent. This graph should be posted on all front pages, it is more important than peccadillos of our ruling elites running after expensive whores. This is them running after Miz Risky, the biggest Whore of them all.]

UBS puts the banks total losses from the subprime fiasco at $600 billion. If that's true, (and we expect it is) then the Fed is out of luck because, at some point, Bernanke will have to throw in the towel and let some of the bigger banks fail. And when that happens, the stock market will start lurching downward in 400 and 500 point increments. But what else can be done? Solvency can only be feigned for so long. Eventually, losses have to be accounted for and businesses have to fail. It's that simple.

Roubini has been right from the very beginning, and he is right again now.

http://elainemeinelsupkis.typepad.com/ezmoneymatters/2008/03/roubinis-nightm.html

http://benbittrolff.blogspot.com/2008/03/really-scary-fed-charts-march.html Read more on this article...

This is possible only for certain stereo tracks. When the vocals are exactly the same on both stereo channels, you can remove them by “subtracting” one channel from the other. This works for many studio recordings, where the vocal track is mixed exactly in the center.

To do this in Audacity:

1. Import your stereo file into Audacity.
2. Open the track menu (click the arrow next to the track title), and choose “Split Stereo Track.”
3. Select the lower track (the right channel) by clicking it in the area around the mute/solo buttons.
4. Choose “Invert” from the Effects menu.
5. Using the track menus, change each track to “Mono.”

Press the Play button to hear the results. If you are lucky, the voice will be gone but most of the other instruments will be unaffected, just like a karaoke track. You can use the Export commands in the File menu to save the results.

If the vocals are not exactly the same on both stereo channels, there are some other techniques or optional plugins you can try. Please see our Vocal_Removal Wiki page for more details. Read more on this article...

"In our view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal."

That warning was in Buffett's 2002 letter to Berkshire shareholders. That was 2002.

Wall Street didn't listen to Buffett. Derivatives grew into a massive bubble, from about $100 trillion to $516 trillion by 2007.

Data on the five-fold growth of derivatives to $516 trillion in five years comes from the most recent survey by the Bank of International Settlements, the world's clearinghouse for central banks in Basel, Switzerland.

The BIS is like the cashier's window at a racetrack or casino, where you'd place a bet or cash in chips, except on a massive scale: BIS is where the U.S. settles trade imbalances with Saudi Arabia for all that oil we guzzle and gives China IOUs for the tainted drugs and lead-based toys we buy.

To grasp how significant this five-fold bubble increase is, let's put that $516 trillion in the context of some other domestic and international monetary data:

U.S. annual gross domestic product is about $15 trillion
U.S. money supply is also about $15 trillion
Current proposed U.S. federal budget is $3 trillion
U.S. government's maximum legal debt is $9 trillion
U.S. mutual fund companies manage about $12 trillion
World's GDPs for all nations is approximately $50 trillion
Unfunded Social Security and Medicare benefits $50 trillion to $65 trillion
Total value of the world's real estate is estimated at about $75 trillion
Total value of world's stock and bond markets is more than $100 trillion
BIS valuation of world's derivatives back in 2002 was about $100 trillion
BIS 2007 valuation of the world's derivatives is now a whopping $516 trillion

"There's nothing intrinsically scary about derivatives, except when the bad 2% blow up." Unfortunately, that "bad 2%" did blow up a few months afterwards, even as Bernanke and Paulson were assuring America that the subprime mess was "contained."

Bottom line: Little things leverage a heck of a big wallop. It only takes a little spark from a "bad 2% deal" to ignite this $516 trillion weapon of mass destruction. Think of this entire unregulated derivatives market like an unsecured, unpredictable nuclear bomb in a Pakistan stockpile. It's only a matter of time.

The fact is, derivatives have become the world's biggest "black market," exceeding the illicit traffic in stuff like arms, drugs, alcohol, gambling, cigarettes, stolen art and pirated movies. Why? Because like all black markets, derivatives are a perfect way of getting rich while avoiding taxes and government regulations. And in today's slowdown, plus a volatile global market, Wall Street knows derivatives remain a lucrative business.

And it takes place outside normal business channels, out there in the "free market." That's the wonderful world of derivatives, and it's creating a massive bubble that could soon implode.

By Paul B. Farrell, MarketWatch
Last update: 7:31 p.m. EDT March 10, 2008

http://www.marketwatch.com/news/story/derivatives-new-ticking-time-bomb/
story.aspx?guid=%7bB9E54A5D-4796-4D0D-AC9E-D9124B59D436%7d&print=true&dist=printTop
Read more on this article...

(For other news from the Reuters Global Mining Summit, click on http://www.reuters.com/summit/GlobalMiningandSteel08?pid=500)

LONDON, March 11 (Reuters) - Soaring gold prices are likely to breach $1,500 an ounce in 2008, the chief executive of Canada's Yamana Gold Inc said on Tuesday.

"There is a good chance we will see it before the end of this year," Peter Marrone told the Reuters Global Mining Summit in London.

Gold was quoted at $977.50/978.40 at 1245 GMT.

It hit a record high of $991.90 on March 6, a rise of 19 percent since the end of 2007, driven by inflation fears, a weak dollar, record high oil, expectations of further rate cuts in the United States and tight supplies.

Marrone said the current environment formed "a perfect storm" for higher gold prices, which would need to rise to more than $2,000 in adjusted dollars to match the previous nominal peak of $850 set in 1980. (For summit blog: http://summitnotebook.reuters.com/) (For more on the Reuters Global Mining Summit see [ID:nN10455170] (Reporting by Ben Hirschler; editing by Rory Channing).

http://africa.reuters.com/metals/news/usnL11325529.html

11th March 2008 Update: Infrastructure shares look good. Market in a bounce. Recoup losses.


10th March 2008

There is no doubt left in my mind that a bear market is underway. Other than short covering in the Sensex, a 50 basis point interest drop in the USA (which itself would have very little positive effect on the market) and considering that we are still highly coupled to the world financial situation (if not its economical situation), I think we are now headed to the Mid August '08 lows when the Sensex was 14,000.

To this effect, I sold off a few minor midcap holdings today at approx. average 20% loss as energy release.

The reason for this minor sell-off if I may call it that, is the fact of what I now term as the :Inverted Sparrow Head", a technical term that I have invented(!). Wild as it may sound, but I have seen at the beginnning of the bull run, a bollinger band formation which I call "Compression" shaped by a narrow bollinger, which becomes pincered and shaped like a walnut- breaker) leading to a huge initial expansion of the share price (in the shape of a "Sparrow Head"), and then the formation of a "Beak", which leads to some consolidation, and once agin into a larger expansion.

The slope of the beak has many times indicated the bullishness of the next move. for example, in the case of a pharma co., the slope of the beak was upwards, which lead to a huge upmove subsequently.

Currently, many shares have now an "Inverted Sparrow Head" exactly inverse of that formed during the bull run. The 'Beaks of many shares is now not horizontal, but pointing downwards. This implies that after trading for a short time within the narrow bollinger, a large break-out has to occur downwards, and keeping in line with the overall market heading towards 14,000.

The double (long term and short term) bollinger buy signals (first on the daily charts, and then on the weekly charts) would be the first indication that one could risk a purchase. A single bollinger band on the daily charts as has occured today in SBI), may lead to a price closer to the upper bollinger, but no more, unless further confirmation of the long term bollinger is also available. The prime principal of "Safety of Capital" (and not mazimising of profits) applies to the bear phase, so it is prudent to only make purchases on double bollinger band buy signals on the Weekly charts and not on the daily charts and hope that they are not false signals. Such signals still seem to have some time to be generated.

It pays to be very stock specific this time, and also to purchase for the longer term, leaving the shorter term buys in Sensex scrips and not in mid caps. That does not mean, however, that we should totally lose track of the mid caps sectors, andhence miss out the quick 25% rise from bottoms.

The one sector, which is not exotic (like solar cells) and which is bound to do well in the future is Infrastructure. To maximise profits one needs to look at the fundamentally good and emerging midcaps in this sector.

Two such midcaps, I feel, are GMR Infra and J P Associates. I'm sure there are more. So, a strategy would be to inddenitfy fundamentally good emerging mid cap scrips, which have a running business, and whose projects are soon to go on-stream (as is the case of GMR Infra with their Air port projects, and take a purchase decision on double weekly bollinger and buy signals with about 25% of the total investment you intend to do in a particular scrip so that a false signal is downplayed.

Short term plays may be done on commodity scrips like ONGC and yes, SBI.

HNI individuals should book some of their long term profits now, and channel the money into gold ETFs.

Kakstearns Read more on this article...

^XAU


"When investors are focused on meeting a threshold like $1,000 an ounce for gold, a sell-off of
upto 15 percent is likely once the goal is achieved."

http://www.chicagotribune.com/business/yourmoney/chi-ym-marksjarvis-0309mar09,0,432614.column

(But with a 2 year target of $ 2,000 an ounce). Wave 1 likely to complete at around $ 1,400 to 1,500 an ounce).
Read more on this article...

You can see clearly that we are on the brink of breaking the trendline that has effectively held the bottom for five years for the second and final time. Once broken, the DJIA won't just retest the January low, it should, in all likelihood, drop to the 50% retracement or lower.

But that's not all. The rally out of the January low overlapped the November low twice. That eliminated the first decline in November as a wave 1. Instead it is an A. It follows that the decline that we are starting is (iii) of C, which may extend considerably further than the 50% retracement. That raises some interesting possibilities. And we are just at the brink of discovering them.

http://www.marketoracle.co.uk/Article3901.html

http://news.bbc.co.uk/2/hi/business/7073131.stm Read more on this article...

It's interesting to read history. Here is what three of India's top technical analysts had to say in January 2008 (!!)

If what they claim to be true technical analysis, then history has proved it so terribly wrong, should the entire method needs to be thrown into the sea?

Not really. The fact is that it is very difficult to have a foresight on turning points in markets as well as in history, by mere procedural analysis. The emtire process is a combination of fundamentals, technicals and human behavior all rolled into one, finally creating ONE insight.

What did I say in October?

"The sensex has peaked and will crash in January 2008."

And this is what I'm saying now.

"The sensex will bottom out in September 2008, albeit with some bear rallys in between".

Read...!!

"How will 2008 be? To know what the charts indicate, The Smart Investor gets three technical analysts to predict what's in store for the current year. Neowave analyst Milind Karandikar, stock market consultant and analyst Devangshu Datta and Orpheus Capitals CEO Mukul Pal predict the market in 2008. Read on to know more. . . "


1. Milind Karandikar

January 07, 2008

This puts the Sensex target at around 27,000 mark. The breakout could be as big as 2.618 times the largest leg, leading to a mind boggling figure of 39,000. Even if we keep aside this over-optimistic view, the target of 27,000 could be achieved and that too most probably in the first half of 2008. ......

2. Devangshu Datta

January 07, 2008

Summing up, the first eight months of 2008 should be positive, and there's no technical signals suggesting that the market is due for a major correction. Intermediate corrections should find support and peter out around 5,600 levels. Breadth looks good and relatively smaller stocks could outperform. ......

3. Mukul Pal

January 07, 2008

After Sensex 20,000, the market expectations are for 30,000, but I don't see the Sensex extending beyond 24,000 this year with the benchmark making a decade high this year.
This year, the BSE Capital Goods index should move its last leg up to complete the cycle trend the sector started in 2002. The index should complete the last leg up from current 20,000 levels to 25,000. ......

To read the complete article, visit:

http://ia.rediff.com/money/2008/jan/07bspec.htm

End of Post Read more on this article...

Guys, here's my take on the markets. The article below does resonate much of my thinking, and also gives reasonable levels. A word first, on this bullish-bearish thingy though.

Yes, we have broken the DAILY chart 200 DMA, not the WEEKLY chart, (in fact, we have just broken the 50 DMA on the Weekly charts, but this could recover very fast after a steep decline, like it happened in June '06 and never again till now), and may continue to ride below that zone say for a month or so.

The article states that this is an Elliot wave 4 correction. Now, Elliot wave counts are very complex and many times the count has been proven wrong, but seeing the structure of the sensex, it seems more like a rounded top rather than a vertical blow-out aswould be expected in an Elliot wave 5. So at the moment, I would accept this as a wave 4 correction. In which case, the good news for LONG term holders is that on completion of wave 4 the final bullish wave 5 will start. (That may take some time though!)

Next, on the DAILY and the WEEKLY charts the market is terribly oversold. I have never seen the WEEKLY Stochastics in such oversold regions (approaching 0) in the last four years. Earlier, a WEEKLY buy signal, (and there have been very few such opportunities ie., once a year, giving a lot of credo (is this a word?) to the fact that a buying opportunity really takes place once or twice a year. (As shown on the chart, May '05, July '06, April '07 and now, when the signal appears, the buying opportunity for '08.) which implies a wait of another 6 to 8 weeks on the WEEKLY Sensex or Nifty, confirmed with early buy signals in the daily charts sometime before that. Sentiment at that stage would still be very BEARISH and would turn BULLISH only after the cream 25% to 30% of the rise has taken place.

From this virtual ground zero levels, there has to be a technical bounce-back! Exactly how high would it go, is a matter of conjecture, but could be as high as 18,000. Again, reaching that level may take some time (and 'm speaking in terms of months).

Before it gets there, there is some bad technical news. The next support after 4900 (which has been broken), is 4300 on the Nifty. That means one has to be ready to sit through another fall of 600 points on the Nifty and hope that holds. That's the point when we will see the real blood bath. This is merely bruising, since long term investors are still in considerable profit.

Having said that, the potential to correctly guage the entry point if you exit now has a very low probability, since the level of FEAR will be so great at that point, that only extremely fool-hardy and contrarian persons (like me!) will even think of entering.

So, the long term strategy is to HANG IN THERE and this may mean for over a year. After all, as a long term player, your interest is to catch the greatest rise, which will take place in the 5th minor wave of the 5th major, (provided it is not truncated by some DISCONTINUITY which is the prime cause of not being able to predict anything in the markets), and the indices at that time would be of the "shock-and-awe" type.

As the article mentions, and rightly so, only a break of Nifty 4000 (gulp!) would declare this as a LONG TERM BEAR MARKET.

As I had mentioned earlier, (and this seems to be coming true now), is that every developing nation has to go through a depression (read a bear market), before a secular BULL can start.

One would need to sit out the hell that is going to happen to the world markets in September '08.

Do read the blog post below this, where Roubini has listed out the 12 stages of economic hell. (Quite akin to the 12 days of Christmas!)

Next post: Another very interesting person to follow. Ms. Meredith Whitney.


Quote, courtesy DNAINDIA: Both the Sensex and Nifty appear to be tracing out an Elliot Wave-4 correction CHENNAI: Technically, indices have fallen enough to cleanse the excesses created during the earlier rally. The key ones such as the Sensex and the Nifty have corrected from deep overbought levels in the monthly time frame and have nearly reached the oversold zone. Benchmark indices have also reached extreme oversold region in the daily and weekly time frames. Hence, technically, the correction that was required has been accomplished with the fall on Monday. Markets have hit crucial support levels in both the indices and have staged an intra-day bounce off those levels. It would be crucial for the indices to hold above the intra-day lows recorded on Monday for a sustainable recovery to materialise in the short-term. A breach of these lows could lead to the test of the next major support levels in these indices. In the Sensex for instance, a drop below Monday’s low of 16951 could lead to the test of 16390-16500 range. In the Nifty, the support levels are at 4900-4950, followed by 4240-4300. Though these support levels may appear scary from current levels, the long-term uptrend will not be affected even if these levels were to be tested. Both the Sensex and Nifty appear to be tracing out a Wave-4 correction (in Elliott Wave parlance) to the earlier rally and the next segment of uptrend would take these indices to new heights. As there is a case for a lot of churning and base-building to happen before the next leg of uptrend begins, we may not see new highs in the index in a hurry. The long-term uptrend would be under threat if the Sensex closes below 15000 and the Nifty below 4000. From a short-term perspective, the scenario is ripe for a sharp technical rally and those who are holding short positions may tighten stop loss or take partial profits. Traders may also wait for short-term “buy” signals and take long positions for a quick 12-15 per cent bounce in the index. The key here would be risk control and entry at the opportune levels. http://www.dnaindia.com/report.asp?newsid=1146698

End of Post Read more on this article...

Consider this: Step one has yet to finish.

"Step one is the worst housing recession in US history. House prices will, he says, fall by 20 to 30 per cent from their peak, which would wipe out between $4,000bn and $6,000bn in household wealth. Ten million households will end up with negative equity and so with a huge incentive to put the house keys in the post and depart for greener fields. Many more home-builders will be bankrupted.

Step two would be further losses, beyond the $250bn-$300bn now estimated, for subprime mortgages. About 60 per cent of all mortgage origination between 2005 and 2007 had “reckless or toxic features”, argues Prof Roubini. Goldman Sachs estimates mortgage losses at $400bn. But if home prices fell by more than 20 per cent, losses would be bigger. That would further impair the banks’ ability to offer credit.

Step three would be big losses on unsecured consumer debt: credit cards, auto loans, student loans and so forth. The “credit crunch” would then spread from mortgages to a wide range of consumer credit.

Step four would be the downgrading of the monoline insurers, which do not deserve the AAA rating on which their business depends. A further $150bn writedown of asset-backed securities would then ensue.

Step five would be the meltdown of the commercial property market, while step six would be bankruptcy of a large regional or national bank.

Step seven would be big losses on reckless leveraged buy-outs. Hundreds of billions of dollars of such loans are now stuck on the balance sheets of financial institutions.

Step eight would be a wave of corporate defaults. On average, US companies are in decent shape, but a “fat tail” of companies has low profitability and heavy debt. Such defaults would spread losses in “credit default swaps”, which insure such debt. The losses could be $250bn. Some insurers might go bankrupt.

Step nine would be a meltdown in the “shadow financial system”. Dealing with the distress of hedge funds, special investment vehicles and so forth will be made more difficult by the fact that they have no direct access to lending from central banks.

Step 10 would be a further collapse in stock prices. Failures of hedge funds, margin calls and shorting could lead to cascading falls in prices.

Step 11 would be a drying-up of liquidity in a range of financial markets, including interbank and money markets. Behind this would be a jump in concerns about solvency.

Step 12 would be “a vicious circle of losses, capital reduction, credit contraction, forced liquidation and fire sales of assets at below fundamental prices”.

In all, argues Prof Roubini: “Total losses in the financial system will add up to more than $1,000bn and the economic recession will become deeper more protracted and severe.” This, he suggests, is the “nightmare scenario” keeping Ben Bernanke and colleagues at the US Federal Reserve awake. It explains why, having failed to appreciate the dangers for so long, the Fed has lowered rates by 200 basis points this year. This is insurance against a financial meltdown."

From:
http://www.rgemonitor.com/blog/roubini/5/5/

End of Post Read more on this article...