I called the crash of the financials
in 2007 and issued several warnings in 2008.
Updated December 14, 2008
While many in the press are trying to call for a
bottom in financial stocks, the bottom is nowhere in sight. We are in the
process of unraveling a generational credit bubble that took flight nearly three
decades ago with the peak in inflation and yields in the early 1980s.
There is warning after warning....would one keep
sitting on Bank & Financial shares after reading this one?
Click here for more....
This time last summer the largest loss
estimates were around $400 billion and by the end of the year it was
twice that. Then
last quarter we saw estimates rise to $1 trillion. Last week, the number
was raised to $1.6 trillion - four times official, original estimates and
enough to pose a grave risk to the world’s financial system. The ordeal of
the financials is far from over!
By engaging in selective protectionism
of a their buddies rather than re- imposing the up-tick rule and treating all
companies equally, the SEC furthered the appearance of favored
treatment for Banks and Financials that raises serious moral hazard concerns
and dampens confidence in U.S. financial markets.
The following is the list of
the 19 firms that the powers-that-be decided were worthy of special protection
from market forces:
BNP Paribas Securities Corp.
Bank of America Corporation
Credit Suisse Group
Daiwa Securities Group Inc.
Deutsche Bank Group AG
Goldman, Sachs Group Inc.
Royal Bank ADS
HSBC Holdings PLC ADS
J.P. Morgan Chase & Co.
Lehman Brothers Holdings Inc.
Merrill Lynch & Co., Inc.
Mizuho Financial Group, Inc.
Posted August 4 and updated November 14, 2008
Morgan Stanley issues alert on Spanish
Morgan Stanley, the investment bank, has
issued a major alert on the health of Spanish banks, warning that a replay of
the ERM crisis in the early 1990s could wipe out the capital base of weak
lenders exposed to the property crash.
Click here for more.
Be aware that
the involvement of the Spanish banks in the Spanish Real Estate market is HUGE.
Also, they are very exposed to the South-American situation.
Posted July 15, 2008
As our charts and fundamental information
show, the world's financial sector is collapsing! Yet, most investors keep
yawning or are in disbelief. They are acting as external observers with the
conviction the soup is not going to be eaten as hot as it is being
served....Today, not only the
Real Estate markets are collapsing, but nobody
really realizes what will happen if
stock markets keep on going down!? The
real weapons of mass destruction are the
Fractional Reserve Banking and the Fiat
money created out of thin air; what we see, is a paradigm shit. Fortunes will be
lost and fortunes will be made. Which side do you want to be on?
Fortis warned about 6000 banks are in
serious trouble and CNBC warned 2,300 U.S. banks need to go. There is NO WAY the
assets of the FDIC will be able to cover even part of these losses!
The least one can do is deposit his savings
into an ISI Class 1 institution and stop being a spectator. What we see, is not a bad
dream. It is for real!...click
here to have you cheek pinched. And it won't go away even if Paulson,
Bush, Bernanke, Trichet and all the politicians and bankers in the world would appear
tomorrow on television and swear the worst is over.
It looks like we might see the
bottom of the bank shares soon.
what we are about to see is not the bottom one would like to see. After Bear
Stearns, Washington Mutual has come down from about $ 47 in 2007 to $ 3 . We are
getting very close to ZERO.... Plenty of similar examples apply. This is what the
Tsunami of a Credit Crunch that is the result of Fractional Reserve Banking and
creation of Fiat Money out of thin air does.
The Single and Double Top
parade of the Banks - posted July 9 and updated
November 4, 2008
Shares of American financials/banks have
been coming down in sequence (first the weaker followed by the stronger) since
2007. During the slide, the best we saw, was a momentarily sideward rest before
the next step down was set. We all know that what happens in America also comes
to Europe. Examples like Citigroup, don’t spell lot of good. Note that
Citigroup is taken as an example, but that the whole sector shows similar
weakness. Not a single chart shows signs of Bottom building yet. But a death cat
bounce is certainly possible. Nothing goes up in a straight line and hopefully
nothing comes down in a same way. Be advised these HUGE DOUBLE TOP REVERSALS
have broken their ultra long secular uptrend and there is a technical
confirmation they have now entered a SECULAR DOWNTREND.
Understanding Technical Analysis is
important, understanding Fundamental Analysis is also important. The
answer to the question: “What will happen to the stock price of Citicorp
and other Banks once the interest rates go up?” is far from not glamorous.
Citicorp shows a double top; the 1st
in 2000 and a 2nd in 2007. By lowering the interest rates, the bank sector was
rescued in 2003/2003 and there was a subsequent new top. However, there is a limit
to lowering interest rates (the key rate in the US is 2 % and the real interest
rates negative) and all ammunition was used before Citicorp could break through
the 2000 top. In 2007, Citicorp fell out of the 2003-2007 distribution pattern
and confirmed a 1st stop loss by falling through its long term uptrend line.
Ever since Citicorp is sitting in a Secular Downtrend. The slide resumed with
little reaction and the stock fell through its 2002 bottom of $ 24 all the way
to $ 18 before we saw the 1st Death Cat bounce ($ 18 to $ 26). Over the past
weeks, Citicorp has also fallen through the $ 18 bottom and is coming down even
Chart 2: HSBC
The chart shows a similar pattern as
Citigroup but is lagging. 2000/2001 we have a 1st top. 2007 there was a 2nd one.
The 2nd one shows a reversed cup and handle formation (this is a strong
technical formation). Not only has HSBC fallen out of the formation but it has
also fallen out of its secular uptrend and tested the stop loss level.
Chart 3: Fortis
Clear double top formations
confirmed by Death Crosses on the Moving Averages (like for all
Bank/Financial) shares. We have reached and penetrated the 2003 bottom. Time for
a Death Cat bounce?
Chart 4: Société Générale
This is a perfect example of an Elliott
Wave cycle. There is no problem in numbering each and every wave and the
last parabolic upward move is distinct. We have fallen back to the level
from where the parabolic rise started from. We have support and a Death Cat
Bounce is possible. (The French typically use an employee who is blamed for the
>back to financials
Goldonomic, Florida, USA -