-- Posted Thursday, 2 October 2008 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Thursday, October 2, 2008
“Phenomenally accurate forecasts”
A few days away from Rick’s Picks has helped clear my head, the better to focus on big issues as opposed to merely tradable ideas. On Monday, when Congress voted down the bailout bill, it felt like a run on U.S. banks was imminently possible. I conferred with my trading partners about shifting our surplus balances into T-bills. Not to sound alarmist, but a run on banks is still possible, since any bailout package that passes Congress will do absolutely nothing to shore up “the system.” The $700 billion cost is not intended to cover all contingencies down to the dollar, since no one can estimate the extent of the problem even within a trillion dollars. The number is just a political guess as to how big a headline figure would be needed to restore the public’s confidence in the banking system. That goal has manifestly failed already, though since it is beyond dispute that the American public thinks the bill stinks. And don’t expect a re-jiggered version to change many minds, even if the bozos, liars and party hacks on Capitol Hill profess themselves satisfied with it.
Do you feel like your confidence has been restored? Neither do we And neither should we infer that the bankers themselves, stupid and greedy though they be, are so very stupid and greedy as to actually believe that a paltry $700 billion will set things right. The real question is whether the alleged rescue package will delay a complete financial collapse until after the election. We doubt that it will. Whatever happens, though, the still-undeclared recession is going to look hellish by then, as even hard-core optimists could surmise from anecdotal evidence and headlines.
Business On Hold
At best, business in this country has been put on hold until the crisis eases, whatever that means. Consider just a few of the headlines from Wednesday’s edition of the New York Times: “Failed Deals Replace Real Estate Boom”; “U.S. Auto Sales Plunge” [suggesting that, in some key industries, there really is no bottom]; “Under Strain, Cities Are Cutting Back Projects”. No question, hard times are already baked into the cake. The scariest Times story of all was reported by one David Leonhardt: “Lessons from a Crisis: When Trust Vanishes, Worry.” A capsule summary of the story noted the following: “The basic mechanics of how the economy might fall into a severe recession look quite similar to those that caused the Depression.”
Indeed. How would you react if, in the middle of your work day, there was news that angry mobs had gathered outside local banks in, say, Springfield, and Pleasantville? Could such a thing happen? Of course it could. And that’s why in the days and weeks ahead, Rick’s Picks will try to focus more specifically on things that we as individuals can do so that we’re not caught with our pants down around our ankles. Bring your ideas to the chat room, or e-mail me. I’ll share the best ideas with all. I will also provide some detailed hedging strategies for precious metals, since Gold’s failure to leap above $1,000 during the worst financial crisis the world has faced since 1929 is a worrisome sign. Time, I fear, is limited, so don’t delay.
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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2008, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Thursday, 2 October 2008 | Digg This Article | Source: GoldSeek.com
