bit more interest, page-6

Spiderman, there is absolutely no way the US can dig itself out of the boghole it's put itself in. When you get your car industry, housing industry and Transports all together at the same time in freefall, and on top of that a fraudulent financial and credit industry about to implode, then the 'bandaids' lies and spin, can only hold it together for a minimum time, and 2008 will prove to be something to behold, and not good in any way at all for equities, credit etc and world economies. The one thing which will survive and thrive is gold, because gold is not tied to any equity markets, gold is once again a stand out surrency and the only true one right now, gold is all about the USD and they're working inversely. The USD is a crock and will fall into the low 60's on the USDX and from there who knows, whilst the price of gold will go into four figures and keep going, and take gold shares with it.

It won't be long and we'll see New York Attorney General, Andrew Cuomo, start putting some of these Wall St financial fraudists in jail, and it'll be interesting to see who is first to start running and bleating to him to spill the beans on the frauds commited by the big banks and financial institutions, to save their own skins.

The house of cards has begun now to collapse, as those who in the game kept silent for so long and used spin to keep the man on the street oblivious of the truth, are now beginning to speak the truth publicly.

Today, Morgan Stanley, one of Americas biggest Banks and Financial Institutions, issued a full recession alert for the US. Like Goldman Sachs, and Lehman Brothers, Morgan Stanley are now saying what we laymen all knew for a long time, and that is, Europe and Asia will not come to the rescue of the US.

If anyone disbelieves what is just around the corner in 2008, or they are complacent about the status quo, then so be it at their own financial peril. The fraudulent valueless mountain of crap Derivatives floating round the financial world has now gone over $US600trillion ( that's trillion not billion) and rising, and with no market to sell into, no gaurantees, and as they say, they're pieces of paper with only a notional value, and we all know that 'notional' means hypothetical. The US Commercial paper market now has a real rank stink to it.

We don't have to be financial wizards to realise what all this means for Equity markets and spec stocks..Good solid companies will survive through what's ahead, but as for the specs?.......

Regards...Chas.

read and absorb.......

.Morgan Stanley issues full US recession alert

By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 2:17am GMT 13/12/2007

Morgan Stanley has issued a full recession alert for the US economy, warning of a sharp slowdown in business investment and a "perfect storm" for consumers as the housing slump spreads.


In a report "Recession Coming" released today, the bank's US team said the credit crunch had started to inflict serious damage on US companies.
"Slipping sales and tightening credit are pushing companies into liquidation mode, especially in motor vehicles," it said.

"Three-month dollar Libor spreads have jumped by 60 to 80 basis points over the last month. High yield spreads have widened even more significantly. The absolute cost of borrowing is higher than in June."

"As delinquencies and defaults soar, lenders are tightening credit for commercial, credit card and auto lending, as well as for all mortgage borrowers," said the report, written by the bank's chief US economist Dick Berner. He said the foreclosure rate on residential mortgages had reached a 19-year high of 5.59pc in the third quarter while the glut of unsold properties would lead to a 40pc crash in housing construction.

"We think overall housing starts will run below one million units in each of the next two years -- a level not seen in the history of the modern data since 1959," he said.
Although the US job market has apparently held up well, an average monthly fall of 138,000 in the number of self-employed workers over the last quarter suggests it may now be buckling. "Consumers face what could be a perfect storm," said Mr Berner.

The partial freeze on subprime mortgage rates announced last week by US treasury secretary Hank Paulson may help cushion the blow for some banks, but it could equally backfire by adding a "risk premium" that drives even more lenders out of the mortgage market.

Like Goldman Sachs, and Lehman Brothers, the bank no longer believes Asia and Europe will come to the rescue as America slows.
It has slashed its 2008 growth forecast for Japan from 1.9pc to 0.9pc, and warned that credit stress will weigh heavily on the eurozone.
Mr Berner said US demand is likely to contract by 1pc each quarter for the first nine months of 2008, but the picture could be far worse if the Federal Reserve fails to slash rates fast enough. It is betting on a quarter point cut this week, with three more cuts by the middle of next year. "We expect the Fed to insure against the worst outcome," he said.


Morgan Stanley is the first major Wall Street bank to warn that it is may now be too late to stop a recession, though most have shifted to an ultra-cautious stance in recent weeks.

The bank at first treated the August crunch as a "mid-cycle correction", much like the financial storm after Russia's default in 1998. But the collapse of the US commercial paper market has now continued for seventeen weeks, suggesting a "fundamental deleveraging of the banking system."
Mr Berner - known at Morgan Stanley as the "resident bull"- is one of the most closely watched analysts on Wall Street. While he began to turn bearish last April as the credit markets turned nasty, the latest report is written in tones that may is rattle the fast-diminishing band of optimists.