Saturday, September 24, 2011

Economics (4) 10/15/2008

Emailed on Wed, 15 Oct 2008 12:31:32

Hi All



"This day I call Heaven and Earth as witnesses against you that I have set before you life and death, blessings and curses. Now choose life, so that you and your children may live"

Economics,
Last month had seen something never happened in the past history of the United States of America and the World in the Magnetitude and acuity in Economics.

      The past month, two big financial Institutions have went bankrupt. Bear Stern was sold to another Institution over that week end for a $2/Share. Last year Bear Stern shares were $180/Share......   You can Immagine.

This followed by Lehman Brothers, this time no body interfere to save it and it fell fast and Hard.

       Then the Government Interfere to help AIG, the largest Insurence company in the World with 85 Billion Dollars, hoping that it recover and operate orderly. AIG assats are in the Trillions

       If that wasn't bad enough, The Government came up to Gaurantee Fannie Mae and Freddie Mack, that blows the mind for two reasons.
First, These two institution deals with more than 6 trillion dollars in mortgages etc.
Second, I don't know what cause this action, and it seems that no body else knows, however you can immagine all the talk about Sub-prime, Housing bubble, etc may be behhind....

      Then WaMu, the largest bank in USA was  sold to  JP Morgan Chase after the FDIC interfered to protect the public The bank was FDIC insured and the FDIC took it over and sold it.
Followed by Wachovia,which was sold to Citi with Government gaurantees....
Merril Lynch was sold outside this pack.

Financial Institutions are trying to Delaverage the previous over Lavarages that they done in the past


      The US Legislature passed a law to Bail out of the Toxic assats for about 700 Billion Dollars just last week.

       Today, a collaborative efforts of USA, Europe, Asia, to lower the intrest rate to boost the economic activities in the world basically, which never happened in the past.

       Iceland nationalized two large troubled banks, England and Europe are attempting to do something to their situation with estimated same 700 Billion Dollars. Switzerland banks has much more than the GDP can cover

What does this means?

Hold on to your Pants.. .......
The coming few months will be very difficult for a lot of people very close to us, Jobs will be lost,
Last month was 159,000 jobs lost, etc more to come which is realy the high paying Jobs in addition  slow down of economics world wide....

Oil prices went down to $88 from few month earlier of $147
This is more than 60% depending on the calculation... One would say this is good, it is, but is a bad indication of slow economics Big Time

Many of the Economists are talking about Economic Curve "Tub like" which means steep downturn then flat bottom for sometime.

Housing is down, down, down... pricess has been exagerated before and now is deflating and in the process of being deflated.

Robert Shiller from Yale who have a National Indicator named after him said the prices of houses will drop more than 20% more than the past which was 30%.

Note their is 2 Markets in housing, New Homes, and Existing Homes (controlled by your desire of money you want for your property, the
Real Estate enthusiasm, and seller availability)

For existing homes their is 2 Markets one has 11 Month in the market and the other is awaiting the first market to start moving so they can jumb in with Both feet.

Auto Industry... same problems, SUV no buyers, oil prices killed the large cars and the Car for the
near future is not available. Electric, Hydrogen, Natural Gas, Solar, Gas-Electric, nothing is clearetc.

Hold on to any Capital Improvement at this time...Keep some reserve for the rainy Days.

The rules are changing, the coming few months will be difficult for many who are closer to us.

My coworker told me she lost $100K, that was last sunday, before the Dow went down to 8400. Everybody in the world will be impacted, loosing money in Investment, Car Prices, House Prices, Goods, etc or if you kept the money under the BALATTA (MATTRESS)

I hope I didn't scare everybody, it is what I saw and I think is happening and I thought a little advise may keep everyone safe.

Last Thanks Giving, Someone said it is not a Turkey we are eating, it is a large Chicken. Who New?

I am going to send this Email quickly and hope we are all enlighted
Nazeeh

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