Oldtent Archives 2009

looks like mid first bank now has a branch in arizona. what a way to cross state lines in one day.

rno

“To not get burned by options, you should not sell call options against common stock.”

How can you get “burned by options” by selling a call option against a stock?

From a few posts, below, I assume that you went a bit postal over my comments.  Let me explain what I am saying.  I think it is rather shallow for you to completely discount the price rise issues of a business owner.   Let me toss out a few examples of the price rises we have seen in my office.

Water and sewer up about 100% over the last 2 years.  Utilities up around 100%, with many patients reporting up to a 200% increase.  Medical waste removal up about 500% over the last 7 years.  Malpractice insurance up around 10% per year.  Medical insurance up between 10 and 12% per year.  Dental supplies on average have increased around 10% per year for a very longtime.  Many bills we receive now have an “energy charge” added on to them over the last 2 years.  Labs have started to add charges for delivery per “case.”  Real Estate taxes up, etc, etc.

Some notes to go with the above…………………..The utility company increased charges by anywhere from what appears to be 100% to 200% around here, but they have come back to credit bills around 15%.  “Energy or fuel” charges have been added onto many bills over the last couple of years, but have not been removed after oil fell from 147 down to 35………………..and they won’t be.  Medical waste services and other services are going through the roof as large  corporations buy-out all of the smaller competitors, thus creating a monopolies.  Large Dental Corporations raise fees by slightly changing products (many times leaving an inferior product) or simply by repackaging them, then charging higher prices. 

Because of all of the above what happens is that “low cost producers” start to rapidly raise prices.  These are the people who historically keep prices in check due to normal supply and demand metrics.  These are also the people who really know what their “cost” is to their business.  This group knows a trend when they see one because they take the “cost side” of their business very seriously.  They understand that the energy surcharges will not only “not disappear”, but once added on will only be raised as an additional way to increase prices by large corporations.

In certain areas there have been subtle price drops over the last several months after prices escalated in the previous years.  Is that deflation?  No, of course not, as the average increase in costs over the last decade has been high, in fact, much higher than the previous decade.  Much of the correction in items that have dropped in business or personal life is simply the result of over capacity in certain productions that was reached as prices moved parabolicly in the recent past.  I expect to see the same now occur in terms of pricing on gloves and masks as the “flu threat arrives.”  After prices go sky high, then they will drop when the scare is over.  Will that be deflation?  No, of course not.  Is the “flu scare” real, or is it a convenient issue to entice people to stockpile goods into economic weakness?  I don’t know.  Is it possible that the flu scare is timed to help keep control of the people during a time when the stickiest issues of “entitilements” is being addressed (witness the town hall meetings)?  Again, I don’t know.

What I do know is that Uncle’s debts are very rapidly piling up and will continue to pile up as under/ un-funded liabilities such as healthcare, pensions, social security, un-employment, and the real estate fiasco, unwind.  This occurs during a time period when foreigners whom have financed all of our crap in the past appear less willing to do so.  That leaves Uncle only the choice to continue to monetize debt at an ever-increasing rate.  The monetization of the debt guarantees a falling value of the Dollar, though much  of it will not be visible since we have a “pricing scheme” in place for the Dollar with currencies measured purely against other paper currencies………..with no reference point to Real Money Gold.  As the value of the Dollar continues to fall, the prices of everything imported into this country as well as all products that are easily transportable that are desired by countries who are not broke, will continue to rise in price.

Bank Failures #75 - #77: Union Bank, National Association, Gilbert, AZ, Community Bank of Nevada, Las Vegas, NV, Community Bank of Arizona, Phoenix, A

by CalculatedRisk on 8/14/2009 09:34:00 PM

From the FDIC: MidFirst Bank, Oklahoma City, Oklahoma, Assumes All of the Deposits of Union Bank, National Association, Gilbert, Arizona

Union Bank, National Association, Gilbert, Arizona, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. …

As of June 12, 2009, Union Bank, N.A. had total assets of $124 million and total deposits of approximately $112 million. …

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $61 million. … Union Bank, N.A. is the 75th FDIC-insured institution to fail in the nation this year, and the second in Arizona. The last FDIC-insured institution to be closed in the state was Community Bank of Arizona, Phoenix, also today.

From the FDIC: MidFirst Bank, Oklahoma City, Oklahoma, Assumes All of the Deposits of Community Bank of Arizona, Phoenix, Arizona

Community Bank of Arizona, Phoenix, Arizona, was closed today by the Arizona Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. …

As of June 30, 2009, Community Bank of Arizona had total assets of $158.5 million and total deposits of approximately $143.8 million. …

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $25.5 million. … Community Bank of Arizona is the 76th FDIC-insured institution to fail in the nation this year, and the first in Arizona. The last FDIC-insured institution to be closed in the state was NextBank, Phoenix, on February 7, 2002.

From the FDIC: FDIC Creates a Deposit Insurance National Bank to Facilitate the Resolution of Community Bank of Nevada, Las Vegas, Nevada

Community Bank of Nevada, Las Vegas, Nevada, was closed today by the State Commissioner, by Order of the Nevada Financial Institutions Division, which then appointed Federal Deposit Insurance Corporation (FDIC) as receiver. …

As of June 30, 2009, Community Bank of Nevada had total assets of $1.52 billion and total deposits of about $1.38 billion. …

The FDIC as receiver will retain all the assets from Community Bank of Nevada for later disposition. Loan customers should continue to make their payments as usual.

The cost to the FDIC’s Deposit Insurance Fund is estimated to be $781.5 million. Community Bank of Nevada is the 77th bank to fail this year and the third in Nevada. The last bank to be closed in the state was Great Basin Bank, Elko, on April 17, 2009

A lot of stuff like this is beginning to surface. It’s probably an indication of extreme anxiety beginning to take hold. Life is so much faster now with the internet and information is coming from all sides.

Glad you and other Canadians like it, I want no part of it, that’s the reason I would never move to Canada or the UK.  

the private medical insurance companies has served many Canadians well since Reagan gave his viewpoints. On the global cooling front, I found the link below for your interest. Cheers, and wishing you a good weekend. Equiz.

tinyurl.com/nkgcsq

Just read the article you posted and definately have an opinion that I plan on posting in the morning.  Been a long day for me so turning the computer off for the evening.  Let me just say that there were several issues within the article that I have an opposing view with.  I also wish I could have read his op-ed piece to see what he actually said … maybe I will find it in the morning.  Good night to all.  Anniversary on Saturday - 27 great years and I wouldn’t change one day.

1961   http://www.youtube.com/watch?v=fRdLpem-AAs

This article deserves additional investigation because to me I see a major problem if the government attempts this in the fashion described.  Closing just a group of banks in one region will alert the public to the plan as outlined, and therefore those with USD’s in banks will initiate a run on the remaining banks.  Additionally, although it was not made clear in that posting, if the procedure was to close banks in a region for 1 week, while leaving the others open, and then reopen the closed banks with the new exchange rate applied only to the banks which were closed, in that case the plan definately would be obvious to others and bank runs would begin the same day.

Therefore, until additional evidence can be provided to validate this, I will keep it in mind but not be convinced of its accuracy.  I will also not be forwarding this to others either as is indicated at the bottom of this posting.  Not enough evidence.  The question then becomes, if I’m correct in my questioning, why would he elect to post this publicly?

http://abcnews.go.com/Business/story?id=8322658&page=1

he should be here before 11:00 pm central. (about 2 hours)

rno

here i go again!!!!

rno

The Pentagon has approached Congress to grant the Secretary of Defense the authority to post almost 400,000 military personnel throughout the United States in times of emergency or a major disaster.This request has already occasioned a dispute with the nation’s governors. And it raises the prospect of U.S. military personnel patrolling the streets of the United States, in conflict with the Posse Comitatus Act of 1878.

In June, the U.S. Northern Command distributed a “Congressional Fact Sheet” entitled “Legislative Proposal for Activation of Federal Reserve Forces for Disasters.” That proposal would amend current law, thereby “authorizing the Secretary of Defense to order any unit or member of the Army Reserve, Air Force Reserve, Navy Reserve, and the Marine Corps Reserve, to active duty for a major disaster or emergency.”

My Comment: Congress better wise up from these town hall meetings - although they may think those attending are out of control, they have no idea then how bad it can actually get if they continue to take steps not in the best interest of this country and its citizens.  Permanent US military forces stationed in towns and cities armed to the teeth will only bring out the more agressive segment of American society who are already prepared to give their lives in another American Revolution.  The other problem they will have which will be an advantage to the citizens is that many in the current military will question such orders and will elect not to participate and likely join the oppossing forces in order to defend the citizens and the nation.  Remember the majority of troops supported Rom Paul last year and are frustrated will higher command for preventing them from coming home on time.  Forced extention of tours leaving many to be away from their families only builds more and more anger toward the conditions they must endure.  Then on top of that, they are also well aware of the health issues they and others have and will have to live with while the government denies responsibility.  I’m speaking here of the military use of DU munitions and Post Tramatic Syndrome.

American’s at homeare at this time are actually IMO performing self-restraint, but if the time comes where it appears that martial law becomes a reality, that will be the point when peaceful communications will cease, and action must and will be taken.  My only desire is that before and when that point arrives, the people fully realize who the true enemy is and focuses all their efforts toward them.

The government has their lists and you can reasonably assume so do those who will do what is necessary to protect our cities and citizens with a primary objective of ending any physical conflict quickly.  One must always keep in the back of their minds that America is well armed and have many patriotic veterans who have been trained as well as those who currently serve.  There are also military strategists who know full well how to prepare for military operations.  Someday I will write more on this issue.

stephen q’s web site..he was on coast to coast a few nights ago..real doom and gloomer

www.stevequayle.com/

« The Federal Government Should Stop Borrowing And Start Lending

Here in the United States, we need to wipe out the derivatives bubble with the help of a 1% Tobin tax or securities transfer tax, on all speculative financial transactions, including futures, options, stocks, bonds, commodities, foreign exchange, and so forth. A California Tobin tax would solve the state budget crisis. The top 16 Wall Street banks are zombie institutions that need to be seized and liquidated under Chapter 7 bankruptcy at once, with all of their derivatives going into the shredder. Foreclosures on homes, farms, and businesses should be banned outright for five years or for the duration of the depression, which ever lasts longer. To provide a credit supply, the Federal Reserve should be seized and nationalized, and used as a vehicle to issue 0% Federal credit for productive activities only, not for speculation. To revive credit demand, state and local governments could then take out 0% Federal loans for such long overdue projects as the construction of 1,000 hospitals, the building of 50,000 miles of modern maglev rail systems, and 100 fourth-generation, high temperature, pebble bed nuclear reactors, plus the rebuilding of water systems and the interstate highway network. Idled auto plants should be reconverted for these purposes. Science drivers in the fields of space exploration and colonization, high energy physics, and biomedical research should also be fully funded in this way to provide technological modernization. »

END

Aug 14, 2009, 6:49 p.m. EST

Colonial BancGroup becomes biggest bank failure of 2009

BB&T takes over after FDIC shuts Alabama lender at cost of $2.8 billion

SAN FRANCISCO (MarketWatch) — Colonial BancGroup Inc. became the largest bank failure this year Friday after the Federal Deposit Insurance Corporation seized the struggling Alabama-based lender and sold it to BB&T Corp.

The deal will knock roughly $2.8 billion off a pool of money, known as the Deposit Insurance Fund, which the FDIC maintains to guarantee bank customer deposits.

www.marketwatch.com/story/colonial-may-become-biggest-bank-failure-of-2009-2009-08-14?dist=bigcharts

. . . . . . . . . . . .

JBI

The Chinese Gold Market

By Simon Black · 2 comments

I’ve been spending a lot of time this week talking to my sources in China, one of whom is inside one of the country’s sovereign wealth funds (SWF).

He could not discuss the details of the Rio Tinto bribery scandal, but indicated that it was far more about saving face and establishing position than anything else.

He also indicated that the SWF analysts were working around the clock trying to put deals together… for China it’s a race against the clock for how fast they can convert their $2 trillion in US dollar holdings into strategic assets– namely oil and gold.

At today’s deflated prices, putting together a really good billion dollar deal is a difficult thing to do. Putting together 2,000 of them is impossible. Doing it before the dollar collapses? Not a Chinaman’s chance. And they know it.

So as a hedge, the government appears to be pumping up demand for gold and silver among the public, possibly preparing them for an imminent dollar decline.

I asked Christine, my China insider you heard from last week, to shed some light on the Chinese gold market to provide some clarity:

It’s funny you ask, I just got off the phone with one of the key executives at the Shanghai Gold Exchange.
You know, for the past 50 years, the Chinese government has controlled the distribution of all types of gold. They dictated prices and forbade citizens from owning or trading any type of precious metal.
It didn’t matter if you were an individual investor, a gold miner or a processor…it was state asset.
In 1959, if you were caught with gold in your possession you were thrown in jail. The result of this policy has been widespread indifference and very little understanding for precious metals as asset class or sound money.
The government is now taking radical measures to change that.
Fast forward to 2009– the FIRST year that the Chinese public is allowed to own physical gold or silver. The government is now trying to drum “gold/silver as an investment” into their heads at every corner.
Banking products, investment products, checking accounts linked to gold. In fact, Chinese have more precious metal investment options than Americans, and the statistics are alarming:
In 1950, China had next to nothing in gold reserves. Today they rank 10th globally, and they are frantically mining for more on their own soil.
For the past half a century, the Chinese had the lowest per capita consumption of gold in the world. Next year, Chinese gold demand will likely surpass that of India.
This year, the government banned silver from being exported… and by July, it was being promoted as an “investment” to the Chinese public on the 6 o’clock news.
You do the math– how does that affect global demand if just 10% of Chinese begin to perceive silver as an investment?
Will the Chinese turn into goldbugs overnight? No. Over the next 5 years? Probably, yes.
I like your long-term silver option strategy for this reason. Even the smallest shift in Chinese investor/consumer preferences can dramatically alter global demand and commodity prices.
From what I’m seeing from the ground, the Chinese government is engaging in one of the most explosive financial marketing campaigns in history. Instead of Maoist propaganda, though, they are attempting to change the entire perception of gold/silver in the Chinese public.
Simply put, the Chinese government is trying to trigger a national gold craze…and it’s working.
The Chinese public now has gold trading platforms on steroids.
You can buy silver bullion or gold bars at any Chinese bank in four different sizes. Wealth management products tied to gold are skyrocketing in popularity, and the public can now instantly buy, sell, and trade gold 24 hours a day in five different forms with different eight types of services.
Also, for the first time in history, Chinese investors can even trade gold abroad (in London) with the swipe of a “Lucky Gold” card.
I can’t even get Bank of America to open a foreign currency account.
Simon again. There is a reason that the Chinese government is promoting gold and silver ownership, this is not coincidental. More to follow.

www.sovereignman.com/finance/the-chinese-gold-market/

-END-

You GATA love that one.

Kitco censoring Willie?

Bill,
Anybody reading Jim Willie’s latest article, “Pressure (Countdown) Toward Breakdown”, on the Kitco site may not know the Kitco post omitted most of a key paragraph. I guess Kitco felt this part hit too close to home, and a good sanitizing was in order. Compared to the same article posted elsewhere on the internet all of the text in blue was removed, leaving only the 2 sentences bracketed in black:

“For those looking to dismiss the rumors of a widely orchestrated plan to shut down the US banking system, for whatever stated or actual reasons, perhaps attention should be directed at the US Dept of Homeland Security (HSA) and the Federal Emergency Mgmt Agency (FEMA). Not only are they spanning the nation in making tentative preparations for a series of bank holidays, but they are working to enlist the police forces at the state and city level under the federal law enforcement system, in addition to the national hospital system. Anecdotal stories stream in from around the country, impossible to ignore. Who knows what legal grounds or unfolding events precede such a development? Watch a turf battle perhaps between HSA and the FBI. [To be sure, tremendous stress is at work within USGovt agencies, ministries, and elsewhere. My focus is primarily on the financial impacts, never to be swayed by official stories and pronouncements.] Mine is not a concern for over-arching networks of power in control, but for breakdowns of the individual systems. Let the billionaires fight among themselves, as our role is to protect our own wealth and to avoid congames.”

Apparently Kitco’s idea of free speech varies significantly from Willie’s, and the First Amendment. Kitco also has a different idea of what constitutes free gold.
James Mc

From my editor, Sarge…
PEANUT GALLERY: When I asked Kitco/Jon Nadler about free speech issues, the answer (I still have the email from Nadler) was “We’re in Canada. There isn’t a first amendment here.” Your amendments in the US don’t apply to us.

This fits with my expectations also.  Until then we all need to prepare and also enjoy the remaining summer months.

Thank you … will need to add this to my list of things yet left to do this week.

  Mr. Celente is another individual whom I respect intensely for his knowledge and ability to communicate his views so anyone who takes time to listen can understand.  To have such skills is a true gift.  Over the years I have read and listened to many people, and as a result, I have been able to identify those individuals who should never be ignored and whenever possible listened to.

It is due to the expertise of Mr. Celente and others that I still maintain my optimism that although conditions look bad now and then, there is always hope and in fact I honestly believe that in the end the world as we know it today will be far better in the future as “their” goals and objectives fail. 

Tools of timing, indicate a major potential turning point that could easily see a break below .7600 or .7200 coming in the final quarter of this year.
 
Add this all together and you get a November bull’s eye for a loss of confidence in the US dollar internally as well as externally.

My favorite writer over at that site.  I read everything this man puts out.  Thanks for the heads up because normally I do not read the editorials of interest over at that site until the weekend when I also listen to their weekly audio presentations.