Thoughts on Markets

Friday, September 19, 2008

End of any Remains of Financial Free Market

From the Washington Post:

Citing Grave Financial Threats, Officials Ready Massive Rescue

Lawmakers Work With Fed, Treasury To Try to Restore The Flow of Money


Henry <span class=
Paulson, second from right, met yesterday with key lawmakers and policymakers."
Treasury Secretary Henry <span class=

Paulson announces the government's intentions with House Speaker Nancy Pelosi and the Fed chairman Ben Bernanke."

Treasury Secretary Henry Paulson announces the government's intentions with House Speaker Nancy Pelosi and the Fed chairman Ben Bernanke. (By Lauren Victoria Burke -- Associated Press)

The Above from the Washington Post. See the full article
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/18/AR2008091804200.html?hpid=topnews

Even China is getting into the game as reported in Casey's Daily Resource Plus today:

"In other news I see in a Bloomberg story that "China will scrap the tax on stock purchases and buy shares in three of the largest state-owned banks to shore up investor confidence..." And lastly it appears that Ford and GM are going to get the $25 billion in loan guarantees from the government that they were asking for. These two companies alone account for 10% of the corporate high-yield debt market in the US."

Ever more intervention into the market place by the Federal Reserve and the Federal Government. "There are no more markets, only intervention!"

The central banks have put in well over $180 Billion over the last two days. This provides liquidity to move markets, but does not help solvency which is the root problem. It just shows with crystal clarity that the U. S. Government and Federal Reserve are willing to do anything to keep the world financial system from failure. I seriously doubt that such band aids will solve the multi-trillion dollar problem. At best the actions will delay and increase the severity of the ultimate solution.

Meanwhile the recent jump in retail sales of precious metals shows clearly that there is much fear. People are beginning to reach for the final safe harbor in the world wide flood of paper currencies.

From Bloomberg:

Gold Coins, Bullion Sales Go `Gangbusters' as AIG, Lehman Fall

http://www.bloomberg.com/apps/news?pid=20601213&sid=awFy4i6wSdmg&refer=home

Adding to the concern is the drop in price below $1 per share of two major money market funds. Both Putnam Prime Money Market Fund and Bank/New York Mellon's Institutional Cash Reserve Fund are the culprits. Money market funds have historically been considered to be one of the safest assets to preserve cash. Apparently, the trust has been misplaced in some of them.

Volatility is the name of all markets these days. Earlier the DJI was up well over 400, but is now up only 293 as I started, but is now 357 at the end of writing. Yesterday was a banner day for the DJI. Both gold and silver great early moves, but disappointing finishes. Today started a bit slow for the precious metals, but there seems to be some recovery now with gold at 857.50 and silver at 12.30. Look for more wild rides ahead with sandy spots here and there.

Folks, we are facing an election, the results of which will reshape much of our way of life. We are faced with choices between two candidates who have both been and propose more violations of our Constitution, pro-abortion, pro-war, socialist, and have not offered any sound solutions to the problems facing our nation. Neither has set a standard of God's Law and therefore would continue on a path of chaos. We either follow God's Law or live in chaos. As James tells us "If we violate the least of the Commandments, we are guilty of all." This is true for all people and equally applicable to governments.

Mrs. Palin is a Christian woman who is knowledgeable and very attractive, but, as I understand it, has not, as governor supported the Constitution. She has added a great deal to the candidacy of McCain, but I have great concern that she is setting the wrong example for the young ladies of our nation. As she has served as the Governor of Alaska and as she likely will serve as Vice President of these United States, can she fulfill her primary God given task of being a perfectly appropriate help meet for her husband and home maker for her children? Can a husband fulfill his God given calling as head of the family and its provider if he is a Mr. Mom? I would pray that the young ladies of our nation fix their eyes and goals on the high calling that God has given them rather than seek careers which prevent primary attention to this calling.

Our nation is facing grave challenges ahead. I pray that our God will raise statesmen to replace the politicians we now have. All is up to Him, and I know that He will put the president of His choice in office. I pray that it will be a blessing and not simply more of His judgment upon our nation.

Let us turn back to Him, His word, repent and walk in His ways.

Best to each, Doug





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