^V^
My forehand call on US stocks , as expected, DOW down below 8,000, it is now close to 7,500, hence is time 4 me to trigger my first entry button liaooo... i hv bought in 3 lots of AIG @ USD 1.45 n 2 lots of Citigroup @ USD 4.80 yesterday night, these 2 stocks r 4 long term hold ( 2 to 3 years ) ,I will not hesitate 2 trigger my next buy button for AIG @ 0.80+ N Citigroup @ < 3.00 if mkt goes against me ^V^ btw, i will not hesitate to sell them off if i can make 25%+- PROFIT FROM THEM IN 2 MONTHS TIME.
Come back to our baby Ytlpowerwb , its mom has just announced its QE with profit decreased by 23.7% , wowww..23.7% down ah ? macam mana ? sell ah ? ha ha... No way hosay ! if u look deep into it , it was due to one off win fall tax , if u minus out this factor , we will get around 4.5cts per q , hence 4.5 x 4 = 20cts which giving u PE of 8.5 @ price of 1.70 .
Read d below, u can see how confident Francis Yeoh is :-
YTL Corp 1st Quarter Profit Grows 30% to RM468 Million (US$130 Million)
YTL Power Declares 6% Gross & 3% Single Tier Interim Dividend
YTL Cement Declares 3% Gross & 7% Single Tier Interim Dividend
-------------------------------------------------------------------------------------------------
Commenting on the quarter's results, YTL Group Managing Director Tan Sri Dato' (Dr) Francis Yeoh Sock Ping, CBE, FICE, said, "The Group achieved a strong start to the year, with our cement division achieving an excellent set of results. Our power division registered a decrease in earnings due principally to the provision for a one-off tax payment to the Government and foreign currency translation differences during the quarter but the division's operational performance remained strong and our utilities are expected to continue to perform well for the duration of the financial year.
"The Group's latest venture in Singapore, the proposed acquisitions of 26% of Macquarie Prime Real Estate Investment Trust (MP REIT) and 50% of the holding company of the manager of MP REIT, represents another exciting new avenue for us to further expand our branding and presence in global markets. The Group's foreign operations continue to take the lead in growing our revenues and profits, and the proposed acquisitions are well in line with this trend, complementing our existing utilities in the UK, Australia and Indonesia, cement operations in Singapore and China and high-end real estate in Singapore."
-------------------------------------------------------------------------------------------------
Kuala Lumpur, 20 November 2008 YTL Corporation Berhad ("YTL Corp") today announced profit after taxation of RM468.4 million (US$130.1 mil, based on the prevailing exchange rate of US$1.00:RM3.60) for the first quarter of the financial year ending 30 June 2009, an increase of 30.1% over the same period last year, on the back of a 9.9% growth in revenue to RM1,739.2 million (US$483.1 mil), compared to RM1,582.9 million (US$439.7 mil) for the previous corresponding period ended 30 September 2007.
Commenting on the quarter's results, YTL Group Managing Director Tan Sri Dato' (Dr) Francis Yeoh Sock Ping, CBE, FICE, said, "The Group achieved a strong start to the year, with our cement division achieving an excellent set of results. Our power division registered a decrease in earnings due principally to the provision for a one-off tax payment to the Government and foreign currency translation differences during the quarter but the division's operational performance remained strong and our utilities are expected to continue to perform well for the duration of the financial year.
"The Group's latest venture in Singapore, the proposed acquisitions of 26% of Macquarie Prime Real Estate Investment Trust (MP REIT) and 50% of the holding company of the manager of MP REIT, represents another exciting new avenue for us to further expand our branding and presence in global markets. The Group's foreign operations continue to take the lead in growing our revenues and profits, and the proposed acquisitions are well in line with this trend, complementing our existing utilities in the UK, Australia and Indonesia, cement operations in Singapore and China and high-end real estate in Singapore."
The Group's listed utilities division, YTL Power International Berhad, reported profit after taxation of RM180.4 million (US$50.1 mil) for the 3 months ended 30 September 2008, a decrease from RM235.1 million (US$65.3 mil) during the same period last year, although revenue increased marginally to RM1,049.3 million (US$291.5 mil) compared to RM1,038.3 million (US$288.4 mil) last year.
The decrease in profit was principally due to provision for a one-off tax payment to the Malaysian Government by YTL Power Generation Sdn Bhd, a wholly-owned subsidiary of the Group and an independent power producer which operates power stations in Paka and Pasir Gudang, as well as lower exchange rates applied in translating the earnings of the Group's foreign subsidiaries. The division's foreign operations, including wholly owned Wessex Water Limited, one of the most efficient water and sewerage providers in the UK, and P.T. Jawa Power, a 35%-owned associate company in Indonesia, the owner of a 1,220 MW power station in East Java, continued to perform well during the quarter.
The Group's listed cement division, YTL Cement Berhad, achieved a 36.4% increase in profit after taxation to RM76.5 million (US$21.2 mil) for the quarter ended 30 September 2008, compared to RM56.1 million (US$15.6 mil) for the previous corresponding quarter ended 30 September 2007.
Revenue grew 42.9% to RM459.0 million (US$127.5 mil) this year, compared to RM321.3 million (US$89.2 mil) last year. The growth in revenue and profit was due substantially to overseas operations, improved production efficiencies and better selling prices.
On the property investment and development front, Starhill Real Estate Investment Trust, the Group's listed REIT, recorded growth in income after taxation to RM275.0 million, and revenue to RM27.9 million. Included in income after taxation was a revaluation surplus of RM254.36 million required to be made under fair value accounting standards. This arose from the revaluation of the REIT's properties during the quarter, namely, Lot 10, Starhill Gallery and the JW Marriott Hotel Kuala Lumpur.
In addition, the increases in Starhill REIT's revenue and income were contributed mainly by increases in service charge rates, higher rentals received from the renewal of existing tenancies and the commencement of new tenancies at Starhill Gallery and Lot 10. Meanwhile, the Group's listed property development division, YTL Land & Development Berhad, reported profit after taxation of RM1.15 million for the quarter under review.
Rounding out the Group's listed subsidiaries, YTL e-Solutions Berhad, the Group's information technology division, reported an 81.2% jump in profit after taxation to RM2.18 million on the back of a 35.2% increase in revenue to RM9.46 million for the first quarter ended 30 September 2008.
Shareholders Rewarded with Interim Dividends YTL Power declared a first interim dividend for the financial year ending 30 June 2009, comprising a 6% gross dividend less Malaysian income tax and a 3% single tier dividend. The book closure date for this interim dividend is 5 January 2009 and the payment date is 20 January 2009.
YTL Cement declared a first interim dividend for the financial year ending 30 June 2009, comprising a 3% gross dividend less Malaysian income tax and a 7% single tier dividend. The book closure date for the interim dividend is 5 January 2009 and the payment date is 20 January 2009.
******
Never too late to know CIMB also calling buy on Ytlpower with TP 2.25 :-
0721 GMT [Dow Jones] YTL Power International (6742.KU) +0.6% at MYR1.73 in thin volume; this despite annualized 1Q09 core net profit falling 30% short of consensus FY net profit. CIMB says results within expectations as group booked full one-off windfall tax charge of MYR90 million during that quarter. "Its local power earnings should normalize in the subsequent quarters," CIMB adds. Notes, positive surprise from first interim gross dividend per share of 5 sen. Also, YTL Power''s cash hoard swelled to MYR10.0 billion as at end of Sept from MYR9.3 billion at end of June. "The group sees increasing opportunities in these times as recessionary concerns have depressed asset values. The group has indicated that it is eyeing power assets with a preference for regulated and brownfield assets," CIMB says. Keeps Buy rating on stocks with slightly lower MYR2.25 sum-of-parts based target from MYR2.30 previously. (VGB)
*****
Cash is king in recession , 10 billion is really super cash kow 4 Ytlpower ! too bad , Francis Yeoh doesnt want to involve in gambling sector, otherwise , Sands' casino in Macau is one of d super goldmines !
Still d same, my next entry level 4 ytlpowerwb is @ < 0.40 ! $$$$$$$
27 comments:
Sam, how do you buy the foreign share? Through local securities firm or oversea?
2 chen, as mentioned in my previous posting, i hv an ac in HK, i bot them thru my HK ac.
If u interested , u can open an ac with rhb oso, they did provide such foreign trade ac oso.
Hi Sam,
What do you think of Goldmansach?
Sam,
YTLPOWR-WB have a good chance of being below RM0.40 after the 2 dividend ex-dates.
Unless their Power Seraya bid succeeds.
Personally I think there's still downside to US equities. Citibank might be too big for the govt to save and has made a lost for the last 4 quarters.... looking at the last few govt takeovers or planned takeovers (Bear and WaMut) the shareholders has few or little payout only...
Anyway my 2 cents oni... at this market conditions... all opinions, predictions and analysis can throw out the window... =P.
thx skiddtrader n joy 4 yr infos, yes citigroup is too big 4 us gov to safe , it is bcos of she is too "big", therefore i am doubt US gov dare to ignore her !
AIG rose 16cts yesterday ..not bad not bad but citigroup down 0.94cts ..sighhhh...
No hurry..my second entry 4 citigroup shld be around 2.50 to 2.80 .
as 4 ytlpowerwb.. i wish she can come down < 0.40 .let wait n see ^V^
Sam , you left out something , i have seng's call in my pc, seng bought bank of america @ 21 on Oct 20, BOA closed @ 11 yesterday, read this >
20 Oct 08, 10:46
cycle: seng, u must be clear on certain things ? hahahaha
20 Oct 08, 10:45
Seng: And I'm queueing to buy at $21.00 for Bank of America ...I will lock into my freezer for years.
may be you are interested to buy BOA also, dont you ? ha ha
let monitor seng's US stocks from now onwards
BOA USD 21.00
GS USD 87
Citi USD 8.50
Will car price drop in malaysia ?
Why car price in malaysia so expensive ?
I can't even afford to buy a Myvi.
Hai....
Uncle Sam,
Long time no see and never chat with u for long time.. hope u doing well there :)
Lee Chung Wei, boleh!!! He successfully enter into Final.. Haha!!!
By the way, i really wonder why bible metioned Jesus was 1st borned creation which created by GOD!!! Why the churches still recognise Jesus is God?? Haha.. Funny..
Have a nice weekend ahead..
Hi Sam,
Just wondering wht will be the impact on the IPP contract that expire around 2015 will have on YTLPOWER? I know electricity is just part of YTLPWR revenue but if after 2015, it will affect the YTLPWR profit. Hope you can shed some light. Thanks in advance.
Citi funnymentally cheap at USD 3 ? or every night never sleep at all hoping a white/dark knight saviour appear out of nowhere to come to the rescue ?
This is d latest update 4 citifroup :-
Goldman, Morgan Stanley May Want Citigroup, CreditSights Says
By Christine Harper
Nov. 23 (Bloomberg) -- A purchase of Citigroup Inc. would “significantly” add to Goldman Sachs Group Inc. or Morgan Stanley’s earnings as long as the U.S. government absorbed losses on the embattled bank’s assets, according CreditSights Inc.
Buying Citigroup “would be significantly accretive to Goldman and Morgan Stanley’s earnings as the potential buyer would be acquiring a significant future earnings stream for a relatively low price,” David Hendler, an analyst at CreditSights in New York, wrote in a report yesterday. The buyer “would probably receive government support if it was needed.”
Led by Chief Executive Officer Vikram Pandit, Citigroup lost 60 percent of its market value last week as investor confidence in the New York-based company’s prospects faltered after four consecutive quarterly losses. The share-decline may rattle Citigroup’s customers, counterparties and employees, threatening the operations of the second-biggest U.S. bank by assets, according to Hendler’s report.
“We sense that Citi’s board will also recognize the difficult chain of events which can be brought about by its low stock price, and prefer to take action in the next few days or weeks,” Hendler wrote.
Pandit, 51, told employees on a Nov. 21 conference call that he doesn’t plan to break up the company. He and Chief Financial Officer Gary Crittenden said they don’t expect to sell the Smith Barney brokerage unit, two people who listened to the call said at the time. Citigroup’s board, led by Chairman Win Bischoff and independent director Richard Parsons, met the same day to discuss the bank’s options.
Citigroup issued a statement last week saying the company has “a very strong capital and liquidity position and a unique global franchise.” Spokeswoman Christina Pretto didn’t return phone calls seeking comment today.
Debt-Market Funding
Goldman Sachs and Morgan Stanley were the two biggest U.S. securities firms before converting to bank holding companies in September. They took the step after smaller rival Lehman Brothers Holdings Inc. was forced into bankruptcy, undermining investors’ faith in investment banks that rely on the constricted debt markets for financing. All three firms are based in New York.
Goldman and Morgan Stanley have said they would consider acquisitions to help build their deposit bases. Spokespeople for both companies declined to comment on whether they would consider buying Citigroup.
Citigroup’s $2 trillion of assets would have to be booked by any acquirer at current market values, which could translate into about $100 billion of writedowns, CreditSights estimated. To help facilitate a transaction, the Federal Deposit Insurance Corp. could provide loan-loss support or the U.S. Treasury could contribute money from the $700 billion Troubled Asset Relief Program passed by Congress in October, the report said.
Intervention
Even without an acquisition, the government could intervene if Citigroup’s depositors start to withdraw money because the company would be considered an institution whose failure could threaten the entire financial system, the report said.
“Government intervention could take place under the purview of one or more of several federal departments, including the Treasury department, TARP program, the Federal Reserve, or the FDIC,” Hendler wrote.
Citigroup’s debt remains on review for downgrade by both Moody’s Investors Service and Standard & Poor’s. Moody’s rates Citigroup’s senior unsecured debt Aa3, while S&P has an AA- rating. A downgrade to A1 by Moody’s or to A+ by S&P is possible as the bank’s falling stock price could be deemed to hamper the company’s “financial flexibility,” the report said.
A single-A rating at the parent-company level should be manageable as long as the company’s banking subsidiaries maintain double-A ratings, CreditSights said. JPMorgan Chase & Co., now the biggest U.S. bank by assets, managed to endure with single-A ratings earlier in the decade, the report notes.
“That said, Citi does not disclose what additional collateral it might need to post if it faced a downgrade to high- A territory, so we do not have any hard numbers as to whether a downgrade would cause a sizeable collateral call,” the report said.
2 gamelion , I will definitely make $$$$ from citigroup in long term , that's 4 sure ! there is still a great chance 4 me to make $$$$ in short term ( 1 to 2 months time ), as i said, citigroup is far too big 4 US gov to ignore her !
As 4 AIG , this one is even water liu liu @ 1.45 ! it was at his peak of USD 70+ last year , if not bocs of d bond purchases , insurance biz is a sure win biz ! they hv learned their lesson well now, give them sometimes n u will see what i means by buying aig @ 1.45+- is actually a gem in long term play, 20 to 30% returns in 6 months 4 aig is nota big problem 4 aig , it is now 1.66 liaoo.. ^V^
let see yah !?
2 steve , read d below :-
YTLpwr-wb
Current price 0.51
Expiry : 2018
Conversion :1.21 Average FD rate = 6%
1210 x 0.06 x 10 years = 72.6 x 10 = 726 = cost saving
1210 - 726 = 484 484 + 510 = 994
mother price as at 2008 = 1.80
1800 - 994 = 806 $$$$$ see d value ?? Look, this is what u r buying now, ur total cost @ 2018 is only =RM994 if u do the conversion.
NTA for YTL PWR = 1.20
EPS =0.20 per annum ( to sustain it ,shouldnt be any problem )
Theoritically NTA for YTLPWR 10 years from now = 0.20 x 10 + 1.200= 3.20, base on NTA alone u already made RM2206 (RM3200-994) ^V^ dont forget 10 year from now the price for YTLPWR should be much much higher than its NTA of 3.20 ^V^
The above is only applicable on stock with good earning n management track records like PBB, PPB , YTL...... dont apply it on speculative n lousy stocks with no fundamental back up ^V^
IF THE MOM SHARE PRICE IS > 3.20TOTAL RETURN OF YTLPWR-WB IS ( 3.20-1.21 ) / 0.51 X 100 = > 390% Take note : Mom1.80 - conversion 1.21 = 0.59 very much in money ! ( , that's y its son reluctant to come down below 0.50 despite d fall of KLSE ! ) Ask yrself is YTLPOWER 五星级股票 ? is YTLPOWER HIGH DIVIDEND YIELD COUNTER ? 只买五星级股票 !
SAMGOSS
--------------------------------------------------------------------------------
^V^ Dont forget YTLPOWER @1.79 is trading @ PE around 9 , YTLpower is a blue chip counter, cash kow + excellent management track records ! Once mkt bounce back , bluechip is d first one to move up ! Shortfall :- its base is too big, not easy to move up but she is traded @ almost bottom , hence 4 her to climb above 2.00 in 2 years time is definitely not a problem at all ! ( it could be earlier than that ) Imagine 2.00 -1.21 =0.79 (0.79-0.51)/0.51 x100% =55% return 4 in 2years! what about 2.20 ? almost 100% return liaoooo $$$$$
SAMGOSS
If follow the path of AIG where it is a luxury of having a privilege of being too big to fail/ignore, then why its share price never went up to pre-bailout times of USD20 ? but instead asking again and again for more Government bailout ? How much money did Fed need to print to save everyone at this turbulent times ? Can Fed grow it money supply forever to heaven ? Oh OMG !It is tough decision to make who is the bad rotten apple to get rid off without affecting the rest of good ones !!!!
Hi Sam, I feel I need to respond to some readers here on the misunderstandings on Christianity, for instance "Blogger herbert said... By the way, i really wonder why bible metioned Jesus was 1st borned creation which created by GOD!!! Why the churches still recognise Jesus is God?? Haha.. Funny.."
My quick comment: Bible never mentioned Jesus was created by God. Actually Jesus is God. And there is no such thing as "borned creation". What is born, is born. What is created, is creation.
I just want to encourage healthy discussion on the subject matter of Christianity. Thanks & Bye.
Sam, looks like CITI is getting a helping hand from the US government.
Let's see how high it can go.
Dear Sam,
Is this the first time u are buying US stocks or u had previous experience buying US stocks?
Other than AIG and CITIGROUP is ther other US stocks worth buying?
BZ
2 believe , what is created, who created who doesnt matter , u believed yr god , n we believed ours..all r d same ! just that one need to respect others , dont condem ppl's religion in front of them ^V^ d problem here is i hv heard lot of them ( christian n catholic ) saying those statues that we buddhist prayed r evil ! just ask yrself, if one telling u that Jesus is not god but evil , how do u feel ?
do u know what d monks told me when i asked them about jesus n nabi ? they said all r d same god , no harm to know more about christian n islam , this is d answer from them ! if u go n ask yr church father ( be it catholic or christian , i hv tried it b4 ) all of them saying d statues that we prayed r evil ! some even said it right infront of you ! if u talk about statues , d jesus n maria statues that hang in church , r they not a statue also ??
If u guys still adopting this type of mentality , u r no different like those extremist ! dont try be open minded when u r not !
let come back 2 citigroup, I hv never doubt about d bailout or buy out of citigroup ! Citigroup is far too big to be ignored ! i dont need to defend my buy on citigroup , let d time tell us d answer (AIG also ), marked it down, latest 2 to 3 years , it could be faster than that may be 2 to 3 months time.
can someone explain to me?.... Pls read below
WHILE on earth, Jesus was a human, although a perfect one because it was God who transferred the life-force of Jesus to the womb of Mary. (Matthew 1:18-25) But that is not how he began. He himself declared that he had "descended from heaven." (John 3:13) So it was only natural that he would later say to his followers: "What if you should see the Son of man [Jesus] ascend to where he was before?"—John 6:62, NJB.
Thus, Jesus had an existence in heaven before coming to the earth. But was it as one of the persons in an almighty, eternal triune Godhead? No, for the Bible plainly states that in his prehuman existence, Jesus was a created spirit being, just as angels were spirit beings created by God. Neither the angels nor Jesus had existed before their creation.
Jesus, in his prehuman existence, was "the first-born of all creation." (Colossians 1:15, NJB) He was "the beginning of God's creation." (Revelation 3:14, RS, Catholic edition). "Beginning" [Greek, ar•khe'] cannot rightly be interpreted to mean that Jesus was the 'beginner' of God's creation. In his Bible writings, John uses various forms of the Greek word ar•khe' more than 20 times, and these always have the common meaning of "beginning." Yes, Jesus was created by God as the beginning of God's invisible creations.
Notice how closely those references to the origin of Jesus correlate with expressions uttered by the figurative "Wisdom" in the Bible book of Proverbs: "Yahweh created me, first-fruits of his fashioning, before the oldest of his works. Before the mountains were settled, before the hills, I came to birth; before he had made the earth, the countryside, and the first elements of the world." (Proverbs 8:12, 22, 25, 26, NJB) While the term "Wisdom" is used to personify the one whom God created, most scholars agree that it is actually a figure of speech for Jesus as a spirit creature prior to his human existence.
As "Wisdom" in his prehuman existence, Jesus goes on to say that he was "by his [God's] side, a master craftsman." (Proverbs 8:30, JB) In harmony with this role as master craftsman, Colossians 1:16 says of Jesus that "through him God created everything in heaven and on earth."—Today's English Version (TEV).
So it was by means of this master worker, his junior partner, as it were, that Almighty God created all other things. The Bible summarizes the matter this way: "For us there is one God, the Father, from whom are all things . . . and one Lord, Jesus Christ, through whom are all things." (Italics ours.)—1 Corinthians 8:6, RS, Catholic edition.
It no doubt was to this master craftsman that God said: "Let us make man in our image." (Genesis 1:26) Some have claimed that the "us" and "our" in this expression indicate a Trinity. But if you were to say, 'Let us make something for ourselves,' no one would normally understand this to imply that several persons are combined as one inside of you. You simply mean that two or more individuals will work together on something. So, too, when God used "us" and "our," he was simply addressing another individual, his first spirit creation, the master craftsman, the prehuman Jesus.
As expected , citigroup is far too huge to be ignorned , finally US gov has announced its bailout plan on citigroup, as long as she is still alive , making $$$$$ is only matter of time , 20 to 30% jump from citigroup possible after this news ? let see yah ^V^
11月17日，花旗集团宣布下季度将再度裁减53000个职位。花旗集团表示，除裁员外，花旗还计划将减少其持有资产及下属部门。花旗集团已经连续四季度宣布亏损，仅今年三季度即巨亏28亿美元。 中新社发 井韦 摄
中新网11月24日电 综合外电报道，美国财政部今日宣布，同意向陷入困境的美国花旗集团注资200亿美元，并向该行账面上的近3000亿美元不良资产提供担保。
据报道，美国政府出手拯救陷入财困的花旗集团，向集团注资最多200亿美元，以换取对方的优先股，花旗将会支付8%股息。另外，财政部及联邦存款保险公司将提供最多3060亿美元的损失担保。
财政部表示，联储局已准备好为花旗资产提供额外支持。另外，花旗在未来三年内，若未获政府准许，向普遍股派发的股息不能超过每股0.01美元。集团将遵守加强管理层薪金福利制度的规定，亦要履行联邦存款保险公司的抵押贷款修定计划。
I may sell one lot of citigroup @ >6.00 tonight for some profit taking , The shares were up $1.52 at $5.29 in Germany in recent trading.
read d below :-
Nov. 24 (Bloomberg) -- Citigroup Inc., facing the threat of a breakup or sale, received $306 billion of U.S. government guarantees for troubled mortgages and toxic assets to stabilize the bank after its stock fell 60 percent last week.
Citigroup also will get a $20 billion cash injection from the Treasury Department, adding to the $25 billion the company received last month under the Troubled Asset Relief Program. In return for the cash and guarantees, the government will get $27 billion of preferred shares paying an 8 percent dividend. Citigroup rose as much as 41 percent in German trading today.
The Treasury, Federal Reserve and Federal Deposit Insurance Corp. said in a joint statement that the move aims to bolster financial-market stability and help restore economic growth. The decision came after New York-based Citigroup’s tumbling share price sparked concern that depositors might pull their money and destabilize the company, which has $2 trillion of assets and operations in more than 100 countries.
“It really was a must-do thing,” said Nader Naeimi, a Sydney-based strategist at AMP Capital Investors, which manages about $85 billion. “If they’d let Citigroup go, that would’ve been disastrous.”
Citigroup’s stock plunged 83 percent this year and dropped below $5 last week for the first time since 1995. The shares were up $1.52 at $5.29 in Germany in recent trading.
Herbert, I will try to explain you about the article that you have quoted at my site (http://yesuloves.blogspot.com/).
Thanks again Sam.
R we ready for this ... ???
30 reasons for Great Depression 2 by 2011
New-New Deal, bailouts, trillions in debt, antitax mindset spell disaster
By Paul B. Farrell, MarketWatch
Last update: 11:53 a.m. EST Nov. 19, 2008Comments: 1709ARROYO GRANDE, Calif. (MarketWatch) -- By 2011? No recovery? No new bull? "Hey Paul, why do you keep talking about a bigger crash coming by 2011?" Readers ask that often. So here's a sequel to my predictions of 2000 and 2004, with a look three years ahead:
First. Dot-com crash
We pinpointed the dot-com crash at its peak, in a March 20, 2000 column: "Next crash? Sorry, you won't see it coming." Bulls-eye: The dot-com bubble popped. The economy went into a 30-month recession. The stock market lost $8trillion.
And today, over eight years later, the market is still roughly 40% below its 2000 peak. Video: Discussing the Great Depression
Dorothy Womble and William Hague survived the Great Depression. They share their stories of living during that time as children. (Nov. 14)Factor in inflation and the average stock has lost well over 50% of its value. Stocks have proven to be a very big loser, a bad investment for Americans, thanks to Wall Street's selfish greed, plus the complicity and naiveté of politicians, press and public.
Second. Subprime meltdown
We reported on warnings of another crash coming as early as 2004, wrote a sequel, also titled "Next crash? Sorry, you won't see it coming." Yes, we were early, but in good company. We wrote many more warning columns. Few listened.
Subsequent events, notably former Fed Chairman Alan Greenspan's admission of his failures in congressional testimony, prove that if he and other Reaganomic ideologues weren't so myopic and intransigent about proving their free-market deregulation theories, they could have acted earlier and prevented today's colossal mess. Instead, their ideology kept the bubble blowing, delayed the pop, making matters worse.
So once again, as history proves over and over, ideology trumps common sense, reality and the facts. Greed drives ideologues to blow bubbles. They pop. Crashes happen. The public is collateral damage.
Third. Megabubble cycles
We also detailed the broader, accelerating macroeconomic sweep of cycles last summer in columns like "20 reasons new megabubble pops in 2011." We summarized a long list of major warnings from financial periodicals -- Forbes, Fortune, the Wall Street Journal, Economist -- and from the voices of Warren Buffett, Bill Gross, a sitting Fed governor and a former Commerce secretary. Multiple warnings "hiding in plain sight," beginning with a Fed governor warning Greenspan in 2000 about subprime risk.
But the big shocker came from the new Treasury secretary two years before the meltdown: Bloomberg News reports that shortly after leaving Wall Street as Goldman Sachs' CEO, Henry Paulson was at Camp David warning the president and his staff of "over-the-counter derivatives as an example of financial innovation that could, under certain circumstances, blow up in Wall Street's face and affect the whole economy."
Yes, they knew. And still both Paulson, a Wall Street insider, and Greenspan's successor, Ben Bernanke, a Princeton scholar of the Great Depression, stayed trapped in denial and kept happy-talking the public for months after the meltdown began in mid-2007. Get it? While they could have put the brakes on this meltdown years ago, our leaders were prisoners of their distorted, inflexible views of conservative Reaganomics ideology.
As a result, once again the "best and the brightest" failed America and now they and their buddies in Washington and Corporate America are setting up the Crash of 2011.
Now it's time for my 2008 update, a look into the future where things will get far worse during the next presidential term. And given human behavior, especially in the deep recesses of Wall Street's "greed is good" DNA, it seems inevitable that no matter how well-intentioned the new president may be Wall Street and Washington's 41,000 special-interest lobbyists will drive America into the Great Depression 2.
30 'leading edge' indicators of the coming Great Depression 2
Every day there is more breaking news, proof Wall Street's greed is already back to "business as usual" and in denial, grabbing more and more from the new "Bailouts-R-Us" bonanza of free taxpayer cash and credits, like two-year-olds in a toy store at Christmas -- anything to boost earnings, profits and stock prices, and keep those bonuses and salaries flowing, anything to blow a new bubble.
Scan these 30 "leading indicators." Each problem has one or more possible solutions, but lacks unified political support. Time's running out. We're already at the edge. Add up the trillions in debt: Any collective solution will only compound our problems, because the cumulative debt will overwhelm us, make matters worse:
America's credit rating may soon be downgraded below AAA
Fed refusal to disclose $2 trillion loans, now the new "shadow banking system"
Congress has no oversight of $700 billion, and Paulson's Wall Street Trojan Horse
King Henry Paulson flip-flops on plan to buy toxic bank assets, confusing markets
Goldman, Morgan lost tens of billions, but planning over $13 billion in bonuses this year
AIG bails big banks out of $150 billion in credit swaps, protects shareholders before taxpayers
American Express joins Goldman, Morgan as bank holding firms, looking for Fed money
Treasury sneaks corporate tax credits into bailout giveaway, shifts costs to states
State revenues down, taxes and debt up; hiring, spending, borrowing add even more debt
State, municipal, corporate pensions lost hundreds of billions on derivative swaps
Hedge funds: 610 in 1990, almost 10,000 now. Returns down 15%, liquidations up
Consumer debt way up, now at $2.5 trillion; next area for credit meltdowns
Fed also plans to provide billions to $3.6 trillion money-market fund industry
Freddie Mac and Fannie Mae are bleeding cash, want to tap taxpayer dollars
Washington manipulating data: War not $600 billion but estimates actually $3 trillion
Hidden costs of $700 billion bailout are likely $5 trillion; plus $1 trillion Street write-offs
Commodities down, resource exporters and currencies dropping, triggering a global meltdown
Big three automakers near bankruptcy; unions, workers, retirees will suffer
Corporate bond market, both junk and top-rated, slumps more than 25%
Retailers bankrupt: Circuit City, Sharper Image, Mervyns; mall sales in free fall
Unemployment heading toward 8% plus; more 1930's photos of soup lines
Government policy is dictated by 42,000 myopic, highly paid, greedy lobbyists
China's sees GDP growth drop, crates $586 billion stimulus; deflation is now global, hitting even Dubai
Despite global recession, U.S. trade deficit continues, now at $650 billion
The 800-pound gorillas: Social Security, Medicare with $60 trillion in unfunded liabilities
Now 46 million uninsured as medical, drug costs explode
New-New Deal: U.S. planning billions for infrastructure, adding to unsustainable debt
Outgoing leaders handicapping new administration with huge liabilities
The "antitaxes" message is a new bubble, a new version of the American dream offering a free lunch, no sacrifices, exposing us to more false promises
Will the next meltdown, the third of the 21st Century, trigger a second Great Depression? Or will the 2007-08 crisis simply morph into a painful extension of today's mess to 2011 and beyond, with no new bull market, no economic recovery as our new president hopes?
Perhaps some of the first 29 problems may be solved separately, but collectively, after building on a failed ideology, they spell disaster. So listen closely to "leading indicator" No. 30:
At a recent Reuters Global Finance Summit former Goldman Sachs chairman John Whitehead was interviewed. He was also Ronald Reagan's Deputy Secretary of State and a former chairman of the N.Y. Fed. He says America's problems will take years and will burn trillions.
He sees "nothing but large increases in the deficit ... I think it would be worse than the depression. ... Before I go to sleep at night, I wonder if tomorrow is the day Moody's and S&P will announce a downgrade of U.S. government bonds." It'll get worse because "the public is not prepared to increase taxes. Both parties were for reducing taxes, reducing income to government, and both parties favored a number of new programs, all very costly and all done by the government."
Reuters concludes: "Whitehead said he is speaking out on this topic because he is concerned no lawmakers are against these new spending programs and none will stand up and call for higher taxes. 'I just want to get people thinking about this, and to realize this is a road to disaster,' said Whitehead. 'I've always been a positive person and optimistic, but I don't see a solution here.'"
We see the Great Depression 2. Why? Wall Street's self-interested greed. They are their own worst enemy ... and America's too.
sam,
Have u dispose ur citygroup? Memang tak boleh tahan... u earn money from share market like drinking mineral water!! Haha
dear Sam,
Your earn my respect by ignoring a certain blogger here instigating you to flame Seng's BOA, Citi and GS..
you are such a gentleman, ignored it and then proceed to describe a very informative reason on why YTLPWR is a good buy..
and also the good news on Citi, I wish I can follow you to buy Citi and AIG.., no account yet..
remember, even bad thots will generate bad karma..
always have good thots and good deeds..
then losing will be impossible :-)
thanks a lot..
Hi Sam,
ALL THE BEST 2UR CITIGRP. PIRACY RULES ......An article for ur reading pleasure. Enjoy.
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Somali Pirates in Discussions to Acquire Citigroup
November 24 (Bursa - Chat Blogspot) -- The Somali pirates, renegade Somalis known for hijacking ships for ransom in the Gulf of Aden, are negotiating a purchase of Citigroup.
The pirates would buy Citigroup with new debt and their existing cash stockpiles, earned most recently from hijacking numerous ships, including most recently a $200 million Saudi Arabian oil tanker. The Somali pirates are offering up to $0.10 per share for Citigroup, pirate spokesman Sugule Ali said earlier today. The negotiations have entered the final stage, Ali said.
"You may not like our price, but we are not in the business of paying for things. Be happy we are in the mood to offer the shareholders anything," said Ali.
The pirates will finance part of the purchase by selling new Pirate Ransom Backed Securities. The PRBS's are backed by the cash flows from future ransom payments from hijackings in the Gulf of Aden. Moody's and S&P have already issued their top investment grade ratings for the PRBS's.
Head pirate, Ubi Khalid Aduka, said: "We need a bank so that we have a place to keep all of our ransom money. Thankfully, the dislocations in the capital markets has allowed us to purchase Citigroup at an attractive valuation and to take advantage of TARP capital to grow the business even faster."
Aduka added, "We don't call ourselves pirates. We are coastguards and this will just allow us to guard our coasts better."
Events update
*CITI IN TALKS WITH SOMALI PIRATES FOR POSSIBLE CAPITAL INFUSION
*WILL REQUIRE ALL CITI EMPLOYEES TO WEAR PATCH OVER ONE EYE
*SOMALIAN PIRATES APPLY TO BECOME BANK TO ACCESS TARP
*PAULSON: TARP PIRATE EQUITY IS AN `INVESTMENT,' WILL PAY OFF
*KASHKARI SAYS `SOMALI PIRATES ARE 'FUNDAMENTALLY SOUND' '
*MOODY'S UPGRADE SOMALI PIRATES TO AAA
*HUD SAYS SOMALI DHOW FORECLOSURE PROGRAM HAD `VERY LOW' PARTICPATION
*FED OFFICIALS: AGGRESSIVE EASING WOULD CUT SOMALI PIRATE RISK
*FED AGREED NOV 23 TO TAKE `WHATEVER STEPS' NEEDED FOR SOMALI PIRATES CITI ACCQUISITION
Post a Comment