Is another Wall St crash coming?

[synergy777]

http://www.telegraph.co.uk/money/mai...cncrash115.xml

Is another Wall St crash coming?
Last Updated: 1:50am BST 15/10/2007

The triggers for 1987's Black Monday – when Wall Street fell 22.6pc in a single day – are back, writes Ambrose Evans-Pritchard

Exactly 20 years after "Black Monday" – which saw Wall Street plunge 22.6pc – economists have warned of eerie parallels with the tensions visible on global markets today.

Simon Derrick, chief currency strategist at the Bank of New York Mellon, says the collapse of the US dollar in the mid-1980s lay behind the ructions that led to Black Monday – modern times' most dramatic one-day crash. The dollar had been sliding relentlessly for two years and was at risk of breaking down in a disorderly rout, much like today.

"The dollar was under severe pressure in October 1987. Interest rates were on the rise globally, the US trade deficit remained high and energy prices had been increasing on the back of tension in the Gulf," he said. These conditions are more or less in place once again.

The price of crude oil reached an all-time high of $84 a barrel last week on news of dwindling stockpiles, while US inflation has yet to subside. The producer price index surged in September –now up 4.4pc on last year.

The dollar has fallen below parity against the Canadian dollar for the first time since 1976. The global dollar index has dropped 9pc over the last year, touching an all-time lows of 77.66.

Jim Baker, the former US Treasury Secretary, said Black Monday's trigger was an interest rate rise by Germany's Bundesbank, forcing the whole European system to raise in lockstep.

The move sparked fears that the US Federal Reserve would have to match with tightening of its own, or risk a further dollar slide and the start of an inflationary spiral. The Fed found itself hemmed in by world forces.

Economists' concern this time is that Asian and Middle East central banks and investment funds are losing their taste for US investments. This could knock away a key prop for the dollar. There is already evidence that Korea, Singapore, Taiwan, Vietnam and Qatar are drawing back. Europe is less likely to prove a trigger today. Even so, European Central Bank governors recently warned that inflation risks are rising, hinting at another rate rise.

John Lonski, Moody's chief economist, said the G7 club of major powers will take pre-emptive action. "I don't think that other central banks would allow the US dollar to collapse. It's not in the interest of the world economy to allow the US dollar to enter a downward spiral," he said.

One missing ingredient this time is that 10-year US Treasury bonds – the world's benchmark price of credit – remain stable. Yields have risen 30 basis points to 4.69pc since the Fed cut the Discount Rate in August. In 1987 they jumped 300 basis points from the start of the year to a pre-crash peak of 10.23pc on October 16, as investors feared a return of 1970s-style inflation. Nor are stocks as richly valued today. The price-to-earnings ratio of Wall Street stocks was 22 in 1987. It is nearer 17 now.

In the end, the 1987 crash was a false alarm. After dropping 35pc from top to bottom over the early autumn, the Dow rallied as the Fed injected liquidity, reaching new highs in less than two years. A recent Fed study – A Brief History of the 1987 Stock Market Crash – said two key events on October 16 appeared to set off the storm: a move by the US Congress to end tax benefits for leveraged buyouts – threatening a spate of high-profile deals – and dire data on the trade deficit.

[synergy777]

http://www.telegraph.co.uk/money/mai...bcngold115.xml

Japanese send gold through the 'clouds' as it breaches 3,000 yen
By Ambrose Evans-Pritchard
Last Updated: 5:03pm BST 15/10/2007


Gold has roared to a fresh 28-year high of $760 an ounce on the fears of global currency disorder and a surge of buying by Japanese investors using exotic trading signals.

Traders reported a sudden of burst of activity on the TOCOM gold futures markets in Tokyo as the price broke through the psychological barrier of 3,000 yen (£12.49) per gramme, the measure used by the Japanese to trade gold.

The country's irrepressible grannies and housewives rely heavily on Ichimoku 'cloud charts', which have issued a powerful buy signal in recent days.

John Reade, head of precious metals at UBS, said the Japanese can be a major driver of the gold price once they step in. "Japanese buying can come out of the blue, but it is too soon yet to tell whether they are about to take over the gold market. When the Japanese public move in with reckless abandon, everybody else gets out of the way. They can be the last to join the rally," he said.

The fresh interest in gold comes as the yen renews its relentless slide, hit by signs that the economy may be tipping back into deflation after the housing collapse over the summer. Housing starts fell 23.4pc in July and 43.4pc in August as new laws came into effect.

The Bank of Japan has signalled that it will keep interest rates at 0.5pc for the forseeable future, inviting funds to step up borrowing in Tokyo to chase higher yields elsewhere through the global "carry trade".

Rising inflation across China, India, the Middle East, Eastern Europe, and Latin America have all created the backdrop for a major move in gold.

Citigroup said a global "reflation rally" caused by cuts in US interest rates could push prices above $1000 an ounce.

UBS has upgraded its long-term forecast, but is turning cautious for now as the optimism barometer hits the ceiling.

"The net long positions on the US futures markets are at all-time highs. They have been at extreme levels for four weeks and when that happens you can be sure there will be a correction. It could be any time now," he said.

Ths Swiss bank is the world biggest manager of funds for the super-wealthy and is closely watched by gold experts. It timed the latest rally perfectly, issuing a "table-thumping" buy alert to clients on 21 August just as gold began a surge of $114 an ounce.

Ichimoku Kinko charts look impenetrable to westerners. Nicole Elliott, a technical analyst at Mizuho, said their unique features is to look both forwards and backwards.

"The Japanese started charting rice futures in the 1700s.. They are streets ahead of us. I use Ichimoku charts all the time, and wouldn't be without them. You can't even begin to trade the dollar-yen otherwise," she said.

"What you can see on gold is that it closed last Friday above technical uber-resistance, telling anybody still hesitating that it was time to jump in. Even so, we like the platinum group metals best. Platinum has reached an all-time high of $1428 an ounce, and palldium looks even better. If it closes above $380 an ounce, it is going to fly," she said

[synergy777]

http://business.timesonline.co.uk/to...cle2666689.ece

October 16, 2007

Oil price hits record of $85 as commodity rises intensify inflation fears

Carl Mortished and Steve Hawkes

The price of crude oil rose to a record of $85 a barrel yesterday amid fears that a surge in the price of traded commodities is storing up a winter squeeze on consumer wallets and new risks of inflation for the global economy.

Gold, a traditional inflation hedge, jumped to a 28-year peak of $759.90 a troy ounce and dragged platinum with it in a scramble by speculators for safe havens. The precious white metal rose to a record $1,428 an ounce.

The real cost of a barrel of oil, which reached $85.41 yesterday on the Nymex exchange in New York, is edging closer to its peak in 1980, when the price, adjusted for inflation, reached $90 a barrel after the Iranian revolution.

The surge yesterday stemmed from reports that the Turkish Government might send troops into northern Iraq, raising the prospect of more violence and cuts in Iraqi oil exports. The Turkish Government asked permission of its parliament to send forces to pursue rebels who belong to PKK, a militia group seeking independence for Kurds within Turkey.

Higher crude prices should soon feed through into the price of motor fuel but the effect in Britain has been mitigated by the weakness of the dollar, the currency in which oil and wholesale petrol is traded. Unleaded petrol is averaging 97.58p a litre across the UK, with diesel costing 99.56p, within reach of the record high set last week.

The high cost of petrol means that motorists are spending nearly £8 million more a day to fill their tanks than at the start of the year.

Economists gave warning that soaring energy costs could delay any further reduction in interest rates by the Bank of England. George Buckley, the chief UK economist for Deutsche Bank, suggested that economic growth could be hit if oil continued to rise.

He said: “This is going to affect companies who find it more difficult to invest and it will also affect the high street, as households simply won’t have as much money to spend.”

Householders are being hit from all sides as the cost of globally traded commodities begins to push up basic household necessities, even as mortgage rate increases add to monthly bills. As the petrol price climbs, the cost of a basket of groceries is gaining ground, with price increases in milk, eggs, bread and pork.

Food manufacturers, such as Associated British Foods and Danone, of France, have signalled that price increases are on the way because of turmoil in international markets. Droughts in the southern hemisphere have left the world short of vital food commodities, such as wheat and skimmed-milk powder, and a scramble by governments to build up buffer stocks has caused the price of grain and powdered milk to soar.

The price of coal is also gaining ground because of a burgeoning demand for fuel from Chinese power stations, logistical bottlenecks in Australia and a shortage of bulk carriers to transport the dirty fuel.

The cost of a tonne of coal delivered in Rotterdam has risen 50 per cent since the beginning of the year, squeezing the margins of power generators and raising the prospect of higher electricity bills if the winter proves to be less than balmy.

Underlying the surge in the price of oil is a continuing concern about declining inventories of crude oil in Western countries. Crude stocks in the United States fell, as reported last week by the US Energy Information Administration, confounding expectations of an increase.

Stock levels have continued to fall in OECD countries, a consequence of a succession of Opec cuts over the past year, only partially reversed by a decision last month by the oil producers’ cartel to increase output by 500,000 barrels a day.

Evidence that dearer fuel is curbing demand has been slow to emerge and has only just begun to feed into official US figures of petrol consumption, which show a decline in demand growth from the beginning of this year.

[chandrakavi]

Thanks for the update posts SYNERGY 777
Maybe for people's memories of what is happening
they need shorter quotes of the events, or summarized
Thanks again, great posts,
We'll hear soon from the REAL news of Wall Street....

[anoninnyc]

yeah thanks synergy..... glad i made those adjustments to my portfolio already.

[synergy777]

http://www.bloomberg.com/apps/news?p...flU&refer=home

Oil Rises Above $86 to a Record on Turkey-Iraq Border Tension

By Mark Shenk

Oct. 15 (Bloomberg) -- Crude oil rose above $86 a barrel for the first time in New York on concern Turkish forces may pursue Kurdish militants in Iraq, curbing shipments as refiners prepare for the peak-demand heating season.

Prices climbed as much as 3 percent because Turkey's military may attack Kurdish bases in Iraq, which has the world's third-largest oil reserves. Futures also increased after the Organization of Petroleum Exporting Countries said production outside the group will be lower than previously forecast.

``Everything imaginable is going wrong as far as the oil market is concerned,'' said Robert Ebel, chairman of the energy program at the Center for Strategic and International Studies in Washington. ``Turkey is saber rattling, Iraq isn't calming down, Iran is also saber rattling and supplies are tight.''

Crude oil for November delivery rose $2.44, or 2.9 percent, to settle at a record $86.13 a barrel at 2:54 p.m. on the New York Mercantile Exchange. Oil reached $86.22, the highest since the contract was introduced in 1983. This is the fifth straight rise. Prices are 47 percent higher than a year ago.

Today's intraday high passed the previous all-time inflation-adjusted record reached in 1981 when Iran cut oil exports. The cost of oil used by U.S. refiners averaged $37.48 a barrel in March 1981, according to the Energy Department, or $84.73 in today's dollars.

Citigroup Inc., Deutsche Bank AG and HSBC Holdings Plc have predicted over the past month that oil prices would decline because of falling gasoline demand and a slowing U.S. economy. Oil may end the year below $70 a barrel, forecast Adam Sieminski, the global oil analyst at Deutsche Bank in New York.

New Legislation

Turkey's government will ask lawmakers to approve legislation to launch attacks on bases of the Kurdistan Workers' Party, or PKK. The resolution, which requires the backing of a simple majority of legislators in Turkey's 550-seat parliament, is also supported by the main opposition parties.

``The market is looking for any excuse to move higher right now,'' said Brad Samples, commodity analyst for Summit Energy Services Inc. in Louisville, Kentucky. ``Eventually this speculative move will exhaust itself because the fundamentals don't justify these prices. There's plenty of supply.''

Crude-oil and other commodities also rose because the U.S. dollar declined against the euro, enhancing their appeal as an investment. Commodities often move in the opposite direction of the U.S. currency. A lower dollar makes oil relatively cheaper in the countries using other currencies.

U.S. Complaints

``You don't hear a lot of complaining about high prices except in the U.S.,'' Ebel said. ``The rise in prices is a lot less impressive in other currencies.''

In U.S. dollars, West Texas Intermediate, the New York- traded crude-oil benchmark, is up 41 percent so far this year. Oil is up 31 percent in euros, 35 percent in British pounds and 39 percent in yen. Oil reached a record against the euro on July 17, 2006, when Israel struck targets in Lebanon, raising the prospect of a halt in Middle East shipments.

``It's going to soon hit $90 and go north of $100 next year,'' said Peter Schiff, chief executive officer of Darien, Connecticut-based brokerage Euro Pacific Capital, with $700 million in customer accounts. ``We should see $150 to $200 oil in the next two to three years because of the drop in the dollar. Once Asian countries allow their currencies to appreciate, demand will explode there.''

Brent crude oil for November settlement rose $2.20, or 2.7 percent, to close at a record $82.75 a barrel on the London-based ICE Futures Europe exchange. Brent reached $82.90, the highest since trading began in 1988.

The Euro gained against the dollar today on speculation quickening inflation will prompt the European Central Bank to keep raising interest rates. The U.S. Federal Reserve cut its benchmark rate by a half percentage point to 4.75 percent on Sept. 18 because of an increase in short-term borrowing costs.

Money Flow

``We are seeing the effects of the Fed lowering rates when it didn't need to,'' said Bill O'Grady, director of fundamental futures research at A.G. Edwards & Sons in St. Louis. ``Bonds and the U.S. currency have fallen while commodities and foreign currencies have become more attractive. There's been a steady flow of money into these markets since the cut.''

OPEC members have said a falling dollar justified higher prices because oil-producing countries sell oil in dollars and often buy goods in euros. OPEC will discuss the impact of the falling dollar when members meet on Dec. 5, Algerian Oil Minister Chakib Khelil said today.

``Oil exporters are losing a lot of money because of the weak dollar,'' Khelil told national public radio in Algiers. Rising oil prices are helping Algeria recoup losses from the falling value of the U.S. currency, he said.

OPEC said today that non-OPEC supply will average 50.29 million barrels a day this year, down 28,000 barrels from last month's estimate.

Heating oil for November delivery increased 6.08 cents, or 2.7 percent, to close at a record $2.3072 a gallon in New York. Futures touched $2.311, a record intraday price.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net .

Last Updated: October 15, 2007 16:05 EDT

[synergy777]

http://www.bloomberg.com/apps/news?p..._KE&refer=home

Citigroup Net Falls 57 Percent on Fixed-Income Losses (Update8)

By Bradley Keoun

Oct. 15 (Bloomberg) -- Citigroup Inc., the biggest U.S. bank, said mortgage delinquencies and consumer lending will deteriorate for the rest of the year after earnings fell 57 percent in the third quarter.

Citigroup had its biggest drop in more than a month in New York trading after Chief Financial Officer Gary Crittenden on a conference call said borrower defaults are ``accelerating.''

Chief Executive Officer Charles Prince, who has overseen a 17 percent drop in the company's stock this year, said momentum ``continues very strong'' in most of the company's businesses. Since Prince became CEO in 2003, Citigroup shares are virtually unchanged, compared with a 29 percent jump at Bank of America Corp., the second-largest U.S. bank by assets.

``They certainly had a lot of troubles and to some extent have been tripping over themselves the last couple of years,'' Jeffery Harte, an analyst at Sandler O'Neill & Partners LP in Chicago, said in an interview. Prince is ``doing the right things strategically. It's become more of an execution problem lately.''

The New York-based company said in a statement that net income declined to $2.38 billion, or 47 cents a share, from $5.51 billion, or $1.10, a year earlier. Citigroup said two weeks ago that earnings would fall 60 percent.

Citigroup dropped $1.63, or 3.4 percent, to $46.24 in composite trading on the New York Stock Exchange at 4:17 p.m.

Wall Street Writedowns

The results included about $6.5 billion of costs for fixed- income trading and underwriting losses and consumer loans gone bad. Like Wall Street rivals Goldman Sachs Group Inc., Morgan Stanley and Merrill Lynch & Co., Citigroup had to write down the value of mortgages, asset-backed securities and corporate loans held on trading books or in its underwriting business.

Earnings included a $729 million pretax gain on the sale of shares of Redecard SA, MasterCard Inc.'s transaction processor in Brazil. Revenue climbed 5.8 percent to $22.7 billion.

Return on equity, a gauge of how effectively the company reinvests earnings, dropped to 7.4 percent from 18.9 percent a year earlier, making it the second-lowest among Wall Street firms that have reported earnings, after Bear Stearns Cos.' 5.3 percent. Goldman Sachs Group Inc.'s 31.6 percent was the highest.

Citigroup is the first of the nation's biggest banks to report earnings for the quarter. New York-based JPMorgan Chase & Co. releases its results on Oct. 17, and Bank of America, based in Charlotte, North Carolina, is scheduled for Oct. 18.

Analyst Expectations

Citigroup's profit exceeded analysts' estimates of 44 cents a share, according to a Bloomberg survey.

``Their revenues actually weren't as bad as we were expecting,'' Harte said. ``The trading and some of the banking businesses held up better than we thought.''

Revenue in Citigroup's trading and investment-banking division was $4.6 billion, compared with Harte's estimate of $3.75 billion. Revenue from wealth management, including the company's Smith Barney retail brokerage, was $3.51 billion. Harte had predicted $3.25 billion.

Bank of America is expected to report a return on equity of 15 percent for the third quarter, Fox-Pitt Kelton Cochran Caronia Waller analysts estimated. Wachovia Corp., the nation's fourth-largest bank, will report an ROE of 13 percent when it releases earnings on Oct. 19, according to the analysts.

Citigroup's profit drop included costs of $1.35 billion for leveraged-buyout loans and $1.56 billion for subprime mortgage assets. It also suffered a $636 million fixed-income trading loss and reported $2.98 billion of costs to guard against rising defaults for consumer loans. The losses and writedowns announced today were $600 million bigger than the company estimated two weeks ago.

Maheras, Barker

On Oct. 11, Citigroup replaced Thomas Maheras, 44, who ran trading, and Randy Barker, 48, a senior fixed-income executive. The company promoted Vikram Pandit, 50, to run trading, investment banking and alternative investments.

The board is ``comfortable'' with the management changes, Prince said on the call, declining to comment on whether his own job was in jeopardy.

Past-due home loans doubled in the U.S. The slide in the mortgage business is frustrating Prince's effort to increase revenue faster than expenses.

Surging defaults ``raise fear that credit quality may continue to be challenging,'' said Tom Kersting, an analyst at Edward Jones & Co. in Des Peres, Missouri. The delinquencies are ``worse than they talked about even a couple of weeks ago.''

Late Payments

The percentage of U.S. real-estate loans where borrowers were more than 90 days behind on payments climbed to 1.8 percent, from 1.4 percent in the second quarter and 1 percent a year earlier, Citigroup said.

Investors were further disheartened after Crittenden said capital ratios -- a measure of the bank's ability to handle a business decline -- have fallen below the company's target, according to Kersting. The bank now has to divert spare capital away from share buybacks, Crittenden said.

Prince, 57, said when the losses were announced that they were an ``aberration'' and that profit would ``return to a normal earnings environment'' in the fourth quarter. Citigroup is part of a group of banks that agreed to set up a fund of about $80 billion to revive the market for asset-backed commercial paper, or loans that mature in 270 days or less.

The stock's slide has fueled criticism from investors such as Second Curve Capital LLC's Thomas Brown. Prince came under fire last year from Saudi billionaire Prince Alwaleed bin Talal, Citigroup's largest individual shareholder, for failing to control costs.

Alwaleed's Support

Prince placated Alwaleed by pledging earlier this year to cut annual expenses by $4.6 billion, or 10 percent, by 2009. The CEO announced plans in April to eliminate 17,000 jobs. Alwaleed said this month that he supports Prince.

Crittenden, the CFO, said on the conference call that the company is ``ahead of our commitment'' on headcount reductions and expense savings.

Since taking over in October 2003, Prince has defended the company's breadth as helping to assure stable earnings. The bank says it has about 200 million customer accounts in more than 100 countries.

``Prince has been dealt a tough hand,'' said Michael Chren, a portfolio manager at Allegiant Asset Management Co., which oversees about 1 million Citigroup shares. ``He's doing the best job he can, and I think at this point you have to give him the benefit of the doubt.''

To contact the reporter on this story: Bradley Keoun in New York at bkeoun@bloomberg.net .

Last Updated: October 15, 2007 17:18 EDT

[synergy777]

http://www.marketoracle.co.uk/Article2459.html

The Stock Markets October Panic Window Approaches
Stock-Markets / Financial Crash
Oct 15, 2007 - 09:45 AM

By: Captain_Hook


Adding to the list of things that can go wrong from our last discussion , things that could cause a possible dislocation in the stock market during the possible panic window opening next month, we have an astute observation by Rick Ackerman. Then you have Gary North out further discussing Fed antics associated with a contracting monetary base , which he is suggesting will topple the equity complex, and possibly the system. Here, you can't blame the Fed for instituting such policy. Again, the idea behind constricting growth in the monetary base is to support the dollar ($) and curb the inflationary effects of easing rate policy. And while I agree with the conclusions of both these gentlemen, as stated in our last commentary the timing associated with when such factors will come home to roost is still very much up in the air however, not imminent by any means.

Enter Goldman Sachs, where last week they came out saying the worst of the credit crunch is over, and to bet on a recovery. Obviously this must be the way they are betting now, betting their expanding balance sheet (buyers of last resort) on seasonal tendencies and an easy money environment. One does need wonder just how long this can go on for however if as Rick Ackerman above points out the consumer is saturated with debt. Try as they will however, brokers, bankers, and politicos (the ‘authorities') are attempting to get the borrowing binge back on track, attempting to get companies interested in leveraged buyouts again, anything to keep the credit bubble from collapsing. If you believe the message in a rising gold price, one must consider the possibility they will be more successful than is the conventional wisdom at the moment, making short selling a very dangerous prospect indeed. Outcomes in October will tell the story in this respect.

And then we have the Chinese, whose ‘upper-ups' are apparently waking up to what Goldman Sachs and the Rothschild's have planned for them now. So, it will be interesting to see just how things develop moving forward. I am looking for profound change in trade related exchange between China and the West developing after the Olympics next year to mark acceleration in the demise of the Western Banking Model known as ‘Globalization'. This is when you can expect to see the $ come under intense pressure as the Chinese pull their support, and interest rates rise. (More on this below.) This of course will make above considerations very important because if the monetary base is already shaky by then, a genuine system collapse is possible at the extreme. Continue to buy gold and silver bullion. You will not regret it in the end.

The markets have now completed a close resemblance of a 1987 signature in the trade as month end approaches. That being said, based on the strength of the move in stocks into new all time highs in many cases, this does suggest that despite what authorities would have you believe, money supply growth rates are accelerating. In this regard I will refer you to the attached resource piece pointing out the fact one need be a scientist these days in grappling with increasingly complex accountings and methodologies employed by monetary authorities. Of course we have known this for some time, along with the fact unaccounted for inflation is coming from so many sources now that it's not possible to add the total largesse befalling the larger system today. Here, the only way one can be sure you are on the right track interpretation wise is to watch prices, with gold featuring prominently as a leading indicator. This may become more apparent to Gary North in coming days.

Further to this, end of quarter window dressing of stock markets is now almost complete, with greedy fund managers jamming prices higher into month's end. Moreover, and as mentioned above, the current sequence into month's end has in fact been surprisingly strong; again, witnessing new high / recovery closes in many markets around the world, with tech stocks in the states no exception. Of course one should note that like ending characteristics witnessed in the 1999 / 2000 bubble topping sequence, large cap tech stocks have a tendency to outperform in such circumstances, which is also occurring today as the combination of increasing inflation coupled with more players chasing a ‘sure thing' intensifies momentum oriented sectors. With this in mind, it should be pointed out that from a seasonal perspective, and like the timing associated with the tech stock top in 2000, odds favor prices remaining buoyant within what appears to be an accelerating echo-mania right into the first quarter of next year. We are watching for what we will term a ‘hyperinflation signal' in the CBOE Volatility Index (VIX) over the next few days to aid in confirming this view. (See Figure 1)

more at the link

engineered collapse for the introduction of a new currency, the Amero

[synergy777]

http://www.prisonplanet.com/articles...omic_crash.htm

Experts Fear Repeat Of 1929 Economic Crash

Kuttner blames "insiders with conflicts of interest" for meltdown danger, tanking of dollar

Paul Joseph Watson
Prison Planet
Tuesday, October 16, 2007

Two prominent economic experts have warned that "insiders with conflicts of interest" allied to the Fed's policy of tanking the dollar to bail out Wall Street could lead to a repeat of the economic crash of 1929, during a segment on Bill Moyers' PBS show.

"I think there are three big parallels between what happened in the 20's and what has been happening in Wall Street lately," Robert Kuttner told Moyers.

Kuttner is a veteran economic journalist and a former legislative assistant in congress.

"One is insiders with conflicts of interest that are not fully disclosed to the public generally, secondly - there's much too much borrowed money....particularly in the financially engineered parts of the economy....and third is the lack of transparency - regulators and the public don't get any kind of disclosure," added the former BusinessWeek writer.

Kuttner blamed an economy based on "asset bubbles" for the rising tension in the markets and said that, similarly to the 1920's, "engineered euphoria" and companies cooking the books had combined to endanger the safety of the economy.


A clip of the PBS discussion, for the full video, click here.

Kuttner called for more transparency and slammed the Fed for recycling a vicious circle of cheapening the dollar to bail out Wall Street, inviting another round of speculative excess.

"The risk is that every time we repeat this cycle, we get bigger and riskier bubbles. And with the dollar being in the tank-- it's not a costless kind of bailout," said Kuttner. "One would have thought that if the dollar were down to 140 Euros there'd be a run on the dollar. We're gonna see inflationary pressures as a result of the cheap dollar. So it's not as if the Fed can simply print more money to bail out these excesses, and there be no cost to everybody else

William Donaldson, the former chairman of the Securities and Exchange Commission, also warned that the dollar was "disappearing" through the floor as a result of the Fed's policy of bailing out "devious" investors.

So I think that the central banks have a greater technique and ability to meet this problem," said Donaldson. "But insofar as they do-- we run into a moral hazard, i.e. we bail out the people who made bad or devious, or whatever you wanna call 'em, investment decisions. So you sort of are saying, "Go ahead and do whatever you want, and you can count on the good old Fed to bail you out."

[chandrakavi]

Well its already happening but people don't want , to read about the Amero, and the economy. (Economists fear a repetition of the crash of the market like 1929)

Good post Synergy 777