Thread: WARNING.... U.S. Dollar Exchange Article of Interest

Originally Posted by tiffany

1. RE: Buns of Steel...have the videos (abs, arms, etc.) and I suppose they'd work if I played them...

2. Viet Nam ~ Thank you!

3. There's no place like home...Clicking your heels 3 times really DOES work!

BIGGIE PAT! I'm glad to see your tail up and perky again! From your posts awhile back I was starting to think you got it caught in a bear trap!

p.s....sorry for playing in your thread Mike ~ Old habits are hard to break!

hey tiff....it wasn't a bear trap i was avoiding...it was a neno and sgs trap....lol....never did buy into all her bunk...and his at the end either.....i never did go to the other forums...always stayed here.......at the best one....lol....hopefully everything is falling in place...soon.....been a long and wild ride...hope its near its end...Looney cooney here...Pat

World''s demand for gold peaks in Q3 -- report


RIYADH, Nov 17 (KUNA) -- The world's demand for gold during the third quarter of the year hit records in dollar terms to USD 20.7 billion, marking a rise of about 30 percent compared to the corresponding period last year, a report said on Saturday.

In tonnage terms, the world's demand for gold during the third quarter rose to 947.2 tons, a rise of 6 percent compared to the same period in 2006, the report, issued by the World Gold Council regional office in Dubai, said.

According to the report, demand for gold in the Middle East remained strong increasing by 24 percent in dollar terms and 13 percent in tonnage to 93.2 tons.

The report attributed the rise to the fact that gold is a safe haven at times of instability and fears of inflation and the sliding US dollar.

In Saudi Arabia, the world's fifth biggest consumer of gold, the demand rose to 34.4 percent during the third quarter of the year, marking an increase of 19 percent compared to the same period last year. Thus, the Kingdom had 30 percent of the 93.2 total demand for gold in the Gulf area and Egypt. The report revealed that the jewellery demand was strong through the quarter, and that de****e the steep rises in prices which had an impact on key markets, jewellery demand rose in tonnage and value terms. The gold demand in the UAE was strong in the quarter as it reached 26.3 tons, rising by 10 percent compared to the third quarter last year, thanks to the success of the "The Summer Surprises" festival and the rise in the number of tourists.

As for the rest of the Gulf states, the rise for gold during the Q3 hit 11.

2 tons, 3 percent more in tonnage terms compared to the same period in 2006.

In India, the world's top consumer of gold, demand hit 185.1 tons during the third quarter, while in China, the second biggest consumer, demand rose by 25 percent.

On the contrary, demand for gold in the USA, the world's third biggest consumer, it decreased by 13 percent during the Q3 to 64 tons

Kuna site|Story page|World''s demand for gold peaks in Q3 -- report ...11/17/2007

Interesting read on just how fragile the economy is at this point in time.

November 19, 2007


It appears that the world in general and the United States in particular are on the edge of a major disruption in the global financial system. Here's the summary as we see it.

At a recent Board meeting of The Arlington Institute, Dr. David Martin, CEO of M*CAM and one of the members of the Board was asked for his assessment of the global financial situation in the coming months.

Here are my notes from his response:

I stand by my commentary in July of '06.

The next shoe to fall is consumer credit Currently as reports came in on the 3rd quarter, foreclosures were up 470% this quarter alone. They will be up over 500% this coming quarter (4th). A foreclosure in our terms is when the bank has officially declared an account insolvent and tries to regain the asset (if it exists). The person who is foreclosed upon can no longer secure any traditional consumer credit. This in turn goes straight to the banks as no one will be able to get the store issued charge cards.

A minority of people pay off their consumer debt every month. When one considers the combination of consumer credit card debt and the compounded debt of "home equity" financing, we estimate that less than 20% of people actually carry no consumer credit from one month to the next. Many of the ones who don't pay off their carried consumer debt have at least one credit card at its limit and therefore lack credit capacity. Most have their paycheck directly covering bills and servicing the minimum balance due.

Therefore people who are foreclosed upon will not be able to obtain credit and since their paychecks will be maxed out, there will not be extra cash left over from the paycheck to service a new debt.

Next, everybody buys things at Christmas. As much as 40% of retail sales are done in the 4th quarter of the year – i.e. the retail miracle. The purchase decline in retail goods this fourth quarter will occur because many credit-only consumers will lack the credit capacity mentioned above. Frequently, people overcharge their limit and the banks (albeit a profit center for subprime credit users) levy a penalty by increasing interest rates and charging additional fees. In the 4th quarter of 2007, the amount of people overcharging their limits will be too many for the banks to handle. We do not have a system in place to deal with overcharge on that scale. A substantial number of this December's purchases will go into an overdraft on credit limits.

CDO – Collateral Debt Obligation – Consumer Credit

Consumer credit pooled debt investment instruments (a form of CDO) are originated and rated based on underlying historical credit behavior and a complex series of predictive models for repayment dynamics. CDOs have "strips" which are a combination of similar profile tranches within a larger investment product. Based on the market's appetite for risk, investment performance guarantees (or credit enhancements) are packaged with the credits. These credit guarantees are issued by insurance companies, reinsurance companies, and other specialty finance companies – many operating with extra-territorial jurisdiction rendering fiscal oversight more complicated.

These strips come in several categories:

* Investment grade
* Almost investment grade
* Junk and
* Why did we give them a credit card?


All of these grades are priced on historical default rates. The credit insurance companies (AIG, MBIA, Ambac, Financial Security Assurance, Channel Re, XL, Zurich Re and other reinsurers) have, from time to time, issued credit guarantees to the securities. Banks sell debt in the form of a Collateralized Debt Obligation (CDO).

Minor shifts in default actuarial activity (+/- 25 basis points) from normative behavior is absorbed within pricing of these financial guaranty contracts. However fundamental shifts (hundreds or thousands of basis points in one quarter) are not built into the model and result in credit enhancement insolvency on a major scale. When the insurer cannot pay based on its own liquidity impairment, the bank is left with catastrophic (an insurance term for excessive loss outside of expected) exposure.

If in a single quarter we have an increased foreclosure rate of 400% (or 4000 basis points) the insurance contracts simply cannot handle that kind of drastic shift as evidenced by the write offs in the third quarter. When we will follow the drastic third quarter with a loss of 500% in the fourth quarter, the trajectory becomes clear.

Neither the banking nor the insurance industry has a historical experience in dealing with this type of challenge and neither has the liquidity linked to these contracts to support system wide collapse.

Where was the announcement of this? There was no announcement.

However Hank Greenberg is resurfacing in AIG leadership even during an SEC investigation because without him, no one else can remember where the counterparty risks are. In order to save the insurance industry, shareholders have looked past alleged SEC violations as there is no one with Mr. Greenberg's awareness of the market and counterparty agreements who can hope to navigate the coming challenges. In the 4th quarter, the US will have another record foreclosure announcement. Once you're over 25% (25 basis point) foreclosure, all models are broken.

Under a consumer credit melt-down, Capital One and/or Wachovia are likely going to put a massive foreclosure liability to an insurance company and the insurance company will not have liquidity to cover the exposure.

This is the problem we got into when we issued credit card debt on top of secondary mortgages - (inflated the value of the home) and gave out credit based on faux equity that no one really had.

The reason why this problem is the second shoe to fall (subprime mortgage collapse was the first shoe) is because consumer credit has a different foreclosure frequency than traditional mortgage credit.

December is when the maturity of the giant buyout of the economy moves.

By December, you'll have a second round of charge offs based on consumer credit. The real big problem – when you foreclose on consumer credit, people stop buying things. When people stop buying things, we don't have a tertiary way to pump liquidity into the market. People won't have extra cash from their paychecks and won't have capacity on their cards.

Try this case study:

Go to the mall and stand in front of counter at Victoria Secret. Watch what happens when someone wants to pay with cash. The clerk won't know how to ring up cash. They will need a manager to come over to give change and unlock drawers. When you don't have capacity on those cards, you don't buy things. VISA credit cards actually denigrate using cash in their run-up-to-Christmas add campaign.

Next, go to any savings bank data set. If you were going to spend $1000 in cash this Christmas, can you do it? For the most part, the answer would be "no" because we have had a net negative spending for the last 5 years.

Therefore there will be depressed consumer spending this Christmas but what is spent, people will overcharge. This will take what used to be good investments in CDOs and will change the dynamic. If you used to be a person who paid their bills on time, you will now only pay half. If the credit companies are counting on the top two tranches to pay their card off in full and they don't, they won't have liquidity to cover the rest. The banks cannot afford the top tranch paying half.

The estimates are out. There will be at least $400B in the first round of charge offs in the CDO market.

We're not going to be done with the subprime mortgage when the CDOs fall. Therefore we will have an insolvency problem with the banks that are mentioned above.

This is the kiss of death of a privately held Federal Reserve. For the Federal Reserve to function, its stakeholder banks (like JP Morgan Chase) must remain viable and liquid. When one of them, or any major bank in the U.S. (like Bank of America, Citibank, Wells Fargo, Bank of New York, Washington Mutual, etc.) is impaired or ceases to exist, the architecture of the Fed's capacity to respond to systemic challenges is unsustainable.

If the banks have no money, they can't pump liquidity into the market. Taking half of a trillion dollars out of market in a single distressed write down becomes problematic. The US banking system does not have the liquidity to take the hit.

The actual solvency of the Federal Deposit Insurance Corporation is relatively indecipherable due to the fact that their treasury management processes (and the risks of their own investment strategies) are not uniformly disclosed with sufficient transparency. The FDIC was set up for isolated problems with a few bad banks but is NOT prepared to "insure" the system in an industry-wide crisis. The actual liquidity reserve of the "insurance" that Americans view as their safety net is 1/100th the actual exposure of outstanding deposits. The actual coverage ratio for the Bank Insurance Fund (BIF) fell below 1.25% in 2002, the same year that less stable credit practices were adopted by America's leading banks.

The funny part is that the Federal Government will be on holiday when all of this happens. There will be no one to put freeze actions and moratoria on actions. The only way you stop the cataclysm is to put together civil actions on deposit withdrawals.

As I discussed previously, the Chinese currency wild-card may become relevant far sooner than expected. An effort by China to convert its $1.4 trillion U.S. Treasury holdings into euros is not viable for many reasons – not the least of which is the European Central Bank's inability to absorb such an event. As China continues its rush away from supporting U.S. Treasuries and as Middle Eastern investors are buying them up in more diversified holdings, a new "currency exchange" is unfolding. Realizing that they cannot liquidate their holdings, it appears that the Chinese are currently using their U.S. Treasury holdings as collateral for euro denominated purchases and long term infrastructure transactions. In other words, they may be "liquidating" their holdings as collateral and, in so doing, effectively migrating to non-dollar value without ever having to officially dump their current Treasury holdings.

Therefore, collateralize the credit in dollars – especially if you're long in dollars. The lender/financier won't call the note because you have it structured in such a way to both allow it to perform and hold illiquid collateral that no one wants. This essentially inflates euros. Although you can't sell dollars, the whole purpose of collateral is that it is a second source of payment – collateral is there to down rate the risk of the loan. Secondary becomes irrelevant.

When February comes, the Chinese are going to do something as they will have to decide what the exposure is going to be with the treasury. As I see it they have to just dump the treasury. They only keep it because they can use it – they have 43% direct/indirect of US treasuries so they'll dump them on the market.

The US Congressional pressures to decouple the RMB will work, but not in the way we want. Our plan includes helping them hold on to the treasuries, it does not involve them not holding the dollar anymore. The US wanted the tether to be part of the float. This will cause disenfranchisement of the US electorate (during primary season). February is also when public (media) will realize we won't pull out of this.

Side note: Mayor Bloomberg could enter the race at this point, being the savior candidate (at least economically), but has $1B dollars in non-liquid money so he may not be able to enter.

March is when we realize that the dollar doesn't come back.

OPEC price with the whole fluctuation of oil futures presages the event. They are going to run the price of oil as high as they can get it on the dollar, while buying US treasuries from China with the money. When the dollar does collapse, they'll flip denominations. The wild card is long about March when the OPEC cuts spot oil off the dollar to the euro. One can look at the current oil price at close to $100/barrel and fail to see that, as this premium price is currently turning around and investing in a weakening dollar, the effective price (less the dollar investment hedge) is probably closer to $50/barrel than the spot price reflects.

Currency problems will change the game – they are financially structuring themselves to take the hit.

When we can't afford to buy oil commodities on a spot market – it compounds the problem however the consumer that Saudi Arabia ships to is liquid (China). In the US it is a big problem. There is still a market for oil; it just changes. When you come out of Straits of Hormuz, turn left to China.

OW thank you for the lesson in world economy 101 and the failure of the USD.. I am already pretty sure that we will not see anything but measured movement in the IQD, they have us in their pocket as I see it. Dreams, Dreams we have all had them about this investment. Reality is that when it is over, we will make a buck or two, no millions (JMO). I have just about run thru all my positive thoughts today, and after your post, think an adult beverage is in order. The warrior bows to your Greatness. Have a Great Sunday. Always willing to learn from the master. Blessings all.

Originally Posted by Offshore-Wealth.com

Interesting read on just how fragile the economy is at this point in time.

November 19, 2007


It appears that the world in general and the United States in particular are on the edge of a major disruption in the global financial system. Here's the summary as we see it.

At a recent Board meeting of The Arlington Institute, Dr. David Martin, CEO of M*CAM and one of the members of the Board was asked for his assessment of the global financial situation in the coming months.

Here are my notes from his response:

I stand by my commentary in July of '06.

The next shoe to fall is consumer credit Currently as reports came in on the 3rd quarter, foreclosures were up 470% this quarter alone. They will be up over 500% this coming quarter (4th). A foreclosure in our terms is when the bank has officially declared an account insolvent and tries to regain the asset (if it exists). The person who is foreclosed upon can no longer secure any traditional consumer credit. This in turn goes straight to the banks as no one will be able to get the store issued charge cards.

A minority of people pay off their consumer debt every month. When one considers the combination of consumer credit card debt and the compounded debt of "home equity" financing, we estimate that less than 20% of people actually carry no consumer credit from one month to the next. Many of the ones who don't pay off their carried consumer debt have at least one credit card at its limit and therefore lack credit capacity. Most have their paycheck directly covering bills and servicing the minimum balance due.

Therefore people who are foreclosed upon will not be able to obtain credit and since their paychecks will be maxed out, there will not be extra cash left over from the paycheck to service a new debt.

Next, everybody buys things at Christmas. As much as 40% of retail sales are done in the 4th quarter of the year – i.e. the retail miracle. The purchase decline in retail goods this fourth quarter will occur because many credit-only consumers will lack the credit capacity mentioned above. Frequently, people overcharge their limit and the banks (albeit a profit center for subprime credit users) levy a penalty by increasing interest rates and charging additional fees. In the 4th quarter of 2007, the amount of people overcharging their limits will be too many for the banks to handle. We do not have a system in place to deal with overcharge on that scale. A substantial number of this December's purchases will go into an overdraft on credit limits.

CDO – Collateral Debt Obligation – Consumer Credit

Consumer credit pooled debt investment instruments (a form of CDO) are originated and rated based on underlying historical credit behavior and a complex series of predictive models for repayment dynamics. CDOs have "strips" which are a combination of similar profile tranches within a larger investment product. Based on the market's appetite for risk, investment performance guarantees (or credit enhancements) are packaged with the credits. These credit guarantees are issued by insurance companies, reinsurance companies, and other specialty finance companies – many operating with extra-territorial jurisdiction rendering fiscal oversight more complicated.

These strips come in several categories:

* Investment grade
* Almost investment grade
* Junk and
* Why did we give them a credit card?


All of these grades are priced on historical default rates. The credit insurance companies (AIG, MBIA, Ambac, Financial Security Assurance, Channel Re, XL, Zurich Re and other reinsurers) have, from time to time, issued credit guarantees to the securities. Banks sell debt in the form of a Collateralized Debt Obligation (CDO).

Minor shifts in default actuarial activity (+/- 25 basis points) from normative behavior is absorbed within pricing of these financial guaranty contracts. However fundamental shifts (hundreds or thousands of basis points in one quarter) are not built into the model and result in credit enhancement insolvency on a major scale. When the insurer cannot pay based on its own liquidity impairment, the bank is left with catastrophic (an insurance term for excessive loss outside of expected) exposure.

If in a single quarter we have an increased foreclosure rate of 400% (or 4000 basis points) the insurance contracts simply cannot handle that kind of drastic shift as evidenced by the write offs in the third quarter. When we will follow the drastic third quarter with a loss of 500% in the fourth quarter, the trajectory becomes clear.

Neither the banking nor the insurance industry has a historical experience in dealing with this type of challenge and neither has the liquidity linked to these contracts to support system wide collapse.

Where was the announcement of this? There was no announcement.

However Hank Greenberg is resurfacing in AIG leadership even during an SEC investigation because without him, no one else can remember where the counterparty risks are. In order to save the insurance industry, shareholders have looked past alleged SEC violations as there is no one with Mr. Greenberg's awareness of the market and counterparty agreements who can hope to navigate the coming challenges. In the 4th quarter, the US will have another record foreclosure announcement. Once you're over 25% (25 basis point) foreclosure, all models are broken.

Under a consumer credit melt-down, Capital One and/or Wachovia are likely going to put a massive foreclosure liability to an insurance company and the insurance company will not have liquidity to cover the exposure.

This is the problem we got into when we issued credit card debt on top of secondary mortgages - (inflated the value of the home) and gave out credit based on faux equity that no one really had.

The reason why this problem is the second shoe to fall (subprime mortgage collapse was the first shoe) is because consumer credit has a different foreclosure frequency than traditional mortgage credit.

December is when the maturity of the giant buyout of the economy moves.

By December, you'll have a second round of charge offs based on consumer credit. The real big problem – when you foreclose on consumer credit, people stop buying things. When people stop buying things, we don't have a tertiary way to pump liquidity into the market. People won't have extra cash from their paychecks and won't have capacity on their cards.

Try this case study:

Go to the mall and stand in front of counter at Victoria Secret. Watch what happens when someone wants to pay with cash. The clerk won't know how to ring up cash. They will need a manager to come over to give change and unlock drawers. When you don't have capacity on those cards, you don't buy things. VISA credit cards actually denigrate using cash in their run-up-to-Christmas add campaign.

Next, go to any savings bank data set. If you were going to spend $1000 in cash this Christmas, can you do it? For the most part, the answer would be "no" because we have had a net negative spending for the last 5 years.

Therefore there will be depressed consumer spending this Christmas but what is spent, people will overcharge. This will take what used to be good investments in CDOs and will change the dynamic. If you used to be a person who paid their bills on time, you will now only pay half. If the credit companies are counting on the top two tranches to pay their card off in full and they don't, they won't have liquidity to cover the rest. The banks cannot afford the top tranch paying half.

The estimates are out. There will be at least $400B in the first round of charge offs in the CDO market.

We're not going to be done with the subprime mortgage when the CDOs fall. Therefore we will have an insolvency problem with the banks that are mentioned above.

This is the kiss of death of a privately held Federal Reserve. For the Federal Reserve to function, its stakeholder banks (like JP Morgan Chase) must remain viable and liquid. When one of them, or any major bank in the U.S. (like Bank of America, Citibank, Wells Fargo, Bank of New York, Washington Mutual, etc.) is impaired or ceases to exist, the architecture of the Fed's capacity to respond to systemic challenges is unsustainable.

If the banks have no money, they can't pump liquidity into the market. Taking half of a trillion dollars out of market in a single distressed write down becomes problematic. The US banking system does not have the liquidity to take the hit.

The actual solvency of the Federal Deposit Insurance Corporation is relatively indecipherable due to the fact that their treasury management processes (and the risks of their own investment strategies) are not uniformly disclosed with sufficient transparency. The FDIC was set up for isolated problems with a few bad banks but is NOT prepared to "insure" the system in an industry-wide crisis. The actual liquidity reserve of the "insurance" that Americans view as their safety net is 1/100th the actual exposure of outstanding deposits. The actual coverage ratio for the Bank Insurance Fund (BIF) fell below 1.25% in 2002, the same year that less stable credit practices were adopted by America's leading banks.

The funny part is that the Federal Government will be on holiday when all of this happens. There will be no one to put freeze actions and moratoria on actions. The only way you stop the cataclysm is to put together civil actions on deposit withdrawals.

As I discussed previously, the Chinese currency wild-card may become relevant far sooner than expected. An effort by China to convert its $1.4 trillion U.S. Treasury holdings into euros is not viable for many reasons – not the least of which is the European Central Bank's inability to absorb such an event. As China continues its rush away from supporting U.S. Treasuries and as Middle Eastern investors are buying them up in more diversified holdings, a new "currency exchange" is unfolding. Realizing that they cannot liquidate their holdings, it appears that the Chinese are currently using their U.S. Treasury holdings as collateral for euro denominated purchases and long term infrastructure transactions. In other words, they may be "liquidating" their holdings as collateral and, in so doing, effectively migrating to non-dollar value without ever having to officially dump their current Treasury holdings.

Therefore, collateralize the credit in dollars – especially if you're long in dollars. The lender/financier won't call the note because you have it structured in such a way to both allow it to perform and hold illiquid collateral that no one wants. This essentially inflates euros. Although you can't sell dollars, the whole purpose of collateral is that it is a second source of payment – collateral is there to down rate the risk of the loan. Secondary becomes irrelevant.

When February comes, the Chinese are going to do something as they will have to decide what the exposure is going to be with the treasury. As I see it they have to just dump the treasury. They only keep it because they can use it – they have 43% direct/indirect of US treasuries so they'll dump them on the market.

The US Congressional pressures to decouple the RMB will work, but not in the way we want. Our plan includes helping them hold on to the treasuries, it does not involve them not holding the dollar anymore. The US wanted the tether to be part of the float. This will cause disenfranchisement of the US electorate (during primary season). February is also when public (media) will realize we won't pull out of this.

Side note: Mayor Bloomberg could enter the race at this point, being the savior candidate (at least economically), but has $1B dollars in non-liquid money so he may not be able to enter.

March is when we realize that the dollar doesn't come back.

OPEC price with the whole fluctuation of oil futures presages the event. They are going to run the price of oil as high as they can get it on the dollar, while buying US treasuries from China with the money. When the dollar does collapse, they'll flip denominations. The wild card is long about March when the OPEC cuts spot oil off the dollar to the euro. One can look at the current oil price at close to $100/barrel and fail to see that, as this premium price is currently turning around and investing in a weakening dollar, the effective price (less the dollar investment hedge) is probably closer to $50/barrel than the spot price reflects.

Currency problems will change the game – they are financially structuring themselves to take the hit.

When we can't afford to buy oil commodities on a spot market – it compounds the problem however the consumer that Saudi Arabia ships to is liquid (China). In the US it is a big problem. There is still a market for oil; it just changes. When you come out of Straits of Hormuz, turn left to China.

'When the dollar does collapse, they'll flip denominations. The wild card is long about March when the OPEC cuts spot oil off the dollar to the euro. One can look at the current oil price at close to $100/barrel and fail to see that, as this premium price is currently turning around and investing in a weakening dollar, the effective price (less the dollar investment hedge) is probably closer to $50/barrel than the spot price reflects."

So at the end of the article with your comments at the end do you feel it is to late to invest in the euro and hold the dollar??? or the euro is a good investment at this time based on your observations??? You think the dollar will be half of what it is worth today meaning 50$ a barrel??? im confused?? The dollar is so weak right now..... PM if you like.....good article and observations!

Dinartank is asking exactly what I wanted to ask Off-ShoreWealth. Thanks. Nidya

So at the end of the article with your comments at the end do you feel it is to late to invest in the euro and hold the dollar??? or the euro is a good investment at this time based on your observations??? You think the dollar will be half of what it is worth today meaning 50$ a barrel??? im confused?? The dollar is so weak right now..... PM if you like.....good article and observations!

I don't feel the Euro is worth investing in either at this point as it benefited from U.S. dollars plunge already, so I am sticking with CAN and Swiss Franc, and of course dinar. We know OPEC is talking about basket and moving away from dollar, but the Saudi's have too much invested in dollar to go along with Iran and VZ, and we already know Kuwait moved away from dollar, so it sure is getting interesting. (g)

Good luck and health to all, Mike

Originally Posted by Offshore-Wealth.com

I don't feel the Euro is worth investing in either at this point as it benefited from U.S. dollars plunge already, so I am sticking with CAN and Swiss Franc, and of course dinar. We know OPEC is talking about basket and moving away from dollar, but the Saudi's have too much invested in dollar to go along with Iran and VZ, and we already know Kuwait moved away from dollar, so it sure is getting interesting. (g)

Good luck and health to all, Mike

Mike thank you for all your posts and encouragement....do you have an opinion of the YEN?

Originally Posted by payoffloans

Mike thank you for all your posts and encouragement....do you have an opinion of the YEN?

I look at the Yen like Yin and Yang, up and down every other day, so even though I am into FOREX trading, I have always stayed away from Yen for the most part. As example, down for last two days, but I do watch it.

Good luck and health to all, Mike

Fed Official Warns About Wall St Turmoil
Wednesday November 28, 10:40 am ET
By Jeannine Aversa, AP Economics Writer
Kohn: Persistence of Wall Street Turmoil Could Hit Consumers, Businesses

WASHINGTON (AP) -- If a fresh bout of turmoil on Wall Street persists, it could further crimp the flow of credit to people and businesses, raising risks to economic growth, a Federal Reserve official said Wednesday.
Donald Kohn, the No. 2 official at the Fed, said the increased turbulence in recent weeks "partly reversed some of the improvement in market functioning" seen in late September and in October. The credit crunch had taken a turn for the worse in August, causing stocks to nosedive. Fresh worries about troubles in the housing and credit market have unnerved Wall Street once again.

"Should the elevated turbulence persist, it would increase the possibility of further tightening in financial conditions for households and businesses," Kohn said in remarks to the Council on Foreign Relations in New York. A copy of his speech was made available in Washington. Heightened concerns about larger losses at financial institutions now reflected in various markets have depressed stock prices and could induce lenders and other financial companies "to adopt a more defensive posture in granting credit, not only for house purchases but for other uses as well," Kohn warned.

The big worry for economists is that consumers and businesses will cut back on spending and investing, dealing a blow to the economy. The odds of a recession have grown this year. Still, many economists remain hopeful the country will be able to weather the financial storm.

Against the backdrop of such uncertainty about how forces will play out with consumers and businesses, Kohn once again said Federal Reserve policymakers must remain "nimble." In his view, "these uncertainties require flexible and pragmatic policymaking," Kohn said.

Wall Street viewed Kohn's comments as hinting that additional rate cuts could be forthcoming.

The Fed has sliced interest rates twice this year -- in September and late October -- to prevent the ill effects of the housing collapse and credit crunch from throwing the economy into a recession. Fed Chairman Ben Bernanke and his colleagues at the October meeting signaled that further rate reductions may not be needed to help the economy through its rough spots. Since then, however, financial markets have suffered through another period of turmoil.

Fed Official Warns About Wall St Turmoil: Financial News - Yahoo! Finance