As I warned last year, Portugal is on the verge of getting bailed out. Just like its already bailed cousins in insolvency, Greece and Ireland, Portugal declared to the very last minute that they didn't need, and would not ask for a bailout. Credibility is the key!!! What many may be missing is that the cause of all of this mess is the overleveraging of banks into over valued real estate. The default or restructuring of debt in Portugal, Greece or Ireland (or realistically a combination that may include larger countries) will spike rates that will make the 2008 real estate crash look like a bull rally. Here's the lay of the land...
A systematic plan to create the illusion of stability and provide no-risk profits to the mega-Wall Street banks was implemented in early 2009 and continues today. The plan was developed by Ben Bernanke, Hank Paulson, Tim Geithner and the CEOs of the criminal Wall Street banking syndicate. The plan has been enabled by the FASB, SEC, IRS, FDIC and corrupt politicians in Washington D.C. This master plan has funneled hundreds of billions from taxpayers to the banks that created the greatest financial collapse in world history. The authorities had a choice. This country has bankruptcy laws. The criminally negligent Wall Street banks could have been liquidated in an orderly bankruptcy. Their good assets could have been sold off to banks that did not take their extreme greed based risks. Bond holders and stockholders would have been wiped out. Today, we would have a balanced banking system, with no Too Big To Fail institutions. Instead, the years of placing their cronies within governmental agencies and buying off politicians paid big dividends for Wall Street. Their return on investment has been fantastic.
The True Cause Of The 2008 Market Crash Looks Like Its About To Rear Its Ugly Head Again, With A VengeanceSubmitted by Reggie Middleton on 03/11/2011 13:16 -0500
I said it! Bill Gross said it (and put his money where his mouth was by selling off all US treasuries)! Common sense says it... Central Bank manipulated interest rates are too low. They will rise. What happens when they rise during a supply glut of real estate, foreclosure issues and a slow economy??? Put it this way... What made the markets crash in 2008: unemployment, slow economy, snow... Or real estate prices getting in touch with reality?
Until the mass of overbuilt homes and commercial properties are liquidated, credit will remain tight and unemployment will remain high. What you thought you knew about the credit situation is wrong.
JP Morgan Purposely Downplayed Litigation Risk That Spiked 5,000% Last Year & Is Still Severely Under Reserved By Over $4 Billion!!! Shareholder Lawyers Should Be Scrambling NowSubmitted by Reggie Middleton on 03/02/2011 08:36 -0500
This has to be one of the biggest "I Told Ya So's" of the year! JP Morgan is forced to come clean on the legal liabilities that I have been pounding the table about for two years as Wall Streets sell side coterie and JPM management have managed to underplay for about as long. Now, it looks as if the chickens are coming home to roost...
The Truth! The Truth! YOU CAN'T HANDLE THE TRUTH!!!
Oh, I just love that scene. Doesn't Jack Nicholson deliver?
A significant extension to my 3 minute Q&A on CNBC's Fast Money show yesterday that, in my opinion, provides irrefutable evidence that commercial real estate is about to enter a cyclical bear market. Then again, what do I know...
In Case You Didn’t Get The Memo, The US Is In a Real Estate Depression That Is About To Get Much WorseSubmitted by Reggie Middleton on 02/24/2011 11:42 -0500
What!!!???? You didn't get the memo?
Today's Headlines Show Interest Rate Volatility, Sovereign Contagion, Geo-political Unrest & Double-Dip Recessions Coming: What's The Answer To Valuing Global Real Estate Through This Mess?Submitted by Reggie Middleton on 02/15/2011 12:36 -0500
I'm putting together what I see as solutions for the many pricing and valuation problems that I see coming down the pike. If you think real asset markets are a little soft now, wait until rates are controlled more by market forces than by concerted central planning cartels.
Here Comes Executive Order 6102 For The QE Generation: Dutch Central Bank Orders Pension Fund To Sell Its GoldSubmitted by Tyler Durden on 02/10/2011 11:36 -0500
Perhaps the most stunning example of what may be in store for asset managers and pension funds (and possibly retail holders) who dare to challenge central bank monetary authority comes from the Netherlands, where we have just witnessed the 21st century equivalent of Executive Order 6102. The story in a nutshell (and as translated loosely from the primary source presented below): the glassworkers pension fund (SPVG) was ordered by De Nederlandsche Bank (DNB, or the equivalent of the Dutch central bank), that it has to sell the bulk of its gold assets. After the SPVG refused to comply with the order, the DNB went to court and the decision has come out, siding with the central bank, ordering the SPVG to sell the required gold within two months. The pension fund, which invests for 1142 employees, in late 2009 had gold bars worth 34.6 million euros, or about 1400 kilograms. The total fund assets amounted to 288 million euros at that time. The DNB argued gold is a commodity and holding 13 percent was overweight in comparison to the 2.7% average that pension funds are invested in commodities. DNB has found that such a large proportion of gold is inconsistent with the interests of the participants. SPVG sees gold as a medium of exchange, such as euros, but DNB believes that the price of gold fluctuates too much for it to be classified as an investment. Translation of the translation: the central bank has now directly ordered a fund how to allocate its gold assets, because it explicitly disagreed with the fund's statement that gold is money, claiming instead that it is nothing but a very volatile commodity. Very soon no pension funds in the Netherlands will be allowed to hold any amount of gold more than the merely nominal. This latest gold confiscation equivalent event is most certainly coming to a banana republic near you.
FASB Bends Over For The Final Time & Accuracy In Financial Reporting Dies An Ignominious Death, Proving Ignorance IsTruly Bliss With Other People's Money!!!Submitted by Reggie Middleton on 02/09/2011 09:13 -0500
Regulatory Capture now appears to be accepted policy procedure as FASB bends over and gives up on even asking financial entities to report accurate market values, leaving only those who spend their lives in spreadsheets and arcane nomenclature capable of discerning trash from treasure. I guess it best that way. The truth has this proclivity to hurt people's feelings, not to mention certain ill gotten gains...
Steve Abrahams, Head of MBS and Securitization Research predicts home prices to drop nationally another 5-11% through 2012 (Florida of course will take much longer.) Oooo, fun!
Less Than 24 Hours After My Warning Of Extensive Legal Risk In The Banking Industry, The Massachusetts Supreme Court Drops THE BOMB!Submitted by Reggie Middleton on 01/10/2011 13:01 -0500
Those who think this will not, better yet... has not metastasized into a very significant problem has overdosed on the Sell Side Kool Aid once too often. The banking industry is soon to be the new tobacco industry.
Morgan Stanley's real estate division hits yet another home run in (in fees) as investment clients get (literally) taken to the bank.