. June 11, 2008 SouthAmerica: When the dust settles the damage is going to be worse than the picture painted on this article. This article represents the optimistic and conservative view of things to come. ***** âHome price drop means $4 trillion in lost capital. Reuters - Wednesday June 11, 2008 By Walden Siew NEW YORK (Reuters) - No one knows when the credit crisis will end. But when it does, U.S home prices may have lost a third of their value, high-yield bond valuations will hit levels close to those seen during the last recession, and what may amount to $1 trillion of Wall Street losses may translate into almost $4 trillion of lost access to capital. That's the view of top credit analysts, who say a U.S. housing decline, sparked last year by subprime mortgage debt defaults, will likely last another two years as a wider group of consumers, including prime borrowers, feel the pinch from a tightening of credit. Peter Acciavatti, a credit analyst and managing director at JP Morgan Securities Inc, said in an interview that Wall Street write-downs and losses totaling at least $325 billion so far may ultimately mean $3.9 trillion in tighter credit conditions. Moreover, home prices may fall as much as 30 percent from their peak in 2006 and not hit bottom until 2010, with greater drops still in subprime mortgage debt markets, he told Reuters. "The housing correction is in a down phase," Acciavatti said during a high-yield bond conference in New York. "We're now going through a phase of deleveraging and the pulling out of easy money." Credit markets also will be under pressure from massive write-downs and losses stemming from consumer debt. The International Monetary Fund has estimated write-downs from global investment banks may approach $1 trillion, while J.P. Morgan forecasts the figure may climb as high as $600 billion. A senior Fitch Ratings analyst forecast more defaults and delinquencies for U.S. home mortgages, and said the highest default rates are coming from recent mortgages originating in the last few years. "There are a lot more mortgage defaults to come," said Glenn Costello, a Fitch Ratings managing director. "We see an ongoing high level of default." High-yield corporate bond default rates may climb to 2.25 percent this year and jump to 6.5 percent next year, Acciavatti said in a separate interview. The default rate is now 0.75 percent, up from 0.34 percent at the start of the year, according to JP Morgan data. Acciavatti, speaking at the New York Society of Security Analysts conference, also said junk bond spreads will push past 800 basis points and may top 900 basis points as the crisis drags out. High-yield bonds now trade at spreads of about 650 basis points over Treasuries, according to Merrill Lynch & Co data. Tightening credit conditions, high energy prices and weaker growth prospects mean that interest in distressed debt sales and trading may be on the rise, according to Jon Kibbe, founding partner at law firm Richards Kibbe & Orbe LLP. Other analysts pointed to opportunities in the loan market for high-yield investors looking for value in other markets. (Reporting by Walden Siew; Editing by Jonathan Oatis) Source: http://biz.yahoo.com/rb/080611/usa_housing_jpmorgan_junkbonds.html .
. Dandxq: SA, The problem with your posts is they lack a lot of objectivity. Then you make arrogant statements like we are lucky to have you, cmon! ****** October 3, 2008 SouthAmerica: Reply to Dandxq I wrote the following article 4 years ago in November 2004. The Sequel to the enclosed article that I am in the process of writing it right now it will be even better because the economic chaos in Germany in 1922, and in Zimbabwe in 2008 is going to look good compared with what is store for the United States economy. ***** Itâs 2008. The US Has Dragged the World into a Depression. Written by Ricardo C. Amaral Brazzil Magazine - Saturday, 12 February 2005 Today, Brazil and most South American countries in general are disconnecting from the United States economy, and at the same time they are making new strong connections to the economies of such countries as China, India, and Russia. Since I wrote a letter to the president of the European Central Bank in December 2001 giving him the reasons why Brazil should adopt the Euro as its new currency, most of my predictions came to past, and since then the US dollar has declined in value against the Euro⦠Today, wealthy Brazilians still have billions of dollars invested here in the United States. Most of these investors probably will lose a large part of their investments in the coming years, because they will not take their money out of the US, and they refuse to believe in the coming melting down of the US dollar and US economy. Following is an example of the type of newspaper article that they will be reading at the time of the next United States presidential election in November of 2008. Headlines - October 31, 2008 Here we are one week away from the 2008 United States presidential election. What a ride Americans, and the rest of the world had in the second term of the Bush administration. Some people did not believe it was possible for George W. Bush to do a worse job on his second term, than he did in his first. A number of events came together to form the perfect storm that pushed the globe into a worldwide depression. The current worldwide depression is getting worse by the day, and it is having a more profound impact than the depression of the 1930âs. Today, some mainstream economists have identified George W. Bush and his administration as the culprits responsible for setting the spark that caused the meltdown of the global economy. The entire fiasco started in November of 2000, with the conclusion of the American presidential election, when the US Supreme Court selected George W. Bush as the new president of the United States. If there were a similar election in any country in Asia, South America, or in Africa, I am sure that the United States mainstream media would characterize the event as a âcoup d'état.â â¦When Actual Performance Doesnât Count In November of 2004, the world was shocked to find out that the American people had re-elect George W. Bush. Among other things George W. Bush and his close circle of advisers had placed the United States on a very delicate international position when the United States attacked Iraq. The reasons given to the international community of why the United States had to go to war against Iraq, turned out to be completely wrong. After looking for two years, the Americans never found the âWeapons of Mass Destructionâ that they claimed Saddam Hussein had at the time of the invasion in March of 2003. Remember the American people (59 million Americans, about 27 percent of the total eligible voters in the US) voted to keep George W. Bush in power despite his terrible performance during his first term. They also gave him complete control of the American government with a Republican majority in the House of Representatives and in the Senate. That was history repeating itself, and it was the 1920âs all over again. George W. Bush followed the footsteps of two other prior Republican presidents - Ronald Reagan, and of his father George H. W. Bush. The Ronald Reagan years established a new mindset for the Republican Party: the level of âDebt Doesnât Matter,â and they thought the US government could get away with a reckless policy of large deficit spending with no end in sight. During the years of the Bush administration - from 2001 to 2008 - the United States finances were completely out of control, and the United States had been borrowing around 89 percent of the savings of the entire world - year after year. For anyone to understand what the US government was really doing in terms of its finances during the Bush administration, you had to study what happened in similar cases to corporations such as: Enron, WorldCom, and Global Crossing - massive administrative mismanagement, and deception. The Money Pit To put the American fiasco in perspective, we have to put the spotlight on the United States governmentâs cumulative national debt. The cumulative US national debts were only $ 930 billion dollars as of December 31, 1980 - right before Ronald Reagan became president of the United States. ...that figure does not include all the other US government unfunded outstanding liabilities conservatively estimated at US$ 70 trillion dollars. Here is the detail of the additions to the US national debt by president: Ronald Reagan (8 years in office) added to US debt $ 1.7 trillion dollars. George Bush Senior (4 years in office) added to US debt $ 1.5 trillion dollars. Bill Clinton (8 years in office) added to US debt $ 1.6 trillion dollars. George Bush Junior (first term, 4 years in office) added to US debt $ 1.8 trillion dollars. George Bush Junior (second term, 4 years in office) added to US debt $ 5 trillion dollars. Since December 31, 1980 the Republican presidents added $ 10 trillion dollars to the cumulative US national debt, and the Democratic president added $ 1.6 trillion dollars. The Republican administrations added 87 percent of the new US national debt, and the Democratic administration added only 13 percent of the new debt. All Republican presidents starting with Ronald Reagan have had a complete disregard for sound long-term economic policy, and how their current policies would affect future generations. All these Republican presidents had one thing in common: they did run a very large credit card bill during their administrations, and they were leaving all these debt to future American generations to pay. Since December 31, 1980 the United States had only one fiscally responsible president - former president Bill Clinton - a democrat. History Repeats Itself During George W. Bushâs presidential campaign for the 2004 election no one in the US mainstream media brought to the attention of the American people that: âthe United States had a Republican president, and Republicans had a majority in the House of Representatives, and in the Senate during the years 1921 to 1930. And we all know the result of the Republican policies during these ten years - The Great Depression of the 1930âs.â Today, looking back from our point of view in October 2008, we should not be surprised that Americans had learned nothing from their prior history. The Republicans policies and complete control of the US government from 2001 to 2008 resulted in a major meltdown of the US economy - and the first âGreat Depressionâ of the new Millennium. â¦The First Great Depression of the New Millennium During the second term of George W. Bushâs presidency, finally all the American mismanagement and mistakes did catch up with the American economy, and a number of trends merged into a perfect storm causing the final meltdown of the US economy. The American economy went through a downward spiraling out of control implosion. Massive US government budget and trade deficits forced the Federal Reserve Bank to raise interest rates to try to stop the steep decline of the US dollar in world markets against other currencies. Soon after September 11, 2001 the US dollar started sinking in world markets like the Titanic. The Economist had a Special Report regarding the US dollar on its December 2004 issue - âThe disappearing dollar.â The article said: the decline of the US dollar in the last 3 years makes the United States responsible for the biggest international monetary default in the history of the world â¦The world lost its confidence in the US economy because they realized that the US economy was over leveraged, and would not have the necessary cash flow to pay its bills in the future. The US economy was outsourcing its good paying jobs by the millions to other countries - in the last four years the US economy had exported over 10 million jobs. A flood of US corporations started reincorporating in tax havens to avoid paying US corporate taxes. To compound the US economic problems, US corporations started repudiating the benefit payments of their pension and health plans. Everybody wanted to pass their pension responsibility to the US government - the trend started with the steel industry, then the airline industry, the major auto manufacturers, and after that, every company with a substantial pension plan. The US government had no choice other than to swallow approximately US$ 600 billion in new pension liabilities. â¦the market dynamic of all these events combined to cause a major institutional collapse in the derivatives market, and that started a domino effect in the entire financial system causing a massive meltdown. Panic among the major holders of US dollar also contributed to the stampede like we had never seen before - and at the end, Chernobyl looked like nothing when compared with the final meltdown of the US dollar, and US economy during the summer of 2008. Source: http://www.brazzilmag.com/content/view/1424/49/ Hits: 8,459 .
. October 6, 2008 SouthAmerica: Someone sent me an article yesterday to let me know that the Brazilian air force announced Oct. 1 three finalists in a long-delayed competition to supply the countryâs next-generation multirole fighter aircraft. Then I responded to that person that I had written an article about that subject a few years ago. He sent me another email asking me for a copy of my article. By the way that article is very interesting in many ways as you be able to see it when you check it out as follows: When you read that article keep in mind I wrote it in December 2002, and Brazzil Magazine and âThe Brasiliansâ published the article in January 2003. Brazzil Magazine â Jabuary 2003 Getting Ready for War http://www.brazzillog.com/pages/p101jan03.htm Quoting from that article: âBrazil is about to spend $700 million dollars on a fleet of jet fighters. Brazilian authorities should use this opportunity to bring new technology to Brazilânot only for the production of state-of-the-art jet fighters, but also to build nuclear weapons. ⦠The Brazilian government should include as part of this new partnership with the French and Chinese, an agreement that they will transfer to Brazil and will help the Brazilian government with the know-how to build nuclear weapons. ⦠I believe that the Dow Jones will sink to the 5,000 to 6,000 levels when the US corporations start expensing their real pension costs, plus the costs of stock options, and when they stop fudging their numbers. When many US corporations start reporting more realistic numbers to the public, their earnings will go downâand the stock prices will follow. It is well understood that when corporations such as General Motors, and Ford are in trouble at the same timeâthat means that the entire US economy is in trouble. ⦠The housing bubble is ready to burstâ¦. For the people who are unemployed, the economic depression is already here. For the people who still have jobs, they know that if they lose their jobs it will be almost impossible to find a new job. The difference between past recessions and the current job slump is that the people laid-off in the past, would be rehired when the economy recovered. This time around most people's jobs have gone forever. We are in the beginning stages of a worldwide depression. The Bush administration recognizes the realityâthe best days of the American economy are long gone, and today the system is running on borrowed money. The federal government, the states, the companies and the public are all surviving on credit. How far can this situation keep going on before the house of cards collapses? ***** Stratfor Today - October 2, 2008 JEAN-PIERRE MULLER/AFP The Dassault Rafale production line near Bordeaux, France Summary: On Oct. 1, Brazil named three Western finalists in a competition to provide its next-generation multirole fighter aircraft. Looking beyond the airframes, this is a long-delayed acquisition program that Brasilia may now be poised to execute in short order. In doing so, it would set a significant new precedent as the Brazilian military moves toward a comprehensive program of defense reform and modernization. Analysis The Brazilian air force announced Oct. 1 three finalists in a long-delayed competition to supply the countryâs next-generation multirole fighter aircraft. Even more important than which airframe the air force selects is the forward progress in the program itself â and what it could signify for Brasiliaâs capacity to reform and modernize its military. According to the Brazilian air force, the Swedish Saab Gripen NG, the French Dassault Rafale and the U.S. Boeing F/A-18E/F Super Hornet have been short-listed for the final phase of the competition, which is to be decided in 2009â¦. .
. Jayford: He has been wrong about virtually everything, and may one day be published in an English speaking (respected) magazine or paper. ******* November 11, 2008 SouthAmerica: Thatâs what people like yourself keep saying all along for example: 1) In December 2001 when I wrote a letter to the President of the European Central Bank saying that the US dollar was going to decline in the coming years against the euro â since that time the US dollar lost 50 percent of its value against the euro. 2) On the same letter I mentioned that the price of gold was going to go up in US dollar terms accordingly with the devaluation of the US dollar. At that time gold was trading at US$295 per oz. 3) When the Fed Funds was 1 percent I said that they had to bring the Fed Funds rate up to around 5 percent â and Bernanke brought up to 5.25 percent during that time. 4) I wrote the enclosed article exactly 4 years ago that people like you laughed about it â people with absolute no foresight â Monday morning quarterbacks like yourself. Itâs 2008. The U.S. Has Dragged the World into a Depression. http://www.elitetrader.com/vb/showthread.php?s=&threadid=124509 Please read again this article and tell me how wrong I have been all this time. And keep in mind I write about things before they happen that is why people like you usually laugh about the subjects that I write and after they come to past - then people like you (Monday morning quarterbacks) say that you knew all along that this was going to happen. I have been saying for a while that we are descending into the first great depression of the 21st Century â and I have posted a lot of information on this forum about this new great depression. Please write a few comments against my forecast since that would give us a chance to laugh about your comments a few years in the future in the same way we look back to the comments posted after my article on Brazzil magazine in February 2005. Here is what people said about my article at the Brazzil magazine website following my article: Comments from February 12 to 15, 2005 1) Interesting fantasy! â¦based on facts selected to bolster the author's viewpoint. 2) Fantasy Indeed! This author has an extremely active imagination. 3) Miscalculation Without the need of investigating further, this casts doubt on all of the other 'facts' presented by the author. 4) Guest Interesting fiction here. Demonstrates how easily a journalist can create deception merely by inserting and omitting facts as he pleases. *** Comments on the same article February 15, 2008 and September 30, 2008 5) Amazing accuracy written by Mark, February 15, 2008 I was just going through websites trying to see when people predicted the next Depression. Whether in 2008 or 2009. I came across a forum where your screen name was "SOUTH AMERICA." I just now read this and WOW. I can totally see all of that happening and am already seeing it happen with my own eyes and ears. 6) written by Marilyn, September 30, 2008 What would you do now, since your predictions here have come to fruition, and NO ONE KNOWS WHAT TO DO OR BELIEVE.! I found you on Charlie Rose' site. Hope you stay informative there. Thank you! ***** I have been wrong about one thing - I thought Al Gore would jump in the presidential race and he would become the new president of the United States. I am 100 percent sure that Al Gore would provide more confidence to the rest of the world right now about handling the Perfect Storm and the first great depression of the 21st Century. I still think that Barack Obama is a rookie and that he will have a harder time confronting all the problems that are just ahead of us. At this point there is no two ways about it or 1) Barck Obama does an outstanding job and becomes the new FDR - or 2) the high expectations, and the weight of the promises that he had to make to a bunch of people to become president of the US can go sour very quickly and his presidency can become a disaster - even with a Democratic Congress - and he becomes a one term president. Even though in my opinion he is not seasoned enough for that job I hope he surprises everybody and becomes the new FDR of the 21st Century. ***** Regarding my prediction that the US has dragged the world into the first great depression on the 21st Century. Keep in mind that we saw the demise of the capitalist system in the United States in the last 9 months. The demise of all American investment baking houses that had been around for 150 years. The nationalization of a large part of the private sector. And US government intervention as never seen before to keep the US economy from spiraling completely out of control into a massive economic meltdown. The US government is throwing trillions of US dollars to keep the US economy from descending into the black hole of the mother of all great depressions. The US economy is being kept artificially alive by massive US government intervention - and what kind of economic system we have today in the United States it is anyone's guess. Only in future years we will be able to look back and will be able to figure out what kind of new economic system has been adopted by the US government after the quick demise of its capitalist system during the summer of 2008. By the way, Jayford - only fools like yourself after all this time with all the evidence available on my published articles still would question my track record and foresight. .
SA, It seems your entire life is nothing but US bashing. That is OK, many people do this. But why do you live here? Many people have asked you this, but you never answer. GO BACK TO BRAZIL.
. Jayford: SA, It seems your entire life is nothing but US bashing. That is OK, many people do this. But why do you live here? Many people have asked you this, but you never answer. GO BACK TO BRAZIL. ******** November 12, 2008 SouthAmerica: Because I have been writing about the cumulative mess that has been growing by leaps and bounds related to the incompetence, greed completely out of control, and a lot of lack of common sense in the US financial system â thatâs considered bashing by certain people like you. This incompetent group of people who got hold of the system and have been milking it to the bone â and they still are including the likes of the Goldman Sachs network and so on⦠- they also have been swindling investors from around the world and burning on its way any sense of credibility of the US financial system and markets. What we have today is only the carcass of the old United States that people still think still alive. It took only one generation to destroy the financial foundations of this country. When I first wrote about the coming decline of the US dollar in 1999 people like you called an idiot. When I wrote about the coming real estate bubble in 2003 and the financial consequences when such bubble burst, people like you also laughed at my warning. I had been writing about American declining influence in South America and the rise of Chinaâs influence in South America long before that trend caught the interest of the mainstream media. In the last 8 years I have been writing about what a bunch of incompetent people we have had running the United States and they are leaving behind just the carcass of the country that was there in 2001 when these gang took over. I am not surprised that we are descending into a new Great Depression and the fact that the world is being reshaped as never seen before as we move into the 21st Century. I just watched on TV Treasury Secretary Henry Paulson give his latest hard sell â he sounds more like a Con Man selling snake oil than anything else. The shenanigans that had been going on in Wall Street for a long time still going on today at the US Treasury and also at the Federal Reserve under the leadership of one of the people responsible for causing this massive mess (Hank Paulson). We had a bait and switch swindle of the American taxpayer â I had a gut feeling that when Hank Paulson with the support of Warren Buffet when they requested a blank check â at that point these guys already knew that was going to be the last party for Wall Street for a while. Most Americans have not realized as yet that people such as Hank Paulson are part of the problem and not of the solutions. There is no transparency on all these dealing and everything is being handled just like in a Banana Republic where you spread the wealth among your cronies. Today the US government does its business just like in Nigeria a country well known for widespread corruption. If you think this is bashing the US government then so be it. If you are happy in having these Con Man and people who does not give a shit about the future of this country running this place into the ground as they have been doing for the last 8 years â then good luck to you. I have been writing about the decline of the US economy and I have been documenting and giving the reasons behind for such a fantastic decline in such a short period of time. Since you donât have any intelligent argument to argue against what I have been saying then you were left with only this silly response: GO BACK TO BRAZIL. You claimed that you went to a top University and that you had a superb education â what happened to that education that you claim that you had? .
SouthAmerica has made a lot of good calls......and seems to work really hard at trying.... I enjoy reading your material SA......keep up the good work !!!!! My opinion is that SA writes what he writes because he really likes the US.....and vents his concerns in his own way..... Like anyone else....just filter out the bad stuff ....and focus on the stuff you like..... Looks like the D word just might happen...as SA has called it..... Check this out.... http://www.theglobalguru.com/article.php?id=223&offer=GURU001
SA What are your thoughts on the Brasilian economy over the next couple of years. Also you thoughts on the Real and real estate would be given careful thought. regards f9
. November 20, 2008 SouthAmerica: Reply to Fearless9 Sorry I forgot to answer your posting. Brazil is fine, and right now I am writing another article about Brazil and the future. I am having a hard time figuring out the future of the United States, since I know I am here aboard of the Titanic and the big ship just hit the iceberg. We have a Con Man as Secretary of the Treasury and he seems lost on his job since the demise of Lehman Brothers and after he distributed hundred of billions of US dollars of bailout money to his pals in the financial area. Henry Paulson turned out to be just another jackass of the Bush administration. Ben Bernanke is turning the Federal Reserve into the biggest bank in the world and at this point I would not be surprised if he takes over Citi Group before that bank goes out of business. At this point I don't know what kind of economic system we have in the United States and how the new system works. .