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US Recession and Credit Crisis 2008

News_Letter / Credit Crisis 2008 Mar 10, 2008 - 08:34 PM GMT

By: Nadeem_Walayat

News_Letter

The stock market continues to trend lower towards a retest of the January lows with an increasing probability that we are now in a bear market despite a bounce off the January lows as the market prices in a definite US Recession.

The economic situation continues to deteriorate as the credit crunch turns into a credit crisis that has yet to reach its bad debts climax.


The Market Oracle Newsletter
March 10th, 2008            Issue #8 Vol. 2


Dear Subscriber,

The stock market continues to trend lower towards a retest of the January lows with an increasing probability that we are now in a bear market despite a bounce off the January lows as the market prices in a definite US Recession.

The economic situation continues to deteriorate as the credit crunch turns into a credit crisis that has yet to reach its bad debts climax.

The US Fed's strategy of providing the banking system with liquidity in exchange for bad debt as collateral is the same mistake that Japan made during the 1990's which resulted in a depression that lasts to this day.

The consequence of rampant money supply growth is manifesting itself in inflation, this is something that the US Fed cannot deal with until AFTER the US Presidential election, and where the Fed goes so must the worlds central banks follow suit. Though the European Central Bank is attempting to hold the line against the building pressures for a rate cut in the face of inflation, but as soon as the economic picture turns decidedly negative so will the ECB cut rates in the near future.

This implies that for the next 12 months at least the world has entered a stagflationary environment. Good for commodities, but bad for assets such as stocks and housing.

Last weeks freebie from our friends at Elliott Wave International- the current issue of Robert Prechter's Elliott Wave Theorist- Worth $29 is Still available for literally just a few hours more so be quick if you have not already grabbed it! Click here

Your stagvesting analyst,

Nadeem Walayat,
Editor of The Market Oracle

In This Issue
  1. Peak Oil - True or False?
  2. Beat the Panic With Commodity ETF's - Major Action Alert
  3. Stock Market Technically Damaged: Is a Crash & Economic Depression Coming?
  4. Stock Markets Set to Plunge to Depths Not Seen Since the 1990's
  5. Deflating Housing and Credit Bubbles Will Lead to DisInflation
  6. US Home Owners Debts Exceed Equity
  7. Real US Interest Rates and US Dollar Index (USDX)
  8. US Dollar-Gold: A Perfect Hyper-Stagflationary Storm
  9. Stock Market Forecast and Outlook for March 2008
  10. Eurozone Economy Heading for Hard Landing- Economic Forecast 2008
1. Peak Oil - True or False?

By: Stephen_Lendman

The arguments are so one-sided, it's practically a given that "peak oil" is real and threatening. Or is it? This article examines both sides. It lets readers decide and deals only with supply issues, not crucial environmental ones and the need to develop alternative energy sources. First some background.

The name most associated with "peak oil" is M. King Hubbert. He became the world's best known geologist when he worked for Houston-based Shell Oil Company from 1943 to 1964. His theory goes something like this. Oil is a finite resource. Peak oil, or Hubbert's peak, is the point at which maximum world production is reached, after which its rate terminally declines.

Read Article

2. Beat the Panic With Commodity ETF's - Major Action Alert

By: Sean Brodrick

These commodity markets are going wild, and I'm responding with major action — new commodity ETF recommendations I'm going to issue by mid-week, probably Wednesday. If you want to jump in, I must hear back by Tuesday.

Think the recent price explosions have been climactic?!

Read Article

3. Stock Market Technically Damaged: Is a Crash & Economic Depression Coming?

By: Robert_McHugh_PhD

This week saw a new all-time low in the Dollar, new all-time highs in Gold and Oil, but the damage continues in stocks. There was a lot of technical damage done to stock averages Friday. We got confirmation of 18 month, very Bearish Head & Shoulders tops patterns in several indices, as prices completed their right shoulders and fell decisively below necklines.

Read Article

4. Stock Markets Set to Plunge to Depths Not Seen Since the 1990's

By: Alex_Wallenwein

Super-Dangerous Dow-Gold Divergence - Gold's been going up and the Dow has been dropping for months, now. If this persists for more than maybe two more months, it can spell utter doom for global equities markets - and will cause a huge explosion in precious metals prices and shares.

Read Article

5. Deflating Housing and Credit Bubbles Will Lead to DisInflation

By: John_Mauldin

  • The BS from the BLS
  • 2,500,000 "Lost Jobs" and Counting
  • Taking a Long-Term Perspective
  • Leverage in Reverse Gear
  • What's That Hissing Sound?

The official number for employment suggested a loss of 63,000 jobs. But could it have been more like 200,000? And I will make a case for 2,000,000 lost jobs last month. This week we will take a look at the confusing labor-market picture in the US.

Read Article

6. US Home Owners Debts Exceed Equity

By: Alex_Wallenwein

The pace of expansion of all forms of debt is decelerating in the fourth quarter of 2007. Domestic non-financial debt rose 8% as a whole over 2007, .75% lower than in 2006. That may not seem like a slowdown, but consumers are changing course at the fastest pace, slowing from a pace of 6.75% annualized growth of debt in the third quarter to 5.5% in the fourth quarter. For the year, household debt rose at 6.75% compared to 10.25% in 2006.

Read Article

7. Real US Interest Rates and US Dollar Index (USDX)

By: Zeal_LLC

After sliding to its lowest levels in history this week, the flagging US dollar has captured the limelight. And it certainly should. The dollar is like nothing else, a critical linchpin that links every market and asset of global importance. The implications of the dollar's fall from grace are profound and universal.

Read Article

8. US Dollar-Gold: A Perfect Hyper-Stagflationary Storm

By: Jim_Willie_CB

The title should really be “Psychology of 1000-20-100” to give respect to the major signpost price targets. The $1000 gold target is within reach. The $20 silver target has been breached. The $100 crude oil price has been breached. Before long, all three price levels will serve as support. When a gold target of $1000 was proposed three to four years ago, most people dominated (or bound) by conventional thinking dismissed such talk as silly, irresponsible, even ludicrous.

Read Article

9. Stock Market Forecast and Outlook for March 2008

By: Hans_Wagner

If you want to beat the market, you need to invest with the trend. In looking at the trend, I believe it is best to begin with the big picture in mind and then work our way down to weekly and then daily views of the charts. You will notice that the chart and the value of the indicators change as we move from a monthly to a weekly and then a daily chart. This is a normal part of the technical analysis.

Read Article

10. Eurozone Economy Heading for Hard Landing- Economic Forecast 2008

By: Dr_Krassimir_Petrov

Economic reality will likely prove forecasts of major international institutions about Europe's 2008 growth prospects wrong. So, let us first see what they think; then we will see what I think and why.

Read Article

 

For more indepth analysis on the financial markets make sure to visit the Market Oracle on a regular basis.

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