The Ultimate Sell Signal

[LaoPo]

This is the current most 'read' and most 'emailed' article at Reuters; decide for yourself:

The ultimate sell signal

Commentary: Resignation of top GAO official directly impacts your portfolio

By Bill Donoghue, MarketWatch Last update: 6:25 p.m. EST Feb. 24, 2008

SEATTLE (MarketWatch) -- The resignation of America's unheeded and under-funded chief accountant and watchdog, along with the billion-dollar bullhorn he's been given, are the ultimate sell signals for America's stock investors.

David Walker, comptroller general of the General Accountability Office (GAO) has since 1998 been the objectively informed and outspoken critic of America's balance sheet. He has criticized supporting Iraq's dysfunctional government, pork barrel spending by Congress, unrealistic "universal health care plans" we can ill-afford or support, the escalating risks of huge deficits, fiscal vulnerability to hostile foreign governments, and a lack of will to reform our government.

"David Walker has proven that one person can make a difference," Senate Budget Committee Chairman Kent Conrad, D-N.D., said in a release. "As Comptroller General for the last decade, he has been a tireless and effective advocate for the need to make our nation's long-term fiscal situation a priority."

Facing indifference on the Hill and unrealistic spending promises, Walker is resigning with five years still remaining in his term to head the newly formed Peter G. Peterson Foundation. Peterson, senior chairman of The Blackstone Group and Commerce secretary in the Nixon administration, has pledged an astounding startup budget for the foundation of $1 billion.

That money will attack what the foundation considers "the most substantial economic, fiscal and other sustainability challenges of our current age" -- including federal entitlement programs, health care, unprecedented trade and budget deficits, low savings rates, mounting foreign debt, soaring energy consumption, an uncompetitive educational system, and the proliferation of nuclear warfare materials. Maybe Congress will listen this time.

"I have been around a very long time, and I have never seen so many simultaneous challenges that I would describe as undeniable, unsustainable and virtually untouchable politically," Peterson said in a prepared statement.

What does this mean for investors?

This sounds to me like the ultimate sell signal on America. As the next president is just under a year away from having the operational authority and consensus to take any definitive action, the Bush administration will have to act. In a highly charged election year such as this, controversial new economic proposals are unlikely to even be discussed.

When the nation's best-informed watchdog resigns and few are acting on his recommendations on his "Fiscal Wake-Up Tour," it's time to reconsider over-optimistic domestic stock investments and look elsewhere, or bet against the U.S. market.

Article continues here:

http://www.marketwatch.com/news/story/ulti...dist=TNMostRead

LaoPo

[LivinLOS]

I dont know if anyones been following the horror story that David Walker has been trying to expose ??? Makes for good viewing..

Also they just did a docu on him at sundance but I cant find a torrent.. I.O.U.S.A. Also looks to be worth watching.

[PeaceBlondie]

This is the man I have been quoting for over a year now. He says the correct national debt of the USA is not 9 or 10 trillion, but 50 TRILLION. He says that by proper accounting methods (which he knows, as the head accountant for the federal govt.), the annual deficits are far, far higher than what is claimed (and the amounts claimed are astronomical). He has warned about unfunded govt. pensions, about the defense dept. being impossible to audit, etc.

My favorite quote of his is that the largest 'deficit' in America is not financial, but political and includes private industry: a total lack of courage to say it like it is.

[VegasVic]

Thats it, you guys have finally scared me soo much that I am liquidating all my shares and financial instuments tomorrow morning and buying gold, or better yet chinese equities I guess that hyper inflation, and the total downfall of the dollar are now only months away? Ah yes what a sad ending for the great American experiment, so now what will the dollar:pound or the dollar:Euro or the dollar:baht be by the end of the year? Better yet what will gold be by the end of the year? Given the apparent imminent and utter colapse of the U.S. economy I would imagine that gold should reach at least $2000+/onuce by years end hunh? C'mon now belly up to the bar boys and be brave and give some year end predictions! O.K. I guess I'll just hunker down for the eventual colapse here in my little hamlet of Sedona and wait for the next article you guys reprint, Martin Feldstien is always good for a laugh

[cclub75]

Thats it, you guys have finally scared me soo much that I am liquidating all my shares and financial instuments tomorrow morning and buying gold, or better yet chinese equities I guess that hyper inflation, and the total downfall of the dollar are now only months away? Ah yes what a sad ending for the great American experiment, so now what will the dollar:pound or the dollar:Euro or the dollar:baht be by the end of the year? Better yet what will gold be by the end of the year? Given the apparent imminent and utter colapse of the U.S. economy I would imagine that gold should reach at least $2000+/onuce by years end hunh? C'mon now belly up to the bar boys and be brave and give some year end predictions! O.K. I guess I'll just hunker down for the eventual colapse here in my little hamlet of Sedona and wait for the next article you guys reprint, Martin Feldstien is always good for a laugh

You like games, obviously with your nickname... The point is : who cares what will be at the end of the year the exchange rate USD/THB ? This is good for casino guys.

This type of question, aimed -apparently and strangely- at debunking the bears is not very efficient in my opinion.

What is important is the trend. And this is something you don't really understand VegasVic.

The global downward trend of USD started 6 years ago.

But still, you don't believe it, you don't want to see it.

You can only play rather childish games : "ah ah ah if you can't tell me what it will be at the end of the year, then na na na nere you have no clue... I'm going to sale all my shares I'm so afraid".

Basically : you bring nothing into the discussion.

But eventually, and hopefully, you make us smile.

[PeaceBlondie]

Forget, for a moment, that the total (civilian, private sector) economy of the USA is still fundamentally sound. What Mr. Walker has been saying for a year or more, even to the London School of Economics, is that the federal economy is a shambles, and he's its accountant. The annual deficits, the total debt, the unfunded debts, etc., are a nightmare on Pennsylvania Avenue, and nobody in command of the US economy, public or private, has the balls to admit the federal government is a naked emperor falling off the penthouse balcony.

The chickens have already come home and roosted, but nobody's admitting it.

[VegasVic]

Thats it, you guys have finally scared me soo much that I am liquidating all my shares and financial instuments tomorrow morning and buying gold, or better yet chinese equities I guess that hyper inflation, and the total downfall of the dollar are now only months away? Ah yes what a sad ending for the great American experiment, so now what will the dollar:pound or the dollar:Euro or the dollar:baht be by the end of the year? Better yet what will gold be by the end of the year? Given the apparent imminent and utter colapse of the U.S. economy I would imagine that gold should reach at least $2000+/onuce by years end hunh? C'mon now belly up to the bar boys and be brave and give some year end predictions! O.K. I guess I'll just hunker down for the eventual colapse here in my little hamlet of Sedona and wait for the next article you guys reprint, Martin Feldstien is always good for a laugh

You like games, obviously with your nickname... The point is : who cares what will be at the end of the year the exchange rate USD/THB ? This is good for casino guys.

This type of question, aimed -apparently and strangely- at debunking the bears is not very efficient in my opinion.

What is important is the trend. And this is something you don't really understand VegasVic.

The global downward trend of USD started 6 years ago.

But still, you don't believe it, you don't want to see it.

You can only play rather childish games : "ah ah ah if you can't tell me what it will be at the end of the year, then na na na nere you have no clue... I'm going to sale all my shares I'm so afraid".

Basically : you bring nothing into the discussion.

But eventually, and hopefully, you make us smile.

Well, so much for your idea about getting off prozac I hope you feel better soon Cclub. FYI just in case you are interested, currencies move in cycles just like everything else and the dollar has bottomed and will begin a sustained rise later this year. Now get down to the local drug store and get that script filled and I'm certain you will feel much better

[LaoPo]

VegasVic: I'm not able to find your name on this list...how come ?

http://en.wikipedia.org/wiki/List_of_stand-up_comedians

Is it your alias ?

LaoPo

[Captain Chaos]

Forget, for a moment, that the total (civilian, private sector) economy of the USA is still fundamentally sound. What Mr. Walker has been saying for a year or more, even to the London School of Economics, is that the federal economy is a shambles, and he's its accountant. The annual deficits, the total debt, the unfunded debts, etc., are a nightmare on Pennsylvania Avenue, and nobody in command of the US economy, public or private, has the balls to admit the federal government is a naked emperor falling off the penthouse balcony.

The chickens have already come home and roosted, but nobody's admitting it.

Agreed - the US economy has shrugged off various problems over the last 20 years or so and there are numerous world class corporations still coming in with record results each year - the weakening US$ might even help some of the export-orientated ones. Guess the "floater in the bowl" may be if the banks are no longer willing or able to extend credit at sensible cost, and whether that slow down the pace of the private sector...

[LaoPo]

The ultimate sell signal: Part II

By Bill Donoghue, MarketWatch

Last update: 8:19 p.m. EST March 2, 2008

SEATTLE (MarketWatch) -- The clues are piling up: this is not a good year to be investing based on wishful thinking. I'm not a perma-bear, parsing the fine print, but I can read the writing on the wall about chronic economic crises.

The Federal Deposit Insurance Corp. is planning to beef up its division of resolutions and receiverships, which handles failed banks, by 40% this year. The division currently has 233 employees. Considering that only three banks failed last year, why do they need more examiners?

For now, the FDIC is looking to bring back 25 retired employees with experience in the bank closures of the 1980s and 1990s. No, it's not just a reunion of hard-nosed accountants who closed banks and savings and loans in notorious Friday night raids and liquidated their assets.

This is a real search for tough, experienced "lone rangers," who set upon a bank or thrift institution on a Friday to take over as much of the assets as possible and open the following Monday with full assurances for insured depositors and firm answers for uninsured depositors. The latter group will get 100% on their insured deposits, probably 50% on the uninsured portion and "well, we can talk about it, and we'll send you some more later."

This week Fed Chairman Ben Bernanke put it bluntly: "There probably will be some bank failures." Regulators have some real work ahead of them. The FDIC had 76 banks on its problem bank list at Dec. 31, down from 136 problem banks in 2002 and 213 banks in 1990. This past year's three failures were the first since 2004. Apparently the FDIC expects to have a busy year.

Continues here:

http://www.marketwatch.com/news/story/ulti...dist=TNMostRead

LaoPo

[cclub75]

The ultimate sell signal: Part II

I guess we have 456654 parts.

I mean it's a festival, a fireworks.

Here is a little game : at any time, of any given day, just peruse Bloomberg...

Today :

U.S. Manufacturing Contracts; Construction Spending Falls Most Since 1994

Auction Supply `Tsunami' Portends Municipal Losses

Asset-Backed, Commercial-Mortgage Spreads Met `Ebola'

Citigroup '07 Fees Led Banks Heading for Worst Year Since '01

Banks Saddled With Unsold Bonds After $4.2 Trillion in Sales

Construction Spending in the U.S. Fell 1.7% in January, Most in 14 Years

Bush Deficit Widening to a Record as Treasury Yields Deter U.S. Pensioners

Alabama's Jefferson County Is Center of Muni Turmoil as Debt Cut to Junk

Muni Bond Criminal Probe Targets Bankers From Bear Stearns, UBS, JPMorgan

At that point, it's not a "sell signal" anymore.

It's just "RUN". "RUN FAST". And "FAR AWAY".

But still, people (a lot) continue to think about the gender of angels, feel confident, are calling for a "bottom soon", are hoping that the FED will solve all the problems, that the stimulus package will work, that the monoliners are a sound business, that prices of houses will increase again, that there is no inflation, that the US consumers is willing to get into more debt and to buy more (chinese) LCD TVs, that the democrat party will be the savior, that the US Dollar will go up, that... that... Martians or ET are going to save us.

Everything is in front of our eyes. The only work you have to do is to get the datas, and to compile them, and link them.

Unfortunatly, most of the people do not have time... or interest... They just turn on CNBC at 8, returning from work... They see that the Dow Jones is only 7 points down... So everything is fine in their mind.

Edited March 3, 2008 by cclub75

[LaoPo]

The ultimate sell signal: Part II

I guess we have 456654 parts.

I mean it's a festival, a fireworks.

Here is a little game : at any time, of any given day, just peruse Bloomberg...

Today :

U.S. Manufacturing Contracts; Construction Spending Falls Most Since 1994

Auction Supply `Tsunami' Portends Municipal Losses

Asset-Backed, Commercial-Mortgage Spreads Met `Ebola'

Citigroup '07 Fees Led Banks Heading for Worst Year Since '01

Banks Saddled With Unsold Bonds After $4.2 Trillion in Sales

At that point, it's not a "sell signal" anymore.

It's just "RUN". "RUN FAST". And "FAR AWAY".

But still, people (a lot) continue to think about the gender of angels, feel confident, are calling for a "bottom soon", are hoping that the FED will solve all the problems, that the stimulus package will work, that the monoliners are a sound business, that prices of houses will increase again, that there is no inflation, that the democrat party will be a savior, that the US Dollar will go up, that... that... Martians or ET are going to save us.

Everything is in front of our eyes. The only work you have to do is to get the datas, and to compile them.

Most of the people do not have time... or interest... They just turn on CNBC at 8, returning from work... They see that the Dow Jones is only 7 points down... So everything is fine in their mind.

I agree....you know, I'm reluctant to post more 'not so positive' news like the bad car sales by GM and Ford; GM is down 12.9% in sales on February I believe. Those signs are alarming....

The signs keep coming and coming but I have admiration and respect for those who are utterly optimistic....and in fact I like that: optimism !

BUT, to put your head in the sand and tell yourself 'all is well and the sun will shine in the morning again' is unrealistic.

We have to brace ourselves and stay cash as much as possible. Opportunities will knock.....

LaoPo