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  • Why The Stock Markets Are Collapsing

    The US economy is in the worst recession since the Great Depression, and the latest economic reports have been even worse than expected. The US stock markets continue to collapse, with the Dow and the S&P 500 down well over 50% since the peak in October 2007. It is estimated that $10 trillion in wealth has disappeared in the US alone as a result of the stock market bust. Investors around the world are asking WHY? In my opinion, a big reason why the markets are collapsing is the trillions of dollars in new federal spending that President Obama has enacted. Plus, his record $3.55 trillion federal budget for 2010 will likely result in a deficit of over $2 trillion for fiscal 2010. I believe that this enormous spending, plus his other liberal plans that he intends to put in place this year, are serving to drive stock prices much lower than what should be happening. This is a lot to cover in one letter, so let's get started....
  • Category 2 Hits Texas, Cat 4 Hits Wall Street

    While Hurricane Ike ravaged the Gulf Coast over the weekend, there was a major financial storm on Wall Street on Saturday and Sunday. Lehman Brothers, the fourth largest US investment bank, announced on Sunday that it was filing for Chapter 11 bankruptcy. Shortly thereafter Bank of America announced that it was gobbling up brokerage giant Merrill Lynch for a mere $45-50 billion in stock. If that weren't enough, insurance giant AIG is in serious financial condition and is requesting $70-75 billion in new loans to stay afloat. These latest developments are the next chapter in the subprime mortgage/credit crisis, and they took a heavy toll on the stock markets yesterday. I will sort it all out for you in the pages that follow....