Tuesday, May 22, 2012
Tuesday, May 22, 2012 3 comments
Jamie Diamon, the smartest guy in the room when the masters of the universe get together, has lost $5 billion so far, and they’re not done counting. Considering that JP Morgan Chase could get into that much trouble, what is going on at the other zombie banks that we don’t know about? Mitt Romney isn’t concerned, “somebody else made money [my friend]”. This dumb ass claims he knows how the economy works. If we had an economy based on pirate ships and mob arsonists, he might know something.
Fat cats (typically those with $500,000 or more in a trading account) who loaded up on Facebook’s IPO because they had the inside deal are “un-freinding” their brokers. They were planning to double their money selling to us peasants, the stock lost 11% on Monday and another 9% today. Rumor has it that Wall Street banks who sponsored the IPO were buying stock on Friday just to keep it from going to the floor.
With the three biggest banks involved, JP Morgan, Goldman Sachs and lead conspirator Morgan Stanley, you had to figure something untoward was going on. It seems they warned off the really big investors that the stock was over priced. The smaller fat cats who thought they were in on something big turned out to be the suckers this time. Facebook does have the potential to make money at some level, doubtless the big money will be happy to buy the stock at some price.
Gold bugs aren’t doing so hot, with it currently trading 20% off its high last fall. I got a lot of heat from Glen Beck fans last year for saying gold wasn’t a good investment, I don’t hear from them so much anymore. Some people are saying it could go to $700/oz and they make a good argument for it, that would be inline with historical prices. This would be opposed to the “hysterical” price of $7000/oz the right was predicting a year ago. Retail bullion and coin sellers report sales are off between a third and half what they had been a few weeks ago.
Austerity proponents are fading fast with Obama lecturing the G-8 summit at Camp David over the weekend, on the benefits of job creation and growth. Some people are catching on that you can’t simply force the middle class to pay off loans without allowing them to have any income. The Europeans still have democracy, and aren’t shy about showing incompetent leaders the door.
Greece however is experiencing a slow motion “bank run” with depositors withdrawing their money and the European Central bank covering the Greek banks with loans. Loans they will default on to a large degree when Greece converts to its own currency. The bankers are making overt threats about isolating and starving Greece if they do this.
The bankers don’t seem take into account that there is a potential White Knight in the BRICS countries (Brazil, Russia, India, China and South Africa). Turkey is already flirting with them. Spain, Italy and Portugal could follow suit making for a rather awkward situation. China is the dominant member in this movement and they have that saying about “… [living] in interesting times”, indeed we do. www.prairie2.com