Ready for a market correction?

[Kiwon]

The International Atomic Energy Agency chief, Mohamed ElBaradei, said on CNN that he had not seen "any concrete evidence" of a secret Iranian weapons program.

Stand down, America. Mohamed AlBaradei told CNN there is no concrete evidence of any secret Iranian Weapons Program.

The military-industrial complex gets in so much trouble by not watching Anderson Cooper regularly.

I knew you guys would get a kick out of that line. You always focus on the good news!

Whoa....hold the phone, people. That's HH's distinguished Nobel Peace Prize winner speaking. He's above second-guessing.

Actually, he's right. Iran's weapons programs aren't secret any longer.....they just talk about them ALL THE TIME!!

(Looking at satellite photos: "You see that large square there in the desert that looks like a launching pad and that thing on it that looks like a rocket?

"Yeah"

"Well, looks can be deceiving. We can't say concretely what it is. Those silly Iranian mulahs are always kidding with us about the destruction of Israel and hatred for the West. Is it lunch time yet? I've got an appointment at the Four Seasons.")

[Freak Out]

There is no doubt that Iran has the vehicles to deliver some pretty serious shit....thanks to the help of North Korea and I believe Russia....but how close they are to a bomb that they can actually strap to one of those vehicles is the question. It's one thing to build a bomb and it's another to get it small enough to deliver with a missile. I saw a poll somewhere that stated something like 52 percent of Americans would support a strike on Iran to "disable" it's nuclear capabilities. Considering how hard the administrations war/spin machine has been working and from what I've seen the last seven years I guess I shouldn't be surprised.

[Kiwon]

Where is the war/spin office located? I want to send them a complaint letter because they've been doing a lousy job during the last several years.

(Freak Out, I've got a mini rant I want to share. Not directed to you personally.)

President Bush is "conservative-lite," a real disappointment in combating the dominant Left-wing and bias mainstream media. A real conservative president would regularly highlight the good things taking place in Iraq and explain to the sizeable portion of Americans that are both ignorant and indifferent to anything taking place outside of their own lives what the big picture is and what the stakes are.

President Bush is too much of an appeaser when for 7 years he should have been more like Buford Pusser in the key "Walking Tall" scene where he takes his big stick and smashes everything and everyone in sight.

Screw the media, screw the Leftists, liberals, pacifists and America-haters all. Bush would have been vilified and hated for years but history will vindicate him. He's tried the appeasement route and he's hated anyway. The problem isn't him; it’s the uniformed and self-absorbed segment of the American people that have never experienced hardship or sacrifice.

The "Greatest Generation" its not.....and yet, the VOLUNTEER MILITARY continues to grow. Men and women from all walks of life are enlisting and serving their country. They KNOW that they are heading for combat and hardship and they join anyway.

If Bush is such an idiot and the war on terrorism is such a disaster and all that is so painfully obvious then why do American citizens continue to enlist in the VOLUNTEER ARMED FORCES? Why would they choose to put themselves in harm’s way and possibly die for a pointless cause?

Because you're smart and they're stupid, right? (Thank you for the wisdom, John Kerry, Matt Damon, and the brains on "The View.")

More importantly, why doesn't the Democrats just cut off the funding and end the war? Why won't these great, humanitarian leaders, the smartest people in the room take charge, use their constitutional powers and "protect our brave soldiers and bring them home" even though they joined to fight and defend their country on the battlefield? The Democrats can practically end the war anytime they want to. They can push and push for a vote to cut off funding until they get what they want. They can, but they don't. Why?

The Democrats won't end the war but they will complain about it and rip Bush every chance they get. Cindy Sheehan was their darling before they took control of Congress. Where is she now that they the Democrats have the power to end the war but won't? Oh, Cindy Sheehan has served her purpose and is now persona non grata. Just a useful idiot for them to exploit for political gain and then cast away.

Well, guess what? President Hillary Clinton, when elected, won't pull the troops out either.

The military will still be in Iraq and the "illegal occupation" will continue. Clinton and the Dems will not pull the troops out and watch on television as Islamic fascists slaughter Iraqi civilians and Iran take control of the Iraqi oil fields. The Dems won't take the responsibility for America's military defeat in Iraq and the disaster to come. They won't do it now and they won't do it when one of their own assumes the presidency.

Hillary's election won't change much of anything. The war in Afghanistan and Iraq will continue.

It's time for more of the President Bush-haters to wake up and face reality. This isn't a political debate. It's real life. Your country and its interests are actively being targeted by Islamic terrorist networks, have been attacked repeatedly, have been the subject of a number of thwarted attacks, and will probably be attacked successfully in the future. It isn’t “war spin.” It’s reality.

America doesn't follow. It leads. We don't need other countries' permission to do the right thing. Leaving Iraq in defeat and shame isn't an option for any American with self-respect or who values his security. Most Republicans and Democrats alike understand this.

Gripe and complain all you want. It doesn't accomplish anything but discourage those protecting you from harm and encourage the people that would like to see you dead. You would do better to quit welcoming defeat and start thinking about an American military victory. The world is the world. Humanity is basically twisted and screwed up. But, at least, you have the privilege to be a citizen of the greatest country on earth. Why not take a little pride in that?

[Freak Out]

Shocking!

Oil's Recent Rise Not as Familiar as It Looks
Traders, Not Political or Supply Concerns, May Be Pushing Fuel Toward $100

By Steven Mufson
Washington Post Staff Writer
Monday, November 5, 2007

After a week of new records for crude oil prices, the question is: How high can they go?

In the past 10 weeks, the price of crude oil has shot up $25 a barrel, closing at $95.93 in New York on Friday, near an all-time inflation-adjusted peak. Unlike earlier spikes in oil prices, which came on the heels of war in the Middle East, this latest ascent does not appear to be linked to any one conflict or to any physical shortage.

Instead, traders who treat oil like any other commodity are widely thought to be driving prices upward, bolstered by a weak dollar and money flowing out of stock markets and other investment vehicles.

So far U.S. consumers have not felt the full impact. Sluggish U.S. gasoline demand over the past two months has made it hard for oil giants to pass through higher costs; refinery profit margins, which hit records in the spring, have been squeezed. But if high crude oil prices persist, they will flow through to the gas pump. Yesterday, the Lundberg Survey reported that the average retail price of regular gasoline is up 16 cents in the past two weeks to $2.96 a gallon.

Many veteran oil analysts say this is a bubble. Oil is historically a cyclical business. Modestly higher production by the Organization of Petroleum Exporting Countries, a warm winter, slower U.S. economic growth and a flattening of demand in the United States could puncture these lofty prices.

"It just seems that the market is spasming here," said Adam Robinson, an oil analyst at Lehman Brothers. If slowly declining petroleum inventories start to build again, he said, "the radical increase we've seen to the upside can repeat on the way down." Oppenheimer & Sons analyst Fadel Gheit says oil is $30 a barrel overpriced.

But analysts also say that the past 10 weeks have demonstrated the power of traders at investment houses. Deutsche Bank oil economist Adam Sieminski, who spent six months on the bank's trading desk, said it is important not to underestimate the role of sentiment and technical factors, such as patterns of price movements and the need to hedge risks in other markets. Now, when investors hold a large number of options to buy oil at a price of $100, he says, "it's almost like magnetism. It draws prices to that level."

Traders say that they are not buying and selling on whims, however. The unusually thin cushion of excess oil production around the world and the rapid growth in consumption in China and India make this rise in prices different from earlier oil price spikes, they argue. That combination, the traders add, leaves the oil markets one incident away from an even steeper increase.

"There is no current shortage, but no one deals on today's market. They make deals based on tomorrow's market. And that's what they're worried about," said Joseph Stanislaw, an oil consultant and senior adviser to the accounting firm Deloitte & Touche.

The weekend declaration of a state of emergency in Pakistan, which has no direct effect on global oil supplies, won't calm nerves.

"It would be silly if we waited until things were not available," said a veteran energy trader at a U.S. hedge fund, who spoke on the condition of anonymity to protect his business relationships. He said traders have become convinced that military conflict between the United States and Iran is inevitable. He added, "People react to perceptions of what will happen. That's not idle speculation."

Last week, nonprofit group Securing America's Future Energy engaged in some speculation. The group invited former Cabinet members and top U.S. officials to act out how a U.S. administration might respond to an oil supply disruption. The exercise assumed that a key oil pipeline was cut by explosions in Azerbaijan, an insurgency continued in Nigeria's oil-rich Niger Delta, and cuts in oil output were made by Iran and Venezuela as a result of souring U.S. relations. In this hypothetical scenario, oil prices hit $160 a barrel.

What makes the scenario more plausible than ever is that the world is consuming 85.9 million barrels of oil a day, but there are only about 2 million barrels a day of extra production capacity, almost all of it in Saudi Arabia. Much of that excess is a low-quality crude oil that can be used only in the most modernized refineries. That leaves the oil market sensitive to threats that might have been disregarded in earlier years.

Some experts say that high prices will change the balance, creating new supplies and lower demand.

"It's hard to keep in mind that things do move in cycles and that the laws of supply and demand are unlikely to have been abolished," said Daniel Yergin, chairman of Cambridge Energy Research Associates. "High prices, particularly if they become very high prices, will catalyze responses in supply and demand, and innovation," he said.

Indeed, just five years after their 1981 peak, oil prices slumped, prompting then-Vice President George H.W. Bush to lament to Saudi leaders about how that was hurting the Texas economy. Eight years after Iraq's invasion of Kuwait drove prices up again, the Asian financial crisis pushed them to new lows.

But many oil experts say that this cycle isn't like earlier ones. A few argue that world oil is running out. Others note that China and India's economic advances and the growth of U.S. suburbs and exurbs have built in oil demand, even at high prices. Moreover, between 2005 and 2015, China and India's populations are expected to grow by about 240 million. That could soak up new production capacity that Saudi Arabia is currently adding.

In addition, countries rich in oil have not been fully exploiting their reserves. War-torn Iraq is producing almost 2 million barrels a day less than its 1970s peak. Production has declined in Venezuela because of government disputes with workers and foreign oil firms. Insurgents in Nigeria's oil-rich Niger River delta have kidnapped foreign oil workers and attacked installations, forcing companies to suspend about 700,000 barrels a day of production. In Mexico, United Arab Emirates, the Caspian Sea and elsewhere, maintenance and weather has at times curtailed production.

Supply and demand might not respond as usual. Ironically, high taxes in Europe that helped reduce consumption in past years now dilute the effect of rising crude oil prices. And high taxes in producing countries mean that oil firms don't get much more incentive to explore as prices rise. At a recent conference in Moscow, one oil executive said that, above certain thresholds, Russian taxes siphon off $19.15 of a $20 a barrel price increase.

OPEC may have also miscalculated. Its most moderate members -- Saudi Arabia and Kuwait -- trimmed production a year ago to prop up then-sagging oil prices at $55 to $60 a barrel. According to the International Energy Agency, Saudi output has been running about half a million barrels a day lower than last year. Saudi Arabia may have delayed a production boost this fall out of fear -- wrong so far -- that the recent credit crisis would slow the U.S. economy.

OPEC countries maintain, however, that the recent run-up in oil prices isn't their fault and point to speculators. "What more can we do?" asks Nader Sultan, an oil consultant and former president of state-owned Kuwait Petroleum Corp. "The taps are open."

The power of traders and investors over the vast oil market has been growing since the early 1980s. Until then, international oil companies had long-term contracts with exporting countries that established prices and volumes. Relatively modest amounts of oil were traded daily on what was known as the spot market.

But after the two 1970s oil shocks and outbreak of war between Iran and Iraq, that system broke down. An ill-disciplined OPEC stopped setting prices and struggled to stick to output quotas to manage prices. Gradually prices declined, because of more efficient use of oil in industrialized countries and extra output from non-OPEC countries and OPEC's swing producer, Saudi Arabia.

In March 1983, the century-old New York Mercantile Exchange started a market for crude oil that has grown steadily. Now most major oil companies simply peg their sales and purchases of crude oil to the fluctuating prices on the exchange.

"I can't explain why the price is where it is today," Henry Hubble, Exxon Mobil vice president of investor relations, said Thurday during a press call about the company's earnings. "The market is going to dictate . . . and we're a taker of those prices."

Exxon has a spacious trading floor in Fairfax, Va., where about 80 people trade crude oil and another 80 trade products. But they don't negotiate prices; instead they try to take advantage of oil quality differences, tanker locations and tiny gaps between markets to meet Exxon's refinery needs as cheaply as possible. The final prices are set relative to those on the New York Mercantile Exchange or similar markets on the day of delivery.

One surprise about oil prices: So far, the economy seems to be coping. Despite an average crude oil price of $75 a barrel, the economy grew at a brisk 3.9 percent pace in the third quarter. Unemployment is low, and inflation is modest.

By contrast, the oil price spikes in the 1970s fueled high inflation and weakened growth, a combination known as stagflation.

Improved automobile mileage, more efficient manufacturers and greater reliance on services have made the U.S. economy more resilient. The United States now uses half the energy it did in 1980 for every unit of economic output. Energy costs make up a smaller portion of household budgets than in 1981.

In a recent paper, "Who's Afraid of a Big Bad Oil Shock?" Yale University economics professor William Nordhaus credited smarter monetary policy and better general economic conditions. Moreover, he said, in percentage terms, the oil shocks of the 1970s were much bigger than the steady price increases since 2002.

But Nordhaus wrote before the latest jump in prices, and many economists are wondering how high will be high enough to hurt the broader economy. Since 2000, oil prices have quadrupled.

Robert Rubin, who repeated that "markets go up, markets go down" while he was President Bill Clinton's Treasury secretary, said last week that "when oil was at $35, people said $60 oil would have tremendous effects on the economy, and at $90 we still have robust growth." But he added, "there comes some point where we will feel that vulnerability to high oil prices."

[LL2]

Where can I get a car that runs on water? electricity?

[Freak Out]

Where can I get a car that runs on water? electricity?

Well...according to Chevrolet from them.

[Freak Out]

I miss watching the McLaughlin group because of this guy:

Pat Buchanan!


Sinking Currency, Sinking Country
Fri Nov 2, 3:00 AM ET

The euro, worth 83 cents in the early George W. Bush years, is at $1.45.

The British pound is back up over $2, the highest level since the Carter era. The Canadian dollar, which used to be worth 65 cents, is worth more than the U.S. dollar for the first time in half a century.

Oil is over $90 a barrel. Gold, down to $260 an ounce not so long ago, has hit $800.

Have gold, silver, oil, the euro, the pound and the Canadian dollar all suddenly soared in value in just a few years?

Nope. The dollar has plummeted in value, more so in Bush's term than during any comparable period of U.S. history. Indeed, Bush is presiding over a worldwide abandonment of the American dollar.

Is it all Bush's fault? Nope.

The dollar is plunging because America has been living beyond her means, borrowing $2 billion a day from foreign nations to maintain her standard of living and to sustain the American Imperium.

The prime suspect in the death of the dollar is the massive trade deficits America has run up, some $5 trillion in total since the passage of NAFTA and the creation of the World Trade Organization in 1994.

In 2006, that U.S. trade deficit hit $764 billion. The current account deficit, which includes the trade deficit, plus the net outflow of interest, dividends, capital gains and foreign aid, hit $857 billion, 6.5 percent of GDP. As some of us have been writing for years, such deficits are unsustainable and must lead to a decline of the dollar.

A sinking dollar means a poorer nation, and a sinking currency has historically been the mark of a sinking country. And a superpower with a sinking currency is a contradiction in terms.

What does this mean for America and Americans?

As nations realize that the dollars they are being paid for their products cannot buy in the world markets what they once did, they will demand more dollars for those goods. This will mean rising prices for the imports on which America has become more dependent than we have been since before the Civil War.

U.S. tourists traveling to the countries whence their ancestors came will find that the money they saved up does not go as far as they thought.

U.S. soldiers stationed overseas will find the cost of rent, gasoline, food, clothing and dining out takes larger and larger bites out of their paychecks. The people those U.S. soldiers defend will be demanding more and more of their money.

U.S. diplomats stationed overseas, students and businessmen are already facing tougher times.

U.S. foreign aid does not go as far as it did. And there is an element of comedy in seeing the United States going to Beijing to borrow dollars, thus putting our children deeper in debt, to send still more foreign aid to African despots who routinely vote the Chinese line at the United Nations.

The Chinese, whose currency is tied to the dollar, and Japan will continue, as long as they can, to keep their currencies low against the dollar. For the Asians think long term, and their goals are strategic.

China — growing at 10 percent a year for two decades and now growing at close to 12 percent — is willing to take losses in the value of the dollars it holds to keep the U.S. technology, factories and jobs pouring in, as their exports capture America's markets from U.S. producers.

The Japanese will take some loss in the value of their dollar hoard to take down Chrysler, Ford and GM, and capture the U.S. auto market as they captured our TV, camera and computer chip markets.

Asians understand that what is important is not who consumes the apples, but who owns the orchard.

Other nations that have kept cash reserves in U.S. Treasury bonds and T-bills are watching the value of these assets sink. Not fools, they will begin, as many already have, to divest and diversify, taking in fewer dollars and more euros and yen. As more nations abandon the dollar, its decline will continue.

The oil-producing and exporting nations, with trade surpluses, like China, have also begun to take the stash of dollars they have and stuff them into sovereign wealth funds, and use these immense and growing funds to buy up real assets in the United States — investment banks and American companies.

Nor is there any end in sight to the sinking of the dollar. For, as foreigners demand more dollars for the oil and goods they sell us, the trade deficit will not fall. And as the U.S. government prints more and more dollars to cover the budget deficits that stretch out — with the coming retirement of the baby boomers — all the way to the horizon, the value of the dollar will fall. And as Ben Bernanke at the Fed tries to keep interest rates low, to keep the U.S. economy from sputtering out in the credit crunch, the value of the dollar will fall.

The chickens of free trade are coming home to roost.

[Freak Out]

Closing in on $100 a barrel!

[LL2]

Closing in on $100 a barrel!

$4 for a gallon of gas coming to a gas station near you by next summer!

[Joemailman]

Dow drops over 200 points
It's a week of big losses as Wachovia, Fannie Mae are the latest lenders caught in the real estate mess. Nasdaq slides over 2.5 percent.

By Steve Hargreaves, CNNMoney.com staff writer
November 9 2007: 5:02 PM EST



NEW YORK (CNNMoney.com) -- Stocks fell sharply Friday, with the Dow ending over 200 points lower, mortgage-induced losses at Wachovia and Fannie Mae riled traders already nervous the woes could spread to the wider economy.

The 30-share Dow Jones industrial average (Charts) lost about 1.7 percent and the broader S&P 500 index (Charts) fell 1.4 percent.

The tech-fueled Nasdaq (Charts) got hammered, tumbling 2.5 percent.

"It got pretty ugly," said Alec Young, an equity strategist at Standard and Poor's Equity Research. "There's just an unprecedented number of negatives coming at the market.

Those negatives include the triple threat of restricted access to credit, a downturn in the housing sector and near record oil prices, said Young.

"People are more and more worried about recession," he said.

For the week, the Dow lost 4.1 percent, while the S&P fell 3.7 percent. The Nasdaq was the biggest loser, dropping 6.9 percent.

Here's what moved markets on Friday:

Wachovia (Charts, Fortune 500), the nation's fourth-largest bank, said this morning the complex debt instruments it held in its portfolio declined in value by an estimated $1.1 billion before taxes in October, leading to a $600 million loan-loss charge for the current quarter. The bank had reported $1.3 billion in pre-tax losses in the third quarter tied to pools of debt backed by home loans.

Fannie Mae (Charts), the largest buyer and backer of home loans in the country, said Friday its profits fell by half over the last nine months.

The government-sponsored company said it earned $1.17 a share from January through September, down from $3.5 billion, or $3.16 a share, in the same period last year. Its shares fell over 6 percent.

Stocks have sold off as traders worried about the wider economic impact of losses at financial companies and the growing ranks of consumers saddled with expensive mortgages and high energy bills.

"The fear is spreading," said Joe Battipaglia, Chief Investment Officer at Ryan Beck & Co. "Investors think profits may have hit thier peak, not just in finacials but across other sectors of the economy."

The losses from Wachovia and Fannie come after Citigroup (Charts, Fortune 500) said last week it expects to write down a further $8 billion to $11 billion in the fourth quarter due to credit- and mortgage-related problems. Citigroup and warnings of more write downs from other banks caused the Dow to lose 362 points last week.

On Wednesday, the Dow posted one of its biggest single-day declines, falling 361 points on further credit market fears.

In recent months, banks and other financial institutions have taken big losses on mortgage-backed securities, which package individual home loans and sell them as an investment.

Those investments soured when people started defaulting on loans because of the decline in the real estate market, which ended their hopes of refinancing on the back of rising home values.

Adding to investor woes was a weak growth forecast from the 27-nation European Union, which said growth is expected to slow to 2.4 percent next year and in 2009, down from 2.9 percent this year. The EU attributed weaker growth to problems stemming from the subprime mess in the United States and the rise in oil prices.

The University of Michigan report on consumer sentiment came in well below estimates, but did little to move markets.

A bit of positive news: The U.S. trade deficit fell to the lowest level in 28 months as a falling dollar helped boost exports.

Among stocks in the news Friday, Merck (Charts, Fortune 500) announced it will pay $4.85 billion to resolve most of the the 27,000 claims involving its blockbuster pain medication Vioxx. Merck shares climbed nearly 4 percent.

Disney (Charts, Fortune 500) reported earnings that beat expectations on sales that were roughly in line with analysts' estimates.

Clearwire (Charts) and Sprint Nextel (Charts, Fortune 500) said they ended an earlier agreement to build a high-speed wireless network.

Meanwhile, oil prices resumed their assault on $100 a barrel. U.S. light crude for December delivery rose 86 cents to settle at $96.32 a barrel on the New York Mercantile Exchange.

The dollar fell against the euro but rose slightly against the yen. Treasury prices rose, with the yield on the benchmark 10-year note falling to 4.22 percent. Bond prices and yields move in opposite directions.

Major markets in Asia and Europe finished lower on mounting credit fears.

Market breadth was negative. Losers topped winners by 2 to 1 on the New York Stock Exchange as 1.35 billion shares traded hands. Decliners beat advancers by 2 to 1 on volume of 2.32 billion shares.

COMEX gold lost $2.80 to settle at $834.70 an ounce. To top of page
Bernanke warns on economic growth

[Freak Out]

I'm running out of hiding places. I've been looking to buy some land in Oregon as a place to hide some dollars but have been unable to find anything that still isn't overpriced. My daughter is going to school in Bend (at least for this winter ) so I thought about a condo but shit, even crap range land is spendy.
Looks like I've found a nice lot in Waitsburg, WA (near Walla Walla) and I think I am going to jump on it. Keeping my fingers crossed that prices start to drop in Portland.

[Freak Out]

I know....the sky is falling.


A Pearl Harbor without War

By Gabor Steingart in Washington, D.C.

The dollar crisis has politicians alarmed worldwide. The US currency has lost 24 percent of its value since the introduction of the euro, and now there is even a chance that China could abandon its policy of pegging its currency to the dollar -- a problem the United States should take very seriously.

Translated into Texan, what the Chinese politely told the Americans last week simply means: Unless something happens, all hell will break loose.
DPA

Translated into Texan, what the Chinese politely told the Americans last week simply means: Unless something happens, all hell will break loose.
What do Brazilian supermodel Gisele Bündchen and the People's Republic of China have in common? The answer, as of last week, is that both distrust the dollar.

Patricia Bündchen, the twin sister and manager of the world's top model, announced that Gisele now prefers to be paid in euros rather than dollars. Almost simultaneously, the Chinese central bank predicted that the dollar is likely to lose its status as the world's leading currency.

One could easily overlook a supermodel's currency preferences, but China is a different story. It's the beast breathing down America's neck.

The most important country in the world for the United States isn't Great Britain, Germany, Saudi Arabia, Russia or Iraq. China holds that dubious distinction, because it is also the country the US can least do without. Without its willingness to buy an almost unlimited supply of US treasury bonds, there would be no American spending miracle. Without a spending miracle there would be no economic growth. In other words, without China the US superpower would lose a significant share of its economic clout.

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So far Beijing has behaved like the benevolent shopkeeper who willingly extends credit to his customers. The Americans receive shipments of Chinese-made television sets, toys and underwear, but the Chinese do not import a comparable volume of US goods. The gap between buying and selling amounts to about $5 billion every week.

The Chinese are satisfied with buying US treasury bonds, partly to keep their most important customer afloat. The central bank in Beijing already holds currency reserves of $1.4 trillion.

The Chinese have looked on with great patience as their best customer has gradually lost its ability to supply goods.

But the men in power in Beijing cannot be indifferent to the dollar's decline. It devalues their central bank's dollar reserves, the monetary embodiment of some of the fruits of China's export machine.

For the United States, a Chinese decision to abandon the dollar would be tantamount to Pearl Harbor without the war. It would represent a challenge to the world's biggest economy by the world's fastest growing economy. Millions of people would see their standard of living suffer as a result, and American self-confidence, already shaky, would crumble even further. The United States would suffer a serious blow on its very own turf, the economy.

Americans can hardly blame Beijing for their troubles. The Chinese aren't exactly kamikaze politicians, concocting some secret plan to attack the dollar. On the contrary, the preparations are taking place in full view. Translated into Texan, what the Chinese politely told the Americans last week simply means: Unless something happens, all hell will break loose.

For years the US economy has suffered one dramatic setback after another. A historic trend reversal began with the rise of the Asian economies -- first Japan, then China and now India. The United States, a once-proud exporting nation, became the world's biggest importer. In only 15 years, from 1992 to 2007, the US balance of trade deficit has surged from $84 billion to $700 billion.

Within a single generation, the world's biggest lender has become its biggest borrower, a circumstance the United States has made no serious attempts to change. And what has been Washington's standard take on the shift? The dollar is our currency, but it's your problem.

Thus, the tone of the US government's callous and thick-skinned reaction to China's announcement last week came as no surprise. There was a reason the dollar became the world's reserve currency, US Treasury Secretary Hank Paulson said in a slightly offended tone.

But the truth is that the United States would be better off if Paulson and the administration of President George W. Bush would take decisive action instead of sulking. The US's ability to deliver goods should be increased and its industrial base should be reinvigorated. Government and consumer spending, which in reality is doing nothing but eating away at the country's future, should be curbed. Although growth would decline as a result, it would be a more sustainable form of growth.

Last week's remark by a Chinese central bank official should be interpreted as a warning, not a threat. Indeed, China has no choice but to respond, given the dollar's ongoing weakness.

For these reasons, an attack on the US economy is probably the most easily predictable event of the coming years. And if it happens, the attacker will even be able to justify its actions as self-defense.

What is the difference between the US government in 1941 and the administration in Washington today? Perhaps there is none. A Japanese attack on the US Pacific Fleet at Pearl Harbor was unimaginable, even though US intelligence had picked up clues that it could happen. Washington, at the time, was convinced that the Japanese wouldn't dare stage an attack on a target 5,000 miles away, and that they wouldn't succeed if they did.

The crews on America's ships were sleeping as the Japanese bombers approached Pearl Harbor.

Translated from the German by Christopher Sultan

[esoxx]

Where is the loud headline for how the market did today?
Or is that just for when it tanks.

[Joemailman]

Where is the loud headline for how the market did today?
Or is that just for when it tanks.

Big rally on Wall Street!!!!!
The Dow gains nearly 320 points, its second-best day of the year, as Wal-Mart's earnings, Goldman Sachs' outlook and falling oil prices spark a big advance.

NEW YORK (CNNMoney.com) -- Stocks surged Tuesday, with the Dow climbing nearly 320 points, after comments from executives at Goldman Sachs and other major banks reassured investors worried about the ongoing fallout from the credit market crisis.

Wal-Mart's earnings report and a nearly 4 percent slide in oil prices also played a role in the day's advance.

The Dow Jones industrial average (Charts) added just under 320 points, posting its second-biggest, single-day advance of the year. The S&P 500 (Charts) index added 2.9 percent and the Nasdaq composite (Charts) added 3.5 percent.

The Russell 2000 (Charts) small-cap index jumped 2.9 percent.

Treasury prices slipped, raising the corresponding yields. The dollar fell against the euro and gained against the yen. Oil and gold prices plunged.

Wal-Mart got the ball rolling at the open, but the advance picked up steam as the session wore on and investors took in comments from Goldman Sachs, Morgan Stanley, JP Morgan and other big banks speaking at a Merrill Lynch-organized financial conference. (Full story.)

"I think you saw relief today that the financial companies didn't indicate any looming meltdowns at the Merrill conference," said Ben Halliburton, chief investment officer at Tradition Capital Management. "And Goldman had some decent news, although it wasn't surprising."

Nonetheless, the banks are far from out of the woods, Halliburton said. "The financial stocks have come down sharply, and clearly there was a fair amount of short covering today."

Short covering refers to a process by which investors who have sold shares short to take advantage of a falling market need to buy them back.

That process was evidenced by the quality of the day's corporate news, which was good, but not as good as the stock market reaction would suggest, said Fred Dickson, chief market strategist at D.A. Davidson.

"I think we had an oversold market due for a bounce," Dickson said.

Stocks have been sliding, since the Dow and S&P 500 peaked at record highs in October and the Nasdaq hit a nearly 7-year high. On Monday, the Dow closed below 13,000 for the first time since August.

While the day's advance was positive, it doesn't indicate a new direction for the market going forward, the analysts said.

"If you look at the market over the last month, it doesn't take much to get investors whipped into a frenzy," said Chris Johnson, chief investment officer at Johnson Research Group.

"A 300-point day on the Dow a few years ago would have been a bigger deal than it is today," he said. "We're seeing these kinds of days more often now, with investors willing to step in and have a feeding frenzy on relatively light news."

Johnson said that because of this trend, and because of lingering questions about the economy, the bank sector, oil prices and consumer spending, stocks will stay choppy between now and the end of the year.

He said he doesn't expect stocks to finish the year much higher than where they stand now, with the S&P 500 likely to end in the 1475 to 1500 range.
What's sinking the dollar?

The financial sector was one of the session's best performers, thanks to a combination of technical factors and the comments coming out of the Merrill Lynch conference.

Among the standouts: Goldman Sachs CEO Lloyd Blankfein said that the company won't take any further significant charges related to the subprime mort

[Freak Out]

Where is the loud headline for how the market did today?
Or is that just for when it tanks.

This is a doom and gloom black Friday kind of thread man.....

We had a thread for a big rally and Champagne....where the hell did it go...?