Wild Cards
Stocks fell today through the floor as volatility is coming back to the market. This is beginning to look like that awful market we remember in January and February this year.
Bond increased in value – as it did previously this year to lower interest rates.
The Dollar gained big time – over 1.5 cents against the Euro.
Oil and gasoline fell like a rock too – as consumer spending was the worry for the market.
Gold went sideways – making it look like the strongest of the players out there.
In the news today…..
Norway – became the first European country to raise interest rates. If you remember, Australia was the first nation to raise rates since the meltdown. Norwegian Kronas should now be worth more as people like getting more interest for their money. Japan kept their key interest rate steady at 0.1%.
Who owns your mortgage? – a Federal judge wiped out a mortgage that was brought to him in court because the bank could not prove it owned the mortgage. Why? It had lost the Note. With all the toxic securities based on mortgages and the quantity over the past decade, the paperwork can overwhelm a bank, and paper can be lost. Interesting isn’t it? Well I wonder if my bank lost my paperwork?
Another blow to the Dollar? – In a surprise move, the World Trust Fund managed by Lazard Asset Management has dumped the U.S. dollar as its primary currency in favor of the pound sterling. When international funds start moving away from the Dollar, it says a lot to me.
Tonight’s Dinner Conversation…..
How safe is your Safe Deposit Box? Most of us, including me, thinks my Safe Deposit Box is very safe and its privacy is protected by law. For example, I don’t think anyone can go into my box without my permission unless they have a search warrant from a judge. Let’s hope all my assumptions here are true.
In Britain, this just isn’t true. The British police went into thousands of safe deposit boxes and took the money, gold, jewelry, etc. They then questioned the owners and forced them to prove they came by this wealth in legitimate ways. (This is just unthinkable in the US). A recent survey estimates that only 10% of the safe deposit boxes belonged to felons – the real reason the police say they entered the boxes in the first place.
So, how safe is your Safe Deposit Box? Could law enforcement be given the power to search based on law changes being discussed right now?
Another Dinner Conversation….. (I know you like to do this!!!)
Wild Cards – those are events that shape our financial world. Generally, they also shape politics, and lots of other things at the same time. But, I will concentrate on the economic impact of Wild Cards. These can be natural disasters, man-made disasters, wars – even last year’s financial meltdown, as not many people, and certainly no one in the mainstream or political circles, forecast its happening.
Let’s just look at possible future wars, or military conflicts. The ones on my mind today include two main countries – Iran and Pakistan.
Iran is a supporter of terrorism around the world, is building an A-bomb, and wants to bury Israel. This sort of a recipe for war, and Israel is my number one suspect for starting it by bombing the A-bomb facilities in Iran. This conflict will definitely drag the US into it. The real bad news is that Iran can shut down the Straits of Hormuz where lots and lots of oil flows through on tankers. This is the real reason the US would get dragged into it – and besides we happen to have a lot of troops right next door in Iraq and Afghanistan. This one is ugly in my opinion. Let’s hope the negotiations with Iran work out. Otherwise, you can count onn Gold going up, the Dollar strengthening, the stock market falling, and I really haven’t thought about things outside of the US yet.
Pakistan is a problem because there is a significant number of terrorists living in Pakistan, and bombing the heck out of the government and foreigners. If there is ever a coup d’etat in Pakistan, the US would have to invade to get the A-bombs that Pakistan is holding. India would get very nervous instantly, of course, and their A-bombs are targeted on Pakistan. Iran recently said it wanted to go to war with Pakistan – and while this is just rhetoric, it could easily mean giving support to terrorist groups in Pakistan. This is very ugly too. Financially, it would have the same impact as a war with Iran.
What do you think?
Here are the last numbers for today:
Dow Jones 30 Industrial – 9712 (down 250 points)
10 Year Treasury Bond – 3.39% (down 0.11%)
Euro – $1.4716
Gold – $1045 (down $2)
Oil – $76.99 (down $2.88)
Gasoline – $1.96 (down $0.07)