`Panic of '07,'
THE MARKETS WILL CRASH FRIDAY..
Wed Sep 19, 2007 20:05

 
THE MARKETS WILL CRASH FRIDAY...

The ten thousand pound gorilla in the room.
Sub prime mortgages are only the tip of the iceberg !!!!

======================

Men who can both be right and sit tight are uncommon.
--Jesse Livermore

Posted On: Wednesday, September 19, 2007, 2:39:00 PM EST

In The News Today

Author: Jim Sinclair
http://www.jsmineset.com/


"Raising the debt limit so often should give Congressmen reward points. Like going to Starbacks 10 times, you get your 11th cafe' mochaccino for free." --From the book, “Musing of CIGA Rusty" the Father of www.cometgold.com

Dear CIGAs,

Here is additional proof that what I have been telling you for years is absolutely true. The problem is over the counter derivatives, but no one has yet told you how big. It is at least a $20 trillion dollar problem. There are no tools anywhere to fix this one other than working overtime to hide what it really is. That means, as I have told you, the problem is still out there and has not been extinguished, nor can it be by any degree of interest rate adjustment. This one is coming home to roost, so prepare yourself now!

Now let me tell you that all I have told you about short of gold derivatives is absolutely true. 99 percent of recent and oncoming development projects have this problem. The industry breaks down into two groups. Those that are so stupid they do not know it, and those that know it but will not tell. Therefore the probability is 99 to 1 that you have the problem.

Even gold sites bashed me on the existence of the over the counter derivative problem both as the key economic risk as well as the primary risk to all varieties of precious metals shares. I have argued this for eight years.

As gold stays longer above $700 all varieties of gold shares are firming, giving you an opportunity to think deeply about what I have been telling you and the opportunity to consider fixing it.

Central Banks Lack Tools to Fix `Panic of '07,' Moody's Says
2007-09-18 19:33 (New York)
By Mark Pittman and Kabir Chibber

Sept. 19 (Bloomberg) -- Central banks may not have the tools to restore stability to credit markets amid the ``Panic of '07,'' and instead should demand greater transparency from financial companies, Moody's Investors Service said today.

Derivatives and the growth of hedge funds using unprecedented amounts of debt have magnified the impact of a rise in borrowing costs, New York-based Moody's said in a report.

``The new financial paradigm has brought with it some problems, which the world's financial policy technicians have not yet solved,'' Moody's said in a report by Vice Chairman Christopher Mahoney and Senior Vice President Pierre Cailleteau. ``Each credit crisis teaches new lessons, often resulting in corrective reforms. The current `Panic of '07' will as well.''

Central banks failed in their initial efforts last month to stem a credit crunch that was sparked by rising defaults on subprime mortgages. The banks used their traditional instruments for propping up markets such as adding cash to the financial system through overnight lending and cutting interest rates.
 

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