I.O.U.S.A. : Banks Bankrupt

Aug 20. Hans Lysglimt
I.O.U.S.A. will screen tonight, if you are in a major US city be sure to make it. I sure hope the post film panel will be aired online.
Yesterday the DOW fell 1.14% and the NASDAQ 1.35%. Gold rose overnight to USD 822 up 3.8% from USD 792 yesterday. Fear sat in again. The banks in particular are getting hammered. We are certain more banks are going bankrupt, and this will cause havoc. Fear will at least rise again, making us certain that our put option positions in Swedish banks will spike – being a good time to sell some. It is just about sitting down and waiting for now.
If there is another wave of confidence in the markets you might still get some put for cheap, the true risk is not priced in. The next reporting cycle in October will be bad, and January worse. The worst is yet to come.

Shanghai rose 5.9% overnight (ended at +7.63% witch is just ridiculous). Yes, you saw that right, 5.9%. Shanghai is down by about half so far this year, and bounces by about 6%. This increase in volatility tells us we are about to see a major move, up or down with down being far more likely.

Ambrose Evans-Pritchard says he ” do not believe the eurozone is a fully workable currency union over the long run” and that there will be multi currency devaluations. We agree, and wonder how the central banks will finally resign their inflation targets. It will be a great spectacle of lying and cheating, we can’t wait.

The Georgia situation is hopefully stabilized. Admitting Georgia and Ukraine to NATO is a very bad idea. They are in the Russian sphere, and there is nothing we can do about that. They have lived with it for generations, and will find ways to deal with it in the future. We can not bail out the entire world. Being “nice” is not a good idea when it comes to geopolitics. Facing reality is a better approach. Offer support, but no bail. Anyone advocating Georgia and Ukraine into NATO better ask themselves if they are willing to die, or send their sons to die for Georgia or Ukraine. Are they willing to risk being nuked out of exsistence at home in Western Europe or USA to protect Georgia or Ukraine? This is what is at stake, no less. Is Georgia or Ukraine worth it? NATO is not about friendship, spreading democracy, being nice, promoting trade or peace for that matter. NATO is about current members mutually protecting each other.

Oslo, Norway. Aug 20. 2008 Hans Lysglimt

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