The Bear Strikes

Sept. 10 2008 Hans Lysglimt

The Oslo Stock Exchange fell a whooping 5.6% on Tuesday. As we have predicted again and again, and as lately as September 4, Oslo is now about to take a major hit. The Oslo market has been soaring high on several factors that all stand to reverse now. I fully expect to see the 200 numbers. Expect to see other more mainstream economist predict the same now that we are approaching it.

Markets are falling further today. Is the panic here yet? We still wonder. Even this time what could have been the panic was averted by the US government bailing out Fannie and Freddie. The question is how much more they can muster up. What will they do the next time there is sign of panic?

During the Monday boom the London Stock Exchange suddenly stopped working for 8 hours. Now this might be a coincidence, but we smell something. While other European markets unexpectedly boomed 4+%, London was unable to trade. Someone benefited massively from this, in the order of billions on Pounds. Always follow the money, how hard can it be to bribe some developer to inject a bug into the system somewhere to halt trading for a few hours. Answer: Not very hard…

We believe one of the big US banks will go belly up very soon. That will trigger considerable fear. But the FDIC will be recapitalized and that will put confidence back in. This is how the markets are going to sway during the next couple of quarters. You might be able to play it.
The coming bank failures will however not produce the kind of rally that the Fannie Freddie rescue did, the coming bank failures are bad news period.

Lehman fell 45% yesterday. There is talk of them presenting their numbers early to calm the markets. We will be biased to not believe the numbers they present. It is human nature to try to make up the façade, however ugly the realities. We are confident the reality is worse than what is presented, because they still see the glass is half full.
The glass is actually half empty, and when that truth is forced out they might well be the next Bear Stearns. This will happen fast and dramatically, like the strike of a bear.

Opera Software has taken a major hit on Google’s launch of their own Chrome. We are of the strong opinion that Google has become to strong and to dominant. It is in everyone’s interest to protect themselves from Google. Google is quickly building a comprehensive profile on ever internet user there is. This is not good, no single company should have this. We use Google ourselves, a lot, but we advice everyone to use Google as little as possible. Use other alternatives when they are as good. Do not allow Google to see everything you do.
For browser use Opera. We here at Farmann intend to take a more active role in monitoring that Opera follow good privacy guidelines. As they are based here in Oslo and we know them personally we actually believe we can have certain insight into this.

Intrade.com now tells us that the odds are 53% for Obama and 46% for McCain. McCain is this closing in so much that this is really turning into a game that can go either way. That is exciting.
Tomorrow Ron Paul will go out with a broad appeal for voters to not vote for either Obama nor McCain but to find and vote for a third party candidate. Here at Farmann we fully support this initiative.

Gold fell to USD 780 last night. It might well fall lower, and the dollar will reverse lower eventually. So holders of non-US currency might well be able to buy into gold at lower prices later. For anyone not holding gold we still now advice careful accumulation as gold is falling. It takes some time to get an understanding for gold. At some future point, if gold falls considerably and the dollar falls considerably at the same time we might advice to do a major purchase of gold, but not now. If you have zero gold today, then today is the day to buy your first coin.

Silver is plummeting, now trading at USD 11.24 down from the peak of USD 21 in April 2008. The people recommending silver had a nice ride when silver was booming, but now the bottom has fallen out of silver. People like Kiyosaki (Rich Dad Poor Dad) who rode and promoted the silver bubble should stick to what they know, real estate. We advice mainly gold, not silver as your metal investment.

Oslo, Norway. September 10. 2008. Hans Lysglimt

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