We thought the bill would pass. The short analysis is that the power elite allways look after their own. That is also why we still believe the bill will somehow pass, perhaps in a modified form.
We are however extremely proud of the Republican and Democrat Congressmen who voted the bill down.
We personally actually bought some finance shares in expectation of a bailout rally, we sold them as we saw the bill did not pass and took a hit on that. We are so proud the bill did not pass that we don’t really mind that minor loss. We did the right thing is selling as the market plunged further.
However we do blaim ourselves for not taking into account that Intrade predicted all day that the bill would not pass. It was there in plain sight. The likelyhood, on Intrade, of a passing bill by Tuesday fell from almost 90% to under 10%. That is just amazing, the writing was right there on the wall for everyone to see all day from the morning. I just did not put the two and two together. The political buffs on Intrade saw this comming, they did the math beforehand, but Wall Street did not. This is an extremely interesting observation, and observation worth a trillion dollars or more, we will need to follow the prediction markets much more carefully. Intrade, extremely important.
A lot of what we have predicted has come true.
So, going forward:
– Bailout bill will pass, sooner or later, somehow. They look after their own, this has not changed.
The margin was just 10 Congressmen, how hard can it be to bribe over an additional 10? Not very hard.
– There will be a bailot bill rally. When, how big, how long?
Bailout bill rally will be strong, and short.
Bailout will make US financial institutions stronger. They will start lending money.
Who will get this money?
– The bailout finaly kills any moral authority of the US for free market capitalism.
This is significant, it might be the historical point of the decline of the US on the world scene.
This is socialism on a grand scale, massive.
The US will continue it’s rethoric, “Land of the free” – sure, reminding us that “Liberia” in Africa is also suposedly the land of the free, so is France. Rethoric means nothing.
– There will be fear in the meantime, expect great volatility.
– The bailout bill might cost as much as 5 trillion in the end.
– The recession will not end from this. It will take years to play out regardless of the bill.
– The recession will move to Europe with a vengance.
– The recession will hit Asia hard, their cash will count for little as long as they just passively hold it in US treasury bills.
– Oil will fall.
– Gold will fall.
– Silver will fall.
– The dollar will intially rally, then decline.
US investors will continue to bring money home.
– US 10 year interest rates will decline, this might come about quite rapidly.
We have not seen a fall back to the 3.2% levels we were at. This baffles us.
– The bailout bill will not stop the decline in house prices. It might soften the fall.
– On Intrade McCain is now down to 38% and Obama 62%. This is very significant.
This increases the likelyhood of a new war. A war is the thing that can save McCain.
Perhaps the Israeli will attac Iran after they pass the bailout bill. That will take attention away, how convenient.
If the Israeli so do they should be prepared to loose their precious state before long. “Live by the sword, die by the sword“.
Let us hope people come to their senses.
Let us hope the bill never passes.
But I am afraid the opposite is more likely.
The Russia stock exchange is closed again today. We have warned you about Russia repeatedly and we would be very dissapointed with you if you still have any money there.
The Oslo Stock Exchange will fall below the 300 mark today and see the 2XX numbers.
We have been predicting this since January 2008. We have contacted the media about this, trying to get our view accross. But people would not listen, we were probably seen as a crackpot for predicting such a freefall from the 400 number and about 500 at the time. It was easy to dismiss us then. And just as we predicted right now there are plenty of economist claiming to have predicted this all along. Boy, we get tired from this.
What really anoys us that even now, that we have fallen down to these levels we have predicted our Austrian analysis is still not brought out by the media to most people. Most people are in the stock market blindfolded, they have no way of seeing the dynamics of what is happening as long as the media is not actively helping them to the material. It is all avaliable online, for free.
If you read this, find your way to Mises.org and start reading up.
Oslo, Norway. Sept. 30 2008 Hans Lysglimt
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