A larger part of Ukrainian , Russian  population for a mutually beneficial cooperation between Kyiv  and Moscow

100 Reasons to Invest in Ukraine

 

 

Macroeconomics

1)       Corporate tax rate in Ukraine is 25%, compared with 35-41.6% combined federal-state in the US

2)       Ukraine’s new tax code implemented in 2010 established zero taxation for small businesses for a period of five years and for the hospitality sector and light industry for 10 years

3)       Income tax rate in Ukraine is 15%, compared with up to 46% combined federal-state in the US

4)       Budget deficit in Ukraine is projected to be 3.5% of GDP in 2011, compared with 10.91% in the US

5)       Government external debt in Ukraine is projected to be 25.3% of GDP in 2011, compared with 102.63% in the US

6)       Current account deficit in Ukraine is projected to be under 3% for the second year in a row (actually a surplus in January 2011), comparable to that of the US

7)       Ukraine’s GDP was over $300 billion and its per capital GDP was about $6,700 in 2010, and its GDP growth is projected to be over 4% in 2011 for the second year in a row

8)       Ukraine is a leader in GDP growth rate among the CEE nations

9)       Ukraine has a population of more than 45 million, and a labor force of more than 22 million

Debt & Equity Markets

10)   The market capitalization of the Ukrainian PFTS Stock Exchange is over $25 billion

11)   More than 800 securities are traded on the Ukrainian PFTS Stock Exchange, and 38 securities are traded on the Ukrainian UX Stock Exchange

12)   In 2010, the PFTS index rose 70.2% and the UX index rose 67.9%, outperforming all major global indices

13)   The Ukrainian stock exchanges (PFTS, UX) are projected to increase 30-40% in H2 2011

14)   The ratio of total market capitalization of Ukrainian companies to their total sales is 30% lower than comparable countries (Russia, Kazakhstan, Central and Eastern Europe, Turkey)

15)   Shares of Ukrainian banks are traded more cheaply than stocks of similar banks in Central and Eastern Europe

16)   Investors resumed buying several ? billion of Ukrainian corporate and sovereign Eurobonds in September 2010

17)   Ukraine reached an agreement with the International Monetary Fund for a new $14.9 billion loan in July 2010, which Ukraine has begun to drawn down in tranches

International Trade Organizations

18)   Ukraine is a member of the WTO

19)   Ukraine plans to enter into a free trade agreement with the CIS in May 2011

20)   Ukraine plans to enter into a free trade agreement with the EU in 2011

Investment

 21)   Ukraine led Europe in 2009 with a 48% growth year-over-year in foreign direct investment projects 

 22)   Ukraine received about $6 billion in foreign direct investment in 2010, a 7% growth rate year-over-year

 23)   Ukraine expects to receive $21 billion in foreign direct investment in 2011-2012, 40% of it from foreign investors

24)   The Government of Ukraine has approved 163 investment projects worth a total of $46.6 billion

25)   Ukraine’s infrastructure investments for the European Football Championship Euro 2012 include $2 billion for airports, $4 billion for high-speed rail, and over $1 billion for highways and stadiums

26)   Ukraine plans to develop the Northern European model of highways within 5 years

27)   At an International Economic Forum in September 2010, German and Swiss companies pledged to invest ?185 million in the Kharkov region of Ukraine

Ukrainian-Russian Economic Cooperation

28)   In November 2010, Russia and Ukraine agreed to a 10-year program on economic cooperation, that included 19 joint projects costing a total of $48 billion

29)   Ukrainian-Russian trade exceeded $35 billion in 2010 toward a long term target of $100 billion

30)   In 2010, Ukraine signed a nuclear power plant deal with Russia valued at $5-6 billion

31)   In 2010, Ukraine signed a new gas deal with Russia, saving Ukraine about $3 billion per year

Privatization

32)   In 2011, Ukraine intends to accelerate the privatization of industrial enterprises, such as telecom providers, power utilities and power distribution companies, chemical manufacturers, and seaports

33)   In the first privatization of 2011, Austrian investment firm EPIC bought a 92.79 percent stake in Ukraine’s main fixed-line operator Ukrtelecom from the Ukrainian government for $1.3 billion

Energy

34)   Ukraine produces about 100,000 barrels of oil per day

35)   Ukraine produces over 20 billion cubic meters of natural gas per year, and has proven reserves of over 1 trillion cubic meters

36)   Ukraine has five nuclear power stations with fifteen reactors with a total power output of 13.6 thousand MW, 47 thermal power stations with a total power output of 32.4 thousand MW, 6 large hydraulic power stations on the Dnieper and 55 small stations on other rivers

37)   Ukraine is a member of the EU Energy Community

38)   Ukraine’s energy strategy is for 20% of energy to come from renewable energy sources by 2020

39)   Ukraine’s feed-in tariff for renewable energy is nearly twice that of some G8 members

40)   Ukraine offers VAT exemption for importation of capital equipment used in renewable energy projects

41)   Ukraine has high average wind speeds, a good solar radiation profile, plentiful biomass raw materials, and numerous dams on the Dnieper River, all ideally suited for renewable energy generation

42)   The World Bank has pledged $200 million to Ukraine to develop energy efficiency projects, and has pledged to buy 10 million Ukrainian carbon credits

43)   Ukraine plans to sell 50 million ERUs for $1 billion

44)   The EBRD has already provided ?5 billion for about 200 projects in Ukraine, and continues to provide funding of about ?1 billion per year for projects in Ukraine

45)   Ukraine plans to raise $6.5 billion to modernize its gas transport system

46)   15 wind power parks with ?7 billion in planned investment are in progress in Crimea, Ukraine, and two solar power plants have been commissioned in Crimea, toward a goal of 750MW of wind energy and 1000MW of solar energy in Crimea

47)   Ukraine plans to build 52 hydroelectric power plants in the Ivano-Frankovsk region

National Innovation Project

48)   The Government of Ukraine plans to apply the best practices of Silicon Valley, Singapore, and Skolkovo in its National Innovation Project

49)   Ukraine is planning to construct a Technopark in Borispol, Kiev Oblast

50)   Ukraine will create a University of Innovation and Nanotechnology

51)   Ukraine created a new Council of Domestic & Foreign Investors that includes the CEOs of Microsoft and other multinational corporations

IT Outsourcing

52)   Ukraine has the world’s 5^th largest and fastest growing IT outsourcing services market in the world, with revenues in 2011 expected to reach $1 billion

53)   There are over 4,000 IT companies and about 300 ISPs in Ukraine, employing over 100,000 hardware, software and IT consulting professionals

54)   Ukraine has about 20 major IT educational centers producing about 30,000 IT-graduates annually with bachelor, MSc or PhD diplomas

55)   The cost of employing a software developer in Ukraine, or outsourcing IT business solutions development to Ukraine, is still about one-half of the cost of doing so in the EU or the US

56)   The IT industry in Ukraine is trending from system integration and development of “turnkey” information systems to Build-Operate-Transfer (BOT) and IT business solutions adapted for a long-term perspective

Telecommunications

57)   The telecom services market in Ukraine has annual revenues of more than $1 billion

58)   There are more than 55 million mobile telecom subscribers in Ukraine (higher than 100% saturation)

59)   Ukraine has an internet penetration rate of greater than 33%, or over 15 million users

Transportation

60)   Ukraine has 425 airports and 7 heliports

61)   Ukraine has over 20,000 km of railways, nearly 17,000 km of roadways, and over 20,000 km of waterways

62)   Ukraine has pipelines for gas – 33,327 km; oil – 4,514 km; and refined products – 4,211 km

63)   Ukraine has over 150 merchant marine ships, plus nearly 200 additional merchant marine ships of foreign registry

64)   Ukraine has ports and terminals in Feodosiya, Illichivsk, Mariupol, Nikolaev, Odessa, Yushny, and Sevastopol

Metallurgy

65)   Ukraine produces about 30 million tons of iron and steel annually, accounting for about 5% of GDP, and is the world’s third largest exporter of iron and steel

66)   The metallurgy sector in Ukraine, its largest key industry, includes 14 integrated steel making plants, 7 pipe plants, 10 plants producing metallic articles, 16 merchant-coke plants, 17 refractory production plants, 3 ferroalloy plants, 20 non-ferrous metallurgical works, 35 factories reprocessing ferrous and non-ferrous scrap metal, and other enterprises

67)   Ukraine has about 27 billion tons of iron ore deposits

Machine Building

68)   Machine-building is the largest Ukrainian industrial sector, and the largest machine-building subsectors in terms of their employment are instrument-making, tractor and agricultural machinery building, electric engineering, automobile building, chemical and petrochemical engineering, and machine-tool construction

69)   Ukraine also manufactures science-intensive and highly technological machines and equipment, including the development of the rocket and space industry, aircraft building, production of advanced tankers and large-tonnage vessels, fabrication of turbines for nuclear power plants, highly-efficient gas-pumping installations, equipment for high-voltage power transmission lines, etc.

Automotive Manufacturing

70)   Ukraine produced about 70,000 cars in 2010, and total car production in Ukraine is expected to grow 20-22% in 2011 and reach 271,600 units per year by the end of 2014

71)   ?koda’s Ukrainian arm Eurocar alone is expected to produce 100,000 units in 2011

Aircraft Manufacturing

72)   Ukraine is one out of just nine countries worldwide currently designing and building transport aircraft as well as top-class civil aircraft

73)   The Antonov Aircraft Plant manufactures the An-124 Ruslan, the world’s most power aircraft, and the An-225 Mriya (Dream) aircraft, which has been recognized by the International Aviation Federation as having scored 124 world records

Shipbuilding

74)   The Ukrainian shipbuilding industry is a complex of colleges, universities and research centers; experienced design bureaus; 9 shipbuilding yards with different capacities and specialisation; and a number of ship repair yards

75)   Its close geographical location to European Union, combined with availability of up-to-date design bureaus, powerful production facilities of shipyards, experienced labor force, presence of strong national metallurgic industry make the Ukrainian shipbuilding industry very attractive alternative to distant shipbuilding centers

Agriculture

76)   Ukraine, once “the breadbasket of the Soviet Union”, has the potential to become “the breadbasket of Europe”

77)   Among all the European countries, Ukraine is a leader in growing of sugar beet, buckwheat and carrot; second place in growing of wheat (after Russia) and of tomato (after Poland)

 78)   The market for wheat, barley, sunflower and canola, also grown in Ukraine, has been excellent

 79)   More than 60% of Ukraine is covered in Black earth top soil

 80)   28% of the population work in or are involved in agriculture, and labor is inexpensive

 81)   Ukraine plans to allow the purchase of farm land in 2013

 Chemicals and Petrochemicals

 82)   The multi-branch chemical sector of Ukraine includes chemical, petrochemical and chemical-pharmaceutic sub-sectors with over 1,600 enterprises and structural units

 83)   This sector in Ukraine produces mineral fertilizers, non-organic acids and soda; synthetic resins, plastic masses, chemical fiber, man-made caoutchouc and threads; and car and motor-cycle tires, hoses, and consumer goods

 Pharmaceuticals

 84)   At the present time there are 58 companies manufacturing drugs in Ukraine, mostly producing lower-priced products, such as generic drugs and vitamins

85)   Two of the countries giants in the Ukrainian pharmaceutical industry, Kyivmedpreparat and Halychpharm received the Ukrainian Government’s approval to merge and form Arterium Corp, which will be involved in the research, marketing and distribution of new medical products

86)   Nonetheless, pharmaceuticals imported into the country accounted for 62 per cent of the Ukrainian drugs market; therefore, there is a huge market potential for drug manufacturers willing to establish research, marketing, manufacturing, and distribution in Ukraine

87)   The compound annual growth rate (CAGR) of generic medicines is projected to be 31% in Ukraine in local currency between 2011 and 2013, and by way of comparison, the innovative drug subgroups will develop on average by 14% per annum

Fast Moving Consumer Goods

88)   The fast moving consumer goods industry in Ukraine includes over 3,000 enterprises producing textile, knitting, clothing, leather, footwear; basic foods, such as sugar, salt, oil, alcohol, confectionery, etc.; meat and dairy processing, sugar refining, flour milling and cereals production, oil extraction and starch and molasses; and other products

89)   The FMCG sector In Ukraine has considerable production, research and labor potential, but its production capacities are not fully utilized; thus, vast reserves of the sector are potentially available to strategic investors

Retail

90)   The Fozzy Group, the largest retailer in Ukraine, increased their revenues by 37.5% in 2010 on a 6% y-o-y increase in retail trading space

91)   Grocery retailers on the Ukrainian retail market increased their total retail trading areas by 6% y-o-y in 2010 to 2.1 million m?

92)   The Ukrainian ATB-Market retail grocery chain reported the highest growth in operated retail space – a 16% y-o-y increase, after opening 71 new stores in 2010

93)   The Ukrainian retail industry is still unconsolidated, with the top 10 retail operators accounting for less than 25% of the total share, and thus M&A opportunities exist for strategic investors

Hospitality and Tourism

94)   More than 12 million foreign tourists visit Ukraine each year, to see the Carpathian Mountains, the coastline of the Black Sea, the Dnieper River, vineyards, ruins of ancient castles; ancient churches, cathedrals, and monasteries; world-class opera and ballet, and more

95)  In the Ukrainian resort and hotel industry, demand greatly exceeds supply; there are many resorts and tourist places which are up for sale and many of them have put out proposals for investments

96)   The Government of Ukraine is still seeking investors to build hotels for the one million football fans anticipated to attend the European Football Championship Euro 2012

Political Stability

97)   Ukraine has a popularly elected President who is favored to win re-election in 2015, and a ruling coalition in the Ukrainian parliament headed by the President’s party that is expected to solidify their majority in the next parliamentary election in 2012

Anti-Corruption Law

98)   In March 2011, the Ukrainian parliament, the Verkhovna Rada, passed a tough anti-corruption law that was praised by the EU

Crime Rate

99)   With the exception of software piracy, Ukraine’s crime rate is below that of many industrialized nations

100)  Ukraine has anti-money laundering controls approved by the global Financial Action Task Force (FATF)

 

Sources: Over 100 various sources of information, too numerous to list. No originality of thought in the content herein is claimed.

 

http://bearmedia.com.ua/news/100-reasons-to-invest-in-ukraine/

 

 

 

http://www.alfabank.ru/4d/

 

http://www.youtube.com/user/alfabankru

 

http://www.youtube.com/watch?v=MD7EEBVW_zY&feature=related

 

 

Концерт ко Дню Независимости Украины 20 лет

 

В День Независимости Украины на главной площади страны – Майдане Независимости - загорятся все звезды украинского шоу-бизнеса. На протяжении двух с половиной часов поздравлять украинцев с государственным праздником будут популярные отечественные исполнители и художественные коллективы. Среди них – Таисия Повалий, Ирина Билык, Ани Лорак, Верка Сердючка, Гайтана, Алена Винницкая, Евгения Власова, Николай Гнатюк, Лама, группы "Алиби", "Авиатор" и многие другие. А чтобы телезрители не отвлекались от торжественного мероприятия, его трансляция пройдет без единого рекламного блока!

http://www.youtube.com/watch?feature=player_embedded&v=w-RpopFCKFk

 

 

 

News Flash October 14, 2011

 

 

Hope floats the markets, but for how long?

 

Hope isn’t a viable investment strategy.

 

But it’s so thick on Wall Street right now, you could cut it with a knife!

 

I’m talking about Hope that when they meet 10 days from now, European leaders will get things right on their 136th bailout attempt (or whatever the count is now).

 

Hope that the U.S. economy isn’t slipping back into recession, despite overwhelming evidence to the contrary, plus

 

Hope that 3rd quarter corporate earnings won’t be as bad as feared, that the “Occupy Wall Street” crowd won’t upset the apple cart and that Congress’ “Super Committee” can somehow figure out how to cut the deficit without starting another budget war.

 

But in the real world where I live, I see new signs of imminent turmoil, especially from Europe:

 

 

Sign 1

 

 

Germany is suffering a frightening decline in its true credit rating.

 

Germany is the country that’s supposed to put up most of the money for any bailout of the PIIGS countries or any rescue of Europe’s giant banks.

 

But now it’s having credit problems of its own, including:

 

A dismal bond auction:

 

At Germany’s most recent auction of its 30-year bonds, the country only attracted 1.78 euros for every 2 euros of bonds being sold, a dismal failure and a big red flag.

A doubling in default risk:

 

The major ratings agencies still seem to think Germany merits a triple-A.

 

But the rest of the world disagrees; the institutions buying and selling insurance against a possible German default say the risk of default has DOUBLED!

These two market factors make up a country’s TRUE credit rating.

 

And they’re telling us that Germany has just been DOWNGRADED!

 

 

Sign 2

 

 

Investor contagion is beginning to strike Belgium.

 

Belgium’s capital city is, in effect, the capital of the entire European Union.

 

Yet, the country itself is now emerging as the next major victim of the sovereign debt contagion:

 

Its 10-year yields just hit the highest level since late summer.

 

Why?

 

One big reason is that investors are worried sick that Belgium will now bust its already fragile budget to pay for bank bailouts.

 

Already, Belgium has admitted it will have to raise an extra 4 billion euros of debt this year just to pay for its share of ONE bank bailout, Dexia.

 

 

Sign 3

 

 

A new, even larger debt crisis is cropping up in Italy.

 

Italian government bonds have just plunged anew, driving yields to their highest level since late September.

 

The main trigger:

 

Italy is supposed to push through a major austerity program to satisfy its European Union paymasters and calm the bond vigilantes.

 

But a budget vote in the country’s lower house of Parliament just failed!

 

This now puts Prime Minister Silvio Berlusconi’s administration in jeopardy.

 

It makes investors wonder if they’ll EVER see the necessary budget cuts enacted.

 

And it raises the spectre of a far larger sovereign debt crisis that could envelop Europe in the days ahead.

 

 

Sign 4

 

 

Major credit rating agencies are finally responding, announcing a cascade of downgrades.

 

Moody’s and Fitch have just downgraded Spain and Italy, while putting Belgium on the chopping block.

 

Plus, they’ve announced a raft of downgrades of banks in the U.S., the U.K. and Portugal, with many more to come.

 

What’s Europe’s “new” solution?

 

We won’t find out the details until October 23, when Europe’s leaders are supposed to huddle again to come up with a new plan.

 

Their “new” idea?

 

Run still ANOTHER round of “stress tests” on the European banks and then just shovel taxpayer money into the ones who fail the test.

 

But who are they kidding?

 

These are the same folks who ran tests on banks like Dexia and declared they passed in flying colors, all just three months before the bank went under.

 

The bigger problem:

 

Injecting money into banks only works when the governments actually have the money and borrowing capacity to pay for it!

 

But right now, that’s obviously not the case.

 

As I just explained, Europe’s bond markets are already falling, the cost of insuring against sovereign debt defaults is already surging, credit ratings are already being slashed and the holes in Europe’s megabanks are growing far larger than they dreamed possible.

 

All this leaves you with just two choices:

 

You can put your financial future in the hands of the same bureaucrats who have failed to preserve and protect it for the past decade or more, OR

 

You can take matters into your own hands, to protect your money and even transform this explosive crisis into an explosive profit opportunity.

 

 

 

News Flash October 13, 2011

 

 

Most daring act in modern times!

 

Slovakia, a small euro-zone country with 5 million people, has burst into the world’s headlines with the most daring act of financial defiance in modern times:

 

Its parliament voted “NO” to the massive $590 billion bailout plan that the world is counting on to prevent the wholesale collapse of the European Union.

 

Even a New “Yes” Vote Tomorrow Will Do Nothing to Stop This Crisis!

 

Tomorrow, Slovakia will vote again; and after some of the most intensive international arm-twisting since the Treaty of Versailles, they’re expected to vote “yes.”

 

But that will STILL do virtually nothing to prevent the fall of the European Union, the largest economy in the world.

 

Why?

 

Because it’s widely recognized that the $590 billion bailout fund they’re supposed to approve is grossly outdated, only a fraction of the amount needed to bail out the PIIGS countries.

 

Because now, in addition to collapsing PIIGS countries, Europe faces collapsing megabanks.

 

And here’s the clincher:

 

The most powerful player in this drama, Germany, is insisting that European banks must bite the bullet and accept a fair share of the losses on their loans to Greece.

 

In other words, Germany is now finally caving in and demanding that everyone accept the reality we’ve been telling you about all along: Greece is broke. No matter what, chances are it’s going to default.

 

This leaves Europe with two and only two choices:

 

It plans Greece’s default and tries to control the damage.

 

Or

It lets the default happen on its own and completely loses control.

 

Either way default is a default.

 

There’s no amount of planning or sugar-coating that can change that fact.

 

Nor can anyone change this reality:

 

The failure of Lehman Brothers three years ago nearly triggered the meltdown of the entire global financial system!

 

Now, just two prime candidates for default, Greece and Italy, have over FIVE times more debt than Lehman Brothers had!

 

All this raises extremely urgent questions for all investors:

 

When Greece is forced into default, will investors just pooh-pooh it as a non-event?

 

Or will they start dumping the bonds of all other PIIGS countries in trouble, driving Europe into a death spiral?

 

What impact will the fall of Europe have on your stocks, your bonds and your real estate properties?

 

The U.S. is already on the verge of its own financial and political turmoil.

 

With Europe now caving in, what’s going to happen to your retirement, your income, and your job?

 

What about your physical security?

 

How can you prepare ahead of time?

 

Better yet, how can you turn this looming disaster into a life-changing wealth-building opportunity?

 

 

 

 

News Flash October 13, 2011

 

 

Derivatives: The $600 Trillion Time Bomb That's Set to Explode!

 

 

Tick...Tick...Tick

 

• That means banks with large derivatives exposure have to risk even more money to generate the incremental returns needed to cover the bets they've already made.

 

• And the fact that Wall Street believes it has the risks under control practically guarantees that it doesn't.

 

 

 

Seems to me that the world's central bankers and politicians should be less concerned about stimulating "demand" and more concerned about fixing derivatives before this $600 trillion time bomb goes off.

 

 

 

 

News Flash October 12, 2011

 

 

Will Europe bail out its megabanks? If so, then what?

 

Some investors seem to think that political leaders can simply promise some more bailouts and magically solve all their debt problems.

 

Yes, I know that sounds absurd.

 

But as you know, it’s the main reason the stock market rallied yesterday: The leaders of Germany and France promised to come up with a new plan to bail out their collapsing megabanks, and Wall Street rejoiced.

 

In the REAL WORLD, of course, it’s not that easy.

 

If anything, this crisis has just gotten dramatically WORSE.

 

First and foremost, the PIIGS countries are still careening toward default and there’s absolutely nothing that France, Germany or any European institution has done or has promised to do that can turn the tide.

 

Yet, this crisis has the potential to be far more dangerous than the debt crisis that was precipitated by the failure of Lehman Brothers three years ago.

 

In fact, just two candidates for default, Greece and Italy, have FIVE times more debt than Lehman Brothers had when it failed.

 

Second, the cost of bailing out troubled banks just keeps on rising.

 

Dexia, which just failed with $707 billion in assets, will require a mass infusion of capital from the governments of Belgium, France and Luxembourg.

 

It’s the SECOND bailout the bank has required in the past three years, all the more ridiculous when you consider it was just given a stamp of approval by Europe’s bogus “stress test” exercise a few months ago!

 

Meanwhile, although Dexia grabbed the headlines over the past few days, it was far from alone: Greece just had to step in and bail out that country’s Proton Bank, while Denmark had to engineer the bailout of Max Bank, hobbled by souring loans.

 

And never forget: Far larger European banks, with trillions in assets each, are also buried in bad sovereign debts. To bail them out would require more money than even the richest countries can afford.

 

So when the final bailout plans are announced in a few weeks, they’re bound to be a huge disappointment for investors, too little, too late.

 

Third, even if the governments of France and Germany could somehow afford a truly massive bank bailout, it would merely gut their own finances, drag down their own credit ratings and create a far larger sovereign debt crisis.

 

Already, the sovereign debt contagion has spread from Greece to Ireland and Portugal, then to Spain and Italy and now to Belgium.

 

In the wake of a massive bank bailout, France and Germany are likely to be next on the firing line.

 

The big picture?

 

Think of it this way: Until recently, the European crisis was strictly about sovereign countries on the brink of failure.

 

But now we have sovereign countries and giant banks, both on the brink of failure at the same time!

 

That means the more sovereign governments sink, the greater the danger of a global banking crisis.

 

And the greater the banking crisis, the more that sovereign governments will sink.

 

Now do you see why I say the crisis is getting a lot worse and not better?

 

This is no time for complacency.

 

With a disaster of this historic magnitude now looming, you must act well ahead of time.

 

 

 

News Flash October 11, 2011

 

 

Giant bank fails!

 

Biggest since last debt crisis!

 

Next, expect another failed bailout!

 

 

A giant bank has just gone under.

 

It’s the biggest bank failure since the debt crisis of 2008-2009.

 

It’s so big, in fact, that its assets are actually LARGER than the total GDP of the country where it’s domiciled.

The bank that just failed is Dexia and the country is Belgium.

 

But if you don’t live in Belgium and you think that fact makes this failure less relevant to your banks or to your investments, consider these shocking facts:

 

 

Shocking fact 1

 

 

Dexia was the world’s largest lender to municipal governments in the U.S. and overseas. So as the bank’s various pieces are chopped up and sold off to other institutions, it’s naturally going to be a lot tougher for municipalities to get financing.

 

 

Result:

 

 

More belt tightening and job cuts at local governments everywhere.

 

 

Shocking fact 2

 

 

Dexia was one of many large banks that actually PASSED Europe’s official “stress tests” just three months ago.

 

And yet it’s the first to go down!?

 

What does that tell us about the OTHER, even larger banks that supposedly passed the tests?

 

 

I’m talking about giant banks loaded with bad loans like:

 

 

Italy’s UniCredit, which is 1.8 times larger than Dexia in terms of assets.

France’s Soci?t? G?n?rale, which is more than double the size of Dexia.

France’s Credit Agricole, which is almost three times larger than Dexia.

France’s BNP Paribas, nearly FOUR times larger than Dexia.

 

The big disconnect:

 

 

The official stress tests let these banks lie through their teeth about their huge loans to Greece, Ireland, Portugal and other PIIGS countries.

 

Those loans are worth as little as 40 cents on the dollar on the market.

 

And yet, in the recent stress tests, the banks were allowed to value them at 100 cents on the dollar!

 

 

Result:

 

 

They also lied about their capital and their solvency!

 

 

This absurd and deliberate oversight by the banking regulators is widely known; and they’ve already been raked over the coals for it.

 

 

What’s not widely known is:

 

 

Shocking fact 3

 

 

It wasn’t recognition of the bad PIIIGS loans that sunk Dexia.

 

Even today, as Dexia is being split up and sold off, it’s STILL carrying those loans at full value on its books!

 

So what did sink Dexia?

 

It was a bank run, the sudden and mass withdrawal of its funding.

 

Moreover, the run on Dexia’s funds was not by consumers lining up on the street to pull out their deposits.

 

Rather, it was by so-called “wholesale funding” sources, other big banks and institutional investors who can pull out hundreds of millions of euros and dollars with a simple click of the mouse.

 

What makes this truly shocking is that nearly ALL large banks in Europe, including many that supposedly passed the stress tests with flying colors, also depend very heavily on these same funding sources: 

 

 

On average, they get nearly HALF of their money from these here-today-gone-tomorrow funding sources.

 

That’s far MORE than they get from ordinary deposits.

 

Even Moody’s admits: “Until this problem is corrected, ‘fixing’ European banking is merely applying band-aids.”

 

And guess what!

 

The promises made last night by France and Germany, to “recapitalize the banks” do NOT fix this problem!

 

If anything, if France and Germany throw more good money after bad into saving these banks, it will merely sink their own finances, invite more ratings downgrades, cause bigger losses in sovereign bonds and dig a deeper hole in the banks’ capital.

 

 

 

 

 

 

 

Shocking fact 4

 

 

Some of the largest U.S. banks, including Bank of America and JPMorgan Chase, are equally vulnerable, according to our analysis.

 

They’re loaded with toxic assets of their own. And to make matters worse, they have placed big bets with European banks.

 

Just bear in mind that the crisis is hitting right now.

 

So time for protective action is running out.

 

 

 

 

News Flash October 10, 2011

 

 

7 Major Advance Warnings

 

As soon as I see the likelihood of major bankruptcies and defaults, I don't wait around. I warn you immediately. I know you need time to get your money out of danger. And I also know that financial disasters don't obey any particular clock.

 

They can strike suddenly especially in the stock and bond markets, where investors often start selling in anticipation of the troubles to come.

 

That's why I specifically warned you about:

 

 

•   The failure of Bear Stearns 102 days ahead of time (December 3, 2007).

•   The failure of Lehman Brothers 182 days ahead of time (December 3, 2007 and March 17, 2008).

•   The near-failure of Citigroup 110 days before (August 11, 2008).

•   The failure of Washington Mutual 51 days before (August 11, 2008).

•   The demise of Fannie Mae four years before it collapsed (September 24, 2004).

 

 

Now, the time has come to issue new advance warnings.

 

My new warnings are mostly focused on Europe.

 

But as I'll explain below, they're bound to have a life-changing impact on nearly all investors in the U.S. and around the globe.

 

 

An historic, world-changing event
is about to permanently alter your life!

 

 

This monumental event will plunge vast numbers of families into the nightmare of poverty, homelessness and hunger.

 

In the worst case scenario, you will see soaring crime, the confiscation of property,...

 

 

Warning #1

 

Greece will default very soon.

 

 

Banks and other investors who hold Greek notes and bonds have already seen massive losses in their market value, over 50% on 2-year notes and even more on other issues.

 

Until now, European authorities have turned a blind eye as their largest banks continued to carry these toxic assets on their books at full value, as if they were the best, most pristine assets in the world, as if the sovereign debt crisis never happened!

 

But now, European authorities are finally conceding that the banks must "partake in any solution of the crisis."

 

In other words, the banks must bite the bullet and take some big hits in their Greek loans.

 

They must officially recognize at least some portion of their losses.

 

Conclusion: Whether the banks accept this "solution" voluntarily or not, it will mean Greece is in DEFAULT!

 

 

Warning #2

 

The contagion of fear will spread.

 

 

Anyone who thinks global investors will turn a blind eye to the Greek default is in for a big shock.

 

Greece is not a small, third-world country.

 

It's a member of the European Union and part of the euro zone.

 

It has over 328 billion euros in debt, more than Ireland and Portugal combined.

 

Moreover, Greece is not alone, and investors know it.

 

Investors will automatically assume, with good reason, that if one major Western government can default, so can others. And with that assumption, they will refuse to lend any more money to highly indebted governments. Or they will demand outrageously high yields.

 

 

Warning #3

 

 

European megabanks will collapse.

 

 

Some of Europe's largest banks will collapse under the weight of defaulting sovereign debts and in the wake of mass withdrawals.

 

Spain's banks are especially vulnerable, swimming in a cesspool of bad mortgages left behind from that country's giant housing bubble and bust.

 

In fact, this year, the European Banking Authority ran stress tests on the largest banks in Europe; and among the eight banks that failed the test, five were Spanish. Their names:

 

 

• Caixa Catalunya
• Unnim
• Caja de Ahorros del Mediterr?neo
• Grupo Caja 3
• Banco Pastor

 

 

Major French banks are bigger and in no less trouble.

 

They barely passed the stress tests. And that was DESPITE the fact that they were allowed to cheat, not booking a penny of their losses on loans to Greece, Portugal or Ireland.

 

 

According to Bankers Almanac, on a consolidated basis:

 

 

•   BNP Paribas has $2.7 trillion in assets, making it the largest in the world.

•   Cr?dit Agricole has $2.1 trillion and is the world's fourth-largest bank.

•   Soci?t? G?n?rale has $1.5 trillion.

 

 

The total assets of these three French banks alone are greater than the total assets of the banking units of JPMorgan Chase, Bank of America and Citigroup.

 

All three are drowning in bad loans to PIIGS countries.

 

All three are in danger, in my view.

 

But there's an even more imminent threat: mass withdrawals!

 

You see, banks in the euro zone get less than 35% of their funds from deposits, according to Bloomberg data.

 

Instead, they rely far more heavily on what's called "wholesale funding" money borrowed from other banks and institutions.

 

In other words, they're hooked on HOT MONEY!

 

That's the kind of money that is quickly withdrawn at the first sign of trouble.

 

And that's also the same kind of money that caused mass bank runs in the U.S. three years ago, runs that doomed big U.S. banks like Washington Mutual, while nearly sinking giants like Citigroup and Bank of America.

 

Big European banks are especially vulnerable because they rely on hot money far more than U.S. banks.

 

And many appear to be suffering big runs at this very moment.

 

This is why the European Central Bank rushed to the rescue last week with 40 billion euros in emergency loans for banks suffering withdrawals.

 

But 40 billion is a drop in the bucket, barely covering ONE CENT for each dollar of PIIGS' debts outstanding.

 

In the weeks ahead, will governments stand idly by while their biggest banks collapse?

 

 

Warning #4

 

European governments will suffer a
cascade of new credit rating downgrades.

 

 

The richest governments of the European Union, France and Germany will scramble to rescue their failing banks, and so, global markets may breathe a temporary sigh of relief.

 

But recent history proves that the entire concept of bank bailouts is seriously flawed because of the following, now-obvious sequence of events:

 

 

•   In their zeal to save the banks and the economy, the governments gut their own fiscal balance.

•   They suffer big downgrades, losing their stellar credit ratings.

•   And as soon as they have to borrow more money, they must pay through the nose with far higher interest rates.

 

 

In other words, in their zeal to lift banks up from the brink of failure, the governments themselves are dragged down into the abyss.

 

Case in point: Last week, we learned that Dexia, a Franco-Belgian megabank, is in distress. It's smaller than the giant French banks in trouble. But its assets are still 1.5 times the size of Belgium's ENTIRE economy!

 

What happens if the government of Belgium tries to help rescue the bank?

 

It will surely lose its still-good credit rating.

 

Indeed, late Friday, Moody's announced it's ALREADY putting Belgium on review for a downgrade just based on the POSSIBLITY it may have to bail out banks like Dexia.

 

Moody's specifically states that a key reason Belgium is on the ratings' chopping block is "the impact on the already pressured balanced sheet of the government of additional bank support measures which are likely to be needed."

 

And the prospect of big bank bailouts is also a key reason other major PIIGS countries have suffered massive downgrades in recent days.

 

 

Warning #5

 

Spain and Italy will be next to face
default on their massive debts.

 

 

Spain and Italy have nearly $3.4 trillion in debt, or about 10 times more than Greece.

 

But with their borrowing costs surging and their big banks failing, they will be unable to borrow enough new money to pay off old debts coming due.

 

Result: Spain and Italy will also risk default.

 

 

Warning #6

 

Global debt markets will
suffer a critical meltdown.

 

 

In anticipation of a default by a country as large as Spain or Italy, nearly all debt markets in the world will freeze, as investors withdraw in panic.

 

This panic will not only crush the borrowing power of the PIIGS countries, hastening their default, but it will also threaten to melt down the bond markets of countries like France, Germany, Japan, the U.K. and the U.S.

 

That could mean sharply higher interest rates and, ultimately, the inability to borrow at almost any cost.

 

 

Warning #7

 

The vicious cycle of sovereign debt defaults and
bank failures will lead to a global depression.

 

 

Sovereign debt defaults will trigger more bank failures.

 

More bank failures, in turn, will precipitate more sovereign debt defaults.

 

This vicious cycle will cut off the flow of credit to businesses and households, sink the global economy into a depression, and perpetuate the vicious cycle.

 

Ultimately, we will see an extended period of great economic hardship for billions of people on every continent.

 

Skeptical?

 

If so, I don't blame you, and I assume you have your reasons. Yet there are far stronger reasons to be skeptical of all those who believe we can easily avoid disaster.

 

 

Reason #1

 

Even the highest authorities
have admitted the dangers.

 

 

U.S. Treasury Secretary Tim Geithner warns of "cascading defaults," "bank runs," and "catastrophic risk."

 

The International Monetary Fund says "the global economy is in a dangerous new phase."

 

World Bank President Robert Zoellick warns that Europe, Japan, and the U.S. are in such danger, they're threatening to "drag down not only themselves, but the global economy."

 

And never forget: These statements are all from leaders who want to CALM financial markets!

 

Imagine what they'd be saying if they were out of office and speaking freely!

 

Clearly, the crisis has now progressed far beyond the deniability stage.

 

 

Reason #2

 

The major credit rating agencies have
finally (and belatedly) begun to
recognize the dangers.

 

 

Here are just a few of the most recent examples:

 

This past Friday, October 7, Fitch downgraded Spain and Italy.

 

Fitch cited the severity of the European debt crisis coupled with an increasingly recessionary atmosphere that can only impair governments' abilities to come to the aid of their faltering economies.

 

On Spain, Fitch talked about the still sizeable structural budget deficit, high level of net external debt, and the fragility of the economic recovery as the process of deleveraging and rebalancing continues render the country especially vulnerable to such an external shock.

 

For Italy, Fitch also stressed the "high public debt and tax burden; an inefficient public sector; barriers to competition in product markets and services; inflexible labor market; and a pronounced north-south divide."

 

Most alarmingly, Fitch says it has concerns about "the risk that a further worsening of the euro-zone debt crisis and volatility in the value of Italian government bonds will further erode confidence in the banking system.

 

"In such a scenario," Fitch continues, "concerns about the banks would start to weigh on the sovereign credit profile as a contingent liability and a vicious cycle of deteriorating sovereign and bank credit quality could emerge."

 

The day before, on October 6, Moody's downgraded 12 U.K. financial institutions.

 

The reasons?

 

Similar to those cited for its earlier downgrades of major U.S. banks:

Moody's believes that the U.K. government is now more likely to allow smaller institutions to fail if they become financially troubled and that even U.K.'s larger banks will suffer a reduction in the government's support.

 

In other words, even if big banks fail, the government is likely to dish out less cash and more tough love.

 

On Wednesday, October 5, Moody's downgraded Italy by three notches in one fell swoop.

 

Moody's says Italy's ability to tap into sovereign debt markets may be constrained by the "uncertain market environment and the risk of further deterioration in investor sentiment."

 

Alarmingly, writes IHS Global Insight, "the rating agency also warned of further downgrades should any long-term uncertainty arise over the availability of external sources of liquidity support to Italy."

 

All told, including the downgrades of Citigroup and Bank of America announced the week before, we calculate that the countries and institutions downgraded in the last 10 days alone total at least $7.3 trillion in debts outstanding (see chart below).

 

 

 

Countries and Institutions Downgraded in
Past 10 Days Alone Have at Least
$7.3 Trillion in Total Debts Outstanding

 

 

 

 

 

 

Reason #3

 

The era of big bank bailouts is over!

 

The facts are simple:

 

•   Not even the richest countries of Europe could possibly afford to bail out their biggest banks.

•   Not even the richest banks of Europe could possibly afford to finance the bulging deficits of their sovereign governments.

 

Yet, right now, they are leaning on each other to avoid failing.

 

European banks are holding on to the bad debts of sinking European governments.

 

And, at the same time, European governments are trying to find ways to keep the banks afloat.

 

But this entire structure is based on nothing more than a pack of legalized lies: Banks are allowed to lie about the value of their loans to PIIGS countries, their capital and their solvency.

 

And governments lie about how much it would really cost to save the insolvent banks.

Solemn promises are made. Paper is shifted back and forth. But it's no better than rearranging chairs on the deck of the Titanic.

 

This Impacts You No Matter Where You Live, in the US, in Europe, in Ukraine,...

 

If you're a U.S. investor, you may think you're better off simply because the downgrade of the U.S. did not precipitate the feared collapse in U.S. Treasury securities. But that's merely due to a temporary flight to quality.

 

Or if you're living in a country that's growing nicely and in good shape financially, you may think you're even more immune to Europe's crisis.

 

But the European Union has the largest economy and the largest banks on Earth.

 

It would be vastly unreasonable to think that Europe could fall and leave any other region standing.

 

The market contagion ALONE would be enough to cause a global meltdown, destroying trillions of dollars in wealth in bonds, stocks and real estate.

 

The big blows to corporate profits, trade and trust would merely compound those losses.

 

So my recommendations are unchanged:

 

 

•   Get all or most of your money out of danger immediately.

 

•   For any vulnerable assets you may still own, buy protective hedges, inverse investments specifically designed to rise when asset values fall.

 

•   And for funds you can afford to risk, go for potentially windfall profits, using those same inverse investments.

 

 

 

Europe's Lehman Brothers

 

 

I warned you that Europe probably had its own Lehman Brothers, an unstable financial institution on the brink of a collapse.

One big firm, the Brussels-based Dexia SA, is already set to be dismantled.

And based on an analysis of 50 European banks with a combined $129 billion (92 billion euros) tied up in Greek sovereign debt, I've identified two other suspect institutions: BNP Paribas SA, and Societe Generale SA.

These banks have a high level of exposure to Greek sovereign debt and once they're forced to acknowledge the precariousness of their situation investors will stampede for the exits.

 

That will have negative effects for both European and U.S. banks, as well as the overall markets.

 

But there is a way to not only protect yourself, but turn a serious profit. 

 

Europe's Lehman Brothers!

 

 

Basically, there are two ways to judge which banks are most at risk.

 

You can look at how expensive the credit default swaps on these banks are compared to their peer group. And you can look at how quickly those credit default swaps have climbed.

Credit default swaps, in case you are not familiar with them, were originally created as "insurance" that protected the lender in case of a default. When they are purchased, the loan is turned into an "asset" and is then "swappable" for cash if the borrower defaults.

Generally speaking, the more expensive a credit default swap is and the faster its price has increased, the greater the risk there is associated with it.

As of Oct. 4 , the senior debt of the top 25 global banks with tradable CDS instruments was at 289 basis points. (A basis point is equal to 1/100 of a percentage point . They are commonly used to denote a rate change or, in this case, the difference or spread between two interest rates.)

However, the five-year senior credit default swaps for Societe Generale and BNP Paribas are considerably out of line with that figure or at least they were as of Oct . 6. They've recovered since rumors of another rescue surfaced, but they're still dangerously high. Five-year senior credit default swaps were recently valued at about 386 points for Societe Generale and 287 basis points for BNP Paribas.

As for how fast the cost of insuring that debt has risen, the data is even more incriminating.

 

Since 2009 Societe General's credit default swaps are up 294.17% and BNP Paribas credit default swaps have risen 199.60%.

This suggests two possibilities:

 

 

1) Traders are betting that the banks are substantially undercapitalized, meaning they may not have enough money to meet potential losses.

 

 

2) They've got way too much exposure to Greek debt to withstand the country's failure.

 

This is no coincidence.

 

 

BNP and Societe Generale are among the top foreign holders of Greek government bonds, according to the European Central Bank (ECB) and the Institute of International Finance (IIF).

 

Why regulators and central bankers cannot put two and two together is beyond me. To hear them tell it, BNP and Societe Generale have already written their Greek debt down 21%, so this shouldn't be an issue.

But other European banks wrote their Greek debt down by 51% on average. That means BNP and Societe may still have another 30% in write-downs that they don't want to pull from the closet like the skeleton everybody hopes isn't really there.

An additional 30% in write-downs for these suspect banks could result in more than $2 billion in extra losses, or roughly triple what's already been booked.

In BNP's case, the hit would be another $2.3 billion (1.7 billion euros). The bank calls that manageable, but I have my reservations. And Societe Generale would have to take an additional net loss of $135 million to $200 million (100 million to 150 million euros), according to Laetitia Maurel, a spokeswoman for the firm.

 

The Two Moves to Make

 

The word is that Europe is going to "handle it" (again).

Well call me crazy, but I don't believe it.

Aside from the fact that this is the seventh or eighth attempt at subduing this crisis, I simply don't believe that it can be done based on my experience in Japan over the past 20 years.

I lived through the financial crisis in that country and I recall very vividly what happened when Japanese banks were forced to take write-downs on bad debt.

 

 

Many went bust and those that shorted the entire Japanese financial sector made a fortune.

 

That's what I see happening here.

So here's how you might play this if you're an aggressive trader.

Bear in mind, though, that what I am about to suggest will require some finesse, if only because the world's central bankers still believe they can save Europe's banking system.

 

That they will try I have little doubt. That they will ultimately fail, I have no doubt.

 

 

The key to this trade is sentiment.

 

 

Stocks rose sharply towards the end of last week, lifted by the hope that the European authorities will succeed.

Good. The longer the illusion is maintained, the higher prices will be before we short them.

The timing signal I'm looking for is very simple:

 

 

When Greece misses its first bond payment or news of break up talks hits the wires.

 

 

That's going to cause a cascade of sales, forcing the value of all Greek bonds to immediately drop as traders make a mad dash for the exits. The three banks we're targeting will get hit the hardest, but U.S. banks will be adversely affected as well.

I don't think it would be out of line to get in the game a little early, but recognize that the trades may go against you before they ultimately perform as expected.

So here's what to do:

 

• Short the banks I've mentioned - BNP Paribas SA and Societe Generale SA. Be careful, though. These may rise dramatically in the short term before falling again in 2012 when the write-downs and declining earnings really come home to roost. Proper risk management is critical.

 

• Buy long-dated put options on the individual banks, as well the broader Standard & Poor's 500 Index. Ideally, you want these to be dated 2012 or even 2013 when they become available. While your risk is limited to the amount of money you use to buy them, these puts will be volatile so only use capital you can afford to lose entirely.

 

 

 

Deutsche Bank AG (NYSE: DB) Will Be Crushed Under the Weight of Europe's Debt!

 

 

 

Frankfurt-based Deutsche Bank AG (NYSE: DB) is about to be critically wounded by the European banking crisis.

 

Don't get me wrong, it will survive the spiraling financial mess. Germany will defend it because it's the bellwether of big banking in Europe. It's their version of "too big to fail."

 

But as the continent's largest bank, it won't be able to escape unscathed from the capital crunch about to take over the European banking system.

 

So it's time to sell Deutsche Bank AG, before the region's financial system falls apart.

 

Europe's Coming Capital Crunch

 

 

Many European banks don't have enough money to survive a Greek default. They hold huge amounts of their home sovereign's debt, as well as debt of their troubled Eurozone neighbors. Any write-down of those holdings will slam their balance sheets.

 

These banks were already overleveraged when the financial crisis started in 2007, and they have relied on outside sources like the United States to maintain core capital ratios.

 

In the 2008 crash, the European banks turned to the U.S. Federal Reserve for trillions of dollars of liquidity injections. They also used sources like U.S. money market funds for short-term loans, commercial paper that matures in less than 270 days to cover capital loaned out at longer maturities. In May 2011, U.S. money market funds had an average 40% of holdings in European commercial bank paper.

 

But then U.S. banks, afraid of the unfolding European sovereign debt drama, let these short-term loans mature. This brought the capital back home and took an estimated $350 billion in liquidity out of the European banking system.

 

Now Europe's real levels of available capital are by far the weakest link in the world's interwoven financial system and banks are struggling to find new funding sources.

 

This capital crunch prompted a former Chinese central bank official to say the debt crisis will spread across Europe like the "Black Death of the fourteenth century."

 

The banks most exposed to sovereign debt will crumble, and will share some damage with the region's biggest institutions - especially Deutsche Bank.

 

Why Deutsche Bank AG is a "Sell"

 

Deutsche Bank's position as Germany's financial powerhouse makes it highly vulnerable to this crisis for three reasons.

First, Deutsche Bank will be highly exposed to its smaller, troubled counterparts when they start the recapitalization process. It will have to absorb some of Germany's undercapitalized banks if they don't raise enough money to protect themselves from a Greek default.

And at the rate they're going, they won't.

Second, due to its integral role in the region's banking system Deutsche Bank will be affected by firms refusing to do business with each other. Funds will almost certainly freeze up as fear regarding overnight funding risks increases.

Third, since Deutsche Bank represents Europe's biggest economy, it could be pressured to take political actions that might not be in its best economic interest. And Deutsche Bank needs the ruling body's support because even though it has raised some capital, it'll likely need to access the German government's emergency capital fund for more help.

The company's $32 billion market capitalization is down 31% from a year ago, compared to a 3.2% rise in the Standard & Poor's 500 Index. The stock hit a 52-week high of $66.00 per share on May 2, 2011. It fell to hit a new 52-week low of $28.57on Sept. 12.

The stock tumbled 5.00% on Friday to close at $35.15.

 

 

 

News Flash October 10, 2011

 

 

Shocking new data on unemployment! What to do?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fed Chairman Ben Bernanke just told Congress that unemployment is a "national crisis."

 

I disagree with "Helicopter Ben" about a lot of things. But on this call, he's right on target!

 

Just look at the shocking facts we got from the Labor Department on Friday:

 

The average person out of work in the U.S. now takes a stunning 40.5 weeks to find new work.

 

That's now MORE than double what it was in the last recession and the WORST in history!

 

If that's not the prelude to much more trouble for the U.S. economy, I don't know what is.

 

Meanwhile, 16.5% of Americans are now either out of work, unable to find full-time employment or so disgusted with the lack of their job searches that they're giving up the hunt entirely.

 

That's the worst reading in 2011, and it STILL underestimates true unemployment by a mile, according to http://shadowstatistics.com/ .

 

This is the sad legacy of the housing bust, the credit crisis and more.

 

They prove that all the government's highly touted programs to deal with their fallout TARP, HAMP, the $800+ billion economic stimulus package and more have failed to help average Americans.

 

What about the Fed's QE1 program?

 

QE2?

 

Operation Twist?

 

Also epic failures!

 

Look, I wish I could be more optimistic about the future.

 

And I would be if we would just take our medicine let vulnerable banks default, clear out all the bad debts, eliminate the excesses of the bubble years for once and for all.

 

But instead, our leaders keep trying to get in the way.

 

They keep borrowing, spending, and printing money they don't have.

 

Can't they see that every single PAST whiz-bang program has failed to restart the great American job engine?

 

Can't they see it has failed to buy more than temporary, artificial bounces that inevitably fail!

 

The only way to deal with this harsh, yet REALISTIC, outlook?

 

Take matters into your own hands.

 

Take steps to protect your wealth and your assets from destruction.

 

Tomorrow we start a new week and it looks like it could be ugly: 10 European Banks are BANKRUPT!!!

 

Dexia's Belgian Bank To Be 100% Nationalized!

 

http://www.zerohedge.com/news/dexias-belgian-bank-be-100-nationalized

 

 

An imminent Belgian rating downgrade and the unleashing of the completely unpredictable domino effect in the US and Europe.

 

Who is NEXT?

 

Bank of America (NYSE: BAC) America's largest Bank?

 

The US government will need to nationalize Bank of America (NYSE: BAC), like the Belgium government nationalized Dexia Bank.

 

 

Market crash looming!

 

 

You can take several steps to protect your portfolio, and even PROFIT from a further decline!

 

Inverse ETFs investments could very well make the difference between a cracked nest egg and one that is well-protected, and even increasing in value, as more QE4 earnings warnings pour in and the Dow heads much lower.

 

 

Inverse ETFs investments that rise in value when stocks fall.

 

That's precisely what I'm doing.

 

 

• ProShares UltraShort Euro ETF (NYSE: EUO) – This ETF operates inversely to the
movements of the euro in a given day, meaning it will move up as the euro heads
south. Even better, the UltraShort provides a 200% inverse. Losses in the euro will
create double the gains in the EUO.

 

http://www.proshares.com

 

 

• DB X-TRACKERS EURO STOXX 50 Short Daily ETF (LON: XSSX) – This inverse ETF
trades on the London Stock Exchange, but it’s based on the Dow Jones Euro Stoxx 50
Index, a collection of Europe’s largest companies (50 of those companies, to be exact).
It’s also the easiest way for American investors to access a broad-spectrum short on
the European markets.

 

 

• ProShares UltraShort Financials ETF (NYSE: SKF) – Like EUO above, SKF is an
ultra-short ETF that will provide a 200% inverse return on the asset it follows. In this
case, that asset is the Dow Jones U.S. Financials Index. Many U.S. banks continue
to gamble on their European exposure, despite clear warning signs that the region is
unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.proshares.com

 

 

 

• Direxion Daily Financial Bear 3x Shares ETF (NYSE: FAZ) – FAZ is an
ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Financial Bear 3X ETF seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the Russell 1000® Financial Services Index ("Financial Index"). Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.direxionshares.com

 

 

 

• Direxion Daily Russia Bear 3x Shares ETF (NYSE: RUSS) to protect your investments in Russia and Ukraine. RUSS is an ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Daily Russia Bear 3x Shares seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the DAX Global Russia+ Index. Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the Russian, Ukrainian financial sector.

 

http://www.direxionshares.com

 

 

 

 

 

 

 

Kyiv Capital Disclaimer:

 

Nothing published by Kyiv Capital should be considered personalized investment advice.

 

Any investments recommended by Kyiv Capital should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Investment products are not bank deposits or obligations of or guaranteed by Kyiv Capital, are not insured by any governmental agency and are subject to investment risks, including the possible loss of the principal amount invested. Past performance is not indicative of future results, prices can go up or down. Investors investing in funds denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Funds are subject to market risk. Please read the prospectus or financial statements of the company (Direxion, ProShares) carefully before investing. Kyiv Capital do not assume liability for any loss that may result from relying on these Kyiv Capital opinions or information. Kyiv Capital opinions or information is not intended as an offer or solicitation for purchase or sale of any security, nor is it individual or personalized investment advice. Investing involves risk, including the possible loss of principal. There may be additional risks associated with international investing, including foreign, economic, political, monetary and/or legal factors, changing currency exchange rates, foreign taxes, and differences in financial and accounting standards. These risks may be magnified in emerging markets. International investing may not be for everyone.

 

 

 

 

INVESTMENT PRODUCTS:   NOT FDIC INSURED  • NOT A BANK DEPOSIT  
• NOT INSURED BY GOVERNMENT AGENCY  • NO BANK GUARANTEE  • MAY LOSE VALUE

 

 

 

 

News Flash October 10, 2011

 

QE4 Catastrophic Market Crash Setting Up

 

There is a QE4 Catastrophic Market Crash Setting Up and you need to protect yourself from this coming event.

 

With so much uncertainty in the market right now, investors are at a huge disadvantage.

 

How do you know which way the market is going to turn?

 

You DON’T!

 
There is a catastrophic market crash looming in QE4 of 2011. 

 

You need all the help you can get right now with the way the markets been acting.  
 

This is why it’s so important for you to know:

 

1. You won’t lose your entire portfolio’s worth.

2. You’ll be able to profit from the market crash.

3. You’ve worked way too hard to for your money.

 

 

You can take several steps to protect your portfolio, and even PROFIT from a further decline!

 

Inverse ETFs investments could very well make the difference between a cracked nest egg and one that is well-protected, and even increasing in value, as more QE4 earnings warnings pour in and the Dow heads much lower.

 

 

Inverse ETFs investments that rise in value when stocks fall.

 

That's precisely what I'm doing.

 

 

• ProShares UltraShort Euro ETF (NYSE: EUO) – This ETF operates inversely to the
movements of the euro in a given day, meaning it will move up as the euro heads
south. Even better, the UltraShort provides a 200% inverse. Losses in the euro will
create double the gains in the EUO.

 

http://www.proshares.com

 

 

• DB X-TRACKERS EURO STOXX 50 Short Daily ETF (LON: XSSX) – This inverse ETF
trades on the London Stock Exchange, but it’s based on the Dow Jones Euro Stoxx 50
Index, a collection of Europe’s largest companies (50 of those companies, to be exact).
It’s also the easiest way for American investors to access a broad-spectrum short on
the European markets.

 

 

• ProShares UltraShort Financials ETF (NYSE: SKF) – Like EUO above, SKF is an
ultra-short ETF that will provide a 200% inverse return on the asset it follows. In this
case, that asset is the Dow Jones U.S. Financials Index. Many U.S. banks continue
to gamble on their European exposure, despite clear warning signs that the region is
unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.proshares.com

 

 

 

• Direxion Daily Financial Bear 3x Shares ETF (NYSE: FAZ) – FAZ is an
ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Financial Bear 3X ETF seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the Russell 1000® Financial Services Index ("Financial Index"). Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.direxionshares.com

 

 

 

• Direxion Daily Russia Bear 3x Shares ETF (NYSE: RUSS) to protect your investments in Russia and Ukraine. RUSS is an ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Daily Russia Bear 3x Shares seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the DAX Global Russia+ Index. Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the Russian, Ukrainian financial sector.

 

http://www.direxionshares.com

 

 

 

 

 

 

 

Kyiv Capital Disclaimer:

 

Nothing published by Kyiv Capital should be considered personalized investment advice.

 

Any investments recommended by Kyiv Capital should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Investment products are not bank deposits or obligations of or guaranteed by Kyiv Capital, are not insured by any governmental agency and are subject to investment risks, including the possible loss of the principal amount invested. Past performance is not indicative of future results, prices can go up or down. Investors investing in funds denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Funds are subject to market risk. Please read the prospectus or financial statements of the company (Direxion, ProShares) carefully before investing. Kyiv Capital do not assume liability for any loss that may result from relying on these Kyiv Capital opinions or information. Kyiv Capital opinions or information is not intended as an offer or solicitation for purchase or sale of any security, nor is it individual or personalized investment advice. Investing involves risk, including the possible loss of principal. There may be additional risks associated with international investing, including foreign, economic, political, monetary and/or legal factors, changing currency exchange rates, foreign taxes, and differences in financial and accounting standards. These risks may be magnified in emerging markets. International investing may not be for everyone.

 

 

 

 

INVESTMENT PRODUCTS:   NOT FDIC INSURED  • NOT A BANK DEPOSIT  
• NOT INSURED BY GOVERNMENT AGENCY  • NO BANK GUARANTEE  • MAY LOSE VALUE

 

 

 

 

 

 

News Flash October 9, 2011

 

 

The Bank of England falls off the wagon. The pound could be sore in the morning!

 

Another major central bank opens up the flow of more liquidity.

 

This time it was the Bank of England (BOE).

 

And it was only a matter of time.

 

The UK has been flying under the radar because there are so many different angles to scrutinize the euro zone.

 

But the UK has been rolling over towards recession for quite some time now.

 

You may, if you paid close attention, remember that UK GDP contracted in 4Q 2010 and trudged through with nearly no growth in the first and second quarters of this year, 0.4 percent and 0.1 percent, respectively.

 

No doubt, the growth deterioration there has been steady.

 

With that said, Thursday's move by the BOE to enact a new round of quantitative easing was not a surprise to me.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The $110 billion worth of new stimulus via gilt purchases will probably have about the same impact on the real economy in the UK as the Fed's QE1 & 2 had on the real economy in the U.S.

 

The economic deterioration will continue while the British pound gets hung out to dry.

 

Notice in the chart below the correlation between the British pound and 10-year gilt yields. And notice the recent divergence i.e. gilt yields have fallen, but the pound hasn't matched that fall ... yet!

 

 

 

 

 

 

 

During each and every bout of global market risk aversion, the British pound is likely to feel the heat. And our thermometer for risk appetite is the U.S. stock market.

The correlation between the British pound and S&P 500 Index can be seen in the chart below. This tells us that another sell off in stocks, which we expect once this "oversold" rally is complete, will be yet another factor pushing down the pound relative to the U.S. dollar ...

 

 

 

 

 

 

Indeed, there are plenty of negatives still swirling around Europe and the prospects for the global economy. Those bits and pieces have incited a renewed focus on backstopping a potential Armageddon scenario that would spawn in Europe. The latest efforts taken so far include Federal Reserve FX Swap Lines, BOE quantitative easing, bolstering of the European Financial Stability Fund, and the ECB considering an interest rate cut.

 

 

The IMF Chimes In

 

But perhaps the most active lately has been the fine folks of the IMF. Here is a quick montage of IMF-related news, in no particular order:

 

 

• IMF considers a plan to buy European bonds in the open market; it later retracts the statement.
  
  
• IMF says Latin America must prepare to inject stimulus and ease policy if crisis materializes.
  
  
• IMF suggests the Fed should not rule out additional easing measures to avoid a credit crisis.
  
  
• IMF urges the Troika not to force a larger budget adjustment in Ireland for 2012.
  
  
• IMF cuts back its 2011 and 2012 global growth projections to 4 percent after the world saw a 5 percent growth in 2010.
  
  
• IMF sees greater risks to its global growth projections.
  
  
• IMF urges action from countries so they may steer through a dangerous phase.
  
  
• IMF recommends the Bank of England loosen monetary policy if recent trends continue.
  
  
• IMF suggests the UK put fiscal tightening on hold.
  
  
• IMF suggests Canada may need to rein in the housing market, household debt accrual.
  
  
• IMF looks to double its bailout capacity to $1.3 trillion.
  
  
• IMF suggests it will consider issuing bonds to help raise additional bailout potential.

 

 

 

Nothing has changed, the pressure is on countries to employ stimulus, as if it were a proven solution to economic and financial crises.

 

For without some action taken by the rulers, how will the private sector regain confidence, unleash investment, and create jobs?

 

Lions and tiger and bears, oh my!

 

The current measures being discussed could likely dictate investor sentiment until early November when it's expected the G20 meeting will pile on even more global stimulus plans.

 

Global policy makers' deliberations might be enough to buoy risk appetite until then.

 

But come the G20 meeting, which is almost always a guaranteed disappointment, policymakers may just reveal the true weakness of the global economy and their brilliantly-concocted prescriptions.

 

And by that time, investors probably won't care about the prescriptions.

 

It'll be time to rush for the exits again, assuming everyone hasn't already fled before then!

 

A corrective bounce may be materializing for the British pound, as well as other currencies and risk assets.

 

But don't expect it to last too long.

 

I think the primary trend in the British pound is down.

 

The two charts below reflect my technical view of the pound, which I think is validated by the longer term fundamentals facing the UK and the global economy.

 

My most probable weekly view of the path of the pound:

 

 

 

 

 

 

My worst-case view if something develops in the global economy that is akin to what we saw during the credit crunch:

 

 

 

 

 

 

You'll notice I labeled the projected ugly path lower for the pound as the "Global Deleveraging Crush."

 

I think this next phase of the crisis, a crisis that started with the credit crunch, has been exacerbated by governments and central banks creating even more debt in the global economy.

 

So think about this for a moment: The credit crunch was the result of too much leverage (debt) in the global economy.

 

So the private sector starts to deleverage and instead of letting the market take its natural course, authorities add more debt to the global economy.

 

Now the imbalances are worse than before the credit crunch.

 

I couldn't make this stuff up if I tried.

 

Thus, I believe this story ends badly again; deleveraging globally is the only way to solve the problem if countries wish to see real growth ever again.

 

It won't be pretty for most asset classes, but I suspect one asset (fiat as it may be) could surprise.

 

So I leave you to ponder the following chart I created showing the major cycles in the dollar index since the world's major currencies began floating:

 

 

 

 

 

 

 

I believe the dollar bear market ended during the credit crunch, in March 2008.

 

That was the major global macro event representing the catalyst; you can see how significant events like that often ignite a trend change.

 

And global deleveraging will be the driver of the New $ Bull Market.

 

Why?

 

The process of deleveraging means dollar credit is removed; thus the supply of dollar is removed.

 

And let us not forget that this process will likely be bad for most asset classes as I said.

 

And where does big money hide historically during those events?

 

In the deepest capital markets in the world, which happen to coincide with the U.S. dollar.

 

Spain, Italy downgraded! More cuts coming! Look out below!

 

The ratings agencies are on the warpath!

 

Just a few short days after Moody’s Investors Service slashed its rating on Italian sovereign debt by three notches, Fitch Ratings just lowered the boom.

 

It cut its rating on Italy’s government bonds to A+ from AA-.

 

But Fitch didn’t stop there.

 

It also lowered Spain’s debt rating by two notches to AA- from AA+.

 

And in BOTH cases, Fitch’s outlook for both countries is NEGATIVE!

 

Translation: If you think these are the last cuts, think again!

 

These are precisely the kinds of events that can blow up the European debt crisis at virtually any moment!

 

They underscore just how insurmountable Europe’s debt crisis is, regardless of the “latest, greatest bailout” rumor to spike the markets temporarily.

 

Your only defense is to go on the offense, to not only shed risk, but also to add investments designed to help protect your wealth and BUILD your profit as the debt crisis rampages through more than nine out of ten investments in the world!

 

Market crash looming!

Breaking news: Worst unemployment all year!

 

Johan here with a quick update on this morning’s shocking unemployment news.

 

First, the 103,000 jobs added in September are far short of what’s needed to bring down the official unemployment rate, one reason why it’s still stuck at 9.1%.

 

Second, the “all in” unemployment rate, including people who must settle for part-time jobs or have given up searching entirely, has SURGED to 16.5%, the worst this year!

 

Third, FORWARD LOOKING indicators of employment are deteriorating. Consumers just polled by the Conference Board said it was harder to find work now than at any point since 1983!

 

And job placement firm Challenger, Gray & Christmas tracked more than 115-thousand corporate layoff announcements last month alone, the most since April of 2009.

 

As those firings actually take place, the jobs figures for the next few months should drop like a stone!

 

Bottom line:

 

We’ve seen an almost-100 point rally in the S&P 500 futures in the past few days.

 

That sounds like a lot, but all it does is push us right into a wall of technical resistance.

 

And it is actually the fifth such rally we’ve seen since the August meltdown, every single one of which has failed.

 

Those are pretty lousy odds, and if the bulls want to play ‘em, I say “Have at it! Just don’t use my money to do it!”

 

Instead, I’d treat the latest rally as a gift, potentially your last, greatest chance to sell!

 

Or better yet, take advantage of the better prices on inverse ETFs that the rally is handing you on a silver platter!

 

 

 

 

News Flash October 8, 2011

 

 

Huge Market Crash is Coming in October 2011

 

http://www.telegraph.co.uk/finance/financialcrisis/8812260/World-facing-worst-financial-crisis-in-history-Bank-of-England-Governor-says.html

 

Bear market is here! Are you prepared?

 

I'm convinced more than ever that we are entering a new bear market and a double-dip recession.

 

And if you do NOT follow the powerful, step-by-step instructions I give here to both protect your wealth and profit, I believe you're going to regret it.

 

Why do I say that?

 

Because the evidence of a renewed bear market and economic slump is irrefutable.

 

Just consider:

 

* The Dow has dropped 2,000 points in less than three months.

 

* The S&P 500 has dropped roughly 20 percent, the classic definition of a bear market.

 

* The Russell 2000 Index of smaller capitalization stocks just dropped to the lowest in 13 months.

 

As if that weren't enough, the cost of obtaining dollars to pay off dollar-based loans is surging to three-year highs in Europe.

 

Credit default swap costs for insurance on bank bonds and European sovereign debt is at or near record highs.

 

Junk bond yields are soaring, while issuance of mortgage bonds and leveraged loans is plunging.

 

Those are straightforward credit market indicators of extreme stress.

 

Meanwhile, on the economic front:

 

* The Conference Board's index that tracks how tough it is for consumers to find a job surged to the highest since 1983.

 

* Challenger, Gray & Christmas tracked more than 115,000 corporate layoff announcements in September, the most since April 2009!

 

* Home construction dropped 5.3 percent in August, pending home sales fell for the second month in a row, and new home sales slumped to the lowest since February.

Why a Replay of 2008 Is All but Inevitable!

 

Why are we back in the soup again?

 

Why did the great post-recession rally fizzle out?

 

Simple: We tried to paper over our problems with the same failed policies that got us into the mess in the first place!

 

We tried to combat a debt crisis brought about by borrowing and spending too much money we didn't have by borrowing and spending even MORE money we didn't have!

 

We tried to combat excessive leverage brought about by keeping interest rates too low and money too easy by pushing rates even lower and easing monetary policy even further!

 

We tried to deal with mega-banks that had delved too deeply in complex financial instruments by bailing them out and merging them into even BIGGER mega-institutions, rather than letting weak banks fail and chopping them up into more manageable entities!

 

Most importantly, and tragically, policymakers from Washington to Frankfurt to Tokyo learned the wrong lesson from the 2008 meltdown.

 

They decided we should have a policy of "No more Lehmans" regardless of the costs.

 

So now rather than just having a bunch of troubled banks dragging us down, we have troubled banks AND troubled sovereign nations!

 

Greece is already on the verge of default, while Portugal and Ireland aren't far behind.

 

Italy's debt rating was just slashed three notches by Moody's, while France's debt costs are soaring due to fear its AAA is in jeopardy.

 

Even the core of Europe, Germany, is taking heat as its potential bailout tab climbs sky-high!

 

Your Crucial Steps for Self-Defense!

 

Nobody would like to be optimistic more than me.

 

But as I've said repeatedly, when it comes to the markets, I have to be a REALIST.

 

Hope has no place in investing strategy.

 

So I continue to counsel you to:

 

Eliminate most of your stock exposure, taking advantage of bear market rallies to do so at better prices.

Eliminate exposure to real estate and riskier bonds, with the understanding that higher REIT or junk bond YIELDS don't mean squat when the PRICE of your income-generating investments is tanking.

Add inverse ETFs as hedges and profit-generating vehicles on rallies until the big-picture fundamental and technical outlook changes.

 

Belgium Nationalized Dexia Bank!!!

 

Who is NEXT?

 

Bank of America (NYSE: BAC) America's largest Bank?

 

The US government will need to nationalize Bank of America (NYSE: BAC), like the Belgium government nationalized Dexia Bank, Today.

 

 

Kyiv Capital Disclaimer:

 

Nothing published by Kyiv Capital should be considered personalized investment advice.

 

Any investments recommended by Kyiv Capital should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Investment products are not bank deposits or obligations of or guaranteed by Kyiv Capital, are not insured by any governmental agency and are subject to investment risks, including the possible loss of the principal amount invested. Past performance is not indicative of future results, prices can go up or down. Investors investing in funds denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Funds are subject to market risk. Please read the prospectus or financial statements of the company (Direxion, ProShares) carefully before investing. Kyiv Capital do not assume liability for any loss that may result from relying on these Kyiv Capital opinions or information. Kyiv Capital opinions or information is not intended as an offer or solicitation for purchase or sale of any security, nor is it individual or personalized investment advice. Investing involves risk, including the possible loss of principal. There may be additional risks associated with international investing, including foreign, economic, political, monetary and/or legal factors, changing currency exchange rates, foreign taxes, and differences in financial and accounting standards. These risks may be magnified in emerging markets. International investing may not be for everyone.

 

 

 

 

INVESTMENT PRODUCTS:   NOT FDIC INSURED  • NOT A BANK DEPOSIT  
• NOT INSURED BY GOVERNMENT AGENCY  • NO BANK GUARANTEE  • MAY LOSE VALUE

 

 

"This crisis has the potential to be a lot worse than Lehman Brothers." George Soros, hedge fund investor.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

News Flash October 7, 2011

 

 

Giant banks failing! Bailouts futile! Take action now!

 

If someone is trying to assure you that Europe’s latest moves will actually save its giant banks from disaster, you’ve got to get the real story.

 

Just this morning, for example, the European Central Bank announced that it would offer Europe’s giant failing banks some new emergency loans to tide them over.

 

So the market rallied.

 

But when you read the fine print, you realize all the new loans add up to a meager 40 billion euros!

 

That’s barely more than a penny, one miserable red cent, for every euro of debt owed by Europe’s weak-link PIIGS countries (Portugal, Italy, Ireland, Greece and Spain.)

 

It’s a drop in the bucket that doesn’t even buy a pig in the poke!

 

The reality is that none, not ONE of these half-baked rescue plans has made a whit difference.

 

If anything, they’ve just made things a lot worse.

 

So now it’s not just Greece that’s crashing.

 

Now we also have Spain, Italy and France’s largest banks!

 

The bottom line is that Germany and France can’t afford to save entire countries and giant banks without trashing their own AAA credit ratings.

 

The only way out of this crisis is for Europe to take its medicine.

 

That means the dreaded D-word default.

 

That also means big losses and multiple bank failures.

 

Those events will cause massive dislocations in the stock markets, and I recommend you take immediate action to protect yourself.

 

Plus, this opens up a unique opportunity to go for very substantial profits, using specialized investments that rise in value when select asset classes fall.

 

Will Belgium Nationalize Dexia Bank?

 

Its assets are more than 150% of Belgium’s GDP!

 

 

Will The Fed Nationalize Bank of America?

 

There is a plethora of speculations buzzing around Wall Street with the central theme being Bank of America (NYSE: BAC) America's largest Bank and biggest “cleaner upper” of the financial crises buying both Merrill Lynch and Countrywide Home Loans before they collapse is going to get “taken over” by the US government.

 

 

The US government will need to nationalize Bank of America (NYSE: BAC), like the Belgium government will need to nationalize Dexia Bank.

 

Kyiv Capital Disclaimer:

 

Nothing published by Kyiv Capital should be considered personalized investment advice.

 

Any investments recommended by Kyiv Capital should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Investment products are not bank deposits or obligations of or guaranteed by Kyiv Capital, are not insured by any governmental agency and are subject to investment risks, including the possible loss of the principal amount invested. Past performance is not indicative of future results, prices can go up or down. Investors investing in funds denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Funds are subject to market risk. Please read the prospectus or financial statements of the company (Direxion, ProShares) carefully before investing. Kyiv Capital do not assume liability for any loss that may result from relying on these Kyiv Capital opinions or information. Kyiv Capital opinions or information is not intended as an offer or solicitation for purchase or sale of any security, nor is it individual or personalized investment advice. Investing involves risk, including the possible loss of principal. There may be additional risks associated with international investing, including foreign, economic, political, monetary and/or legal factors, changing currency exchange rates, foreign taxes, and differences in financial and accounting standards. These risks may be magnified in emerging markets. International investing may not be for everyone.

 

 

 

 

INVESTMENT PRODUCTS:   NOT FDIC INSURED  • NOT A BANK DEPOSIT  
• NOT INSURED BY GOVERNMENT AGENCY  • NO BANK GUARANTEE  • MAY LOSE VALUE

 

 

 

News Flash October 5, 2011

 

 

Putin Is Back!

 

http://www.famousputin.ru

 

Over the last several years Russia has seen an incredible influx of investment from all over the world as emerging markets, like China, try to secure its vast resources.

 

The oil and mineral wealth in Russia is immense.

 

For savvy investors the opportunities are tremendous.

 

Russia with a stable and favorable investment climate.

 

Vladimir Putin has announced that he will be running for president of Russia next year.

 

That's great news!

 

 

 

The Economic Integration of Russia  and Ukraine

 

 

Recommendations :

 

The first step that the Government of the Russian Federation   and the Government of Ukraine  should take, to facilitate the continued integration of their economies, is to jointly adopt President of Russia   Dmitry Medvedev's 10-Point Modernization Plan outlined in his speech to the World Economic Forum in Davos, Switzerland on January 27, 2011.

 

In some of these 10 areas, Ukraine  already has a corollary to Russia's  , and in some of these 10 areas, Russia   and Ukraine  are already coordinating their respective activities.

 

However, what is needed is an integration of Russia's   and Ukraine's  economic modernization plans that is so seamless that Ukraine  functions as Russia's   84th federal subject.

 

Russia   should offer Ukraine  100% inclusion in its modernization plans, never failing to do so in an effort to promote Russia's   prestige above that of Ukraine's .

 

It should be left entirely up to Ukraine's  domestic political calculations whether Ukraine  can participate in 25%, 50%, 75% or 100% of a joint Russia-Ukraine   modernization plan.

 

Detailed recommendations in each of the 10 points follows:

 

1. Privatization

 

Russia : President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated, "Shares worth a total of tens of billions of dollars in leading banking, infrastructure and energy sector companies will be privatised over the next three years."24

 

Ukraine : In September 2010, it was reported in the Kyiv Post that Ukraine had received less than $53 million from privatization, far below its projected revenue from privatization of $820 million in 2010.27 In October 2010, President of Ukraine Viktor Yanukovych stated that he intends to accelerate the privatization of industrial enterprises, such as telecom providers, power utilities and power distribution companies, chemical manufacturers, and seaports.28

 

Russia-Ukraine Integration Recommendation  : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to compare the list of enterprises targeted for privatization by Russia and by Ukraine, identify potential synergies from mergers of Russian and Ukrainian enterprises, merge the lists of enterprises to be privatized into one list, and then hold a joint Russia-Ukraine Privatization Forum for international investors.

 

2. Sovereign Fund

 

Russia : President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated that Russia "will soon establish a special sovereign fund that will share the risks with foreign investors by carrying out joint investment in economic modernisation projects in Russia."24

 

Ukraine : In December 2010, President of Ukraine Viktor Yanukovych issued Decree of the President 1119/2010 which calls for the Cabinet of Ministers to issue financial support to a domestic enterprises development bank within one month.29

 

Russia-Ukraine Integration Recommendation  : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan to create a joint Russia-Ukraine sovereign fund that will match the equity investments of foreign investors, and to create a joint Russia-Ukraine domestic enterprises development bank.

 

3. Financial Sector

 

Russia : President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated that Russia plans to "develop Moscow as an international financial centre that will become not just the nucleus of Russia's financial system but also a catalyst for developing financial markets throughout the post-USSR region."24 Back in July 2010, President Medvedev had signed a decree instituting a working group to
establish an international financial center in Moscow, which Moscow authorities indicated at the time would require $150 billion in investment.30

 

Ukraine : In April 2010, it was reported that there were 10 Ukrainian companies planning an IPO, and that only 22 percent of companies in Russia and CIS including Ukraine that were planning an IPO had chosen one of the two Moscow-based exchanges (MICEX or RTS) as a preferred destination.31

 

Russia-Ukraine Integration Recommendation  : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan to encourage companies in Russia and CIS to select either a Moscow-based exchange or a Kiev-based exchange (PFTS or Ukrainian Exchange) for their IPO, and to determine means by which Russia and Ukraine can cooperate to increase the competitiveness of the Russian and Ukrainian financial markets and attract more foreign and domestic capital to the national economies.

 

4. Trade Organizations

 

Russia : President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated that Russia plans to join the WTO, join the OECD, build a Common Economic Space (CES) with the EU, and advance the Customs Union with Belarus and Kazakhstan to a CES.24

 

Ukraine : In November 2010, President of Ukraine Viktor Yanukovych stated that Ukraine, already a WTO member, may join the Customs Union of Russia, Belarus, and Kazakhstan.16 In December 2010, President Yanukovych signed a Presidential Decree ordering the Cabinet of Ministers to take additional steps toward Ukraine's signing Free Trade Agreements (FTA) with the EU, Russia and CIS, and Canada.32

 

Russia-Ukraine Integration Recommendation  : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan for Ukraine's geopolitical support of Russia's accession to the WTO; Russia and Ukraine's joint building of a CES or joint establishment of an FTA with the EU; and Ukraine's subsequent accession to the CES, or joint establishment of an FTA, with Russia, Belarus, and Kazakhstan.

 

5. Innovation

 

Russia : President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated that Russia is continuing its "active efforts to develop new possibilities for innovative business and venture investment," of which "the Skolkovo Innovation Centre is our biggest project+"24

 

Ukraine : The Chairman of the Kiev Regional State Administration, Anatoly Prisyajnyuk, stated in July 2010 that Ukraine was planning to construct a Technopark in Borispol, Kiev Oblast.33 In January 2011, Prime Minister Mykola Azarov indicated that Ukraine will create a University of Innovation and Nanotechnology20; President Yanukovych promised to apply the best practices of Silicon Valley and Skolkovo in a National Innovation Project in Ukraine21; and President Yanukovych created a new Council of Domestic & Foreign Investors that includes the CEOs of Microsoft and other multinational corporations.22

 

Russia-Ukraine Integration Recommendation  : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan for the integration of Russia's and Ukraine's innovation initiatives as they relate to Universities, Technoparks, laws, and attracting foreign corporations, investors, and scientific and managerial talent.

 

6. Renewable Energy and Energy Efficiency

 

Russia : President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated, "Given Russia's important place in the energy sector it is essential too to make this sector one of the main driving forces behind innovation."24 Back in May 2010, President Medvedev had directed the Government of Russia to develop incentives for renewable energy development and use.34 In June 2010, it was reported that the Federal Grid Company of Russia sought to invest $30 Billion in a smart grid for alternative energy and energy efficiency projects.35 In August 2010, Russia's renewable energy and energy efficiency road map was revealed.36

 

Ukraine : Ukraine already has incentives in place to attract investment in renewable energy projects, including a Green Feed-in Tariff that provides one of the highest returns in the world for generation of energy from renewable sources, VAT exemption for importation of capital equipment used in renewable energy projects, membership in the EU Energy Community, high average wind speeds, good solar radiation profile, plentiful biomass raw materials, numerous dams on the Dnieper River, and so on. The largest impediment to energy project development in Ukraine is the nation's continued distressed
sovereign debt rating and plans to assume more public debt, and the resultant unavailability to private developers of international sources of finance for large infrastructure projects in Ukraine.

 

Russia-Ukraine Integration Recommendation  : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan wherein Russia's and Ukraine's renewable energy and energy efficiency road maps can be integrated; the optimum blend of energy from all sources including coal, gas turbine, natural gas, CHP, nuclear, wind, solar, hydro, and biomass can be determined; Russia can adopt laws and incentives for renewable energy comparable to Ukraine's; and financing for development of energy projects in both Russia and Ukraine can be provided.

 

7. Joint Ventures

 

Russia : President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated, "We will make full use of technology transfers to modernise our industry. Joint ventures and technology exchanges are important in all sectors+"24 In October 2010, Russia and Ukraine signed 10 contracts, and discussed the prospective Gazprom-Naftogaz merger, during the visit to Kiev of Prime Minister of Russia Vladimir
Putin.14 Specifically, Ukraine and Russia agreed to projects in nuclear, oil and gas, aerospace, aircraft, shipbuilding, transport, and agriculture.15

 

Ukraine : In November 2010, Ukrainian Deputy Economy Minister Valery Muntiyan stated at a meeting of The Intergovernmental Committee on Russia-Ukraine Cooperation that Russia and Ukraine agreed to a 10-year program on economic cooperation. He further stated that the program might include 19 joint projects costing a total of $48 billion.17

 

Russia-Ukraine Integration Recommendation  : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan to ensure that JVs and technology transfers involving either Russia or Ukraine separately benefit both nations; that all potential JVs and technology transfers between Russian and Ukrainian enterprises have been considered and agreed to when feasible; and that insufficiently funded JVs between Russian and Ukrainian enterprises be presented to international investors at a joint Russia-Ukraine Investment Forum.

 

8. Broadband Internet

 

Russia : President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated, "We are carrying out an extensive programme to develop broadband internet throughout the whole of Russia."24 In June 2010, it was reported that the Internet penetration rate in Russia had reached 37% overall; in Moscow and Saint Petersburg, over 60%.37

 

Ukraine : In July 2010, it was reported that Internet penetration in Ukraine had grown to 25%.38

 

Russia-Ukraine Integration Recommendation  : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan to ensure that appropriate incentives exist for telecom operators to provide affordable fixed and/or mobile broadband internet services to the entire populations of both Russia and Ukraine.

 

9. Talent

 

Russia : President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated, "Our task is to make Russia a more attractive place for the world's brightest minds. This is why we are ready to take the unilateral step of granting automatic recognition to diplomas and degrees from the world's top universities. I note too that we have simplified the immigration rules for highly qualified specialists coming to Russia."24

 

Ukraine : In 2005, in anticipation of an influx of visitors for the Eurovision Song Contest in Kiev, Ukraine took the unilateral step of repealing Cold War era immigration policy by allowing citizens of the following countries to visit Ukraine without a visa on short-term tourist, business or private travel of up to 90 days: USA, Canada, Japan, EU nations, Switzerland, Liechtenstein, Andorra, Vatican, Iceland, Monaco, Norway,
San Marino, Mongolia, Lithuania and the countries of the CIS (except Turkmenistan). Although Ukraine's immigration laws were tightened in Q4 2008 upon the onset of the global financial crisis to preserve jobs for Ukrainian nationals, it is still a relatively simple procedure to obtain immigration sponsorship for employment in Ukraine from a Ukrainian enterprise.

 

Russia-Ukraine Integration Recommendation  : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to discuss the possibility of further simplifying Russia's immigration policy to make it aligned with Ukraine's; and to acknowledge that attracting foreign talent and arresting the Russian and Ukrainian brain drain is as much a matter of perceptions and emotions as it is of Governmental policy, and to discuss the potential role of public relations in shaping perceptions and emotions to ensure that Russia and Ukraine secure the talent necessary to achieve their joint modernization plans.

 

10. Infrastructure Projects

 

Russia : President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated, "We have begun carrying out big infrastructure projects, especially as we have been chosen to host major international sports events. These projects will all be carried out on a public-private partnership basis."24 In June 2010, it had been reported that Russia had embarked on 10-year, $1 trillion construction program to upgrade its infrastructure.39

 

Ukraine : Also in June 2010, It was revealed that Russia's |2 billion high-speed electric train project would include the Ukrainian cities of Kiev, Kharkov, and Simferopol.8 In July 2010, it was reported that the heads of the CIS countries, including Russia and Ukraine, had agreed to cooperate on free trade, joint investment, transport and tourism infrastructure, and sports.40

 

Russia-Ukraine Integration Recommendation : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan wherein Russia's and Ukraine's infrastructure development road maps can be integrated; Russian and Ukrainian enterprises can be awarded contracts for infrastructure development for UEFA Euro 2012, Sochi 2014 Winter Olympics, and World Cup 2018; and infrastructure projects can be financed by a combination of the joint Russia-Ukraine sovereign fund, the joint Russia-Ukraine domestic enterprises development bank, and international investors at the joint Russia-Ukraine Investment Forum.

 

Conclusion:

 

The premise promoted in Western  capitals that Ukraine  needs to choose between economic integration with the European Union , a trade bloc with a population of 500 million, or economic integration with Russia  and the Russian-speaking nations with a collective population of 250 million, is a false dichotomy.

 

Ukraine  can instead choose to both enter into a Free Trade Agreement with the EU , and join the Customs Union among Russia, Belarus, and Kazakhstan after Russia's accession to the WTO anticipated to occur in late 2011.

 

Equally flawed is the Western  premise that Ukraine  must choose between modernization or return to the cultural and spiritual heritage it has shared with Russia since the 9th Century.

 

The better choice is for Russia  and Ukraine  to go forward together into the 21st Century, modernizing and integrating their economies to ensure their mutual prosperity, without ever compromising their common cultural and spiritual values that have made them great nations for over one thousand years.

 

Sources:
1 - http://en.rian.ru/business/20100419/158648733.html
2 - http://en.rian.ru/world/20100517/159050692.html
3 - http://bit.ly/cjl4yG
4 - http://delo.ua/vlast/politika/na-kakie-obekty-nacelilis-rossijane-140566/
5 - http://korrespondent.net/business/1077923
6 - http://korrespondent.net/ukraine/politics/1078895
7 - http://en.rian.ru/news/20100609/159356520.html
8 - http://tinyurl.com/2b89uk4
9 - http://tinyurl.com/2ck3b4x
10 - http://bit.ly/cmadg9
11 - http://bit.ly/dabK3y
12 - http://bit.ly/bJGFSM
13 - http://ow.ly/2GZmm
14 - http://bit.ly/dyZKsZ
15 - http://bit.ly/b1v6lj
16 - http://bit.ly/fscIIv
17 - http://bit.ly/geR0XA
18 - http://bit.ly/gOW3OO
19 - http://goo.gl/fb/GdbIV
20 - http://bit.ly/fZ4FwI
21 - http://bit.ly/hID31l
22 - http://ow.ly/1b2DbI
23 - http://goo.gl/fb/8ZkvG
24 - http://forumspb.com/en/news/2161
25 - http://bit.ly/gMaMrv
26 - http://bit.ly/g7wYZO
27 - http://www.kyivpost.com/news/business/bus_general/detail/80889/
28 - http://bit.ly/dtOPVz
29 - http://bit.ly/frbW2z
30 - http://bit.ly/dpzvBj
31 - http://www.pbnco.com/eng/news/release.php?rid=67
32 - http://bit.ly/hCtHBO
33 - http://bit.ly/bIUAYk
34 - http://en.rian.ru/russia/20100527/159185774.html
35 - http://goo.gl/fb/03kZa
36 - http://goo.gl/fb/cLSjB
37 - http://bit.ly/aawUsO
38 - http://bit.ly/bNS1bt
39 - http://tinyurl.com/2dyfnka
40 - http://bit.ly/cAi806

  

 

 

 

 

http://www.forumspb.com/

 

 

 

 

 

 

http://www.rts.ru/

 

http://www.rts.ru/en/

 

 

 

 

Bank of Russia

 

 

 

 

http://www.cbr.ru

 

 

Look at which country could be NEXT to go down!

 

You’ve heard about the looming default by Greece and possibly by Spain or Italy.

 

But now look!

 

With big French banks on the brink and the French government rushing to their rescue, investors are now beginning to worry that FRANCE could be among the next big countries to go bad!

 

The proof: They’re now willing to pay DOUBLE for insurance against a future default by France (see chart).

 

And France is one of the largest economies in the world!

 

If France goes, what will THAT do to the stock market?

 

Will any bank in the world survive?

 

Is there ANY safe place left for your money?

 

If so, where?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

News Flash October 4, 2011

 

 

Breaking news: Italy's debt rating slashed!

 

The stock market was saved from yet another 200-plus-point plunge today by rumors that a big French-Belgian bank in trouble was getting a bailout.

 

But before the ink was even dry on the rally, Moody’s Investors Service lowered the boom on the market:

 

Moody’s slashed the debt rating on Italy by a hefty THREE notches in one fell swoop!

 

Plus, it says the outlook is NEGATIVE, pointing to more downgrades on the way.

 

So investors are asking:

 

 

If big governments keep bailing out
their biggest banks, who’s going to
bail out big governments?

 

 

Take Dexia, the bank that the French and Belgium governments are trying to save.

 

Its assets are more than 150% of Belgium’s GDP!

 

So how the heck can the country Belgium afford to help bail it out?

 

 

 

 

 

 

 

 

 

And what about the United States, which has more bad debt than any country in the world? Can any stock survive?

 

What about the world’s biggest banks?

 

What about YOUR stocks and YOUR bank?

 

Markets cratering around the world! What's next?

 
While we were still sleeping here in the U.S., Asian markets were already renewing last week’s slide with Hong Kong’s Hang Seng Index down a massive 4.5% and China’s Shanghai Composite sinking to a fresh 14-month low.

 
Then, as European markets opened for trading a few hours later, the continent’s major indexes followed suit, Germany’s DAX lost as much as 3.9%, France’s CAC-40 lost 3.1%, and the FTSE 100 in London fell 2.8%.

 
It’s more of the same in economically-sensitive commodities, too.

 
Oil traded down by almost 3% to less than $77 a barrel while copper slumped to its lowest since last July!

 
Importantly, I’m also seeing MAJOR weakness in U.S. junk bonds, a sure sign investors are running scared.

 
ETFs that track this riskier section of the fixed-income world are gapping down to new 17-month lows and in my opinion, this action foretells what is about to happen in U.S. stocks.

 
In fact, while U.S. shares are mixed this morning, I’m more convinced than ever before that we’ll see a much bigger fall that could take the Dow all the way back down to 7,000 and possibly much lower.

 
Why?

 
Already, we’re seeing plenty of signs of an economic slowdown in Asia, we’re getting further evidence that Europe’s banks and credit markets are falling apart and domestically, our economy is no better off than it was during the depths of the original financial crisis! 

 
So please,

 
Don’t Wait Until the Market REALLY Crashes, Tomorrow, Next Week,...!

 

Take Protective Steps Right Now!

 
You don’t have to sit idly by and let an inevitable stock market crash destroy your wealth, just like it did to so many portfolios during the first phase of this great bear market.

 
Instead, you can take several steps to protect your portfolio and even PROFIT from a further decline!

 

Dow plunges 258 points! Risky bonds, real estate rocked! What to do?

 
The Dow Jones Industrial Average cratered another 258 points today, following on the heels of a 240-point decline on Friday.

 
The Nasdaq Composite did even worse, plunging 79.6%, while the Standard & Poor’s 500 just closed below its August panic lows.

 
Meanwhile, the high-yield bond market got crushed and the REIT sector got rocked!
 

HYG, JNK, and IYR ETFs that track the price of these sectors are all in freefall. 
 

Plus, key financial stocks like Goldman Sachs (GS) and Bank of America (BAC) plunged to fresh multi-year lows, lows we haven’t seen since the depths of Phase I of the Great Recession and credit crisis!
 

The warning signs of a precipitous market decline couldn’t be any clearer. 
 

Nor could the need for protective action be more urgent!
 

Great American corporations tumbling toward bankruptcy!
 

Eastman Kodak. American Airlines. Bank of America.

They’re all great American names and great American success stories.

Or at least, they were.

Unfortunately, they now share something else in common: Heightened risk of bankruptcy!

 

Late last week, Kodak’s shares plunged as much as 54% after reports suggested the 131-year-old company was contemplating a bankruptcy filing. 

 
Kodak has lost money for the last three years as digital photography and foreign competition has cannibalized its core markets.

 
Then yesterday, shares of American Airlines’ parent AMR tanked as much as 41% amid rumors the airline would have to file for bankruptcy. 

 
The company has lost money for the past four years, with high labor costs and stiff competition hurting results.

 
And Bank of America, the mega-bank, I have warned you about repeatedly as being at high risk for financial trouble due to its mortgage exposure, plunged to a fresh 31-month low yesterday.

 
Almost every day, we learn of another multi-billion dollar lawsuit tied to Bank of America’s mortgage exposure.

 
It doesn’t help that new home sales just slumped to a six-month low, while home construction dropped more than 5%.

 
Or that purchase mortgage activity just slumped to the lowest level in almost 15 years, despite the lowest mortgage rates in U.S. history.

 
What is going on?

 
Why are so many iconic corporate brands in so much trouble? Simple:
 

The credit markets are coming unglued again!

 
That’s causing funding to dry up for companies who were already on the ropes and making it much more expensive for everyone else to operate.

 
Just a few indicators of how the credit crunch is getting more brutal by the day:
 
 
 
*ETFs that track high-yield bonds broke to fresh multi-month lows yesterday.

*The average yield on junk debt just surged to the highest since December 2009.

*The market for leveraged loans is imploding, with issuance down a whopping 57% in the last quarter.

*Lending between banks in Europe is all but drying up.

*And the cost of default insurance on U.S. bonds is surging. The financial sector is getting hit particularly hard, with costs for some forms of protection rapidly approaching 2008’s mega-crisis levels!

 
 
Look, I wish I could be more optimistic about the economy or the markets. But all my indicators are pointing in the other direction: That we’re going down and going down hard!
 

 

The door to Dow 7,000 is wide open!

 

Take immediate action before it’s too late!

During the first phase of the great credit crisis, I did all to prevent investors from suffering devastating losses.

 
This time around, there are steps you can take to protect yourself.
 

You do NOT have to let your portfolio go down with the sinking ship!
 

Instead, you can take several steps to protect your wealth, and even PROFIT from a further decline!

 

 

 

Don’t Wait Until the Market REALLY Crashes!

Take Protective Steps Right Now!

 

 

 

Given all this bad news, I think it’s inevitable that the Dow is going to fall back to 7,000 or lower.

 

But you don’t have to sit idly by and let an inevitable stock market crash destroy your wealth, just like it did to so many portfolios during the first phase of this great bear market.

 

Instead, you can take several steps to protect your portfolio, and even PROFIT from a further decline!

 

Inverse ETFs investments could very well make the difference between a cracked nest egg and one that is well-protected, and even increasing in value, as more earnings warnings pour in and the Dow heads much lower.

 

 

Inverse ETFs investments that rise in value when stocks fall.

 

That's precisely what I'm doing.

 

 

• ProShares UltraShort Euro ETF (NYSE: EUO) – This ETF operates inversely to the
movements of the euro in a given day, meaning it will move up as the euro heads
south. Even better, the UltraShort provides a 200% inverse. Losses in the euro will
create double the gains in the EUO.

 

http://www.proshares.com

 

 

• DB X-TRACKERS EURO STOXX 50 Short Daily ETF (LON: XSSX) – This inverse ETF
trades on the London Stock Exchange, but it’s based on the Dow Jones Euro Stoxx 50
Index, a collection of Europe’s largest companies (50 of those companies, to be exact).
It’s also the easiest way for American investors to access a broad-spectrum short on
the European markets.

 

 

• ProShares UltraShort Financials ETF (NYSE: SKF) – Like EUO above, SKF is an
ultra-short ETF that will provide a 200% inverse return on the asset it follows. In this
case, that asset is the Dow Jones U.S. Financials Index. Many U.S. banks continue
to gamble on their European exposure, despite clear warning signs that the region is
unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.proshares.com

 

 

 

• Direxion Daily Financial Bear 3x Shares ETF (NYSE: FAZ) – FAZ is an
ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Financial Bear 3X ETF seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the Russell 1000® Financial Services Index ("Financial Index"). Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.direxionshares.com

 

 

 

• Direxion Daily Russia Bear 3x Shares ETF (NYSE: RUSS) to protect your investments in Russia and Ukraine. RUSS is an ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Daily Russia Bear 3x Shares seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the DAX Global Russia+ Index. Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the Russian, Ukrainian financial sector.

 

http://www.direxionshares.com

 

 

 

 

 

 

 

Kyiv Capital Disclaimer:

 

Nothing published by Kyiv Capital should be considered personalized investment advice.

 

Any investments recommended by Kyiv Capital should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Investment products are not bank deposits or obligations of or guaranteed by Kyiv Capital, are not insured by any governmental agency and are subject to investment risks, including the possible loss of the principal amount invested. Past performance is not indicative of future results, prices can go up or down. Investors investing in funds denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Funds are subject to market risk. Please read the prospectus or financial statements of the company (Direxion, ProShares) carefully before investing. Kyiv Capital do not assume liability for any loss that may result from relying on these Kyiv Capital opinions or information. Kyiv Capital opinions or information is not intended as an offer or solicitation for purchase or sale of any security, nor is it individual or personalized investment advice. Investing involves risk, including the possible loss of principal. There may be additional risks associated with international investing, including foreign, economic, political, monetary and/or legal factors, changing currency exchange rates, foreign taxes, and differences in financial and accounting standards. These risks may be magnified in emerging markets. International investing may not be for everyone.

 

 

 

 

INVESTMENT PRODUCTS:   NOT FDIC INSURED  • NOT A BANK DEPOSIT  
• NOT INSURED BY GOVERNMENT AGENCY  • NO BANK GUARANTEE  • MAY LOSE VALUE

 

 

 
Please watch the Movie:
 
Margin Call

 
Set in the high-stakes world of the financial industry, Margin Call is a thriller entangling the key players at an investment firm during one perilous 24-hour period in the early stages of the 2008 financial crisis.

 
When an entry-level analyst unlocks information that could prove to be the downfall of the firm, a roller-coaster ride ensues as decisions both financial and moral catapult the lives of all involved to the brink of disaster.

 
http://www.margincallmovie.com
 
http://www.youtube.com/watch?v=pUiLd_mTmSk&feature=related
 

 

 

 

News Flash October 3, 2011

 

 

 

 

News Flash October 2, 2011

 

 

Housing's double-dip continues! What it means?

 

It’s no secret that real estate was largely the spark behind the financial crisis of 2008.

 

Nor is it a secret that our country’s economy has yet to recover from that huge shock.

 

But a lot of investors continue to ignore the simple fact that our nation’s housing market is heading into the toilet AGAIN!

 

Want proof?

 

Well, we just learned that new-homes sales hit a SIX-MONTH LOW in August.

 

To make matters worse, median new home prices fell 7.7% on a yearly basis and 8.7% from July.

 

It was the same basic story with existing home sales in August: Pending sales dropped 1.2% from July, the second consecutive monthly decline.

 

And keep in mind, this weakness is coming amid some of the lowest mortgage rates in history!

 

Even If You’re Not Looking to Buy or Sell a House,

This Has Major Implications for Your Finances!

 

If housing can’t find a bottom, it’s unlikely that the U.S. economy will either.

 

So that alone argues for more weakness in everything from jobs to stock prices.

 

However, that’s just the tip of the iceberg.

 

Never forget that Washington is obsessed with trying to “fix” the real estate problem.

 

It’s why politicians are practically begging our nation’s banks to stop hoarding money.

 

It’s why lawmakers continue to dream up new initiatives aimed at underwater borrowers.

 

And it’s why the Federal Reserve continues doing everything in its power to force interest rates to rock-bottom levels.

 

But clearly nothing is working.

 

That’s because the only real cure is a whole lot of time and a whole lot more pain along the way.

 

There's an important sign of further weakness in U.S. markets: Earnings warnings have been coming in fast and furious!

 

It's not even the heart of the third-quarter earnings season, and we're already seeing companies miss targets left and right.

 

And more disappointments are on the horizon!

 

The Bankers Are The Problem!

 

http://www.youtube.com/watch?v=j5xRaQnHGA0

 

THE ROTHSCHILDS!

 

http://www.youtube.com/watch?v=8ZPO_t-ocFA&feature=player_embedded

 

Are hedge fund managers dumping gold to raise cash?

 

The swift sell-off in gold surprised many, as it seemed a foregone conclusion that this gold game was so easy.

 

Oh yeah, $2,000 gold and beyond is slam dunk, no brainer, don't you know.

 

The U.S. dollar is going into the tank, seemed the sentiment till last week's reality intervened.

 

What happened?

 

And will gold continue to slide?

 

Let's just take a little retrospective and see if the odds are the top is in on gold.

 

Let me be clear, though, I don't know if a top is in place. But I want to show you a few charts that suggest this selloff is part and parcel due to the need for liquidity and an indication the currency everyone loves to hate has probably put in a multi-year bottom.

 

Let's start with the Gold/Silver Ratio vs. Dow Jones Industrial Average (DJIA) Weekly.

 

Now, this isn't a gigantic sample size I grant you. But I think it carries some logic and gives us some insight about the relationship between gold and other risk assets measured by the DJIA.

 

As you can see in the chart below, there is a tendency for the gold/silver ratio and DJIA to confirm troughs and peaks:

 

 

 

 

 

 

The correlation of these peaks and troughs in gold and DJIA in the past have represented multi-year moves based on these confirmations.

 

My theory is that silver being more of an industrial metal tends to ebb and flow more closely with risk assets i.e. stocks, thus why this ratio moves in the manner it does.

 

And what is interesting too, is that the last two peaks in stocks have preceded a break in gold prices by five months.

 

You can see it in the chart below comparing Gold and the Dow Jones Industrial Average Weekly.

 

 

 

 

 

 

We've heard a lot of talk about hedge fund managers liquidating gold positions. It makes sense given that risk assets, stocks and commodities, have been hammered.

 

When fund managers get margin calls on the bad side of a portfolio, they meet that call by raising cash from the winning side of their portfolio in this case that would be gold.

 

If this is true, and stocks and other risk assets, continue to fall based on the decline in global growth and liquidity, gold should follow stocks lower.

 

And the much vaunted safe-haven appeal of gold could be history.

 

Was the end of QE2 the bell ringing at the top?

 

The following chart of the Dow Jones Industrial Average Weekly can help answer that.

 

 

 

 

 

 

And the Commodities Index Weekly (CRB) chart looks to be turning over, too.

 

 

 

 

 

 

So if you think global liquidity is in trouble, where is the best place to hide, besides short-term U.S. paper?

 

I would say the U.S. dollar is looking like it can be a safe haven now.

 

Below is the dollar chart.

 

 

 

 

 

 

And:

"This indicates a real and sustainable move into the dollar. It might be a flight to safety and/or liquidity. And it could eventually turn into something much more this time around."

I have one more question for anyone who believed the dollar was heading into never-never land: Why didn't the U.S. dollar index sink miserably to an all-time-new-low as gold blew off to a new high?

 

 

 

 

 

 

The market will soon share the truth.

 

Stay tuned, but if you own a bunch of gold and are heavily short the U.S. dollar, I think it pays to be careful here.

 

 

NATO

 

Clearly, NATO is not protecting civilians when they are bombing cities that are considered to be pro-Gaddafi, when they are killing people, not because they’ve done something wrong, but because their own political beliefs are contrary to what NATO wants in terms of the kind of government they want for Libya.

 

So I think that NATO need to be brought to justice.

 

Libya has the largest oil reserves in all of Africa and the 9th largest oil reserves in the world.

 

Given this fact, the real goal of the NATO powers is to take control over Libya’s vast oil reserves.

 

In order to achieve this, they have to carry out regime change, so that the Gaddafi government is gone once and forever, and that there will be a new government that will not necessarily be more democratic or more humane, but will be an ally or, I would say, in fact, a proxy, a client, perhaps, a puppet of Western powers.

 

http://www.youtube.com/watch?v=9KuO9i_4hPg&feature=player_embedded

http://www.youtube.com/watch?v=f_v94WqCSnk&feature=player_embedded

 

 

 

 

News Flash October 1, 2011

 

 

Hunt for European bailout enters "Theatre of the Absurd" territory!

 

The fumbling around for a "solution" to the European debt crisis continued this week. And frankly, we're entering "Theater of the Absurd" territory!

 

What does that mean for you?

 

Simple. Bureaucrats and politicians on both sides of the Atlantic are getting increasingly desperate to contain a crisis that is uncontainable at least until the REAL endgame is reached.

 

That endgame will involve debt defaults, writedowns, bank failures, and market washouts.

 

So rather than continue to chase every rally fueled by hope and hype for some newfangled solution, it's time to batten down the hatches and prepare for the inevitable!

 

What Happens When Policymakers Get Desperate? Here's Exhibit A!

 

So what do I mean when I call the current search for a solution absurd?

 

Here's Exhibit A:

 

Earlier this week, some bureaucrat apparently decided he or she had to spike the stock markets higher.

 

So details of a new bailout "plan" were leaked to CNBC mouthpiece Steve Liesman. I put the word plan in quotes because it has to be one of the most convoluted solutions I've ever seen cooked up.

 

According to the plan:

 

 

1. Money from the European Financial Stability Facility (EFSF) would be used to help "seed".
   
   
2. A Special Purpose Vehicle (SPV) that would be backed by
   
   
3. The European Investment Bank (EIB).
   
   
4. That SPV would buy bad sovereign bonds from banks, who
   
   
5. Would buy the SPV's own bonds, then
   
   
6. Use those bonds to get more money from the European Central Bank (ECB).

 

 

 

If that sounds like the messiest, most doomed-to-fail plan you've ever heard of, you're not alone!

 

But just a few hours after the plan was leaked to the media, things got even WEIRDER!

 

You see, the EIB has historically been a development bank.

 

Its loans have helped fund a medical center in Estonia, promote small business lending in Rwanda, and plant trees in Spain.

 

Yet somehow, markets were led to believe it was going to switch its mission to buying sovereign bonds.

 

That sounded like yet another desperate attempt to stick it to the "shorts" to me.

 

Sure enough, within hours the bank itself came out and said it had no idea what CNBC was talking about!

 

In fact, it went a step further and said it will play no part whatsoever in any bailout!

 

Read the statement yourself online here if you like.

 

http://www.eib.org/about/news/eib-maintains-no-bailout-stance.htm

 

You can't make this stuff up folks.

 

Clearly, the left hand in Europe doesn't know what the right hand is doing!

 

How to Protect Yourself and Profit in Today's Volatile Market?

 

So what are the investment implications here?

 

European politicians are backed into a corner.

 

Their citizens don't want to pay for more bailouts.

 

They don't want to be taxed into poverty just so far-away bankers don't have to bite the bullet for making dumb investment decisions.

 

The Germans in particular are worried that if they have to write a bunch of big checks to bail out the Greeks, the Irish, and everyone else, their OWN "AAA" grades from the major agencies will get cut.

 

I already rates Germany much lower than the major agencies: C+.

 

That could easily slip if billions and billions of euros in contingent liabilities are added to its balance sheet.

 

No wonder German Finance Minister Wolfgang Schauble just called the U.S.'s suggestion that the Europeans "lever up" their bailout fund a "stupid idea" that "makes no sense!"

 

Yet big banker buddies like U.S. Treasury Secretary Tim Geithner and Federal Reserve Chairman Ben Bernanke continue to insist that the world will come to an end if horror of horrors bondholders actually lose money!

 

They want Europe to do a big TARP-like program, giving away the store in order to save their fat-cat friends.

 

They keep repeating the mantra "No more Lehmans" and are willing to sacrifice virtually anything to back that up.

 

Ultimately, though, I believe a day of reckoning, market collapse, or whatever you want to call it is inevitable.

 

That's because sovereign governments ALREADY spent all the money they had and then some to bail out private banks in Phase I of the credit crisis.

 

Now those very same governments are under siege in Phase II, so they can't bail each other out!

 

The money's gone!

 

Your best bet as an investor?

 

Don't let hope guide your investment strategy.

 

Deal with the reality in front of you.

 

And in my view, that reality requires a straightforward course of action: Sell down your stock exposure, and ramp up your investments in inverse ETFs, which RISE in value as vulnerable stocks and asset classes fall!

 

There’s another important sign of further weakness in U.S. markets: Namely, the fact that earnings warnings have been coming in fast and furious!

 

It started with FedEx (FDX), the mega-shipping company with operations around the globe. Earlier this year, FedEx said everything was great, and business was strong. A little over a week ago, it slashed its full-year profit forecast due to declining U.S. and global demand.

 

Then, last night and the night before, the semiconductor companies entered the house of pain:

 

Advanced Micro Devices (AMD), the second-largest maker of PC chips behind Intel, cut its third-quarter sales growth forecast in half. It also warned margins wouldn’t live up to expectations. Shares plunged to a 22-month low.

 

Micron Technology (MU), the biggest maker of computer memory chips in the U.S., followed up with its own mega-miss. It lost $135 million in the most recent quarter, a huge swing from the year-ago profit of $324 million. That missed analyst estimates by a country mile!

 

And today, one of the biggest global manufacturing conglomerates Ingersoll-Rand (IR) sandbagged the market! It said third-quarter earnings per share would miss estimates by as much as 16%, citing broad-based weakness in the housing and commercial security markets. Shares tanked to levels they haven’t seen since July 2009.

 

Bottom line:

 

It’s not even the heart of the third-quarter earnings season, and we’re already seeing companies miss targets left and right.

 

More disappointments are going to hit in the days and weeks ahead, thanks to the economic meltdown we’re seeing in Europe and elsewhere around the world, too.

 

 

Don’t Wait Until the Market REALLY Crashes!!!

Take Protective Steps Right Now!

 

 

Given all this bad news, I think it’s inevitable that the Dow is going to fall back to 7,000 or lower.

 

But you don’t have to sit idly by and let an inevitable stock market crash destroy your wealth, just like it did to so many portfolios during the first phase of this great bear market.

 

Instead, you can take several steps to protect your portfolio, and even PROFIT from a further decline!

 

Inverse ETFs investments could very well make the difference between a cracked nest egg and one that is well-protected, and even increasing in value, as more earnings warnings pour in and the Dow heads much lower.

 

 

Inverse ETFs investments that rise in value when stocks fall.

 

That's precisely what I'm doing.

 

 

• ProShares UltraShort Euro ETF (NYSE: EUO) – This ETF operates inversely to the
movements of the euro in a given day, meaning it will move up as the euro heads
south. Even better, the UltraShort provides a 200% inverse. Losses in the euro will
create double the gains in the EUO.

 

http://www.proshares.com

 

 

• DB X-TRACKERS EURO STOXX 50 Short Daily ETF (LON: XSSX) – This inverse ETF
trades on the London Stock Exchange, but it’s based on the Dow Jones Euro Stoxx 50
Index, a collection of Europe’s largest companies (50 of those companies, to be exact).
It’s also the easiest way for American investors to access a broad-spectrum short on
the European markets.

 

 

• ProShares UltraShort Financials ETF (NYSE: SKF) – Like EUO above, SKF is an
ultra-short ETF that will provide a 200% inverse return on the asset it follows. In this
case, that asset is the Dow Jones U.S. Financials Index. Many U.S. banks continue
to gamble on their European exposure, despite clear warning signs that the region is
unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.proshares.com

 

 

 

• Direxion Daily Financial Bear 3x Shares ETF (NYSE: FAZ) – FAZ is an
ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Financial Bear 3X ETF seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the Russell 1000® Financial Services Index ("Financial Index"). Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.direxionshares.com

 

 

 

• Direxion Daily Russia Bear 3x Shares ETF (NYSE: RUSS) to protect your investments in Russia and Ukraine. RUSS is an ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Daily Russia Bear 3x Shares seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the DAX Global Russia+ Index. Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the Russian, Ukrainian financial sector.

 

http://www.direxionshares.com

 

 

 

 

 

 

 

Kyiv Capital Disclaimer:

 

Nothing published by Kyiv Capital should be considered personalized investment advice.

 

Any investments recommended by Kyiv Capital should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Investment products are not bank deposits or obligations of or guaranteed by Kyiv Capital, are not insured by any governmental agency and are subject to investment risks, including the possible loss of the principal amount invested. Past performance is not indicative of future results, prices can go up or down. Investors investing in funds denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Funds are subject to market risk. Please read the prospectus or financial statements of the company (Direxion, ProShares) carefully before investing. Kyiv Capital do not assume liability for any loss that may result from relying on these Kyiv Capital opinions or information. Kyiv Capital opinions or information is not intended as an offer or solicitation for purchase or sale of any security, nor is it individual or personalized investment advice. Investing involves risk, including the possible loss of principal. There may be additional risks associated with international investing, including foreign, economic, political, monetary and/or legal factors, changing currency exchange rates, foreign taxes, and differences in financial and accounting standards. These risks may be magnified in emerging markets. International investing may not be for everyone.

 

 

 

 

INVESTMENT PRODUCTS:   NOT FDIC INSURED  • NOT A BANK DEPOSIT  
• NOT INSURED BY GOVERNMENT AGENCY  • NO BANK GUARANTEE  • MAY LOSE VALUE

 

 

 

 

News Flash September 29, 2011

 

 

Most people only remember the 1930s depression for one thing only: the stock market crash. 

 

Well guess what? 

 

What is not commonly known or commonly taught is that the ’30s depression made some people millionaires. 

 

It is a known fact that more millionaires have been made in the 1930s depression than at any other period of time in history!

 

You see, in the 1930s a group of people knew how to make money in a downward market. 

 

They saw an opportunity. 

 

These guys were prepared and they took action! 

 

If you don’t believe me, just read about a guy called Jesse Livermore. 

 

Jesse Livermore made $100 million after the 1929 crash (that’s in 1930s money).

 

Why is the idea of making money from a recession or a depression so appealing?

 

The “Perfect” Market Conditions

 

One reason that a recession or depression is appealing to stock market or forex traders is that a recession creates the “perfect” market conditions to make money. 

 

These are conditions which most traders like me crave for.

 

Allow me to explain.

 

A recession occurs during an unstable economic climate.  When markets become unstable, whether it is bad news or uncertainty, they create volatility.  A volatile market often creates trending markets.

 

To put it quite simply, a trending market is when that market moves in a particular direction deliberately.  A lot of the times, markets are just range-bound or oscillating sideways.  While you can still make money in those kind of markets, for a “trend” trader that kind of choppiness can cause limitless damage to their trading accounts.

 

In the words of W.D. Gann: “The big money is made in the big trends.”  A good trader will identify the early parts of that trend and ride it through until the trend comes to an end.

 

Speed is King

 

There is a phrase in Wall Street that says “markets will take the staircase upwards, but they ride the elevator downwards.”

 

In case the meaning of that phrase is lost on you, here is an example: it took fifteen years for the stock price of Bank of America (BAC) to rise from $10 to $55 (see chart). 

 

Guess how long it took for its stock price to plunge from $55 to $5?  Two years!  Yes, you read that correctly, two years.

 

 

Markets often move much faster downwards than they do upwards.

 

So let’s be honest folks.  Who really wants to take a staircase?

 

What most people tend to be unaware of is that you can make money as the stock prices are falling. 

 

If you can apply the right strategies to make money in a downward market (more on that in upcoming posts), then heck, I am going to get inside that elevator and press the button to take me to the ground floor!

 

Don’t get me wrong. 

 

I am not into “get rich quick”.  Far from it.  I have always believed that the fastest way to go broke is to try to get rich quick.

 

There are a lot of risks involved in trading no matter which direction you want to bet, long or short.

 

Conclusion

 

One of my biggest regrets is that I did not make as much money as I should have done in the crash of 2008. 

 

I did not do too badly though.  I managed to capture the most of that year’s trends.  But I got sucked into the “fear” and the “waiting for the news” B.S. that everybody else was getting sucked into.

 

I made a promise to myself: never again! 

 

That year taught me to stick to my trading plan and just trade the nice trends like a good trader.

 

That is exactly what I am waiting for this year and next year as well. 

 

If a global recession is heading our way, then that is an opportunity. 

 

It is an opportunity not just for me but for everybody, including you.

 

Don’t get fooled by the fear of everyone else. 

 

Always remember the words of Warren Buffet:  

 

“Be fearful when others are greedy, and be greedy when others are fearful”.

 

 

 

 

News Flash September 28, 2011

 

Europe's bailout plan is doomed to fail

 

I’ve spent the last day analyzing Europe’s supposed plan to fix its problems, and I’ve got to tell you it is the most convoluted, doomed-to-fail shell game I have ever seen.

 

Heck, just wading through all the acronyms is harder than doing a New York Times crossword puzzle!

 

And when you get to the heart of what they’re really proposing, it’s downright scary.

 

For example, most major media outlets have been reporting that European officials are seriously considering using money from the European Investment Bank, which normally funds developing-world projects, things like businesses in Rwanda and hospitals in Estonia.

 

But the European Investment Bank itself just came out and said it had NO IDEA that it was going to be involved in these efforts and that it DOES NOT WANT to be involved.

 

I find their statement very telling:

 

“The EIB has not been approached and has no plans to be involved in this. The EIB will continue to focus on its mission which is financing viable investment projects.”

 

Are they saying that businesses in Rwanda are now MORE viable than many of Europe’s most prominent companies?

 

I’m telling you: This mess in Europe is going to make the financial bailouts of 2008 look like the greatest success story of all time!

 

And the minute market participants wake up to the sad reality that nothing is going to prevent major pain across the Atlantic, you’re going to see SERIOUS downside in global markets, including U.S. stocks.

 

So, please, prepare yourself while the market is giving you a chance to do so!

 

The time to get to safety is RIGHT NOW, before all the “happy bailout talk” fades and before the Dow inevitably crashes to 7,000 or lower.

 

And make no mistake: That IS what I expect to happen.

 

Don’t sit idly by and let an inevitable European bailout failure destroy your wealth.

 

Instead, use this temporary reprieve to take the steps necessary to protect your portfolio, and even PROFIT from a further decline!

 

Must watch // Please, comment // It is all prepared

Trader on the BBC says Eurozone Market will crash!!!

http://www.youtube.com/watch?v=aC19fEqR5bA&feature=player_embedded

 

 

 

News Flash September 27, 2011

 

 

12 Giant U.S. Banks Vulnerable to Disaster!

 

Imagine this scenario:

 

The largest economy in the world is on the brink of a financial meltdown that could make the debt debacle of 2008 seem small by comparison.

 

Its giant banks are buried in bad loans and vulnerable to failure.

 

Its central government is paralyzed.

 

Chaos looms.

 

A Desperate Meeting

 

One weekend, in a last-ditch attempt to avoid disaster, top finance officials representing 117 countries and six billion souls come together and meet.

 

The officials engage in intense sometimes frantic debate.

 

They explore every possible solution known to modern man, plus some that are still not known.

 

But they’re stumped. They come up with no new ideas.

 

That’s when the highest finance official of the world’s second-largest economy speaks.

 

He can barely mask his frustration and fear as he calls for massive, unprecedented steps to stem a domino-like series of defaults.

 

He cites words such as “cascading default, bank runs, and catastrophic risk.” And he bluntly tells the group that time is running out!

 

But when the meeting adjourns, nothing has been done; no decisions have been made.

 

Instead, the finance officials fly home to the far corners of the globe.

 

They go home to their families. And secretly, they pray the financial collapse does not destroy modern society as we know it.

 

Unbelievable? Then Consider This:

 

This was not a fictional scenario. It actually happened EXACTLY as I just described THIS past weekend!

 

The economy on the brink of financial meltdown is the European Union.

 

With a GDP nearly $2 trillion larger than the GDP of the United States, it is clearly the biggest economy in the world.

 

The giant European banks buried in bad loans include France’s Cr?dit Agricole and Soci?t? G?n?rale.

 

With $3.6 trillion in assets between them, they are the largest in the world.

 

And the high finance official who issued the doomsday warning is none other than U.S. Treasury Secretary Timothy Geithner.

 

Speaking before the delegates to the IMF/World Bank meeting in Washington, D.C., this past Saturday, his warnings were shocking. So they merit repeating:

 

 

→ Cascading default

→ Bank runs

→ Catastrophic risk

→ Running out of time!

 

 

 

Why was he so blunt?

 

What does he fear that average citizens are just beginning to comprehend?

 

Is it the recent panic in the global markets investors dumping sovereign bonds, banks recoiling from interbank lending, global money markets freezing up?

 

Is it the utter fragility of the U.S. economy, still struggling to recover from its own debt nightmare?

 

Or is it the chronic vulnerability of America’s largest banks, still loaded with bad mortgages, still taking massive risks with derivatives, and still directly vulnerable to Europe’s debt disaster?

The answer: All of the above! But of greatest concern is:

 

The Fragility of America’s Largest Banks

 

Many investors seemed shocked when Moody’s downgraded Bank of America’s long-term debt from A2 to Baa1 last week.

 

But even with the downgrade, we believe Moody’s is being overly generous to Bank of America.

 

The bank has:

 

 

• $421.7 billion tied up in mortgages, more than any other bank on the planet!

• $52.5 trillion in high-risk derivatives, more than 36 times larger than its total assets and nearly 341 times bigger than its risk-based capital!

• Massive exposure to the possibility that some of its trading partners in the U.S., Europe, or elsewhere might default to the tune of 182% of its capital, according to the Comptroller of the Currency.

 

 

 

And it’s not alone! Other major U.S. banks are in a similar predicament.

 

Candidates for Disaster

 

It’s because of these kinds of dangers that, one month ago, I warned Bank of America was a candidate for bankruptcy.

 

And it’s also because of these dangers that I’m publishing here for the first time the latest list of the nation’s weakest large banks, based the latest second-quarter data recently released by the FDIC.

 

 

 

 

 

 

 

 

 

Bank of America merits a Rating of D (weak). But it’s clearly not the only one. Also getting a D grade are two other giants JPMorgan Chase and Wells Fargo.

 

Nor is this weakness restricted to the nation’s largest banks. Major regional institutions SunTrust Bank, Regions Bank, Compass Bank, Huntington National Bank, and others are also vulnerable.

 

All told, 2,553 U.S. banks and thrifts now get a Rating of D+ (weak) or lower, implying widespread vulnerability to the consequences of sovereign debt defaults in Europe and to a double-dip recession in the U.S.

 

How Could This Impact You?

 

In too many ways!

 

First, if you own bank stocks, you’re bound to lose a lot of money. Their shares are already plunging, and the experience of 2008-2009 tells us they could fall a lot more.

 

Second, banks and other financial institutions are the heartbeat of the entire economy. If they go down, so does business.

 

Third, if you have money in a weak bank, it could be in jeopardy. Yes, the U.S. government may come to the rescue. But because of scarce government resources and new, stricter bailout laws, this time around, any bailouts are bound to be more painful to the bank, its shareholders, AND its creditors.

 

 

My recommendation:

 

1. Get your money to safety. If you must use a bank, do most of your business with those meriting a Rating of B+ or higher.

2. Never allow your deposits to exceed the FDIC protection limit.

3. For added safety and liquidity, seriously consider moving a big chunk of your cash from bank deposits and checking accounts to:

 

• 3-month Treasury bills (which you can buy through your broker or directly from the Treasury) or ...

• A money market fund that invests exclusively in short-term Treasuries.

 

Yes, I know Treasury bills don’t yield hardly anything.

 

And I recognize that Uncle Sam’s finances are also shaky a factor that could impact medium- and long-term Treasuries.

 

But the Treasuries I’m recommending mature in only 13 weeks. And I believe the chance of the U.S. government defaulting on its debt within the next 13 weeks is nil.

 

4. The more bank stocks plunge, the more money you can make. And if a bank fails, the profit potential is enormous. But that’s just one way to use this great crisis as a great wealth builder.

 

Now, the IMF Itself Needs a Bailout!

 

What a weekend it was for global bankers!

 

Policymakers from the International Monetary Fund, the World Bank, the U.S. Treasury, and the European Union were all running around Washington and Frankfurt, trying to put together plans to “solve” the global debt crisis.

 

But as you’d expect, their so-called “solutions” are all over the map. And just like all the ideas suggested in the past, none of them gets at the CORE of the problem that sovereign governments are swamped with too much unpayable debt, and default is the only solution!

 

Meanwhile, the cost of protecting German and French debt against default is surging to record highs, a sure sign the crisis is spreading from peripheral countries like Portugal and Greece to the very core of the euro zone.

 

U.S. Treasury Secretary Tim Geithner just warned of “cascading default, bank runs and catastrophic risk”!!!

 

And the IMF just admitted that its OWN $384-billion emergency fund is too small to cope with the debt crisis, suggesting it too needs a bailout!

 

That’s right! The world’s financial fallback just said it doesn’t have the resources needed to do its job!

 

So why did the market rally today?

 

Because investors are literally clinging to any hint of hope they can find out there and just the sheer idea that policymakers are trying to solve this issue is enough for a quick rebound day.

 

But here’s my take: This movie is kind of like the “Rocky” sequels! Each and every one is worse than the one before it!

 

In other words, buying into this rally is the LAST thing to do because it’s going to fail just like all the other hope-filled bounces before it!

 

The real question is whether or not you’re going to position yourself for the day this all falls apart.

 

You don’t have to sit idly by and let an inevitable day of reckoning destroy your wealth, just like it did to so many portfolios during the first phase of this great bear market.

 

Instead, you can take several steps to protect your portfolio, and even PROFIT from a further decline!

 

It could very well make the difference between a cracked nest egg and one that is well-protected, and even increasing in value, as the Dow heads toward 7,000.

 

 

 

 

News Flash September 26, 2011

 

 

Are YOU ready for Dow 7,000?

 

It may be shocking to hear me say that the Dow Jones Industrial Average is headed for 7,000, because even after this past week's carnage, the Dow is still sitting comfortably above 10,500!

 

But, yes, I firmly believe that we are going to see the broad U.S. stock market fall another 35% from here AT LEAST!

 

Just look at what's happened in the past few days:

 

• The Federal Reserve warned of "significant downside risks to the economic outlook" and the International Monetary Fund said "the global economy is in a dangerous new phase."

 

• The global data took a nasty turn for the worse, with a key Chinese manufacturing index slumping for three months in a row for the first time since 2009 while activity in Europe fell to a two-year low.

 

• And the cost of default insurance on European banks, many U.S. banks, and even entire sovereign COUNTRIES, exploded! The market now expects a Greek default to be a near certainty and even the cost of insuring German bonds hit a record amid fears it will be forced to shoulder the burden of bailing out all its high-risk neighbors.

 

In response, we have already seen the U.S. stock market start falling out of bed.

 

The major averages are now flirting with multi-month lows, while several leading financial, transportation, and materials companies are heading straight to their previous lows of 2009!

 

And Here's the Critical Difference Between the Last Crash and This One:

 

*As usual, bureaucrats are frantically running around Washington D.C. right now, scrambling for the 5,672nd "solution" to the sovereign debt crisis.

 

*The phones are ringing off the hook in Frankfurt, in London, in Zurich and all over Asia, as bankers try desperately to stem the flood of sell orders swamping their offices.

 

*The members of the Federal Reserve board and its district banks are ripping their hair out, trying to figure out why yet ANOTHER one of their attempts to restart the U.S. economy has fallen flat on its face.

 

In short, unlike the last crisis, there is nothing more policymakers can do this time around.

 

The course of market and economic history has already been charted.

 

We're heading back into recession, and the Dow Jones Industrial Average has a date with 7,000.

 

Remember, last time around the Dow plunged as low as 6,470. The S&P 500 slumped to 667.

 

And the Nasdaq Composite sank to 1266.

 

So to me, the question isn't: "How could the Dow possibly plunge to 7,000?" It's: "How could the Dow NOT fall that far?" If anything, 7,000 could be a generous target!

 

Now, Here's the Good News:

 

You don't have to sit idly by and let that kind of decline destroy your wealth, just like it did to so many portfolios during the first phase of this great bear market.

 

Instead, you can take several steps to protect your portfolio, and even PROFIT from a further decline!

 

In fact, if I'm right, and the Dow plunges almost 4,000 more points from here dragging all kinds of indices and assets to their bear market lows, your profit potential will be HUGE!

 

P.S. Again, there's no telling if we'll see the exact same kind of market meltdown that we saw in the first phase of this worldwide crisis. But if we do, wouldn't you want to be protected? Wouldn't you want to profit from it? Doesn't it make sense to take SOME kind of action, before it's too late?

 

I sure think so.

 

Inverse ETFs investments that rise in value when stocks fall.

 

That's precisely what I'm doing.

 

 

• ProShares UltraShort Euro ETF (NYSE: EUO) – This ETF operates inversely to the
movements of the euro in a given day, meaning it will move up as the euro heads
south. Even better, the UltraShort provides a 200% inverse. Losses in the euro will
create double the gains in the EUO.

 

http://www.proshares.com

 

 

• DB X-TRACKERS EURO STOXX 50 Short Daily ETF (LON: XSSX) – This inverse ETF
trades on the London Stock Exchange, but it’s based on the Dow Jones Euro Stoxx 50
Index, a collection of Europe’s largest companies (50 of those companies, to be exact).
It’s also the easiest way for American investors to access a broad-spectrum short on
the European markets.

 

 

• ProShares UltraShort Financials ETF (NYSE: SKF) – Like EUO above, SKF is an
ultra-short ETF that will provide a 200% inverse return on the asset it follows. In this
case, that asset is the Dow Jones U.S. Financials Index. Many U.S. banks continue
to gamble on their European exposure, despite clear warning signs that the region is
unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.proshares.com

 

 

 

• Direxion Daily Financial Bear 3x Shares ETF (NYSE: FAZ) – FAZ is an
ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Financial Bear 3X ETF seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the Russell 1000® Financial Services Index ("Financial Index"). Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.direxionshares.com

 

 

 

• Direxion Daily Russia Bear 3x Shares ETF (NYSE: RUSS) to protect your investments in Russia and Ukraine. RUSS is an ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Daily Russia Bear 3x Shares seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the DAX Global Russia+ Index. Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the Russian, Ukrainian financial sector.

 

http://www.direxionshares.com

 

 

 

 

 

 

 

Kyiv Capital Disclaimer:

 

Nothing published by Kyiv Capital should be considered personalized investment advice.

 

Any investments recommended by Kyiv Capital should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Investment products are not bank deposits or obligations of or guaranteed by Kyiv Capital, are not insured by any governmental agency and are subject to investment risks, including the possible loss of the principal amount invested. Past performance is not indicative of future results, prices can go up or down. Investors investing in funds denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Funds are subject to market risk. Please read the prospectus or financial statements of the company (Direxion, ProShares) carefully before investing. Kyiv Capital do not assume liability for any loss that may result from relying on these Kyiv Capital opinions or information. Kyiv Capital opinions or information is not intended as an offer or solicitation for purchase or sale of any security, nor is it individual or personalized investment advice. Investing involves risk, including the possible loss of principal. There may be additional risks associated with international investing, including foreign, economic, political, monetary and/or legal factors, changing currency exchange rates, foreign taxes, and differences in financial and accounting standards. These risks may be magnified in emerging markets. International investing may not be for everyone.

 

 

 

 

INVESTMENT PRODUCTS:   NOT FDIC INSURED  • NOT A BANK DEPOSIT  
• NOT INSURED BY GOVERNMENT AGENCY  • NO BANK GUARANTEE  • MAY LOSE VALUE

 

 

 

 

News Flash September 25, 2011

 

 

What a GREAT week in the markets!

 

Yes, I realize that this past week was pretty rough for most investors.

 

Heck, it almost didn’t matter where you had your money: U.S. stocks lost 6.4% in just 5 days ...

 

European markets crashed even harder, with the DAX Index off 9.2% and the CAC 40 Index off 9.7% ...

 

And even traditional safe-havens like copper and silver got slammed, shedding 11.6% and 16.5% respectively!

 

So how on earth can I say it was a GREAT week?

 

Because I saw all this coming, and so did anyone who heeded my urgent warning.

 

I have to say that we were absolutely ready for what happened this past week ... and I firmly believe we are going to rack up even more profits in the coming weeks and months.

 

And, look, there’s absolutely no reason you can’t be right there with us, smiling as the markets continue falling ... knowing full well that YOUR portfolio is protected against the world’s problems ... and potentially even INCREASING in value with every passing day.

 

Then there was a story in Bloomberg this week comparing the last five months with the five months that followed the Lehman Brothers collapse.

 

Back then investors withdrew $72.8 billion out of equity funds; since April 2011 investors have withdrawn $75 billion.

 

The article goes on to point out,

 

"Now, investors are withdrawing funds after companies beat profit estimates for 10 straight quarters. The world's largest economy posted two years of growth and economists are calling for GDP to expand 1.6 percent in 2011 and 2.2 percent in 2012, according to the median estimates compiled by Bloomberg."

 

Still, bulls say this is the time to buy. To paraphrase:

 

When the phone is ringing off the hook and investors are asking to sell everything it tends to signal a market bottom. The bottom is less about solid fundamentals but more about getting anxious investors out.

 

And thus, the way is cleared for all of this money on the sidelines to come rushing in, right?

 

I'm afraid it's not that easy.

 

Even if you clear the risk hurdle which is no guarantee at this point there's another potential obstacle ...

 

The Fed

 

The outflow of capital from equity funds is only half of the story.

 

As noted, this could simply be risk aversion; but it could also be a major change in appetite.

 

Clearly the Federal Reserve has been integral in driving investors' appetite for risk.

 

They've provided the monetary ease that's made financial markets the logical destination for investors' capital.

 

But after Bernanke announced plans this week to alter the term of the securities in the Fed's portfolio, to ultimately lower long-term interest rates and make it cheaper to borrow, the market tanked!

 

Apparently it was not the "stimulus" the market wanted ... if it wants any at all.

 

Personal savings shot up when deleveraging began in earnest after the 2008 financial crisis. It fell back as investors started to think the U.S. economy might improve in 2009 and 2010.

 

 

 

 

Now it is rising again, creating a pool of available funds from which to borrow.

 

This is just another sign that capital is available to invest if there becomes any incentive to do so.

 

Unfortunately, artificially low interest rates are not the incentive, as we're beginning to realize.

 

Where does this leave investors?

 

A few weeks ago I said I was watching for a dollar breakout to confirm what may be the beginning of a major trend change. Well ... we are getting that breakout from a 19-week range. Interestingly we saw a 20-week U.S. dollar index range before it broke out sharply higher thanks to the credit crunch back in 2008.

 

 

 

 

This indicates a real and sustainable move into the dollar. It might be a flight to safety and/or liquidity ... take your pick. And it could eventually turn into something much more this time around.

 

 

 

 

News Flash September 25, 2011

 

 

Wall Street HORROR! What to do?

 

Millions of investors and Wall Street insiders alike are horrified at the bloodletting we’ve seen this week on the Dow.

 

There’s no doubt about it: Europe’s great sovereign debt crisis is already beginning to hammer U.S. stocks.

 

Yesterday, the Dow plunged more than 500 points before closing down an eyelash less than 400 points, a 3.5% loss for the day.

 

This morning, with the specter of a Greek default coming into sharper focus, the Dow was on track for its worst week since the depths of the recession in 2008.

 

And although a bounce would normally be expected after a week of losses, the long-term direction is now clearly down ... down ... DOWN.

 

Since 2009, the U.S. “recovery” was a fraud; that it would end as soon as the bailout money ran out.

 

That money is gone now and U.S. economic growth is skidding to a halt.

 

Plus, for many months, now, I have warned you that the threat of massive defaults in Europe would have devastating consequences for U.S. bank stocks and that those stocks would lead the entire U.S. stock market lower.

 

The Dow is now down 2,036 points since May 1, a 15.9% decline; just like I forecast.

 

But all this is little more than a dress rehearsal for the real impacts of this great global debt crisis.

 

And now, with the first European defaults looming, the profit opportunities are about to explode.

 

 

 

 

News Flash September 24, 2011

 

 

Will Greece survive the weekend?

 

Millions of investors are not taking the risk; they’re dumping European stocks with both hands, just like I told you they would!

 

How to protect yourself and profit from Europe’s implosion.

 

European stocks cratered again this morning ...

 

France: Down 2.44%. Germany: Down 3.1%. Switzerland: Down 5.7%.

 

Plus, stocks were down more than 7% in Athens ... down 7.6% in Prague ... and down a staggering 13.5% in Moscow.

 

The reason for this investor panic is clear: With each passing hour, certainty grows that Greece’s government will default on its debts and by doing so, ignite an economic firestorm across Europe.

 

All week long, the European Central Bank and International Monetary Fund have worked feverishly with the Greek government to find a way to approve the next installment of bailout money.

 

Day after day, they have failed to find it.

 

Today, there are rumors that, even while the government continues to assure the world that default is not possible, it is secretly preparing for the final act in this Greek tragedy.

 

Meanwhile, investors are keenly aware that the ultimate announcement of Greece’s demise could come at virtually any moment.

 

When it happens, nobody wants to be holding European stocks.

 

It’s like d?j? vu all over again ...

 

The FIRST sovereign default in history happened more than 2,400 years ago in ... you guessed it ... Greece!

 

It was in 400 BC; ten city states defaulted on money they had borrowed from the temple of Delos.

 

Today, Greece is on the verge of introducing us to another first: The LARGEST sovereign default in recorded history, five times larger than Argentina’s 2001 default on its $95 billion in debt!

 

Credit-insurance prices indicate there is now more than a 90% chance that Greece will default.

 

Many analysts now say the odds are even higher.

 

As one UK banking official said yesterday ...

“It’s too late for Greece.

 

The Greek situation is tumbling out of hand and I suspect Greece will not be able to avoid a substantial default.”

 

When it happens, anyone who owns the Greek government’s treasuries will lose up to 100% of their money.

 

The first casualties will be Greek banks.

 

They hold most of the 137 billion euros of Greek government bonds in domestic hands and one-third of the total.

 

No banking system in the world could survive those kinds of losses.

 

Next, banks all across Europe will be shaken to their foundations.

 

German institutions could lose 9 billion euros.

 

French banks could lose 16 billion euros.

 

Altogether, it is estimated that euro-area banks would lose just over 63 billion euros.

 

Those kinds of losses alone could trigger massive bank failures, a credit freeze and an economic depression in Europe that will dwarf anything we saw in 2008 and 2009.

 

But there’s a far greater risk: The likelihood that Greece’s sovereign default will become a contagion: If investors panic and begin dumping the sovereign debt of other troubled nations Ireland and Portugal for instance, Europe’s debt disaster will instantly become many times worse.

 

If, as I suspect, the crisis spreads to Spain, with 656 billion in debts … and to Italy, with almost 1.6 trillion euros in debt, the entire European Union itself could implode.

Bernanke's "twist" falls flat! Dow plummets! What to do?

 

I've been warning you repeatedly for the last several months to get defensive.

 

I've urged you to sell most of your stocks, dump risky bonds, eliminate your real estate exposure, and even take offensive action, adding inverse ETFs that rise in value when stocks fall.

 

My reasons?

 

The economy is bad and getting worse.

 

The European sovereign debt crisis is bad and getting worse.

 

The credit markets are bad and getting worse.

 

And both fiscal and monetary policymakers are out of bullets!

 

They're unwilling or simply unable to beg, borrow, print, and spend hundreds of billions of funny money to prop up the markets artificially anymore!

 

Many Wall Street pundits took a different view in advance of this week's Federal Reserve policy meeting.

 

They figured Fed Chairman Ben Bernanke would pull some new "magic pony unicorn" out of his hat to save their bacon.

 

But just as I predicted, all he did was serve up a "nothing sandwich."

 

And just as I predicted, the markets are falling apart!

The Dow Jones Industrial Average plunged 284 points on Wednesday in a couple short hours.

 

Then we plunged another 391 points on Thursday.

 

Could this be the start of the march to Dow 7,000 that I've been forecasting?

 

Darn right it could be ... so I urge you not to wait any longer.

 

You simply must take protective steps before it's too late!

 

Why "Operation Twist II"?

Is a Big Nothing Sandwich

 

So what exactly did the Fed do and NOT do at its two-day policy meeting this week?

 

==> First, the Fed admitted the economy stinks! The post-meeting statement warned of "continuing weakness in overall labor market conditions" ... called the housing market "depressed" ... and said there were "significant downside risks to the economic outlook." Couldn't have said it better myself!

 

==> Second, the Fed said it would "do the twist" sell $400 billion of short-term Treasuries with maturities of three years or less and buy an equivalent amount of longer-term Treasuries that mature from between six years and 30 years. The "Operation Twist" reference is to a similar program the Fed implemented back in the 1960s.

 

==> Third, the Fed said it will continue to reinvest the proceeds of mortgage and Treasury securities that it already holds, and reiterated its pledge to keep rates low through 2013.

 

So why do I call these moves a bunch of "nothing sandwiches?"

 

Well, short-term interest rates are already near zero percent, and long-term rates are the lowest they've ever been for key things like mortgages.

 

Yet practically no one is building or buying homes!

 

So why would even lower interest rates, maybe on the order of a quarter of a percentage point, make a difference?

 

Answer: They won't!

 

Then there's the whole idea of flattening the yield curve driving long-term rates down while keeping short-term rates steady.

 

That's the kiss of death for the banking sector, which relies on a STEEP yield curve to make money!

 

No wonder three Fed policymakers dissented again over this ludicrous policy path.

 

And most importantly, the Fed is not printing fresh cash like it did with QE1 and QE2.

 

It's keeping the balance sheet steady.

 

That means all those people buying tech stocks with 100 and 200 price-to-earnings ratios using the 2010 "more liquidity lifts all boats" playbook should get crushed!

 

Bottom line: The Fed is out of bullets, plain and simple!

 

What to Do if You Haven't Acted Yet?

 

I trust that you've already taken my warnings to heart, and taken steps to protect your holdings against a renewed leg down in the markets.

 

If not, I recommend you start doing so as soon as possible.

 

Sell your economically sensitive stocks, including transportation, retail, and materials shares.

 

Sell any remaining banks, brokers, and builders, as well as riskier junk bonds and REITs.

 

And get rid of any exposure you have to the European markets stocks or currencies.

 

Then consider going on the offensive with inverse ETFs that target vulnerable asset classes and market sectors.

 

Inverse ETFs investments that rise in value when stocks fall.

 

That's precisely what I'm doing.

 

 

• ProShares UltraShort Euro ETF (NYSE: EUO) – This ETF operates inversely to the
movements of the euro in a given day, meaning it will move up as the euro heads
south. Even better, the UltraShort provides a 200% inverse. Losses in the euro will
create double the gains in the EUO.

 

http://www.proshares.com

 

 

• DB X-TRACKERS EURO STOXX 50 Short Daily ETF (LON: XSSX) – This inverse ETF
trades on the London Stock Exchange, but it’s based on the Dow Jones Euro Stoxx 50
Index, a collection of Europe’s largest companies (50 of those companies, to be exact).
It’s also the easiest way for American investors to access a broad-spectrum short on
the European markets.

 

 

• ProShares UltraShort Financials ETF (NYSE: SKF) – Like EUO above, SKF is an
ultra-short ETF that will provide a 200% inverse return on the asset it follows. In this
case, that asset is the Dow Jones U.S. Financials Index. Many U.S. banks continue
to gamble on their European exposure, despite clear warning signs that the region is
unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.proshares.com

 

 

 

• Direxion Daily Financial Bear 3x Shares ETF (NYSE: FAZ) – FAZ is an
ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Financial Bear 3X ETF seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the Russell 1000® Financial Services Index ("Financial Index"). Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.direxionshares.com

 

 

 

• Direxion Daily Russia Bear 3x Shares ETF (NYSE: RUSS) to protect your investments in Russia and Ukraine. RUSS is an ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Daily Russia Bear 3x Shares seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the DAX Global Russia+ Index. Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the Russian, Ukrainian financial sector.

 

http://www.direxionshares.com

 

 

 

 

 

 

 

Kyiv Capital Disclaimer:

 

Nothing published by Kyiv Capital should be considered personalized investment advice.

 

Any investments recommended by Kyiv Capital should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Investment products are not bank deposits or obligations of or guaranteed by Kyiv Capital, are not insured by any governmental agency and are subject to investment risks, including the possible loss of the principal amount invested. Past performance is not indicative of future results, prices can go up or down. Investors investing in funds denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Funds are subject to market risk. Please read the prospectus or financial statements of the company (Direxion, ProShares) carefully before investing. Kyiv Capital do not assume liability for any loss that may result from relying on these Kyiv Capital opinions or information. Kyiv Capital opinions or information is not intended as an offer or solicitation for purchase or sale of any security, nor is it individual or personalized investment advice. Investing involves risk, including the possible loss of principal. There may be additional risks associated with international investing, including foreign, economic, political, monetary and/or legal factors, changing currency exchange rates, foreign taxes, and differences in financial and accounting standards. These risks may be magnified in emerging markets. International investing may not be for everyone.

 

 

 

 

INVESTMENT PRODUCTS:   NOT FDIC INSURED  • NOT A BANK DEPOSIT  
• NOT INSURED BY GOVERNMENT AGENCY  • NO BANK GUARANTEE  • MAY LOSE VALUE

 

 

 

 

News Flash September 23, 2011

 

 

Markets Crashed… Here's What To Do Now

 

BLOOD IN THE STREETS! What to do?

 

Europe is imploding NOW: What to do?

 

Europe's Safe Havens Are History.

 

For many weeks now, I’ve been warning you that Europe’s debt crisis was about to crush European stocks and I urged you to take positions that skyrocket when those stocks sink.

 

Today, that forecast came true in spades ... Spain: Down 4.6% ... FTSE: Down 4.6% ... Austria: Down 5% ... Germany: Down 5% ... France: Down 5.25% ... Belgium: Down 5.3% ... Russia: Down nearly 8%.

 

Meanwhile, inverse investments on European stocks skyrocketed.

 

Also, for many weeks, I’ve warned you that Europe’s debt crisis would crush the euro currency and urged you to buy investments that soar when the euro sinks.

 

Today, the euro plunged again and those investments soared again.

 

And I’ve also been warning you that U.S. bank stocks were about to fall apart and that they would lead the market lower.

 

Again another bullseye: By mid-day today, the KBW Bank Index was down 3.4%.

 

Bank of America was down 4.4% ...

 

JPMorgan was down 4.6% ...

 

Morgan Stanley was down 8.5%, and ...

 

Goldman Sachs plunged 5.3%.

 

Both Morgan Stanley and Goldman are now at their lowest levels since 2008.

 

Plus, the S&P was down nearly 3.5%.

 

And the Dow plunged more than 400 points, bringing its four-day loss to well over 725 points.

 

A whopping 6.4% loss so far this week!

 

So WHY are all these stocks and the euro plunging? Why now?

 

Because investors are finally learning what you’ve known for months now: The economic slowdown in Europe and the United States is deadly.

 

Mohamed El-Erian of PIMCO, the world’s largest bond fund, agreed with that view today, saying the world is on the eve of the next financial crisis with sovereign debt at its epicenter.

 

This time could be much worse: Last time around, in 2008, a few big banks and insurance companies were threatened and governments both here and in Europe bailed them out.

 

Now these governments are so deep in debt, there’s no way they’ll be able to save anybody, maybe not even themselves!

 

Europe is imploding NOW: What to do?

 

Let’s not mince words: Europe and the U.S. are falling apart!

 

Late yesterday, in just a few hours, the Dow Industrials plunged 303 points.

 

The Dow Transports were crushed, collapsing 3.2%.

 

And the BKX Bank Index did even worse, shedding 5.2%.

 

Things didn’t get better overnight, either.

 

Germany’s DAX index plunged as much as 6.5% ... France’s CAC-40 tanked 6.6% ... and the euro currency imploded, losing more than 2 cents against the buck.

 

That brings its three-week loss to a hefty 5.9%!

 

What’s going on? Simple.

 

The European economy is falling apart!

 

A key manufacturing index that measures European manufacturing and services activity sank to 49.2, the worst reading in more than two years.

 

Here in the U.S., things aren’t any better.

 

Home construction just fell 5.3%, much worse than forecast.

 

Demand for home purchase loans just fell to the lowest since February, despite record-low interest rates.

 

Regional manufacturing indices are falling to the lowest levels in years, while consumer confidence recently hit the lowest level since the Carter administration!

 

Many on Wall Street are running around like chickens with their heads cut off.

 

They expected Federal Reserve Chairman Ben Bernanke to come to their rescue.

 

They hoped Congress or the Obama administration would bail them out again with more funny money.

 

Now, their hopes have been dashed ... and the drubbing has begun in full force.

 

This is precisely what I’ve been warning you about all along.

 

This past April I said “Financial Armageddon” was coming because of exploding government debts and deficits.

 

In June, I warned that the “U.S. economy is breaking down as government life support dries up!”

 

And this past month, I came out with my most urgent warning yet predicting that the Dow will soon fall as low as 7,000!

 

Fortunately, you still have a chance to prepare your portfolio and potentially make a small fortune in the process, before that last forecast comes true.

 

Europe's Safe Havens Are History!!!

 

Like I told you last month, European unity was always an illusion.

 

Now the crisis is entering a new and more ominous phase.

 

What about Greece?

 

Whether you call it "default" or something else, the facts are the same: Greece and other nations cannot repay their debts.

 

That money doesn't exist anymore. It's gone.

 

I expect more twists and plenty of market action in the coming weeks.

 

What should ETF investors do?

 

Short-term trading is extremely difficult in this environment, but here are some points to remember ...

 

Point #1:

The Euro Currency Is at a Crossroads

 

Europeans are facing an uncomfortable truth: They can't have a common currency and independent governments!

 

A resurrection of the mark and franc is a distinct possibility.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Incentivizing weaker nations to spend while sticking stronger ones with the bill is not feasible in the long run.

 

The European Union has to either get much stronger or disappear completely.

 

What would a stronger European Union look like?

 

In practice, it means Germany and France take charge of Greece, Italy, Spain, and everyone else.

 

In that scenario the euro could conceivably survive, though it would probably face a sharp devaluation.

 

The more likely outcome is for the euro zone to break apart, followed by a return to local currencies.

 

Europe turned out to be far more integrated than even the most enthusiastic euro-boosters imagined.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

It will be a messy process.

 

The 1999 conversion to the euro took years of negotiation and planning.

 

Reversing it all in a hurry will be neither clean nor simple.

 

For ETFs, this introduces yet another element of risk to already-weak European stock markets.

 

In the long run we will likely see some amazing buying opportunities. But meanwhile, look for capital to seek stability elsewhere.

 

That brings us to ...

 

Point #2:

 

No European Stock Market Is Safe

 

As recently as a few months ago, it looked like parts of Europe might be able to avoid the financial contagion.

 

Eastern European and Northern European markets seemed relatively appealing.

 

ETF sponsors always quick to jump on a trend responded with offerings like iShares MSCI Poland (EPOL) and Global X FTSE Nordic 30 ETF (GXF).

 

These seemed like a good way to stay involved in Europe while the Mediterranean nations sorted out their problems.

 

Unfortunately, even nations that had stayed out of the euro (like Switzerland and the U.K.) found themselves caught up in chaos.

 

Poland, Norway, Sweden, the Baltics none have been immune.

 

We may see some of these peripheral markets begin to recover before the worst-hit areas.

 

That's why I still watch them all.

 

As of now, though, I don't see much upside anywhere in European equities.

 

Point #3:

 

Inverse and Leveraged ETFs May Not Work Like You Think

 

Inverse ETFs that gain value when a benchmark index falls probably sound like a great way to trade Europe right now.

 

Maybe, but I have a couple of warnings ...

 

First, recall what I said above: Short-term trading is very difficult right now.

 

An inverse ETF can do just as much damage to your portfolio as a long ETF if you move a day early or a day late.

 

Your timing has to be near-perfect.

 

Second, all inverse and leveraged ETFs depend on derivatives to achieve the desired market exposure.

 

That means counterparty risk, as I explained in Three Often-Overlooked Risks of Inverse ETFs.

 

Under normal circumstances, I don't worry too much about counterparty risk.

 

In this situation with major banks on the edge of collapse and the currency itself probably unraveling, it's probably a good idea to think twice.

 

You don't want to own a fund that zigs when you expected it to zag.

 

Counterparty risk is especially high in exchange traded notes, or ETNs.

 

Be particularly wary of those issued by UBS, Deutsche Bank, and other European banks.

 

My concern there is that we could see a sharp correction from recent gains, so you have to be ready to move fast.

 

If you want to take the plunge anyway, SPDR Gold Trust (GLD) and iShares Gold Trust (IAU) are the most popular gold-based ETFs.

 

Inverse ETFs investments that rise in value when stocks fall.

 

That's precisely what I'm doing.

 

 

• ProShares UltraShort Euro ETF (NYSE: EUO) – This ETF operates inversely to the
movements of the euro in a given day, meaning it will move up as the euro heads
south. Even better, the UltraShort provides a 200% inverse. Losses in the euro will
create double the gains in the EUO.

 

http://www.proshares.com

 

 

• DB X-TRACKERS EURO STOXX 50 Short Daily ETF (LON: XSSX) – This inverse ETF
trades on the London Stock Exchange, but it’s based on the Dow Jones Euro Stoxx 50
Index, a collection of Europe’s largest companies (50 of those companies, to be exact).
It’s also the easiest way for American investors to access a broad-spectrum short on
the European markets.

 

 

• ProShares UltraShort Financials ETF (NYSE: SKF) – Like EUO above, SKF is an
ultra-short ETF that will provide a 200% inverse return on the asset it follows. In this
case, that asset is the Dow Jones U.S. Financials Index. Many U.S. banks continue
to gamble on their European exposure, despite clear warning signs that the region is
unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.proshares.com

 

 

 

• Direxion Daily Financial Bear 3x Shares ETF (NYSE: FAZ) – FAZ is an
ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Financial Bear 3X ETF seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the Russell 1000® Financial Services Index ("Financial Index"). Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.direxionshares.com

 

 

 

• Direxion Daily Russia Bear 3x Shares ETF (NYSE: RUSS) to protect your investments in Russia and Ukraine. RUSS is an ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Daily Russia Bear 3x Shares seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the DAX Global Russia+ Index. Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the Russian, Ukrainian financial sector.

 

http://www.direxionshares.com

 

 

 

 

 

 

 

Kyiv Capital Disclaimer:

 

Nothing published by Kyiv Capital should be considered personalized investment advice.

 

Any investments recommended by Kyiv Capital should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Investment products are not bank deposits or obligations of or guaranteed by Kyiv Capital, are not insured by any governmental agency and are subject to investment risks, including the possible loss of the principal amount invested. Past performance is not indicative of future results, prices can go up or down. Investors investing in funds denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Funds are subject to market risk. Please read the prospectus or financial statements of the company (Direxion, ProShares) carefully before investing. Kyiv Capital do not assume liability for any loss that may result from relying on these Kyiv Capital opinions or information. Kyiv Capital opinions or information is not intended as an offer or solicitation for purchase or sale of any security, nor is it individual or personalized investment advice. Investing involves risk, including the possible loss of principal. There may be additional risks associated with international investing, including foreign, economic, political, monetary and/or legal factors, changing currency exchange rates, foreign taxes, and differences in financial and accounting standards. These risks may be magnified in emerging markets. International investing may not be for everyone.

 

 

 

 

INVESTMENT PRODUCTS:   NOT FDIC INSURED  • NOT A BANK DEPOSIT  
• NOT INSURED BY GOVERNMENT AGENCY  • NO BANK GUARANTEE  • MAY LOSE VALUE

 

 

 

 

 

News Flash September 22, 2011

 

 

Moody’s on the warpath! Fed Surrenders!

 

This afternoon, Moody’s appeared to be endorsing all the warnings we’ve been giving you regarding the shaky condition of America’s biggest banks: It downgraded the long-term credit ratings of Bank of America and Wells Fargo and also downgraded Citigroup’s short-term rating!

 

Why?

 

For the very reasons we’ve been giving you for months now: These banks still hold tons of toxic assets ... they are clearly on the ropes ... and the new fiscally conservative majority in the U.S. House of Representatives is sworn to OPPOSE any bailouts!

 

Meanwhile, in this afternoon’s Fed announcement, Bernanke may as well have just said, “America, we’re out of bullets. You’re on your own!”

 

The announcement turned out to be pretty much a non-event: The Fed announced that it will sell short-term treasuries valued at $400 billion and then buy longer-term treasuries valued at $400 billion.

 

Net effect: Short-term yields may rise somewhat. Longer term yields may decline a bit.

 

Nothing in this announcement has a snowball’s chance of stimulating the economy or reducing unemployment.

 

This is nothing more than the Fed’s attempt to look like it’s fighting for the economy while it’s actually surrendering to forces beyond its control. 

 

It’s tantamount to re-arranging the deck chairs on the Titanic. Total impact on the U.S. economy: Virtually nil!

 

This Is Precisely What I’ve Been Warning You About All Along ...

 

I keep telling you that the U.S. is about to get slammed harder than it did by the financial crisis in 2008 ...

 

That banks stocks are going down the tubes again ...

 

And that Dow 7,000 is right around the corner!

 

 

 

News Flash September 22, 2011

 

 

Lloyd's of London abandons European banks!

 

“Banks could be taken down,” says Lloyd’s finance director.

 

Without warning, Lloyd’s, the world’s oldest insurance market, just announced that it has withdrawn its money from European banks.

 

The reason?

 

According to Lloyd’s, the banks are in danger of failing as Europe’s debt crisis continues to intensify.

 

The company’s Finance Director, Luke Savage, put it simply:

 

“If you’re worried the government itself might be at risk, then you’re certainly worried the banks could be taken down with them.”

 

Which European governments is Lloyd’s talking about?

 

They’re not saying.

 

But it IS interesting to note that Lloyd’s didn’t just withdraw its money from Greek banks; it withdrew its money from banks all over Europe!

 

One thing you can be sure of, though:

 

When the world’s oldest insurance company ...

 

A firm that for 323 years has made its living by accurately calculating the odds of future disasters ...

 

When that company suddenly takes its money and runs, it’s a MASSIVE red flag for investors, a clear sign that the beginning of the end is near!

 

Lloyd’s has every reason to worry.

 

In addition to the government debt crisis that’s threatening to destroy European banks, a huge credit crisis is spreading across the Continent as well.

 

Spanish and Italian banks are rejecting massive numbers of loans and charging customers more as the sovereign debt crisis continues to drive their own borrowing cost higher.

 

Any way you look at it, this shrinking of European credit markets is the worst kind of downward spiral:

 

The government debt crisis is making it harder and more expensive for banks to borrow money; the banks are passing those higher costs along to borrowers.

Corporations have to pay more to borrow; their cost of doing business is rising.

Consumers can’t or won’t borrow at higher rates, so corporate earnings plunge.

As corporate earnings evaporate, the taxes they pay also plummet.

Falling tax revenues cause the government’s deficits to explode higher, driving the banks’ cost of borrowing even higher.

 

Will there be corrections in gold, certainly.

 

Volatility in gold, and silver for that matter, remains very, very high.

 

The exchanges have tried repeatedly to raise margins in an effort to slow buying, but it's been about as effective as butter stopping a hot knife.

 

So is it too late to get in on the gold rush? Not at all!

 

Golden Opportunities

 

There are many good ways to invest in gold, including: Gold coins, bullion, key mining shares, and options on futures.

 

Diversification and risk management are key.

 

One of my favorite vehicles for investing in gold is key gold ETFs.

 

And one that I really like is Market Vectors Gold Miners ETF (GDX).

 

I also like the SPDR Gold Trust ETF (GLD).

 

And while I like the GDX and GLD ETFs, I like trading options on them even more!

 

Buying options on ETFs provides greater leverage and one big bonus, limited risk.

 

 

 

 

For years I've been encouraging people to have gold in their portfolios.

 

 

 

News Flash September 21, 2011

 

 

Europe crisis on a hair trigger!

 

Italy’s credit rating has just been slashed.

 

German economic growth has ground to a virtual standstill.

 

Two major German banks are likely to need bailouts from taxpayers.

 

French banks, the world’s largest are now unprotected and vulnerable to collapse.

 

This crisis is accelerating just like I told you it would.

 

Last night, Standard & Poor’s cut Italy’s credit rating.

 

The reason: S&P says that the Italian economy is slowing so fast that it may not be able to reduce its debt load.

 

That’s big news: Decreasing debt is a requirement for bailouts from the ECB and IMF and without bailouts, Italy is now in danger of default!

 

Plus, the news from elsewhere in Europe is growing more serious by the day.

 

Thanks in large part to Europe’s debt crisis, Germany’s gross domestic product rose just 0.1% in April, May and June.

 

Germany’s DAX stock index has dropped 25% since late July alone.

 

Yesterday, the government reported that German investor confidence fell to the lowest in more than 2 1/2 years in September.

 

Now, the European Commission has cut its euro-area growth forecasts for the second half of the year and warned the economy may come “close to standstill at year-end.”

 

Worse: Today, it was revealed that a Greek default would hit Germany’s state-owned banks hard.

 

Two of these nationalized banks now hold nearly 10 billion euros in Greek debt.

 

If these banks fail, the cost will be passed on directly to German taxpayers, who are already furious at the government for its handling of the bailouts.

 

This is even more bad news for Chancellor Angela Merkel, who lost key elections over the weekend due to her handling of the bailouts.

 

Many analysts now fear that, with voters turning against their government, Germany will not have the political will to move ahead with the next installment of aid for Greece.

 

Meanwhile, Bloomberg reported this morning that French lenders have $56.9 billion in exposure to private and public Greek debt, but the government has taken no steps whatsoever to protect French banks when Greece defaults.

 

 

 

News Flash September 20, 2011

 

 

Greek crisis coming to a head! What to do?

 

All hell broke loose in Europe this morning: European stocks plummeted.

 

The euro plunged.

 

Greek bond prices crashed again and gold rocketed higher.

 

Meanwhile, Greek Prime Minister Papandreou suddenly and unexpectedly cancelled his visit to the U.S. while en route!

 

After receiving a telephone call from his finance minister on a stopover in London, Papandreou hurriedly returned to Greece.

 

Why?

 

Nobody knows for sure, but today, International Monetary Fund (IMF) monitors will announce whether or not Greece is living up to the agreement it signed in order to receive bail outs and the stakes could NOT be higher!

 

If IMF monitors are not pleased with Greece’s progress, next month’s 8-billion-euro bailout payment could be cancelled.

 

And without that money, Greece will certainly default on its debt.

 

Plus, after today’s conference call with IMF regulators, Papandreou’s finance minister will announce plans to accelerate state asset sales and spending cuts.

 

Those new cuts include deep reductions in the pensions of Greek sailors and employees of the state telecommunication company OTE ... PLUS the immediate merger or abolition of 65 government agencies ... AND the freezing of state workers’ pensions through 2015.

 

Nobody expects Greek unions to take that news lying down.

 

Widespread rioting, looting and the firebombing of banks and government buildings have followed similar announcements in the past!

 

And to make matters worse, German Chancellor Angela Merkel received a stern rebuke from voters over the weekend.

 

German voters are furious over Merkel’s handling of bailouts for Greece and other PIIGS nations.

 

As a result, her party was roundly defeated in a Berlin state election. Her coalition ally lost all its seats.

 

Now, it seems, Merkel has two choices: She can continue trying to save Greece by approving new bailouts or she can try to save her own party and her own career by simply letting Greece default.

 

No wonder former IMF head Dominique Strauss-Kahn is warning that a Greek default is now inevitable!

 

“They can’t pay,” Strauss-Kahn said yesterday. “The efforts of European leaders have been too little, or too late, or often both too little and too late.”

 

And when Greece defaults, your profits could be HUGE:

 

>> Investors who own the investments that soar when European stocks sink ...

 

>> That skyrocket when the euro plunges ...

 

>> And that spin off windfall profits when gold and other crisis hedges explode higher ...

 

>> Stand to multiply their money many times over!

 

One of The Worst Financial Disasters of our Lifetime!!!

 

We stand on the threshold of one of the most dramatic financial disasters of our lifetime: The default of the oldest democracy in the history of Western civilization, Greece, is threatening the largest economies in the history of civilization, the European Union and the United States.

 

This monumental event will plunge vast numbers of families into the nightmare of poverty, homelessness and hunger.

 

In the worst case scenario, you will see soaring crime, the confiscation of property, the suspension of civil rights,...

 

The European debt crisis is here!!!

 

It's massive.

 

First, bank stocks are getting killed globally.

 

Second, frightened investors are rushing to the last true bastion of safety on the planet, gold.

 

Third, to combat this crisis, the European Central Bank and the Fed are going to do the same thing they did after the Lehman Brothers failure three years ago.

 

They're going to flood the economy with paper money like there's no tomorrow, and that's going to drive other commodities through the roof, especially essential commodities like food.

 

More and more German politicians and European central bankers realize that Greece is long past the point of no return.

 

Greece is actually bankrupt, it does not just have a liquidity problem, but a solvency problem.

 

A recent poll in Germany showed that 76% of the German population is opposing further rescue packages for over-indebted EU members.

 

That 76% may be enough to convince even Chancellor Angela Merkel, who certainly does not want to lose the next election because of Greece.

 

The Greek government has constantly cheated, first, to enter the European Union in the first place and now by violating the terms of the first bailout agreement.

 

Frankly, the country has no chance of meeting those terms.

 

The economy is much too weak after years or decades of mismanagement.

 

The austerity measures needed would throw this country into a horrible depression.

 

Yes, the German federal court ruled a few days ago that bailouts with German taxpayer money are actually legal. But they also ruled that the Parliament will have to be fully involved in the future.

 

There's seems to be no majority anymore for further bailouts in the German Parliament.

 

So I really doubt Chancellor Merkel will risk breaking up the current coalition that she'll need in the new elections just because of Greece.

 

It looks like the German government is preparing for a change of course and making preparations to finally abandon Greece and let it default.

 

It may be a matter of a few weeks or even days.

 

So in just a few days Greece could default and Germany could just throw in the towel and say, "Forget it."

 

Definitely, it looks like that's the way things are headed.

 

It's interesting being in a country that's just adopted the euro.

 

Estonia is one of the most disciplined countries in Europe and worked hard to get the euro.

 

So for Estonia, it's like being invited to a wedding and finding out it's a funeral!

 

But what's most important is that the entire marketplace now agrees.

 

Based on the astronomical premium cost of insuring against a Greek default, the market is saying that there's a 98% probability that this disaster will happen!

 

Now for the $64 trillion question: Compared to the aftermath of Lehman Brothers' failure of 2008, is the impact of the Greek default going to be less severe, equally severe or more severe?

 

More severe!

 

First, the banks here in Europe, and probably also in the United States, have never really recovered.

 

So the banking sector and the whole financial system is even more susceptible now than in 2008 or 2009.

 

Remember: Our central bank never solved the solvency problems we had in 2008 and 2009. All they did was buy some time. But the solvency problems remained, especially among the biggest banks of Europe, in France.

 

Meanwhile, the French government just said it may be too early to go for nationalization of some of the largest French banks.

 

Whenever you hear something like that you can be sure there is a huge fire there.

 

And based on my analysis, the French banking sector is an accident waiting to happen. Their bigger problem is the threat of outright insolvency.

 

The G-7 countries just announced they're not going to let them fail.

 

Are the G-7 countries going to step in and protect French banks?

 

Maybe, maybe not.

 

Maybe they would like to protect them but they don't have the means anymore. But the next question is: Who's going to save the G-7 countries?

 

Even if they were willing to rescue the banking sector, maybe they can't at least not in the way it was rescued in 2008 and 2009.

 

Because governments themselves are much more strained!

 

That leads me to my second point: It's not just the banks anymore as it was then. Now entire governments are going bust as a consequence of how they dealt with the crisis in 2008/09.

 

They now have huge deficits they didn't have then.

 

And the European Central Bank is already loaded with toxic assets on its balance sheets it didn't have then.

 

So not only do the banks have toxic assets, but now the central banks have toxic assets too, which makes it more difficult for them to respond.

 

You're going to see interbank lending freeze up with leading European and U.S. banks unwilling to lend to each other at almost any price.

 

I think you'll also see the private credit markets freeze up, with companies and consumers unable to obtain the loans they need to spend and grow.

 

And finally, I believe you are going to see the stock markets worldwide respond by falling sharply.

 

This isn't just some possible future scenario.

 

It's precisely what we saw happen after the Lehman failure and we're already starting to see it now, just in anticipation of a Greek default.

 

A few examples that I have seen already in the markets: The cost of short-term loans between European banks just hit its highest level since 2009, while the amount of money banks are parking at the European Central Bank just hit its highest level in 14 months.

 

These are credit market indicators, signs that European banks just don't trust each other.

 

Credit default swaps also.

 

Yes, credit default swaps!

 

If you're a bondholder who owns bonds in a European bank, your cost of protecting against default is exploding to new highs.

 

Even here in the U.S., the cost of making these interest-rate bets, bets the banks make in the derivatives market, is surging just like it did in 2008 and 2009.

 

So you have clear, concrete signs that even our banks don't trust each other.

 

One last point I want to make and that's WHY U.S. stock market investors should care what's going on.

 

My answer is simple and very clear: Because credit markets always lead equities. They did so in the first phase of this crisis and they will do so this time around.

 

So anyone who ignores these bright red warning signs is going to get killed.

 

The authorities are running out of bullets.

 

The last time the markets collapsed both fiscal and monetary policymakers flooded the economy with paper money.

 

The Fed rolled out QE1 and QE2, and the ECB did something very similar.

 

Meanwhile, the Obama administration rolled out a massive $800 billion stimulus program that was packed full of goodies for anyone and everyone.

 

And Congress willingly went along.

 

This time, what is the Fed going to do for an encore?

 

If they do the same thing, investors are going to say: "It didn't work last time. Why is it going to work this time?"

 

If they do less, investors will be even more disappointed.

 

And even if they roll out QE3, QE4 or QE-1,000, the fact remains, all they can do is print paper money.

 

They can't print jobs.

 

They can't create wealth out of thin air.

 

In the end, they just trash paper currencies and destroy the monetary order.

 

As for the fiscal policy, Obama knows he can't ram another $800 billion package through Congress.

 

So he's trying to thread the political needle with this $447 billion package of tax cuts and expenditures.

 

But even that has no chance of passing because of how he's proposing to pay for it.

 

He's trying to pay for it by raising certain taxes in a manner Republicans have already rejected.

 

The whole exercise is a political farce.

 

We're going to start seeing some printing in Europe immediately, they're taking some lessons from Ben Bernanke.

 

This is why I love gold.

 

Gold isn't just a hedge against the falling dollar anymore.

 

It's a hedge against the falling dollar OR the falling EURO, against falling currencies in general.

 

It's protection for investors; it's one of THE places they can go.

 

Plus, gold isn't just a hedge against falling currencies.

 

It has also now emerged as THE go-to investment for safety in ANY crisis.

 

As we see more defaults, we are going to see investors shifting.

 

I really think this could be a parabolic move for gold.

 

We've seen the price climbing up, but now this could be the real shift as we see investors flock into gold.

 

So if the central banks try to rescue the global financial system like they did last time, then what happens to gold?

 

Gold goes higher just like it has done since 2008. Investors are going to flock to the quality vehicle and that has become hard assets. And, of course, gold is the most accessible to investors.

 

And if they FAIL to rescue the system?

 

Then that's all the more reason for investors to rush to gold.

 

It's a win-win for gold and other precious metals.

 

The dollar used to be that, but we can't rely on it anymore.

 

The future of the euro is also too uncertain.

 

So certainly, gold is where investors are going to go.

 

The future of the euro?

 

I'd probably describe it as a best-case or worst-case scenario.

 

In the best-case scenario, we see a rabbit pulled out of a hat.

 

Germany, for some reason decides to commit more of its wealth to keeping this system alive, becoming a major paymaster and being able to call the shots from a fiscal standpoint across the euro zone.

 

If something like that takes shape and I don't know if it's possible, I think the euro still falls to one-to-one against the U.S. dollar.

 

You have to look at it this way: Say they save this thing, you may get a bounce in the euro.

 

But then you have to look at it and realize the euro-zone countries are still spiraling down into deflation, some of them into depression.

 

The European Central Bank is ahead of itself on interest rates and I think they are going to cut rates at the next meeting anyway.

 

So the yield expectations are going to change for the euro and the relative growth expectations are going to change for the euro.

 

We see the euro sinking.

 

A falling euro in this situation is not a bad thing for the countries in Europe.

 

They need a lower euro on the export side to help them create some wealth anyway.

 

So what happens in the worst-case scenario?

 

Worst-case scenario, it just breaks up.

 

Someone leaves the zone, Greece is prospect number one to leave but it could be Portugal, Spain or Italy.

 

I think if one leaves it could create a domino effect.

 

If that's the case, the euro goes away and everyone goes back to their old currencies.

 

Which wouldn't be a bad thing for currency traders because we'd get to trade everything again.

 

What do investors need to do to protect themselves from this crisis?

 

I think investors need to do three things urgently:

 

First, reduce your exposure to everything that can fall in value. Real estate is already down, but can fall even further. Most U.S. stocks, especially financial stocks are down, but can fall a lot further. Get rid of the most vulnerable ones.

 

Second, move your money to safety. That used to be just Treasury bills. But Treasury bills alone won't cut it anymore. You also need gold.

 

Third, for real estate and stocks that you cannot sell, hedge with inverse ETFs. And by the way, you can also use inverse ETFs to profit handsomely from declines in virtually any sector or region of the world, including banks, and including Europe.

 

I recommend you look at GLD, the most popular ETF that's tied to gold bullion. And I also recommend you look into inverse ETFs on key stock sectors, such as REK, the inverse ETF to profit falling real estate stocks, and RWM to profit from a decline in the Russell 2000 index.

 

So that's GLD, REK, and RWM.

 

 

 

News Flash September 19, 2011

 

 

UK warns: "The Euro Cannot Survive"!

 

On Friday, U.K. Prime Minister Gordon Brown laid his cards on the table.

 

In his speech at the World Economic Forum in China, Brown delivered precisely the same warnings I've been giving you for many weeks now:

"The euro cannot survive in its present form. It's going to have to be reformed dramatically."

Brown continued by saying the collapse of the euro is imminent: "We are, I think, at an hour to midnight in the way that we look at this issue," he said.

 

Far More Serious Than the 2008 Meltdown!!!

 

How bad will Europe's crisis get?

 

Brown was equally candid, saying that European banks are "grossly under-capitalized" and that the debt crisis is far more serious than the 2008 meltdown.

 

Why?

 

Simply because this is DOUBLE the crisis we had in 2008: Not only are the banks broke, SO ARE EUROPE'S GOVERNMENTS or as Brown put it ...

"In 2008, governments could intervene to sort out the problems of banks. In 2011, banks have problems, but so, too, do governments."

What Brown Did NOT Say ...

 

I could not agree more with Prime Minister Brown. In fact, there's only one prediction I would add:

Investors who own the investments that soar when European stocks sink ...

That skyrocket when the euro plunges ...

And that spin off windfall profits when gold and other crisis hedges explode higher ...

Stand to multiply their money many times over!

 

 

 

News Flash September 19, 2011

 

 

Despite all the concerted actions and promises we saw from European leaders and even from U.S. Treasury Secretary Geithner this week, Europe is still going down in flames.

 

The fact remains that no bank, or country or group of countries is rich enough to keep the PIIGS nations from defaulting on the huge debts they’ve amassed!

 

The only question that remains is, how will you fare?

 

Are YOU ready for the consequences?

 

Have you taken the steps you need to protect your wealth when the first defaults shake global banks to their foundations?

 

Do you own the investments that will skyrocket as the world’s stock markets and the euro are decimated?

 

Warning Flags: Gold ... and Emerging Currencies

 

Two Thursdays ago President Obama threw a crack at South Korea:

 

"... while they're adding teachers in places like South Korea, we're laying them off in droves. It's unfair to our kids. It undermines their future and ours. And it has to stop. Pass this bill, and put our teachers back in the classroom where they belong. "If Americans can buy Kias and Hyundais, I want to see folks in South Korea driving Fords and Chevys and Chryslers."

 

Come on, Mr. Obama, what did South Korea ever do to you?

 

Maybe it was a patriotic sucker punch, since South Korea is now bolstering its industrial sector while the U.S. economy is fighting to keep its alive. After all, he needed to rally the troops for passage of his jobs bill.

 

But sticking with South Korea, and the rest of Asia for that matter, things are going fairly well.

 

This shouldn't come as too big a surprise since there are plenty of analysts who love to point out Asia's economic growth superiority.

 

Asia has been spotlighted as leading the charge out of the global recession that followed the 2008 credit crunch. Since then growth has never been a concern for Asia in the way it has for the West. But there has been a concern with the global currency wars.

 

I'm willing to bet you've heard about the Federal Reserve's weak dollar policy.

 

And we know that China has suppressed the value of its currency for the sake of its export competitiveness.

 

The Bank of England has been very soft on monetary policy; so has the European Central Bank.

 

The result of action taken by these major central banks, plus the unattractive growth backdrops of their economies, is that capital (hot money) seeks returns, conservative and speculative, elsewhere.

 

That elsewhere has been emerging markets, particularly in Asia.

 

And that's when we start having a problem ...

 

Hot Money Can Stoke Inflation

 

Inflation can wreak havoc on an economy.

 

Just ask Brazil.

 

Their finance minister was the first to officially call out the games being played between central banks as a currency war, even though the dynamic was not new.

 

Brazil even found it necessary to enact capital controls, to keep money from flowing in too quickly, inflating the assets, appreciating the currency, pressuring Brazil's consumers and reducing their export competitiveness.

 

But Brazil is a big, important, and well-known player in the global economy.

 

They are one of the famous BRICS.

 

While some smaller emerging economies in Asia, such as Thailand, engaged some form of capital controls, Asia has so far been able to mitigate the impact of global currency wars; though inflation is still a concern.

 

A bigger concern, perhaps, is that these capital flows reverse. This is from a Reuters' columnist:

 

"A stampede for safety has sent many of Asia's currencies diving and the cost of insuring its debt soaring. The retreat says less about the region's financial health than Europe's. It's a reminder that hot money is most dangerous not when it pours in, but when it pulls out."

 

As for the cost to insure the debt, here are the 5-yr credit default swaps (CDSs) of Thailand, Indonesia, Korea, India and China:

 

 

 

 

 

 

 

Pretty substantial increases relative to the last 12 months. But for a gauge on how much further these CDSs could climb, let's pull back to include 2008 data:

 

 

 

 

 

 

Hmmmm. Now, there's nothing guaranteeing these CDSs will climb to 2008 highs; there's nothing guaranteeing these CDSs will climb any further at all. But if a confluence of expectations and economic data signal a real credit crunch in Europe, you could safely bet these have not yet peaked.

 

BRICS to the Rescue?

 

Months ago at some indistinct point along the timeline of the euro zone's slow speed financial train wreck, China pledged to purchase sovereign debt in an attempt to support confidence in Europe's debt markets.

 

And courtesy of the Brazilian Finance Minister, the BRICS nations will discuss the potential for similar efforts now.

 

It is not sure whether the BRICS nations will come in and simply buy European government bonds or if they'll use sovereign wealth funds to recapitalize banks, thereby acquiring some influence in important European banks. Even if it happens, the impact will likely be negligible anyway.

 

You can't fault Russia, China, and even Brazil for being worried about a collapse in the euro-zone economy, the euro zone represents a huge chunk of demand for Chinese goods; Russia is already very much exposed to euro-denominated securities; and Brazil's fate rests very much on its largest trading partner's (China) access to euro-zone demand.

 

It is believed China will avoid a hard landing and keep the broader Asian economy from a significant slowdown; but China cannot save the euro zone from recession.

 

George Soros, an extremely smart (but equally misguided) man admits it. On several occasions he's come out warning of the dire consequences Europe faces if they cannot enact some type of bailout, or reform, or restructuring, or whatever. He recently came out with this:

 

"The political will to create a common European treasury was absent in the first place; and since the time when the euro was created the political cohesion of the European Union has greatly deteriorated. As a result there is no clearly visible solution to the euro crisis. In its absence the authorities have been trying to buy time."

 

A common treasury in the euro zone among sovereign nations would be a step in this experiment aimed at creating global centralization. Too bad the BRICS will ultimately find it unappealing and their potential support efforts futile.

 

Maybe this is why German Chancellor Angela Merkel is sticking to her guns, saying:

 

"Eurobonds are absolutely wrong.

"In order to bring about common interest rates, you need similar competitiveness levels, similar budget situations. You don't get them by collectivising debts."

 

In other words: Germany, who is most tied to the troubled euro-zone nations, doesn't want to be forced into an arrangement where they must bear the majority of the burden in supporting the troubled periphery nations.

 

And if the problem is not fixed soon ...

 

Gold and Emerging Currencies May Reveal the Markets' Fate

Take a look at this chart of select European banks' credit default swap (CDS) rates:

 

This CDS insurance now costs nearly as much as it did at the height of concern during and immediately after the 2008 financial crisis. Keep in mind, though, the 2008 crisis and concern emanated from U.S. banks and the U.S. subprime mortgage market.

 

This time the euro zone is ground zero.

 

 

 

 

 

 

 

 

 

 

 

 

And I point to the banks not because they are some dark and hidden risk of which only I understand the potential consequences. No, the chart above shows that investors are well aware that there are major risks among major banks in Europe and to a lesser extent in the U.S. Here is another chart to that point:

 

 

 

 

 

 

Rising interbank lending rates signals credit markets growing tighter. We all remember how Libor was heavily watched back in 2008 as an indication of a tightening or loosening credit market. This time it is Euribor (the average rate of borrowing amongst 50 European banks) that needs to be watched:

 

 

 

 

 

 

Euribor has risen dramatically this year; and it has tacked on 35 basis points (almost 30 percent) in August alone.

 

This means banks are growing stingier with their money when it comes to lending to other banks, highlighting deterioration in confidence.

 

The reason I mention all of this is to show the parallels to 2008, a credit crunch, a banking crisis.

 

What's more, gold and Asian currencies took a dive back then, even though the former represents a safe haven and the latter pose solid underlying economic fundamentals.

 

Gold circa 2008:

 

 

 

 

 

 

Emerging currencies circa 2008 (Singapore dollar, Korean Won, Brazilian real, South African rand, Turkish Lira, Hungarian forint):

 

 

 

 

 

 

Will it be d?j? vu all over again? In short: Tread carefully.

 

 

 

 

News Flash September 18, 2011

 

 

As Go the Credit Markets, So Go Stocks!

 

I have a simple rule I follow when it comes to investing in markets like these: As go the credit markets, so go stocks! Or stated another way, if you spend all your time watching stocks like Amazon.com or Apple, you're going to regret it!

 

Why bring this up?

 

Because when I watch the market coverage on CNBC, I usually hear commentary from an endless parade of bullish fund managers. They say that you should buy transportation and manufacturing stocks for this and that reason, or that you should buy technology stocks because it's the "seasonally strong" period for tech.

 

I think these guys wouldn't know a Euribor-OIS spread or 2-year swap spread if it hit them on the nose!

 

But just like they did in the LAST phase of the market meltdown, those obscure credit market indicators are LEADING the stock market.

 

They exploded higher, signaling a flight from risk, BEFORE stocks collapsed in 2007-2009 ... and they're exploding higher again.

 

Signs of an Impending Meltdown Are There, Pay Attention, Please!

 

In order to understand why these kinds of esoteric indicators are so important, you have to understand what they are! So get out your pencils folks ... I'm going to give you a quick credit market primer.

 

The Euribor-OIS spread is up first.

 

It measures the difference between what banks would have to pay to borrow money from each other in the Euribor market (the European equivalent of the LIBOR market where dollar-based loan rates are set) and what they would have to pay by entering into an overnight indexed swap.

 

Normally, the two rates track each other very closely.

 

But when the spread blows out, it's a sign that liquidity fears are surging, essentially, that banks are afraid to lend to each other because they're worried the banks they're trading with won't be able to make good on their promises.

 

Now take a look at this chart.

 

You can see that this spread is soaring to 78 basis points at last count.

 

That's the highest going all the way back to early 2009.

 

 

 

 

 

 

 

 

Then there's the 2-year swap spread.

 

Interest rate swaps are derivatives contracts that banks and other parties sign.

 

They allow parties to swap fixed-rate payments for floating-rate payments on some fixed amount of underlying debt, and they're designed to mitigate interest rate risk.

 

The spread tells you the difference in cost between a 2-year swap and the yield on a 2-year Treasury note.

 

In normal times, the spread is relatively narrow because being on one side of a swap contract or buying a Treasury of equivalent maturity delivers roughly the same result.

 

But when banks get increasingly nervous about the ability of their counterparties to make good on their derivatives contracts, the cost of entering into swaps surges.

 

It exploded higher in 2007-2009.

 

And what do you know, it's rising again.

 

Just look at the chart below and you'll see this spread has blown out to 34 basis points, the highest since last summer.

 

That's nowhere near the 167 points we saw a few years ago at the depths of the credit crisis. But that just tells me we have much higher readings yet to come!

 

 

 

 

 

 

 

 

Next Up: Equity Risk Indicators to Surge, Stock Prices to Plunge!

 

 

So what's going to happen next?

 

What are these credit market indicators telling me to expect?

 

A surge in the CBOE Volatility Index, or "VIX" as it's known.

 

I wouldn't rule out a rise to the 60s from the current level in the high-30s. And along with that surge, we'll get a collapse in stocks.

 

My longer-term target, is around 7,000 on the Dow.

 

The decline won't happen in a straight line, of course. European and U.S. policymakers will try to stand in the way ... just like they did in 2007-2009.

 

This week the ECB and other central banks agreed to extend longer-term dollar loans to European banks to tide them over for a bit longer.

 

The heads of state in Germany, France, and Greece also got together for a "kumbaya" phone call, then promptly announced that everything is peachy!

 

But the moves are straight out of the crisis playbook.

 

Over and over, you see a crisis erupt ... policymakers respond with some new whiz-bang program, sparking a short-covering rally ... then the crisis returns in spades because the underlying problems haven't been solved!

 

Heck, the central banks even chose the Thursday morning of options expiration to roll the latest program out!

 

That's designed to inflict maximum pain on short-sellers, a move first rolled out by former Fed Chairman Alan Greenspan years ago and used repeatedly by Ben Bernanke in Phase I of the crisis!

 

If it weren't such a sad attempt at market manipulation, it'd almost be laughable.

 

Finally, it's not JUST the credit markets that tell me a major Dow plunge is forthcoming.

 

It's the continuing flood of weak economic data.

 

Take the latest National Federation of Independent Business report ...

 

The group's index sank to 88.1 in August from 89.9 in July, the sixth drop in a row.

 

That left the index at a 13-month low, with the group's chief economist William Dunkelberg saying,

"Hope for improvement in the economy faded even further through the month."

In fact, a subindex that tracks how optimistic businesses are about the future plunged to the lowest level since 1980!

 

Meanwhile, retail sales flatlined in August.

 

That was a sharp downturn from the 0.3 percent growth we saw in July, and it missed economist expectations.

 

If you strip out autos, gas, and building materials to get the "core" sales figures used to calculate GDP, you get a big fat goose egg too, the weakest reading so far in 2011.

 

As if that weren't enough, the New York Federal Reserve's index of regional manufacturing sank yet again to -8.8 from -7.7 in August.

 

Economists expected an improvement, but what we got was a decline to a 10-month low!

 

The Philadelphia-area index also disappointed coming in at -17.5 against expectations for a reading of -15.

 

Bottom line: Rallies are meant to be sold.

 

Or better yet, use them to add more exposure to downside hedges and inverse ETFs  investments that rise in value when stocks fall.

 

That's precisely what I'm doing.

 

 

• ProShares UltraShort Euro ETF (NYSE: EUO) – This ETF operates inversely to the
movements of the euro in a given day, meaning it will move up as the euro heads
south. Even better, the UltraShort provides a 200% inverse. Losses in the euro will
create double the gains in the EUO.

 

http://www.proshares.com

 

 

• DB X-TRACKERS EURO STOXX 50 Short Daily ETF (LON: XSSX) – This inverse ETF
trades on the London Stock Exchange, but it’s based on the Dow Jones Euro Stoxx 50
Index, a collection of Europe’s largest companies (50 of those companies, to be exact).
It’s also the easiest way for American investors to access a broad-spectrum short on
the European markets.

 

 

• ProShares UltraShort Financials ETF (NYSE: SKF) – Like EUO above, SKF is an
ultra-short ETF that will provide a 200% inverse return on the asset it follows. In this
case, that asset is the Dow Jones U.S. Financials Index. Many U.S. banks continue
to gamble on their European exposure, despite clear warning signs that the region is
unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.proshares.com

 

 

 

• Direxion Daily Financial Bear 3x Shares ETF (NYSE: FAZ) – FAZ is an
ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Financial Bear 3X ETF seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the Russell 1000® Financial Services Index ("Financial Index"). Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.direxionshares.com

 

 

 

• Direxion Daily Russia Bear 3x Shares ETF (NYSE: RUSS) to protect your investments in Russia and Ukraine. RUSS is an ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Daily Russia Bear 3x Shares seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the DAX Global Russia+ Index. Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the Russian, Ukrainian financial sector.

 

http://www.direxionshares.com

 

 

 

 

 

 

 

Kyiv Capital Disclaimer:

 

Nothing published by Kyiv Capital should be considered personalized investment advice.

 

Any investments recommended by Kyiv Capital should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Investment products are not bank deposits or obligations of or guaranteed by Kyiv Capital, are not insured by any governmental agency and are subject to investment risks, including the possible loss of the principal amount invested. Past performance is not indicative of future results, prices can go up or down. Investors investing in funds denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Funds are subject to market risk. Please read the prospectus or financial statements of the company (Direxion, ProShares) carefully before investing. Kyiv Capital do not assume liability for any loss that may result from relying on these Kyiv Capital opinions or information. Kyiv Capital opinions or information is not intended as an offer or solicitation for purchase or sale of any security, nor is it individual or personalized investment advice. Investing involves risk, including the possible loss of principal. There may be additional risks associated with international investing, including foreign, economic, political, monetary and/or legal factors, changing currency exchange rates, foreign taxes, and differences in financial and accounting standards. These risks may be magnified in emerging markets. International investing may not be for everyone.

 

 

 

 

INVESTMENT PRODUCTS:   NOT FDIC INSURED  • NOT A BANK DEPOSIT  
• NOT INSURED BY GOVERNMENT AGENCY  • NO BANK GUARANTEE  • MAY LOSE VALUE

 

 

 

News Flash September 17, 2011

 

One reason people get hurt in the stock market

 

There is only one reason people get hurt in the stock market.

They're on the wrong side of the trend.

When the market is rising you should jump in with both feet and let the market momentum carry you to greater and greater profits.

When the trend changes you should too, otherwise you'll be crushed and your wealth destroyed when the market begins to move against you.

 

 

News Flash September 16, 2011

 

 

Joblessness surging! Economy slowing! Next leg down approaching!

 

We’ve seen a pop in the markets over the past few days on hopes that the latest “kumbaya” moment between leaders of Greece, Germany, and France will magically “solve” the European debt crisis.

 

And this morning, in an effort to infuse some measure of confidence into the markets, global central banks also announced plans to let European banks borrow dollars for a longer period of time in an effort to increase liquidity.

 

My response? Good luck with that!

 

Each and every short-term rally has proven to be a selling opportunity because investors know default is inevitable!

 

Despite all the politicians’ denials, a breakup of the euro currency union is increasingly likely.

 

 

 

 

The bigger issue that Wall Street won’t be able to ignore, though, is the worsening U.S. economy!

 

Just today, we learned that initial jobless claims surged by 11,000 to 428,000 in the most recent week. That was the highest reading since June.

 

Meanwhile, the New York Federal Reserve’s index of regional manufacturing sank yet again to -8.8 from -7.7 in August.

 

Economists expected an improvement, but what we got was a decline to a 10-month low!

 

The Philadelphia-area index also disappointed, coming in at -17.5 against expectations for a reading of -15.

 

Bottom line: The incoming figures continue to confirm that we’re slumping toward a double dip recession here in the U.S. And the ongoing credit crisis in Europe continues to follow the 2007-2009 playbook:

 

First, we get a market collapse.

 

Next, we get some short-term, market-spiking intervention by fiscal or monetary policymakers.

 

And then we get a renewed collapse because the underlying problems haven’t been solved!

 

The answer: Because the Fed doesn't work for the American public, it works for Wall Street.

That's right.

By keeping overnight lending rates between 0.00% and 0.25%, banks can borrow at next to nothing and buy risk-free U.S. Treasury securities that yield a lot more than their financing costs. The result is a "positive interest rate spread," which is the basis for banks' revenues and profits.

The Fed's Next Disastrous Decision

A Secret Agent

 

 

 

 

News Flash September 15, 2011

 

European Disunion

 

The massive differences between the various nations in the European Union have always been apparent.

 

But now as the euro zone is literally crumbling in front of us, the depth of that divide has become more obvious than ever.

 

Clearly there are, and always have been, major socio-economic divides, vastly different political philosophies, varieties of languages, and even diverse religious views.

 

The list of things that makes a "European Union" next to impossible could go on and on.

 

Despite that, the vision of one Europe and even one currency went forward.

 

Joining the Club

 

The concept of a unified Europe is nothing new.

 

Throughout history the idea has been considered and discussed, largely due to the devastating effects of war between the various nations.

 

So many famous people in history, such as William Penn, Victor Hugo, and Giuseppe Mazzini, turned to the idea of a unified Europe in some form or another.

 

But the concept to develop the EU we know today really took off after World War II, mainly because of the widespread devastation both on a human and an economic scale.

 

However, "the dream" that was the EU and eventually the euro currency was flawed from the start.

 

I compare it to the idea of combining the dollar and the peso.

 

Obviously Mexico and the U.S. have vastly different economies and cultures.

 

And to try and put together one currency, some call it the "amero," would make about as much sense as the euro does.

 

Even so, many of the poorer southern European and Baltic countries, including Estonia where I live, desperately wanted to be a part of the EU.

 

They felt joining the euro club would elevate them to a higher level of respect putting them on equal footing with the wealthier European nations such as Germany and France.

 

But the results of belonging to this club can end up very different depending on where you are located.

 

Take for example the differences between two of the poorer European nations ...

 

A Tale of Two Countries

 

Estonia shows how a disciplined steady exchange rate can bring long-term economic benefits, albeit at the cost of short-term pain. Its rigorous fiscal policy was all in an effort to gain euro-zone membership and eventually the euro.

 

This did not happen by magic; it was the result of years of self-discipline and a simple, flat tax system.

 

Estonia chose to be extremely fiscally conservative after it gained independence from the Soviet Union in 1991.

 

So what you see is a country that has behaved as though it were in the euro zone for much of its life.

 

Greece was the mirror image and failed to accept the fiscal discipline that the zone is supposed to require.

 

Its government spent like drunken sailors, and has put the country on the verge of default and even a return to the drachma.

 

Now that Estonia is a full member of the EU/euro club some are left scratching their heads and wondering if all the years of pain to gain membership were really worth it.

 

Some equate it to being invited to a wedding, and it actually turns out to be a funeral.

 

What's more, the divide is widening between the wealthy northern European countries and the poorer southern EU countries like Greece, which for the time being is clinging on by a thread.

 

The once explicit support from the rest of Europe and the International Monetary Fund has all but dried up, and tensions are at the boiling point.

 

The level of uncertainty in Europe has reached a fever pitch. And the problems are likely to just get worse, with the divides and resentments even deeper.

 

Consequently, the EU itself may not survive, and it's highly likely the euro in its current form will not either.

 

How to Profit from a Collapsing Euro?

 

Is this a club Ukraine really want to join?

 

Is this a club Ukraine would really want to join?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personally, I think it's pretty risky to bet against the euro with futures and options right now.

 

A much better way, in my view is by using an exchange traded fund (ETF) that bets against the euro.

 

One idea to consider is the Market Vectors Double Short Euro ETN (NYSE:DRR).

 

This fund is double short the euro.

 

For instance if the euro falls 15 percent, the fund is meant to appreciate approximately 30 percent.

 

The reverse is also true, of course.

 

Another ETF I really like is ProShares UltraShort Euro (EUO). 

 
ETF options offer the ultimate in flexibility for betting against the euro.

 

ETF options offer the ultimate in flexibility for betting against the euro.

 

 

 

 

 

News Flash September 14, 2011

 

EUROPEAN PROFIT BONANZA DIRECTLY AHEAD!

 

 

Huge profits possible as Europe crashes:

 

This great European debt crisis could crack wide open at virtually any moment.

 

Consider today’s headlines ...

 

*Germany fed up with bailouts: Members of German Chancellor Angela Merkel’s ruling coalition are demanding that Greece be allowed to default and leave the European Union.

Plus, Germany’s vice chancellor and economy minister Philipp R?sler said in Die Welt newspaper yesterday that there can be no “taboos” when considering action “to stabilize the euro in the short term,” including a Greek insolvency.

 

*European bond yields soaring: At yesterday’s bond auction in Rome, the average yield for the Italian 10-year bond soared. Investors are now demanding yields that are more than 4% higher (405 basis points) than they get when investing in 10-year German bonds.

Meanwhile, the spread on the Italian two-year note soared to a euro-era record 436 basis points and in Greece, 10-year bond yields just hit a new euro-era record of 25%!

 

*French banks swooning: In a shocking move, investors are now charging France’s largest banks a premium on short-term loans!

While other companies generally pay less than the LIBOR rate for short-term loans, BNP, Soci?t? G?n?rale and Cr?dit Agricole, France’s largest banks by market value now must pay more than the LIBOR rate.

This is a massive vote of “no confidence” for French banks and it’s only the beginning: According to Bloomberg, the eight largest U.S. money market funds reduced their investments in French banks by a staggering 46% in the past 12 months!

 

*Chinese bailout doomed:

 

The Italian government is in debt to the tune of 1.9 trillion euros.

 

That’s more debt than is now being carried by Greece, Spain, Ireland and Portugal combined.

 

Worse, Rome’s debt will reach 120% of GDP this year, second only to Greece. And now, with the economy slowing, global investors are growing increasingly concerned that Italy could default.

 

Yesterday, we learned that the Italian government has gone, hat in hand, to China and begged for the money it needs to survive this crisis.

 

But today, reports indicate that China is interested in buying chunks of Italy itself, NOT in the government’s shaky debt.

 

On her visit to Rome last month, Chinese Foreign Ministry spokeswoman Jiang Yu asked about buying Italian assets presumably, stock in Italian companies.

 

But China’s involvement in Greece, Spain and Portugal has only given China a far larger footprint in Europe, while doing next to nothing to ease the crisis in those countries.

 

THE BOTTOM LINE: If you wait to take positions that are designed to skyrocket as this contagion continues to spread, you could miss out on huge profits!

 

And for funds you can afford to risk, consider investments that are designed to rise when nearly all else falls:

 

http://www.proshares.com

 

http://www.direxionshares.com

 

 

 

News Flash September 13, 2011

 

90% Stock Market Collapse, Economist Warns!!!

 

2012 could be the worst yet with:

 

• A 90% drop in the stock market . . .
• 50% unemployment . . .
• And, three consecutive years of 100% ANNUAL inflation . . .
  that means gas could hit $28 a gallon . . .

 

 

 

 

News Flash September 13, 2011

 

 

2008 All Over Again?! Or Worse?

 

Years ago, Dad and I often talked about the circular nature of history, the Crash of '29 and the Crash of '87, the Florida land boom of the '20s and the real estate bubbles of later years, the bank failures of the Great Depression and the bank failures of the 1980s.

 

"History repeats itself and has important lessons to teach," he said, "but always on a different plane and never without grave risks to those seeking all their answers in the rear-view mirror."

 

Now, this coming Thursday is the day Lehman Brothers failed three years ago, setting off a chain reaction of events, which continue to reverberate globally. The pattern back then was clear:

 

 

•   A plunge in bank stocks in the first half of 2008, which was the prelude to ...

•   Massive losses revealed at the world's largest banks, which triggered ...

•   Panic withdrawals by investors and lenders from banks and the credit markets, precipitating ...

•   The near failure of America's and Europe's largest financial institutions, prompting ...

•   Mammoth government bailouts, deficit spending, and money printing to rescue the banks and the global economy from the abyss, which, in turn, set the stage for ...

•   The sovereign debt crises in Greece, Ireland, and Portugal, beginning in 2010, plus ...

•   The deficit crisis that paralyzed Washington in the summer of 2011.

 

 

The lesson learned:

A crash in bank stocks is the harbinger of bank collapses, deep recession, and widespread panic in the financial markets.

 

And now ... here we go again!

 

Floyd Norris reports in the Friday New York Times that, among the 30 largest publicly traded bank stocks in the world, 29 are now down by MORE than they were at this point three years ago.

 

http://www.nytimes.com/2011/09/10/business/for-banks-unfortunate-echoes-of-2008.html

 

Worse, the shares of several major banking stocks have already plunged BELOW their deeply depressed panic levels of March 2009: UniCredit, Soci?t? G?n?rale, Morgan Stanley, Intesa Sanpaolo, and others.

 

Short-term credit markets are beginning to freeze up again, with telltale signs of panic now rearing their ugly head.

 

And just as we saw back then in 2008, the largest American and European banks are teetering:

 

Bank of America is caught in a morass of sinking mortgages, costly home repossessions, big lawsuits, and high-risk derivatives.

 

Its share price is down 29% just in the last five weeks and down 54% from its highs of the year, wiping out nearly $84 billion in shareholder value.

 

JPMorgan Chase, the biggest player in the high-risk derivatives market, still holds commitments of $73.6 trillion in derivatives, according to the latest report by the Comptroller of the Currency (table 12, pdf page 35). Its shares are down 33% from this year's high, erasing $62 billion in value.

 

http://www.occ.treas.gov/topics/capital-markets/financial-markets/trading/derivatives/dq111.pdf

 

UniCredit, Italy's largest bank, is swimming in bad sovereign bonds issued by sinking PIIGS countries. It came up short by 5.6 billion euros in its recent official "stress test," despite the fact that the test itself has been widely derided as too soft. Its shares, down by 61% from this year's high, lost a whopping 8.2% on Friday alone. And among the weakest of all ...

 

Soci?t? G?n?rale, France's third largest, is also reeling from the sovereign debt crisis.

 

It scored the lowest among its peers in the stress tests. Down more than 65% from their peak, it shares dropped over 10% just on Friday.

 

 

 

 

 

 

 

 

 

But it's not just megabanks.

 

Based on the FDIC's just-released second quarter database, U.S. banks of all sizes and regions are taking it on the chin ...

 

Their net operating revenues fell for the second quarter in a row, compared to the prior year with Morgan Stanley, Hudson City Savings, State Street, PNC Financial, Citigroup, and Goldman Sachs the biggest losers.

 

Among the 10 largest, nine suffered declines in interest margins, due to the Federal Reserve's efforts to artificially shove down long-term rates.

 

Their favorite cash-cow business overcharging consumers with all kinds of loan servicing fees has plunged by a whopping 40.9%, compared to last year's second quarter (thanks to banking reforms). Adding insult to injury ...

 

Lawsuits are hitting hard!

 

AIG has sued the Bank of America for $10 billion.

 

The Federal Housing Finance Agency has sued 17 U.S. banks for undisclosed damages on $196 billion in securities bought by Fannie Mae and Freddie Mac.

 

A long line of state attorneys generals have piled in as well, suing banks for mortgage fraud.

 

And now, the American Banker reports that many of the nation's largest banks may be under investigation by the Department of Justice for up to $6 billion in kickbacks they've received from mortgage insurers.

 

http://www.americanbanker.com/issues/176_173/mortgage-reinsurance-respa-kickbacks-hud-investigation-doj-1041928-1.html

 

Whether there's any money left to pay all the damages, fines, and legal costs remains to be seen.

 

The biggest immediate danger: Exposure to Europe!

 

SNL Financial, reports that, although U.S. banks have little DIRECT exposure to failing PIIGS countries in Europe, they do have big exposure to European banks which DO hold the bulk of the PIIGS debts.

 

http://www.snl.com

 

That includes $370 billion to German banks, $375 billion to banks in the UK, $276 billion to France's, plus another $143 billion to other European countries.

 

These numbers are bad enough.

 

But what they don't include is the exposure to European derivatives, which is bound to be far larger.

 

Bottom line:

 

After all the bailouts and economy stimulus, we're back to square one, confronting most of the same crises as 2008 plus several more!

 

We have the return of bank stock collapses and a credit freeze-up.

 

Plus, on top of that, we have the sovereign debt crises, the Washington deficit disaster, political gridlock, higher long-term unemployment, mass street protests in Europe, and monetary authorities everywhere running out of bullets.

 

The best evidence:

 

Yesterday, the G-7 pledged to support failing banks. But it's just talk. There was no meat, no muscle, and no MONEY behind their words.

 

Your course of action should be crystal clear:

 

For most of your money, rush to the safest havens you can find, including cash and gold.

 

 

And for funds you can afford to risk, consider investments that are designed to rise when nearly all else falls:

 

http://www.proshares.com

 

http://www.direxionshares.com

 

With the markets already signaling wholesale disappointment to the G-7 announcement yesterday, and with Moody's getting ready to downgrade the credit of major banks, this could be a very BIG week.

 

 

 

• ProShares UltraShort Euro ETF (NYSE: EUO) – This ETF operates inversely to the
movements of the euro in a given day, meaning it will move up as the euro heads
south. Even better, the UltraShort provides a 200% inverse. Losses in the euro will
create double the gains in the EUO.

 

http://www.proshares.com

 

 

• DB X-TRACKERS EURO STOXX 50 Short Daily ETF (LON: XSSX) – This inverse ETF
trades on the London Stock Exchange, but it’s based on the Dow Jones Euro Stoxx 50
Index, a collection of Europe’s largest companies (50 of those companies, to be exact).
It’s also the easiest way for American investors to access a broad-spectrum short on
the European markets.

 

 

• ProShares UltraShort Financials ETF (NYSE: SKF) – Like EUO above, SKF is an
ultra-short ETF that will provide a 200% inverse return on the asset it follows. In this
case, that asset is the Dow Jones U.S. Financials Index. Many U.S. banks continue
to gamble on their European exposure, despite clear warning signs that the region is
unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.proshares.com

 

 

 

• Direxion Daily Financial Bear 3x Shares ETF (NYSE: FAZ) – FAZ is an
ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Financial Bear 3X ETF seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the Russell 1000® Financial Services Index ("Financial Index"). Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.direxionshares.com

 

 

 

• Direxion Daily Russia Bear 3x Shares ETF (NYSE: RUSS) to protect your investments in Russia and Ukraine. RUSS is an ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Daily Russia Bear 3x Shares seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the DAX Global Russia+ Index. Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the Russian, Ukrainian financial sector.

 

http://www.direxionshares.com

 

 

 

 

 

 

 

Kyiv Capital Disclaimer:

 

Nothing published by Kyiv Capital should be considered personalized investment advice.

 

Any investments recommended by Kyiv Capital should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Investment products are not bank deposits or obligations of or guaranteed by Kyiv Capital, are not insured by any governmental agency and are subject to investment risks, including the possible loss of the principal amount invested. Past performance is not indicative of future results, prices can go up or down. Investors investing in funds denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Funds are subject to market risk. Please read the prospectus or financial statements of the company (Direxion, ProShares) carefully before investing. Kyiv Capital do not assume liability for any loss that may result from relying on these Kyiv Capital opinions or information. Kyiv Capital opinions or information is not intended as an offer or solicitation for purchase or sale of any security, nor is it individual or personalized investment advice. Investing involves risk, including the possible loss of principal. There may be additional risks associated with international investing, including foreign, economic, political, monetary and/or legal factors, changing currency exchange rates, foreign taxes, and differences in financial and accounting standards. These risks may be magnified in emerging markets. International investing may not be for everyone.

 

 

 

 

INVESTMENT PRODUCTS:   NOT FDIC INSURED  • NOT A BANK DEPOSIT  
• NOT INSURED BY GOVERNMENT AGENCY  • NO BANK GUARANTEE  • MAY LOSE VALUE

 

 

 

News Flash September 12, 2011

 

 

The great credit catastrophe of September, October 2011!

 

Look: When U.S. banks nearly collapsed in 2008, select investments could have more than quadrupled your money. And that’s a fairly conservative estimate. With the right timing and leverage, you could have made much, much more!

 

But this time ...

• I'm not merely looking at a threat to U.S. banks, but at a serious threat to the entire European banking system with 62% of all the assets now held by banks worldwide ...
  
  
• I'm not only talking about the possible failure of some banks, but also the immediate default of an ENTIRE NATION and potentially up to FOUR even larger countries ...
  
  
• And I'm not talking about the crash of some minor third-world currency, but of the world’s second largest currency, used by more than 327 million people!

 

 

More importantly, there’s no time to delay.

 

The first major collapse of Greece could occur at literally any moment.

 

Greece going down in flames NOW! What to do?

 

If anyone tells you he’s not terrified at what’s happening right now in Europe, he doesn’t even begin to understand the problem.

 

Just look at the news since Friday:

 

>> German banker quits ECB in disgust: On Friday, a German member of the European Central Bank suddenly resigned, a shocking move perceived by most analysts to be an indication of intense German anger at the high cost of attempts to save the PIIGS and stabilize the European economy.

 

>> Greek bailout may be canceled: Also late last week, Germany’s finance minister, Wolfgang Sch?uble, said Greece has violated the promises it made in return for its first bailout and threatened that its next bailout may be withheld.

 

>> Greek economy cratering: Yesterday, Greece’s finance minister announced that in 2011, his nation’s economy will NOT shrink the 3.8% previously reported, it will shrink 5.3%!

That means the government tax revenues and its ability to service its massive debts will plunge much faster than previously thought.

 

>> French and German banks in grave danger: On Sunday, French government officials braced for expected ratings downgrades on France’s three largest banks, BNP Paribas, Soci?t? G?n?rale and Cr?dit Agricole. All told, French banks recently said they hold $13.4 billion in Greek debt.

 

Plus, over the weekend, German Chancellor Angela Merkel’s government continued debating how to save German banks, which recently reported that they held $14.1 billion in Greek debt.

 

>> Greek 2-year bonds paying 60% yields: For the first time in history, yields on Greek two-year notes soared above 60% today. Insurance against a Greek default is now priced at its highest point in history, more than three times the cost of insurance against a Portuguese default.

 

>> The end is near: Any way you look at it, Greece’s demise is imminent. Later this month, German lawmakers will vote on whether or not to approve the next Greek aid package. In a recent poll, a whopping 53% of Germans oppose further aid to Greece.

Plus, French Budget Minister Valerie Pecresse has also threatened to halt her country’s bailouts to Greece.

 

There’s no guarantee that either France or Germany will wait even one more day, let alone for a week or two, to demand that Greece leave the European Union.

 

When that happens, you’re going to see an explosion of stock market volatility and surges in precious metals that will make everything else we’ve seen so far in this crisis PALE by comparison!

 

And remember: Greece is only the first of the five PIIGS nations to approach default.

 

Ireland, Portugal, Italy and Spain are also speeding toward failure.

 

Needless to say, these fiascos can only have a catastrophic impact on the European Union, the euro and the global economy as a whole.

 

 

 

 

News Flash September 10, 2011

 

 

Kyiv Capital to help you protect yourself and profit from the great credit catastrophe of 2011!

 

There’s no question that this worldwide debt contagion is spreading like wildfire:

 

First, it only affected Greece, Ireland and Portugal.

 

Now, it’s hammering Spain and Italy. And the infection is also beginning to threaten banks throughout Europe, here in the States and around the world.

 

A massive freeze in the money and credit markets now seems inevitable.

 

The only questions that remain are:

 

“Will this be worse than 2008?”

 

“What do you need to do now to protect your wealth?”

 

“Which investments are positioned to skyrocket as this crisis unfolds?”

 

The most crucial point: Europe is now on a hair trigger.

 

The first defaults could be announced at virtually any moment.

 

When that happens, it will be too late to protect yourself or profit.

 

 

 

 

News Flash September 9, 2011

 

 

Dow crashing! Greece defaulting NOW?!

 

 

Is Greece going to default right now THIS weekend?!

 

The Greek finance ministry has given its officials instructions to deny, deny, deny!

 

But Bloomberg reports that German Chancellor Angela Merkel is making contingency plans for possible 50% wipeout losses that could sink German banks if Greece defaults, even as soon as the next 72 hours.

 

Whether it happens now or later is uncertain.

 

But no matter when, the repercussions will undoubtedly be devastating, a global credit freeze that could dwarf the Lehman Brothers disaster of 2008.

 

That’s why the Dow, the Nasdaq and the S&P are crashing today.

 

The Shocking Case for Dow 7,000!

 

How far can we fall?

 

How ugly are things going to get?

 

How likely is a 2008-style meltdown?

 

I have a two-word answer for you:

 

Dow 7,000!

 

That's an incredibly likely downside target.

 

So today, I'm going to lay out my shocking case for a 4,000-point drop and tell you what you need to do right away to protect yourself from it!

 

European Bank Run Every Bit as Serious as 2007-2009

 

European policymakers would like you to believe we can never have another Lehman Brothers-style implosion.

 

They want you to believe that their banks are safe, that the markets are just going through a temporary soft patch and that they have the political willpower and financial ability to plug all the holes in the financial dike over there.

 

Don't listen to that malarkey!

 

The markets are telling you the exact OPPOSITE story! Just consider:

 

* Earlier this week, Greek 2-year note yields surged above 50 percent. FIFTY PERCENT!

 

Subprime credit card borrowers don't even pay rates like that, which tells you everything you need to know about how serious their debt crisis is.

 

* Italian bonds just fell in value for 11 straight days, erasing most of the gains notched after the European Central Bank agreed to step into the breach and buy Italian and Spanish bonds.

 

* Belgian bond yields just blew out to the widest premium against core German bond yields since the euro currency was introduced in 1999! That indicates the crisis is spreading even beyond the so-called "PIIGS" countries.

 

* Then there's the Credit Default Swap (CDS) market, where professional investors buy and sell insurance against bond defaults. The cost of protecting against losses on senior bonds issued by 25 major European banks and insurers just surged to the highest level ever: 278,000 euros per year for every 10 million euros in bonds!

 

Not convinced yet?

 

Then look at the Euribor market, where European banks lend short-term money to each other. It's going haywire, with the cost of borrowing surging there just like it did here in the U.S. in 2007-2009.

 

Two-year swap spreads, which represent the cost of exchanging fixed-rate income streams for floating-rate payments between derivatives traders, are also blowing out here in the U.S.

 

That last happened in 2008. And it signals that banks are increasingly worried about counterparty risk on interest rate trades.

 

Plus, the amount of money that European banks are parking with the ECB, rather than lending to each other is skyrocketing.

 

 

 

European banks are squirreling away their money with the ECB instead of lending it.

 

 

 

 

 

 

 

 

 

 

 

 

 

It just hit 166 billion euros, the highest since last August.

 

Bottom line: Every reliable popular and esoteric credit market indicator I follow is flashing bright red, just like they did in 2007-2009!

 

U.S. Economy Sinking toward 2009 Levels or Worse!

 

If all the problems were "across the pond," as they say, our markets could potentially shrug off some of the European selling.

 

But they're not! Here in the U.S., the economy is clearly slumping toward recession for the second time in the past couple of years.

 

The hard evidence?

 

==> Our country created precisely zero jobs last month for the first time since the 1940s.

 

ZERO! Job losses were widespread across a wide range of industries, from construction to manufacturing to retail.

 

As if that weren't enough, average hourly earnings actually FELL, the first time that has happened since January 2008. Over the year that followed, the Dow plunged roughly 4,000 points.

 

==> The Conference Board's consumer confidence index just sank to 44.5 in August from 59.2 in July. That was the worst reading since April 2009. At that time, the Dow was trading around 8,100.

 

==> GDP grew at a rate of only 0.4 percent in the first quarter. The last time the U.S. economy grew that slowly, the Dow was trading for around 7,500.

 

==> The Philadelphia Fed index just tanked to -10, the lowest since March 2009. The last time it was this lousy, the Dow traded for roughly 7,200.

==> Purchase mortgage application activity just slumped to its lowest level since December 1996. The last time this few home buyers were applying for loans, the Dow was going for 6,300.

 

Bottom line: Major European and U.S. bank stocks are plunging to levels last seen in the 2007-2009 crisis. Key economic data is slumping to levels last seen during the 2007-2009 crisis. And credit market risk indicators are soaring toward levels last seen in the chaotic days of 2007-2009.

 

So I ask you a simple question:

 

"Why shouldn't the Dow plunge back toward those levels too?"

 

Wall Street pundits have no good answer for that. I bet your broker wouldn't if you asked him or her, either.

 

Yet I'm here to tell you that it's not only likely we hit Dow 7,000, but that you don't have to just sit there and let a 4,000-point Dow decline rip your portfolio to shreds again!

 

You can and should take protective steps immediately and even consider shooting for PROFITS from a major downside move:

 

 

 

• ProShares UltraShort Euro ETF (NYSE: EUO) – This ETF operates inversely to the
movements of the euro in a given day, meaning it will move up as the euro heads
south. Even better, the UltraShort provides a 200% inverse. Losses in the euro will
create double the gains in the EUO.

 

http://www.proshares.com

 

 

• DB X-TRACKERS EURO STOXX 50 Short Daily ETF (LON: XSSX) – This inverse ETF
trades on the London Stock Exchange, but it’s based on the Dow Jones Euro Stoxx 50
Index, a collection of Europe’s largest companies (50 of those companies, to be exact).
It’s also the easiest way for American investors to access a broad-spectrum short on
the European markets.

 

 

• ProShares UltraShort Financials ETF (NYSE: SKF) – Like EUO above, SKF is an
ultra-short ETF that will provide a 200% inverse return on the asset it follows. In this
case, that asset is the Dow Jones U.S. Financials Index. Many U.S. banks continue
to gamble on their European exposure, despite clear warning signs that the region is
unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.proshares.com

 

 

 

• Direxion Daily Financial Bear 3x Shares ETF (NYSE: FAZ) – FAZ is an
ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Financial Bear 3X ETF seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the Russell 1000® Financial Services Index ("Financial Index"). Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.direxionshares.com

 

 

 

• Direxion Daily Russia Bear 3x Shares ETF (NYSE: RUSS) to protect your investments in Russia and Ukraine. RUSS is an ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Daily Russia Bear 3x Shares seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the DAX Global Russia+ Index. Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the Russian, Ukrainian financial sector.

 

http://www.direxionshares.com

 

 

 

It recently came out that a $1.2 billion derivatives portfolio that an American bank managed for the European government lost 98.5% of its value between 2004 and June 2010.

If an American bank will sit idly by while a client eats about $1 billion on a single investment, where do you think you and your portfolio land on Wall Street's list of priorities?

The message here is simple: You can't trust Wall Street, not with a $10,000 investment, a $100,000 investment, a $1 million investment, and especially not with $1 billion investment.

Losses are not confined to the notoriously murky derivatives investments, either.

I would bet that the special American bank clients who earlier this year bought privately offered shares of Facebook Inc. at a $60 billion valuation will end up losing big on their investment as well.

As investors, most of us are not rich enough to get Wall Street's attention, but we should stay informed about how these American banks are luring their clients into spectacularly bad deals.

That way we'll all know what to avoid.

 

KYIV CAPITAL IS YOUR BEST SOURCE FOR THE UNBIASED MARKET COMMENTARY YOU WON'T GET FROM WALL STREET.

 

Kyiv Capital Disclaimer:

 

Nothing published by Kyiv Capital should be considered personalized investment advice.

 

Any investments recommended by Kyiv Capital should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Investment products are not bank deposits or obligations of or guaranteed by Kyiv Capital, are not insured by any governmental agency and are subject to investment risks, including the possible loss of the principal amount invested. Past performance is not indicative of future results, prices can go up or down. Investors investing in funds denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Funds are subject to market risk. Please read the prospectus or financial statements of the company (Direxion, ProShares) carefully before investing. Kyiv Capital do not assume liability for any loss that may result from relying on these Kyiv Capital opinions or information. Kyiv Capital opinions or information is not intended as an offer or solicitation for purchase or sale of any security, nor is it individual or personalized investment advice. Investing involves risk, including the possible loss of principal. There may be additional risks associated with international investing, including foreign, economic, political, monetary and/or legal factors, changing currency exchange rates, foreign taxes, and differences in financial and accounting standards. These risks may be magnified in emerging markets. International investing may not be for everyone.

 

 

 

 

INVESTMENT PRODUCTS:   NOT FDIC INSURED  • NOT A BANK DEPOSIT  
• NOT INSURED BY GOVERNMENT AGENCY  • NO BANK GUARANTEE  • MAY LOSE VALUE

 

 

 

News Flash September 8, 2011

 

 

Crises coming to a head NOW! What to do?

 

Today, Thursday, September 8, 2011 is turning out to be a crucial one in the global debt crisis.

 

This morning, European Central Bank president Jean-Claude Trichet told the world what everyone already knows: The European economy stinks and it’s stinking worse by the day.

 

That’s bad news: The slowing economy means lower tax revenues for governments that are already struggling to pay their bills.

 

Lower tax revenues could well become the straw that finally breaks the EU’s back.

 

His plan? He has none!

 

The ECB kept interest rates unchanged.

 

Because euro-zone inflation remains high, he effectively said that printing euros to stimulate the economy is off the table for now.

 

Normally, you’d expect that kind of announcement to push the euro higher.

 

But given the shaky state of the European continent, investors dumped euros with both hands. It plunged more than 1.3% on the news.

 

 

 

 

 

 

 

 

 

Meanwhile, yields on 1-year Greek government bonds hit 87.7% today.

 

No, that is NOT a typo: Investors are so terrified that the Greek government will welch on its debt especially now with the euro-zone economy slowing, they’re demanding yields of nearly 90%.

 

 

 

 

Think of that: The annual yield you earn is nearly DOUBLE what you pay to buy the bond!

 

And even despite that outrageous return, investors aren’t buying it for a second.

They’re staying away in droves!

 

Make no mistake: The crisis in Europe is reaching critical mass RIGHT NOW!

 

 

 

 

Kyiv Capital Disclaimer:

 

Nothing published by Kyiv Capital should be considered personalized investment advice.

 

Any investments recommended by Kyiv Capital should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Investment products are not bank deposits or obligations of or guaranteed by Kyiv Capital, are not insured by any governmental agency and are subject to investment risks, including the possible loss of the principal amount invested. Past performance is not indicative of future results, prices can go up or down. Investors investing in funds denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Funds are subject to market risk. Please read the prospectus or financial statements of the company (Direxion, ProShares) carefully before investing. Kyiv Capital do not assume liability for any loss that may result from relying on these Kyiv Capital opinions or information. Kyiv Capital opinions or information is not intended as an offer or solicitation for purchase or sale of any security, nor is it individual or personalized investment advice. Investing involves risk, including the possible loss of principal. There may be additional risks associated with international investing, including foreign, economic, political, monetary and/or legal factors, changing currency exchange rates, foreign taxes, and differences in financial and accounting standards. These risks may be magnified in emerging markets. International investing may not be for everyone.

 

 

 

 

INVESTMENT PRODUCTS:   NOT FDIC INSURED  • NOT A BANK DEPOSIT  
• NOT INSURED BY GOVERNMENT AGENCY  • NO BANK GUARANTEE  • MAY LOSE VALUE

 

 

 

News Flash September 4, 2011

 

Will The World's Markets Crash On September 7th?

 

Mark your calendar: On September 7, 2011, only a few short days from now, world financial markets could implode.

 

On that day, Germany's highest court will decide if it's constitutionally legal for the German government to fork over billions in bailout money to Greece.

 

If the answer is no, then it's almost certain that the entire Eurozone will collapse like a deck of cards.

 

The result?

 

A massive financial crisis that would make the 2008 market meltdown look like child's play in comparison.

 

As you can imagine the most powerful decision makers and power brokers from Wall Street to Washington and all around the world are quickly preparing for a worst-case scenario.

 

They want to be ready to act if and when this crisis unfolds.

 

How To Protect Yourself And Profit if Germany Destroys The EU?

 

The clock may be ticking on the future of the European Union (EU).

 

After being shaken to its core by the sovereign debt crisis, the entire Eurozone now runs the risk of blowing up within a week.

 

Germany’s highest court, the German Federal Constitutional Court, on Sept. 7 rules on the legality of German participation in the euro rescue fund that was established to bail out Greece.

 

If the court rules that Berlin’s commitment to the European Financial Stability Facility (EFSF) goes against EU law, or worse, against the German constitution, the entire Eurozone could collapse.

 

Think of the Eurozone as a minefield full of bombs that have long lay dormant, but are all still
very active.

 

Now, Germany’s court ruling itself a single bomb timed to go off on Wednesday could ignite a massive chain reaction.

 

Germany: The Eurozone’s Bomb Squad?

 

Peripheral Eurozone countries like Portugal, Ireland, Greece, Spain, and Italy (the PIIGS) are in serious trouble and European banks face monumental liquidity and balance sheet issues.

 

So far, only Germany’s singular fiscal conservativism and economic strength have kept the EU from self-destructing.

 

But now the Eurozone’s only legitimate bomb squad may be hanging up its lead-suits, pliers, and contagion containers.

 

What’s at issue for the Constitutional Court is whether Berlin broke the EU’s Maastricht Treaty, which unequivocally stipulates that member states cannot assume each other’s debts.

 

And, more germane to German citizens and the center-right coalition government, will be the Court’s ruling on whether German Chancellor Angela Merkel’s decision to fund the bailout facility circumvented constitutional requirements to put such fiscal matters before the German parliament.

 

And while the court isn’t ruling directly on the EU’s currency or Merkel’s support of it, the decisions rendered will have consequences for the euro’s future and by extension, the EU as a whole.

The euro and European markets will reel from the effects of this court case, no matter what the outcome is.

 

All of Europe’s time bombs have been temporarily defused by Germany’s aggressive support of the euro, and the Chancellor’s vociferous demands that all of the EU’s sovereigns come to the rescue of its ailing members, for the good of the continent.

All the PIIGS have had to come hat in hand to the European Central Bank (ECB) and sister members to float their increasingly suspect debt obligations.

 

But, it’s Germany alone that has the muscle to influence other states to join rescue efforts. And it’s Germany’s generous financial support that greases the meshed gears on which the entire European system turns.

 

Without Germany’s intervention, European sovereign debts will sink the EU, as well as the global markets.

 

Other cracks in the EU’s foundation are already widening.

 

The Future of the European Union?

 

Finland, Austria, the Netherlands and Slovakia are demanding Greece supply acceptable collateral against any and all future installments it is to receive under bailout terms.

 

Just what constitutes acceptable collateral to Finland and its followers?

 

How about the Athens airport, the National Bank, two ports and the country’s main telephone company?

Apparently, Greece’s creditors don’t want to have to maintain too much real estate in a hostile environment, so they are asking for state assets to be put into a trust in Luxembourg so they can eventually securitize those assets and then sell them if they don’t get their money back.

 

It’s certainly not a stretch to imagine militant unions in Greece fighting the government and threatening the International Monetary Fund (IMF), the ECB, and other Eurozone sovereigns when creditors take control of the state enterprises they all work for and cut their jobs.

 

Nor is it a stretch to imagine other European debtor nations being asked for similar collateral when they line up for bailouts.

 

We are fast approaching a difficult question: Are we coming to a point where integrated global economies, capital markets and cross-border debt obligations will necessitate sovereign nations losing control of their sovereign assets?

 

If the German court rules that European law has been broken, then it has been broken by all other nations subject to the Maastricht Treaty who have participated in bailouts and directly or indirectly assumed each other’s debts.

 

If the German constitution has been broken, it’s unlikely that German citizens will tolerate any government that refuses to protect the constitution and their rights to participate in determining whether or not they want to backstop all the profligate neighbors that surround them.

 

The court may sidestep any hard and fast decisions to avoid destroying the entire EU.

 

But it may not have a choice.

 

The law is the law.

 

Action To Take?

Investors need to keep their ears pinned to news reports about the German court’s rulings next
week.

 

And they need to be ready to short the euro, European and American banks, and European, American and Chinese stocks, if broken laws lead to a breakdown in Europe’s monetary support mechanisms.

 

Here are a few specific funds to prepare your portfolio for the upheaval coming to the EU in the next few days.

 

Take note that many of these exchange-traded funds (ETFs) revalue at the end of each trading day.

 

In the long-term, that can lead to a compounding of daily returns, which will no longer reflect the gains or losses in the underlying asset.

 

So keep a close eye on your positions!!!

 

If you notice an unfavorable discrepancy growing between the performance of your position and the performance of the index as a whole, it’s time to sell and buy back in:

 

 

 

• ProShares UltraShort Euro ETF (NYSE: EUO) – This ETF operates inversely to the
movements of the euro in a given day, meaning it will move up as the euro heads
south. Even better, the UltraShort provides a 200% inverse. Losses in the euro will
create double the gains in the EUO.

 

http://www.proshares.com

 

 

• DB X-TRACKERS EURO STOXX 50 Short Daily ETF (LON: XSSX) – This inverse ETF
trades on the London Stock Exchange, but it’s based on the Dow Jones Euro Stoxx 50
Index, a collection of Europe’s largest companies (50 of those companies, to be exact).
It’s also the easiest way for American investors to access a broad-spectrum short on
the European markets.

 

 

• ProShares UltraShort Financials ETF (NYSE: SKF) – Like EUO above, SKF is an
ultra-short ETF that will provide a 200% inverse return on the asset it follows. In this
case, that asset is the Dow Jones U.S. Financials Index. Many U.S. banks continue
to gamble on their European exposure, despite clear warning signs that the region is
unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.proshares.com

 

 

 

• Direxion Daily Financial Bear 3x Shares ETF (NYSE: FAZ) – FAZ is an
ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Financial Bear 3X ETF seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the Russell 1000® Financial Services Index ("Financial Index"). Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the American financial sector.

 

http://www.direxionshares.com

 

 

 

• Direxion Daily Russia Bear 3x Shares ETF (NYSE: RUSS) to protect your investments in Russia and Ukraine. RUSS is an ultra-short ETF that will provide a 300% inverse return on the asset it follows. The Daily Russia Bear 3x Shares seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the price performance of the DAX Global Russia+ Index. Many U.S. banks continue to gamble on their European exposure, despite clear warning signs that the region is unsafe. And as the euro and the EU slide, so will the Russian, Ukrainian financial sector.

 

http://www.direxionshares.com

 

 

Target Index

The DAX Global Russia+ Index is an index comprised of the most liquid Russian ADRs/GDRs and local shares, screening for high liquidity only, and capping the number of securities at 45. Selection is based on average daily trading volume only, with the minimum requirement for inclusion in the Index being daily trading volume of $1 million USD. Weighting of the Index is assigned based on market capitalization and reviewed and changed quarterly. The Index uses a highly transparent and understandable index concept to access the Russian market via easily replicable index underlying securities. Diversified with a historical bias towards the Energy sector, the Index is a broad index portfolio that reflects the Russian economy while still showing the dominance of the Energy sector. One cannot directly invest in an index.

 

Index Sector Weightings

 

 

The European markets, and euro-exposed companies, are about to fall into chaos.

 

And investors looking to protect themselves from the crash, while capitalizing on any upsurges, must find a reliable source for daily updates, information and recommendations from market experts they can trust.

 

Kyiv Capital Disclaimer:

 

Nothing published by Kyiv Capital should be considered personalized investment advice.

 

Any investments recommended by Kyiv Capital should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Investment products are not bank deposits or obligations of or guaranteed by Kyiv Capital, are not insured by any governmental agency and are subject to investment risks, including the possible loss of the principal amount invested. Past performance is not indicative of future results, prices can go up or down. Investors investing in funds denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Funds are subject to market risk. Please read the prospectus or financial statements of the company (Direxion, ProShares) carefully before investing. Kyiv Capital do not assume liability for any loss that may result from relying on these Kyiv Capital opinions or information. Kyiv Capital opinions or information is not intended as an offer or solicitation for purchase or sale of any security, nor is it individual or personalized investment advice. Investing involves risk, including the possible loss of principal. There may be additional risks associated with international investing, including foreign, economic, political, monetary and/or legal factors, changing currency exchange rates, foreign taxes, and differences in financial and accounting standards. These risks may be magnified in emerging markets. International investing may not be for everyone.

 

 

 

 

INVESTMENT PRODUCTS:   NOT FDIC INSURED  • NOT A BANK DEPOSIT  
• NOT INSURED BY GOVERNMENT AGENCY  • NO BANK GUARANTEE  • MAY LOSE VALUE

 

 

 

 

 

News Flash September 2, 2011

 

Financials tanking on both sides of the Atlantic!

 

European markets are in turmoil this morning, and it looks like U.S. stocks are quickly following them down!

 

What’s the cause?

 

Look no further than the world’s major banks.

 

Again.

 

Deutsche Bank’s U.S.-listed shares just hit a fresh multi-year low.

 

Goldman Sachs is sinking to a new low of its own. And Bank of America was off another 7% recently!

 

In short, it looks like the world is now preparing for the failure of another major financial institution or maybe multiple failures!

 

I say that because investments that hedge against implosions in European banks and governments are all at or near record highs.

 

Meanwhile, here in the U.S., the Wall Street Journal just reported that regulators want Bank of America to come up with a contingency plan in case its business takes a serious dive.

 

Could we be setting up for a repeat of what we saw during the fall of 2008?

 

Especially now that we know the economy created no jobs whatsoever last month?

 

Or that the wages of Americans lucky enough to have a job just FELL for the first time in 43 months?

 

It sure looks that way right now. That’s why I want to do everything in my power to make sure you’re prepared for what’s coming.

 

 

U.S. sues big banks over mortgage losses!

 

 

U.S. to 17 banks: You lied!

 

 

Feds sue big banks over sales of risky investments!

 

 

 

 

 

 

 

 

A federal agency sued more than a dozen major banks Friday for billions of dollars in losses on over $200 billion in mortgage securities bought by government controlled Fannie Mae and Freddie Mac during the housing bubble.

 

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, argues the banks misrepresented the quality of mortgage securities they put together and sold.

 

It is seeking billions of dollars in compensation.

 

The lawsuits were filed in federal court and announced after the close of trading on Friday. The New York Times had reported the suit earlier Friday.

 

The FHFA argues that, when it came to mortgage securities purchased by Fannie and Freddie during the years leading up to the financial crisis, the banks failed to meet their due-diligence duties under securities law.

 

It added that the large financial institutions failed to spot evidence that borrowers’ incomes were overstated or falsified.

 

The securities backed by the mortgages quickly lost value when many borrowers proved unable to meet payments.

 

FHFA subpoenaed the big banks last year looking for documents related to loans the institutions securitized and marketed to investors.

 

Mortgage giants Fannie and Freddie bought a number of these securities and reportedly charge that the banks misrepresented the quality of the loans, overlooking evidence that many homeowners didn’t pass muster as qualified borrowers.

 

FHFA filed separate lawsuits against Bank of America and its acquired Countrywide Financial Corp. and Merrill Lynch & Co. divisions.

 

Its suit against Bank of America focuses on $58 billion in residential mortgage-backed securities Fannie and Freddie purchased. That includes $6 billion purchased from Bank of America, $27 billion purchased from the big bank’s Countrywide unit and $25 billion bought by from its Merrill Lynch division.

 

The FHFA is seeking recovery on losses on $3.5 billion in mortgage securities purchased by Fannie and Freddie from Citigroup between 2005 and 2007, according to its suit against the big bank.

 

It’s lawsuit against Royal Bank of Scotland relates to $30.4 billion in residential mortgage securities purchased by Fannie and Freddie between 2005 and 2008.

 

An FHFA spokesman said the agency is seeking to recover some portion of the losses incurred in purchases of the securities. “Actual recoveries would be determined based on filings by the parties, evidence and judicial findings. At this time, it would be premature and potentially misleading to estimate what recoveries would be,” she said in an email. The agency in July announced a similar lawsuit against UBS.

Settlement not imminent

Michael Stegman, director of policy and housing at the The John D. and Catherine T. MacArthur Foundation, said Bank of America and other big financial institutions facing other suits may be less likely to settle immediately with FHFA for fear it will impact their ability to reach a deal with other groups.

 

Large financial institutions are facing investor lawsuits over problem mortgages as well, though these investors want the big banks to repurchase problem loans they sold them before.

 

FHFA is reportedly seeking reimbursement for losses on securities held by Fannie and Freddie.

 

If the representations and warrants from one failed mortgage-backed security are the same as another MBS with the same kinds of loans, the first settlement will likely set a precedent for the other,” said Stegman.

 

He added that he thinks it’s especially important for Bank of America to settle because until the company reaches a variety of settlements nobody can know how well-capitalized it is.

 

Separately, Bank of America was asked by the Federal Reserve to show what measures it could take if conditions were to worsen for the bank, according to a Wall Street Journal report.

 

The Charlotte, N.C.-based bank responded by saying it could issue tracking shares in Merrill Lynch, the brokerage giant it acquired during the height of the financial crisis. Fed spokesman David Skidmore declined to comment.

 

http://www.marketwatch.com  

 

 

 

News Flash September 1, 2011

 

European Bailout Fatigue Spells Big Trouble for Stocks!

 

There comes a time when you just can't go back to the well. When your citizens in the words of Howard Beale from the movie Network stand up and say "I'm mad as hell, and I'm not going to take this anymore!"

 

Has Europe reached that point? It sure looks like it to me and that has serious implications for our markets. Here's why?

 

German, Finnish Opposition Putting Bailout Backers Up Against a Wall!

 

Greece managed to wrangle a second, 109 billion-euro bailout program out of its European neighbors in July. But now, that plan is in serious jeopardy.

 

The reason?

 

Opposition from Finland. The country is slated to put up less than 2 percent of the money for the bailout. But it's saying it won't contribute even that amount unless it gets Greek national assets as collateral!

 

Anti-bailout fever is running hot over there, with the country's True Finns party putting pressure on bailout proponents just like the Tea Party is doing so here in the U.S.

 

Finland is far from alone, too.

 

Citizens of Austria and Germany are also getting fed up with the constant demands for more money for their profligate neighbors.

 

Another key threat?

 

The bailout is contingent on 90 percent of Greek bond investors agreeing to a debt swap to lower the country's financing costs. But participation is reportedly much lower. That could cause the deal to fall apart, and risk other bailout programs for Portugal and Ireland!

 

This monumental event will plunge vast numbers of European families into the nightmare of poverty, homelessness and hunger.

 

In the worst case scenario, you will see soaring crime, the confiscation of property, the suspension of civil rights, and even martial law enforcement by the military,...

 

But while the vast majority of Europeans will suffer, a select handful will use this crisis to build substantial wealth.

 

Then there's the issue of "Eurobonds", one of the last, best hopes for a pan-European solution to the credit crisis.

 

The bonds would put the balance sheets of every single euro-zone country at risk to support the weaker PIIGS countries.

 

Advocates believe they will break the back of the debt crisis once and for all.

 

But Germany is having none of it, with Chancellor Angela Merkel insisting she won't be "blackmailed" into backing Eurobonds.

 

And the Germans have every reason to be worried!

 

If they put their balance sheet at risk just to support countries like Greece and Ireland, it could drive German borrowing costs up by 47 billion euros, according to the Ifo Institution for Economic Research in Munich.

 

Opposition from other countries like Austria and France is also running high, making the Eurobond idea look downright "dead on arrival" to me!

 

That means the simmering crisis could explode again at virtually any moment, sending the euro currency and European bank stocks sharply lower.

 

Liquidity Is Not the Problem!

It's Solvency!

 

We've just seen a sharp rally in bank stocks.

 

Warren Buffett has just thrown $5 billion at wounded institution Bank of America.

 

Two Greek banks just agreed to merge in an attempt to staunch the bleeding.

 

So why am I not more optimistic here?

 

Why am I not just throwing caution to the wind and loading up on financials?

 

Because each and every step along the way, European officials have treated the issue like a liquidity crisis. But it's actually a solvency problem.

 

Banks simply do not have enough capital to absorb losses on all the European sovereign bonds they're loaded down with.

 

Outright failures or dilutive capital raises are inevitable!

 

No less than International Monetary Fund managing director Christine Lagarde agrees with me, by the way.

 

She just told policymakers gathered in Jackson Hole, Wyoming that the need to recapitalize is "urgent" and that "we could easily see the further spread of economic weakness to core countries, or even a debilitating liquidity crisis" without it!

 

So my advice remains the same:

 

Don't listen to Wall Street's siren song! Pare back your risk. Limit your exposure to financial stocks. Use rallies to lighten up on equities, and to add investments like inverse ETFs that will make you money when the next leg down gets underway!

 

 

 

 

 

 

 

News Flash August 31, 2011

 

Problem one: Financial crisis triggered by the housing crisis.

 

To fix the housing crisis we need to change our foreclosure system.

 

Today, Banks have to pay for costly foreclosure and then sit on deteriorating non-performing assets they can't sell even for a fraction of original price, having to pay for maintenance,...

 

Instead Banks should be able to go into equal partnership with the homeowner, cutting his payments in half and collecting half of the proceeds when the house is sold eventually. That way they still have a performing asset and equity on the books.

 

This solution will preserve home values and solve housing crisis.

Problem two: a monstrosity of a tax system.

Quick fix solution: Russian style flat tax that helped to increase their revenue and GDP dramatically.

 

"Fair tax", VAT, national sales tax and any other consumption tax will slow down the economy by making everything more expensive and create smuggling and underground black economy.

 

In order to insure compliance, tax should be small enough to make avoiding it unattractive compared to penalty (like voluntary payment for public transportation in most European countries).

 

The best solution: 1% transaction tax. Every time money, goods or services exchange hands, both buyer and seller pay 1%., like $1 we pay for taking $100 from an ATM.

 

It has been calculated that such tax replacing all other forms of taxation will triple the revenue in US, making it easy to pay for universal health care and all other programs.

That is enough for starters. I have solutions for all other economic and financial problems we have, please feel free to ask.

 

 

 

 

News Flash August 30, 2011

 

America's Largest Candidate for Bankruptcy?

 

One of America's giant financial institutions, which I'll name in a moment, could be a candidate for bankruptcy in a double-dip recession scenario.

 

It controls nearly $2.3 trillion in assets and has 57 million customers.

 

It does big business with virtually every other major financial institution in the country.

 

It is THE largest financial institution in America.

 

It's so large, in fact, that, if it cannot avoid failure, it will cause so many other dominoes to fall and so many millions of Americans to lose money, the entire U.S. economy will be threatened.

 

And even if it can avoid failure, investors holding its shares will be decimated.

 

This forecast is not based on conjecture, rumor or hyperbole. It's grounded in solid analysis and hard data.

 

Nor is it without direct precedent. In fact, this mammoth financial institution already came within a hair of bankruptcy less than three years ago!

 

The only reason it's still a big player today is because it was one of the main beneficiaries of the largest federal bailout of all time.

 

But despite the bailout, its business has continued to deteriorate, and its prospects for survival have continued to darken.

 

Its name: Bank of America Corp., the largest banking conglomerate in the United States and 3.6 times larger than Lehman Brothers was when it failed in the fall of 2008.

 

Will BofA go the way of Lehman?

 

Probably not.

 

The authorities would likely break it up into pieces they feel must be saved and pieces that can be more easily shut down.

 

Is a future failure written in stone?

 

If the U.S. economy can somehow sidestep a double-dip recession, BofA can continue limping along.

 

Or if its lobbyists in Washington can somehow overcome the stiff resistance of Republicans in Congress to pass another giant TARP bailout bill, it may escape doomsday.

But the realities of our time are already reducing the chances of those escape routes:

 

  The U.S. economy is already slipping into a double dip with no force on the horizon strong enough to change its course.

 

  The U.S. Congress is already far stingier than at any time in modern history.

 

  And, considering his noncommittal speech at Jackson Hole last week, even Fed Chairman Bernanke seems far more reluctant to promise action than he was just one year ago.

 

Why Bank of America Is in Danger?

 

Right now, BofA is caught in a giant vicious cycle of its own making.

 

The main reason: Back in January of 2008, it made the horrendous blunder of buying the nation's largest mortgage company, Countrywide Financial, just before the mortgage market's worst collapse in history.

 

Result: Bank of America's main banking unit is saddled with $3.9 billion in repossessed real estate. (Back in March 2009, even when its stock was in the gutter and it was getting an emergency capital transfusion from Washington, it had less than half that much in repossessed properties, only $1.7 billion.)

 

And the homes BofA has foreclosed on so far are just the tip of the iceberg.

 

The bank also has a whopping $20 billion in home mortgages that are in the process of foreclosure, up a shocking 224 percent from March '09.

 

Yes, for a few months last year, there was some hope of a housing market recovery.

 

But now those hopes have been dashed by the reality of sinking home prices, down another 5.9 percent in the second quarter, their biggest drop since 2009.

 

The main drivers: 3.7 million foreclosed homes in America, making it virtually impossible to sell properties without deep discounting; 6.5 million homes delinquent or in foreclosure; plus millions more on the way as the economy sinks.

 

See how vicious this cycle is?

 

Prices are being driven lower by massive unsold inventories of foreclosed homes,... while, at the same time, millions of Americans are walking away from their homes and foreclosing precisely because prices are falling!

 

And see how Bank of America is caught smack in the middle of this storm?

 

It has a total of $421.7 billion tied up in mortgages, more than any other bank on the planet!

 

More Troubles?

 

But that's not all:

 

  Bank of America has just been sued by AIG to recover more than $10 billion in losses on $28 billion of investments, claiming that the bank misrepresented the quality of the mortgages. It's the biggest suit of its kind in history, but not the only one. A hoard of investors is suing the bank for similar reasons.

 

  Bank of America continues to hold $52.5 trillion in notional value derivatives. That figure is more than 36 times larger than its total assets and nearly 341 times bigger than its risk-based capital!

 

  Perhaps most frightening of all, the bank's exposure to the credit risks of derivatives, the possibility that some of its trading partners might default is 182 percent of its capital, according to the Comptroller of the Currency.

 

These are frightening numbers. And I am NOT alone in forecasting big trouble for the bank,...

 

1. Former Merrill Lynch analyst Henry Blodget estimates BofA may need to write off between $100 billion and $200 billion in additional losses.

 

 

 

 

 

 

 

If Blodget is right and the bank can't raise the funds, that would be enough to wipe out the main banking unit's $154 billion in capital.

 

What about Warren Buffett's $5 billion loan to Bank of America announced last week?

 

It's a drop in the bucket compared to the bank's potential capital needs.

 

2. Stock investors, recognizing the severity of the crisis, have driven the bank's shares to within striking distance of its March 2009 lows.

 

 

 

 

 

 

 

3. The market for insurance contracts to protect against a BofA default (credit default swaps), is now saying that the crisis is actually WORSE than it was at height of the debt crisis in 2009.

 

The proof:

 

In March of 2009, when the fear of Bank of America's possible demise was sending shock waves of panic through the global financial markets, the cost of insuring $10,000,000 in BofA debt was $343,375 per year (with a ten-year contract).

 

Now, just this week, the same coverage has cost as much as $378,235, or nearly $35,000 more. (See chart above.)

 

Conclusion: No matter what you or I may think about the bank's future, the collective wisdom of investors, as reflected in the current premium cost for default insurance, is saying the probability that Bank of America could go bankrupt is now greater than it was at any time during the great debt crisis of 2008-2009!

 

What to Do?

 

BofA is not going to keel over tomorrow. It still has capital. And the double-dip recession which we feel could be a key cause of its demise is just beginning.

 

But it's not too soon for you to take preparatory steps:

 

Step 1. Make sure your savings are safe.

 

Step 2. Hedge against a worsening banking crisis with gold. The most convenient vehicle: The largest ETF that invests in gold bullion, symbol GLD.

 

You can buy inverse ETFs for protection against a decline in the S&P, the Dow or the Nasdaq.

Plus you can buy them to hedge against declines in various stock sectors.

The goal: The more your stocks fall, the more your inverse ETFs rise, helping to offset your losses and give you pretty good protection.

 

Step 3. Go on the offensive, aiming to turn this spreading crisis into a monumental profit opportunity.

 

 

 

 

News Flash August 30, 2011

 

http://www.cru-capital.ru

http://www.cru-capital.com.ua

 

 

 

News Flash August 28, 2011

 

Enormous Economic Hurricane Warning

 

An enormous economic hurricane is now raking Europe; destroying its economies, pushing its banks to the edge of extinction and bankrupting its businesses and people.

 

The carnage is no longer confined to the infamous PIIGS nations: Portugal, Italy, Ireland, Greece and Spain, the ne'er-do-wells of the Union who have run up debts that are so massive, they can never be repaid.

 

Growth in Germany, Europe's largest economy, has ground to a virtual standstill, just 0.1 percent in the second quarter from 1.3 percent in the first.

 

Growth in the French economy, Europe's second largest, has all but stalled.

 

President Sarkozy's massive budgetary cuts and higher taxes on investors and job creators may help lower deficits somewhat, but they will also be a huge drag on an already-waning economy.

 

Nor is the carnage limited to the members of the European Monetary Union.

 

On Friday, we learned that economic growth has slowed to a near-standstill in the U.K. The culprit: Severe government budget cuts, rising inflation and plunging consumer confidence.

 

And so, like a massive economic hurricane, this great international debt crisis is now thundering westward. It has breached the Atlantic and is just now beginning to make landfall in the United States.

 

But while Europe frantically cuts spending in a desperate attempt to avoid the ultimate debt meltdown, Washington is still jacking up the U.S. national debt at the blistering rate of more than 10 percent per year.

 

As a result, we have already witnessed the unthinkable: America's credit rating cut for the first time in history by Standard & Poor's.

 

Meanwhile, the majority of U.S. state and local governments are barely keeping body and soul together; releasing convicts from prison, laying off police, firefighters and emergency personnel, even selling off state buildings just to avoid financial disaster.

 

And now, as we've repeatedly warned, the U.S. economy is slowing again.

 

Last week, we learned that the crisis that triggered this great recession is worse than ever: Mortgage applications have plunged to a 15-year low. Nationally, median home prices are falling as much as 5 percent or 6 percent in a single month.

 

On Thursday, we learned that the employment picture is still worsening.

 

Consumer confidence has sunk to within an eyelash of its all-time low, devastating news to an economy in which 70 percent of all activity is driven by consumer expenditures.

 

And of course on Friday, we learned that Bernanke and his Fed are effectively passing the buck; refusing to act to stimulate the economy, saying it's up to Congress and the White House to get the economy growing again.

 

This is the worst news imaginable for the U.S. economy.

 

A renewed slowdown now means huge decreases in tax revenues, not just for Washington, but for every state and local government in the nation.

 

And that, in turn, means even greater budget shortfalls ... even greater deficits ... even faster growth in our already-unpayable government debt ... than anything we've seen so far.

 

 

 

News Flash August 27, 2011

 

Market crash 'could hit within weeks', warn bankers

 

A more severe crash than the one triggered by the collapse of Lehman Brothers could be on the way, according to alarm signals in the credit markets.

 

 

 

 

 

 

http://www.swiss-cooperation.admin.ch/ukraine

 

http://www.eda.admin.ch/kiev

 

 

 

News Flash August 26, 2011

 

Euro Unity Was Always an Illusion

 

Because Europe is the epicenter of an earthquake that rocked world markets this month and the shock is far from over!

 

Yet amazingly, some investors seem convinced the European Central Bank (ECB) will ride to the rescue, just like the Federal Reserve did in 2008-2009.

 

Europe's problems first became evident in the so-called "PIIGS" nations: Portugal, Italy, Ireland, Greece, and Spain. Now the whole continent is in trouble.

 

The "economic unity" that made politicians so proud was always an illusion.

 

The euro common currency let PIIGS feed off the prosperity of Europe's dominant nations.

 

Bankers in France, Germany, and elsewhere went along because they saw a chance for easy money and they were right until just recently.

 

The problem with pigs is they don't know when to stop eating.

 

They gorge until the food runs out. Greece was the first crisis only because the bankers had to start somewhere.

 

Italy isn't far behind.

 

Thanks to out-of-control spending, government debt there stands at 120 percent of gross domestic product. Italy ran out of rope when even sky-high interest rates could not convince investors to buy any more of its bonds.

 

The results are pretty clear in the chart below of PowerShares DB 3x Italian Treasury Bond Futures ETN (ITLT), which follows the market for Italy's ten-year government bonds.

 

Launched just this April, ITLT reached an intraday peak of $21.78 on June 3, 2011.

 

In the August 4 panic (barely two months later) ITLT traded as low as $14.93. That's a loss of almost 32 percent!

 

 

 

 

 

Yes, the volatility was amplified by ITLT's built-in 3x leverage. But even the unleveraged version (ITLY) dropped more than 11 percent in the same period.

 

Now, look what happened after August 4: ITLT shot up as high as $20.76 on August 22 for a gain of better than 39 percent in less than three weeks!

 

That reversal came when it was clear the ECB would step in. The prime beneficiaries weren't Italian, though: It was the banks elsewhere in Europe. The bailout saved their huge bond holdings (which are leveraged way more than 3x, incidentally).

 

Now let's contrast this with PowerShares DB 3x German Bund Futures ETN (BUNT). This one tracks a bond index in the same maturity range as ITLT, but these bonds are issued by Germany instead of Italy. Same continent, same base currency, different governments. Look at the BUNT chart below.

 

 

 

 

 

 

 

 

 

While ITLT was racking up a 32 percent loss between June 3 and August 4, BUNT gained about 21 percent!

 

In one sense this isn't surprising. We already knew Germany dominated European finance. The comparison is still a bit startling, though.

 

I'm not bold enough to say the markets are wrong about either country, but short-term moves can still be exaggerated. I suspect the situation in Italy isn't as bad as ITLT makes it look. Nor is Germany as safe as BUNT may suggest.

 

In the bigger picture, neither nation has very good prospects. Growth in Germany is stalling out. And the public is in no mood to keep subsidizing its neighbors in Italy, Greece, or anywhere else.

 

What the euro zone probably should do is refinance their debt with "euro-bonds" backed by the entire union!

 

As of now they can't, because the member nations integrate currencies but not government spending policies. They can't have it both ways.

 

Europe will recover, eventually, but meanwhile expect the volatility to continue.

 

Here are a few Europe-related ETFs and ETNs you should watch closely:

 

 

 

• Vanguard European ETF (VGK) is the largest of the Europe ETFs.
  
  
• iShares MSCI EMU (EZU) includes only countries in the monetary union.
  
  
• iShares MSCI Germany (EWG) covers the dominant country in Europe.
  
  
• ProShares Ultra MSCI Europe (UPV) has 200 percent daily exposure.
  
  
• ProShares UltraShort MSCI Europe (EPV) has 200 percent daily inverse exposure.

 

 

 

News Flash August 25, 2011

 

 

About 48 hours from now, on Friday, August 26, 2011, Bernanke will step before the microphones in Jackson Hole to comment after this week’s Federal Reserve meetings there.

 

Normally, I expect the Fed chief to use this occasion to address the slowing U.S. economy, NOT to issue a major policy announcement.

 

But this time, expectations are sky-high that Bernanke will pull a rabbit out of his hat; unveil a vast new stimulus scheme designed to re-ignite the U.S. economy.

 

That’s why stocks rallied yesterday.

 

That’s why gold prices have pulled back in the last day or so.

 

That’s OK, any pause,... any decline in gold prices is a good thing at this point: Pullbacks are a healthy element.

 

But make no mistake:

 

No matter what Bernanke says,...

 

No matter what the Fed does,...

 

GOLD will continue to spin off huge gains!

 

When you think about it, it’s clear that only one of two things can happen this Friday:

 

Either Bernanke will break with precedent and give investors what they expect, announce that the Fed is about to print billions of new, unbacked dollars in an attempt to stimulate the economy,...

 

In which case the world’s investors will fear inflation AND BUY GOLD,...

 

OR, the Fed will NOT announce a new round of money-printing,...

 

In which case investors’ high expectations will be dashed, leading many to fear economic chaos AND BUY GOLD!

 

Either way, this great gold bull market is FAR from over.

 

Either way, any pullbacks will be short-lived.

 

Either way, gold prices will ultimately continue to surge over the long haul.

 

Either way, the gold investments I’ve been urging you to buy should continue to shoot the moon!

 

 

HAPPY  INDEPENDENCE DAY

UKRAINE 20 YEARS!!!

http://www.president.gov.ua/

 

 

 

 

 

 

 

 

 

 

 

News Flash August 24, 2011

 

Federal Reserve policymakers are meeting in Jackson Hole Wyoming this week and global investors couldn’t be more excited.

 

Judging from today’s market action, they’re expecting big things from the Fed at the end of the week something; anything to save the U.S. economy and stock market.

 

Unfortunately, they’re likely to be bitterly disappointed: The grand announcement they’re waiting for may never come.

 

The simple truth is, there is no political support whatsoever for new Fed intervention in the economy! Inflation is running too hot.

 

Everyone and his sister knows that QE juices commodity prices making it harder for everyday Americans to pay their bills.

 

One major Republican presidential candidate has openly questioned the Fed’s whole reason for being, while another went so far as to call money-printing “treasonous”!

 

And even if Bernanke does try to print more money, it won't matter for more than a few hours or days. Reason: We've already seen that Quantitative Easing doesn't work!

 

The market has given up all its QE2 gains and more. At the same time, the real economy is heading back into a double dip recession, DESPITE the hundreds of billions of dollars Washington has borrowed, spent, and printed!

 

Either way, Bernanke’s big speech on Friday will be a non-event. Any stock market gains we see in the meantime will be wiped out in the twinkling of an eye.

 

Dangerous Sleight of Hand

 

And while the entire world obsesses over what the Fed may or may not announce this coming Friday, the economic nightmare I’ve been warning about isn’t waiting.

 

Just this morning, we learned that the crisis that triggered this great financial calamity in the first place the U.S. real estate collapse is still intensifying.

 

In July, new home sales fell again to a new five-month low.

 

Worse: The median price of a new home fell 6.3% between June and July.

 

Imagine; despite the trillions already spent to fight this crisis, new home prices are still plunging 6.3% in a single month!

 

Separately, an index of manufacturing activity in the Richmond Fed’s territory plunged to MINUS 10 in August. Not only did that miss economist forecasts by a country mile, it was also a fresh 26-month low!

 

No wonder U.S. financial stocks are getting their heads handed to them!

 

In fact, the banks are trading like it’s 2008 all over again. Goldman Sachs and AIG have fallen to within an eyelash of their recession lows. Bank of America is already there.

 

Do NOT be deceived: This great crisis is here now and nothing the Fed says or does can stop it.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

“An historic, world-changing event is about to end the American way of life as we know it.

“But while the vast majority of Americans will suffer, a select handful will use this crisis to build substantial wealth ...”

 

 

 

 

News Flash August 21, 2011

 

REALITY CHECK: The Market Is Gonna Crash

 

Are you prepared to protect yourself and make a bundle, if that market collapses further? We’re about to head into 3rd quarter earnings season, if things aren't rosy that alone could trigger another 1000 point collapse.

 

Just a few hours from now, Europe will awaken and go to work.

 

Its leaders will continue to resist the rapidly intensifying debt disaster tooth and nail.

 

Its banks will continue fighting for their very lives.

 

Its investors will do whatever they can to cope.

 

In the States, the week ahead is looking equally volatile.

 

Not only could bad news out of Europe crush our stock market at virtually any moment, but a blizzard of revealing economic reports will be released, any one of which has the potential to cause chaos and huge profit opportunities in the markets.

 

Just in the next five days alone, we’ll see the New Home Sales report and the FHFA Housing Price Index, Initial and Continuing Jobless Claims and perhaps most importantly, a report on America’s durable goods orders (or lack thereof!).

 

We already know demand for home purchase mortgages just fell to a fresh 13-year low.

 

We already know that jobless claims just surged back above the key 400,000 mark.

 

And we already know that the economic gears in this country are grinding to a halt with consumer confidence plunging to the lowest level since the end of the Carter administration.

 

So it’s reasonable to expect that the NEXT batch of news will be as bad, if not worse!

 

At a time like this, it pays to be prepared.

 
I urge you to put a crash strategy in place immediately, like the ones I use with a history of turning $100 trades into $5000.

 

 

 

BOTTOM LINE: You DON’T have to risk big money to make big money during market crashes.

 
Of course, the bigger the crash, the better the cash. 

 
The more you lose, the harder it is to get back to even…

 

» If you lose 25% in a downturn – you need to GAIN 33% just to breakeven
» If you lose 33% in a downturn – you need to GAIN 50% just to breakeven
» If you lose 50% in a downturn – you need to GAIN 100% just to breakeven

 

 
Just look at the numbers, the more you lose, the harder it keeps getting harder to recover...

 

 

» If you lose 75% in a downturn – you need to GAIN 300% just to get your money back
 
» If you lose 80% in a downturn – you need to GAIN 400% just to get your money back
 
» If you lose 90% in a downturn – you need to GAIN 900% just to get your money back
 
» If you lose 95% in a downturn – you need to GAIN a WHOPPING 1900% just to breakeven!

 

The harsh reality is you cannot expect to make money just by being “in the market”… “buy and hold” strategies are among the riskiest in the world… most trading strategies only work sometimes and rarely recover from big market downturns.

 

Johan de Broyer
Kyiv Capital
MobilePhone : +380989424812

Ask for more @ E-Mail: johandebroyer@russia.ru

 

 

 

 

 

News Flash August 20, 2011

 

"It seems to me it's physically, humanly impossible for the U.S. to ever pay off its debt," Jim Rogers, the famous stock expert, tells CNBC. "They can roll it over and continue to play the charade, but the U.S. is bankrupt."

 

Rogers, the best-selling financial author and co-founder of the Quantum Fund, warns that the S&P's recent downgrade didn't go far enough, as Washington probably doesn't even deserve the AA+ rating.

 

Unfortunately, Rogers isn't alone in his calamitous assessment.

 

Famed economist and author Robert Wiedemer recently warned that Washington, D.C.'s, reckless financial policies could lead us to a 90% stock market collapse, 50% unemployment, and 100% annual inflation.

 

 

 

News Flash August 19, 2011

 

 

A new day; a new record high for gold! What to do?

 

This morning, gold exploded more than $50 to over $1,881 per ounce, another new record high, just as I’ve been telling you it would.

 

WHY is gold on fire? Two reasons:

 

First, Europe is a basket case: European stocks just suffered their worst two-day slump since the 2008 recession.

 

After falling up to 6% and more yesterday, the European stock indexes opened down another 2% or more this morning.

 

Now, global investors are bracing themselves for the country defaults and banking crises that are almost sure to come.

 

AND SECOND, the U.S. economy is a mess, too: This morning, Citigroup and JPMorgan Chase announced that in the last three months of this year, the U.S. economy will grow LESS THAN HALF AS MUCH as forecast earlier.

 

Worse: In the first three months of 2012, U.S. GDP will grow only ONE-THIRD AS MUCH as earlier estimates, a mere 0.5%.

 

And given how wrong GDP growth estimates have been this year, many investors worry that the economy could actually shrink in 2012.

 

Just two days ago, for instance, Philadelphia Fed president Charles Plosser accused his colleagues of painting too negative a picture of the U.S. economy.

 

But yesterday, Plosser’s own bank, the Philly Fed, reported that its manufacturing index plunged to the lowest level in 2 ? years.

 

On top of all this, our warnings of a new U.S. banking crisis are now being proved prophetic:

 

Bank of America just announced that it’s firing another 3,500 workers, in addition to the 2,500 employees who’ve already received their pink slips this year. Overall, banks fired 60,000 employees through the first week of August.

 

Bank of America (NYSE: BAC ) trading @ $2 per share in 2012?

 

Citigroup (NYSE: C ) trading @ $10 per share in 2012?

 

 

 

News Flash August 18, 2011

 

 

Europe imploding! Gold soaring! What to do?

 

 

We’re seeing a stock market bloodbath in Europe: Earlier today, France’s CAC 40 was down 5.3%, Germany’s DAX was down 6.3%, Stockholm General was down 5.3%, the Swiss market was down 4.8% and Britain’s FTSE 100 was down 4.9%.

 

In the States, the carnage was nearly as bad, with the Dow, S&P 500 and the Nasdaq down well over 4%.

 

The economic news is even worse:

 

This morning, we learned that the inflation rate came in at more than DOUBLE expectations.

 

Plus, the Philadelphia Fed’s manufacturing index absolutely imploded in August, to MINUS 30.7 from positive 3.2 in July. That missed expectations for a slight decline to 2 by a country mile.

 

The new orders index plunged to -26.8 from 0.1, while employment slumped to -5.2 from 8.9.

 

These are the worst numbers we’ve seen since the depths of the 2009 recession, bar none.

 

Meanwhile, existing home sales fell 3.5% to a seasonally adjusted annual rate of 4.67 million in July from 4.84 million in June.

 

That missed expectations for a rise to 4.9 million and it was the worst since last November.

 

Plus, median home prices dropped 4.4% from a year earlier, while the supply of homes for sale rose to 9.4 months, also the worse since November.

 

PLUS, the U.S. consumer inflation rate just came in at more than DOUBLE expectations and gold is soaring to fresh all-time highs above $1,800 an ounce!

 

 

Europe Crashing! U.S. Is Next!

 

 

The news out of Europe could not be more frightening:

 

Its debts are mounting as it bails out its most endangered states.

 

Its banks are stretched to the breaking point as they struggle to prepare for the default of member states they have loaned billions to.

 

Its most indebted nations are instituting severe austerity measures that take billions of euros out of the Union’s economy.

 

And now, Europe’s economy is stalling. Official data released this week confirms that GDP growth has plunged to its lowest rate in two years, a factor which can only choke off much of the tax revenues needed to pay back all those debts!

 

Just look at Greece. The country managed to get a $156 billion bailout in 2010, in part by promising to shrink its budget deficit. But its deficit has instead surged by a third in just the first six months of this year alone. The culprit: Plunging tax revenue due to a deepening recession.

 

Then there’s Portugal. The country got its own $111 billion bailout. But the harsh austerity measures it required are leaving the economy in terrible shape, too. The country’s own finance minister is projecting that GDP will shrink 2.3 percent in 2011 and 1.7 percent in 2012. Result: Tax revenue there will likely fall well short of expectations.

 

Germany is the largest economy in Europe, the growth engine of the European Monetary Union.

 

But Germany’s economy has hit the proverbial wall. Its GDP rose only 0.1 percent in April, May and June, a mere one-fifth as much as expected. Now, with its economy stalling, tax revenues can only plunge.

 

The trend is clear and could not be more disturbing: The sovereign debt crisis that at first struck only the PIIGS countries is now a contagion, threatening to crush the entire European Monetary Union.

 

 

Think That’s Serious?

 

Take a Look at the United States!

 

 

Our debts are mounting as Washington continues to spend money like there’s no tomorrow.

 

Our banks are stretched to the breaking point as they struggle to survive massive loan defaults.

 

Our most indebted states are instituting severe austerity measures that take billions of dollars out of the U.S. economy.

 

And now, America’s economy is stalling, a factor which can only choke out the tax revenues that are its lifeblood.

 

President Obama’s budget proposal from earlier this year assumed GDP growth of 2.7 percent in 2011. Then supposedly, GDP growth will accelerate to 3.6 percent in 2012 and 4.4 percent in 2013.

 

Now, though, it’s clear that the U.S. economy is slowing precipitously. We’re tumbling into a second recession already, just over two years after we technically emerged from the last one!

 

And THAT will gut tax revenues just like the first great recession did!

 

Fact: In 2007, federal government revenue grew by 6.7 percent. But it then shrunk 1.7 percent in both 2008 and 2009. It wasn’t just federal revenue that imploded and that continues to implode.

 

Reliable estimates suggest U.S. states are facing a cumulative funding gap between revenue and expenses of $527 billion from 2008 through 2013.

 

In October 2009, the Economic Cycle Research Institute’s weekly leading index was growing at a whopping 27.8 percent rate. But now that growth rate has contracted massively down to an anemic 1.7 percent in early August.

 

That’s just a hair from negative territory and it signals a sharp deceleration in the U.S. economy.

 

That’s not the only warning sign flashing red either. New home sales fell 1 percent in June after declining 0.6 percent a month earlier.

 

The S&P/Case-Shiller index of home prices also pointed to weakness, with prices down 4.5 percent from a year earlier. That was the biggest decline in 18 months.

 

Meanwhile, the ISM manufacturing index plunged to 50.9 in July from 55.3 in June, missing economists’ forecasts by a country mile. That was also the worst reading in two years.

 

Personal spending fell 0.2 percent in June, the first decline in almost two years.

 

Incomes gained just 0.1 percent, the worst reading since last September.

 

To top it all off, durable goods orders dropped 2.1 percent in June against expectations for a 0.3 percent rise.

 

Overall, GDP grew just 0.4 percent in the first quarter of this year, and 1.3 percent in the second quarter.

 

How in holy heck are we going to get to 2.7 percent growth for the year, much less almost 4 percent the year after? Answer: We’re not! Not by a long shot!

 

 

News Flash August 17, 2011

 

 

 

 

http://www.moneyandmarkets.com

 

http://finance.moneyandmarkets.com/reports/SMR/4597/vsp-smr2.php?s=CLST&e=4597108

 

http://blogs.moneyandmarkets.com/interest-rate-roundup/six-steps-to-financial-doomsday-step-2-government-debt-exploding/914

 

 

News Flash August 16, 2011

 

 

If last week proved anything, it's that the stock market is on a hair trigger.

 

It bobbed; it weaved; it did the rope-a-dope, crashing 600 points one day only to soar more than 400 points the next, only to crash and rise again.

 

Even for those of us who have little invested in stocks, it was hard to watch. A sad spectacle akin to a once-proud, but now punch-drunk, fighter struggling to stay on his feet.

 

In the end, of course, not much has changed.

 

Europe is still a mess. The PIIGS nations: Portugal, Ireland, Italy, Greece and Spain are closer to collapse than ever.

 

The European banks that loaned them money are, too. And if they fail, it's likely they'll take the entire European Union down with them.

 

Although this great government debt crisis is not quite as advanced in the United States, our economy is also a disaster zone. Just like the PIIGS, America is drowning in debt. Our economy is slowing.

 

Consumer spending is waning. Unemployment is sky-high. Government revenues are shrinking. And government debt is still piling up at a near-record pace.

 

But recently, it became clear that Uncle Sam is in even worse shape than many European nations. Because several days ago, Standard & Poor's downgraded U.S. debt for the first time in history.

 

Worse: As was just demonstrated in the great debate over the debt ceiling, our leaders seem far too busy quibbling, finger-pointing and jockeying for political advantage to even give a passing thought to how they might save us from the financial nightmare that Europe is living through.

 

As a result, our own banks are taking a drubbing. The average U.S. bank stock is now down 30% in 2011. Bank of America lost nearly that much on Monday and then again on Wednesday.

 

And just as I've been predicting, gold the world's ultimate safe haven investment has shot the moon; hitting $1,808 in the past few days.

 

The most dangerous phase of this great financial calamity is now beginning.

 

The monumental event that now threatens to trigger the ultimate financial doomsday and plunge vast numbers of U.S. families into the nightmare of poverty, homelessness and hunger.

 

Government Debt Exploding

 

 

The number is so big, it’s hard to wrap your mind around it. But look at it this way:

 

That’s $46,800 for every man, woman, and child in the U.S. Or $2,100 for every person on the face of the Earth.

 

If you had $14.6 trillion in your pocket, you could buy more than 918 million Toyota Corollas or 292,000 Gulfstream G550 private jets.

 

Heck, you could buy almost six $300,000 Rolls-Royce Phantoms for every one of New York City’s 8.2 million people!

 

Puts our national debt load into perspective, doesn’t it?

 

Worse, that debt load is going to keep ballooning to a stunning $20.8 trillion in 2021, according to the CBO’s April analysis.

 

It’s shocking. Appalling. Revolting. Pick your adjective.

 

Uncle Sam is now routinely selling tens of billions of dollars in longer-term Treasuries every few weeks.

 

Just in one week in August alone, we dumped $32 billion in 3-year Notes ... $24 billion in 10-year Notes ... and $16 billion in 30-year Bonds on the market. It’s nuts!

 

Indeed, just since the middle of the last decade, our debt load has exploded by 92 percent.

 

And thanks to our legislators in Congress and the Obama administration, Uncle Sam now has the authority to go up to another $2.8 trillion in hock! 

 

 

The Endgame

 

 

 

What’s the endgame here? Why is this so dangerous? How is this second step down the road to perdition so perilous?

 

Again, look at Europe.

 

Greece was allowed to run up its national credit card for years. It owed 195.4 billion euros in 2005. That ballooned to 328.6 billion euros last year.

 

Ireland’s outstanding debt surged from 44.4 billion euros to 148 billion.

 

And Portugal’s soared from 96.5 billion to 160 billion. As a result, their debt-to-GDP ratios exploded to 143 percent, 96 percent, and 92 percent as of 2010.

 

For a while, those countries got away with it. But then, out of nowhere, their creditors started turning off the spigot. They cut up those nations’ credit cards. And the result is the carnage we’re seeing now.

 

Now, with Europe’s economy slowing, the tax revenues needed to service all of that debt are disappearing.

 

The economies of Greece and Portugal have been in recession for some time now. Growth in Spain and Italy is virtually non-existent. And the carnage is spreading far beyond those ravaged nations.

 

Britain’s economy grew only 0.2 percent in April, May and June. Disposable income fell 2.7 percent in the 12 months prior to March of 2011. Retailers are going bankrupt right and left. And to make matters worse, Britain’s austerity program is expected to eliminate 300,000 government jobs.

 

Now, Germany, the most vibrant economy in the EU is flagging.

 

Daimler, Deutsche Bank and Siemens are suffering. Germany’s largest utility is cutting thousands of jobs. 

 

Now, Europe’s banking sector is being pushed to the brink.

 

This month, the European Central Bank had to expand cheap loans to banks to make sure none of them run short of cash.

 

Meanwhile last Friday, the University of Michigan reported that Consumer Confidence just hit the lowest level since 1980, 31 long years ago!

 

In short, we’re buried in debt and our economy is slumping back toward recession! With no changes forthcoming to get us off this pitiful path, a mammoth crisis is all but inevitable!

 

The Gala World Premiere of the all-new video we created to help you protect your wealth and to profit BEGINS TODAY!

 

We’ve just put the finishing touches on America’s Financial Doomsday:  Protect Yourself and Profit and the Gala World Premiere of this all-new, blockbuster video begins NOW!

 

In this blockbuster video, we show you why the most dangerous phase of this great financial calamity is now beginning.

 

We document the monumental event that now threatens to trigger the ultimate financial doomsday and plunge vast numbers of U.S. families into the nightmare of poverty, homelessness and hunger.

 

We show you how a handful of Americans will use this crisis to build substantial wealth.

 

And we give you the things you can do right now to help make sure that you and your family get through this disaster with your wealth intact and still growing.

 

 

 

 

 

http://www.moneyandmarkets.com

 

http://finance.moneyandmarkets.com/reports/SMR/4597/vsp-smr2.php?s=CLST&e=4597108

 

http://blogs.moneyandmarkets.com/interest-rate-roundup/six-steps-to-financial-doomsday-step-2-government-debt-exploding/914

 

 

News Flash August 14, 2011

 

 

In Europe, the story has been all about the dreaded PIG: Portugal, Ireland and Greece.
 
And then in recent months Italy and Spain came under fire, which required the buyer of last resort, the European Central Bank, to quell the downward spiral in those government bond markets.
 
But this week, one of the two core engines of Europe, which is also one of the key orchestrators of managing the euro-zone crisis, is in the crosshairs: France.
 
The chart below shows the credit default swaps of France (orange), the U.S. (red) and a major French bank (black).
 
http://www.moneyandmarkets.com/market-activity-proving-there-are-few-places-to-hide-46727
 
A downgrade to U.S. government debt is the equivalent of a downgrade to the global economy.
 
You can see in this chart the markets are pricing in nearly twice as much risk of a French government default than they were in early July.

The difference between the orange line (France) and the red line (the U.S.) indicates that market participants think that France is three times more likely to default than the U.S.
 
With that, it’s no surprise that French banks also came under attack this week,…
 
In advanced economies, banks often have sizeable exposures to their own domestic government debt. Therefore, when sovereign debt gets downgraded, bank creditworthiness tends to be downgraded, too.
 
And the vicious cycle is set into motion, where bad banks drag down sovereigns and bad sovereigns drag down banks.
 
In a world still working through a historic global financial crisis, we should expect downgrades and we should expect defaults. For your investments, it’s about preservation of capital.
 
I expect that S&P will downgrade France government’s debt.
 
That's why short selling is forbidden, is not allowed in France,...
 
US is facing two problems and both are so serious!!!

First: National Debt of $ 14.3 Trillion (we all are aware of the same).

Second: Great mismanagement of data, like we have seen in Greece (1 year ago).

Last week US Treasury has publised a report where in they are asking for the National Debt of $ 52 Trillion vs $ 14.3 Trillion, so we are again at the same place.

Who is right and who is wrong?

Whose numbers are correct and till what extent and Shall be believe on them?

www.gao.gov/financial/fy2010/10frusg.pdf

Total Federal Securities held by Public - $ 9,060 Bn
Federal Debt Securities held by investments by Govt A/cs - $ 4,576 Bn
Shortfall in Medicare - $ 22,813 Bn
Shortfall in Social Securities - $ 7,947 Bn
Federal Employees and Veteren benefits Payables - $ 5,720 Bn
Other Liabilities - $ 1,673 Bn

Actual US Debt - $ 52 Trillion

 

News Flash August 12, 2011

 

CAUTION:

 

These 4 things happen just before major stock market crashes
(and they're happening RIGHT NOW!)

 

Bank stocks are leading the entire market lower.

 

The economy is winding down; politicians and the Fed are scrambling to find a solution.

 

The Volatility Index — the VIX — is at levels not seen in more than two years.

 

Gold is setting one new record after another.

 

Sound familiar? It should:

 

These are precisely the things that happened just before America's LAST great stock market crash in 2008!

 

 

 

 

 

The S&P 500 average plunged nearly 60%. Many household name stocks lost 80% ... 90% ... up to 100% of their value. Venerable old companies like Lehman simply ceased to exist. Millions of investors were wiped out.

 

 

But this time, things are far worse:

In 2008, investors were worried that consumers had taken on too much debt they couldn't pay.

This time around, investors are panicking because our single largest institution — THE U.S. GOVERNMENT — has taken on too much debt it can't pay.

Back then, investors could only hope that Washington would find a way to end the nightmare with bailouts and stimulus.

This time, investors know that government “rescues” only delay the inevitable collapse.

Plus, they realize that our new, fiscally conservative representatives in Congress are sworn to defeat stimulus and bailout bills.

And they have come to the shocking realization that no institution on Earth has enough money to save the U.S. government now.

This is why gold prices just set another, new all-time high overnight, hitting $1,808 per ounce.

 

It's clear that the bloodletting has only begun:

 

The European Union, the world's largest economy, is coming unglued at the seams.

 

The U.S. economy is slowing dramatically. Unemployment is rising. Consumers are snapping their wallets shut. Loan defaults are rising again.

 

And to add insult to injury, the U.S. Federal Reserve just promised to keep interest rates near zero for two, long years, a decision that will drive inflation higher AND severely limit the interest revenues that are the banks' lifeblood.

 

I show you why insane government spending, massive debts, out-of-control money printing, and almost unimaginable political cowardice are about to exact a heavy toll from each of us.

 

 

Stock market Armageddon in America and Europe! What to do?

 

I sincerely hope you heeded the warnings I have been giving you over the past two months.

Because it’s all happening just like I said it would.

 

The stock market melted down yesterday, crashing through key support barriers, shattering the confidence of millions of individual investors and prompting most who had been trying to turn a blind eye to the carnage to start heading for the hills.

 

It was the worst trading day since December of 2008.

 

Just since the market began falling on July 26th, more than $7.8 trillion in equity has now been erased!

 

And precisely as I frequently warned, Banks stocks got hit hardest of all:

 

US Bancorp and Wells Fargo were both down 9%.

Huntington Bancshares and JP Morgan Chase declined 8.5% and 9.4% respectively.

Fifth Third Bankcorp fell 11.4% and Capital One fell 12.08%.

Regions Bank dropped 13.5% and SunTrust lost 13.9% of its value.

Plus …

 

 

Citigroup declined 16.42% …

Bank of America fell 20.3% …

iStar Financial dropped 23.2% …

Barclays Bank plunged 24.8% of its value …

Capital Trust cratered 27.7% …

And MGIC Investment Corp crashed a staggering 40.6%!

 

 

Meanwhile, the kinds of investments (Direxion Financial Bear 3X Shar NYSEArca: FAZ) that I recommended to profit from this great Bank stock meltdown rose as much as 51.7% in value yesterday!

 

 

In just a single day!

 

 

And that’s just ONE of the big megatrends that has unfolded precisely as I predicted.

 

I have also told you, unequivocally, that gold prices would explode, and now they’ve just done precisely that, reaching a new all-time high of nearly $1,780 per ounce.

 

And the Fed made its "big" announcement.

 

But instead of giving investors what they prayed and hoped for, the Fed laid an egg:

No new initiatives to save the stock market! No new quantitative easing to save the economy. Just the same old maybe-this-maybe-that statements typical of the Fed.

 

Of course the Fed left the door open for major new money-pumping efforts down the road. But for those who wanted instant gratification today, there was nothing new.

 

* Safe haven currencies like the Swiss franc and Japanese yen have exploded in value against the buck! A dollar now buys just 73 Swiss centimes, compared with 1.17 francs last spring.

 

* Bank stocks have been annihilated! The government spent hundreds of billions of dollars bailing out megabanks like Bank of America, American International Group, Citigroup, and more. Now, B of A has plunged to levels not seen since April 2009. Citi has been cut in half in just seven months and AIG is at its lowest level in 18 months.

 

* Real estate stocks are getting crushed, REITs collapsing at a rate I haven't seen since 2008, builders like Pulte Group falling to a fresh 11-plus-year low and mortgage insurers, the companies on the hook when homeowners default, running out of capital and on the verge of shutting down.

 

* Bonds tanking: In just a few short days, the junk bond market has given up every penny of gains racked up since last spring and muni bonds are falling because of imminent downgrades.

 

All this leaves you with just two choices: You can do nothing and allow Washington and Wall Street to destroy your hard-earned wealth. Or you can take urgent action to protect it and PROFIT from these dynamic market moves.

 

Don't wait. Yesterday's market crash is telling you, loud and clear, you have no more time to waste!

 

 

There will be a severe global market crash in about 90 days.

 

My contacts are very reliable and they are in touch with most global central banks. They are 90% confident that a major crash will occur in mid to late October.

They believe the crash will be at least as bad as the 1929 crash. The USD will be obliterated, the Euro zone will be hit extremely hard, and most major governments are in the process of returning their currencies back to the gold standard.

This will change the entire global economy.

If you want to help other friends and clients, you should try to help them understand why they should be buying gold, silver and inverse ETFs for protection against a decline in the S&P, the Dow or the Nasdaq. Plus you can buy them to hedge against declines in various stock sectors.

 

Any investor can add inverse ETFs in any stock brokerage account; you purchase them like any stock. And you can often tailor your selects to approximately match the kinds of stocks you have left in your portfolio. The goal: The more your stocks fall, the more your inverse ETFs rise, helping to offset your losses and give you pretty good protection.

 

 

For the first time ever, dollar-denominated Chinese silver futures began trading on the Hong kong Mercantile Exchange.

 

This could spark the biggest silver price hike in history.

 

Soon after the news hit, Wall Straat analysts predicted huge leaps in silver by years end.

 

Citibank now forecasts silver to more than double up to $100 an ounce.

 

If there was ever a time to jump on the silver bandwagon, it's now while the price is still cheap, around $40 an ounce.

 

Urgent Self-Defense for Hazardous Times

 

 

All hell is breaking loose in the economy and the stock market.

 

So my inbox, Facebook page and blog are packed with emails from investors asking what they should do to protect themselves.

 

I understand your concern and confusion, and I'll give you the urgent answers you need in a moment. But first a quick retrospective,...

 

 

Economic facts:

 

 

Slowing economy, accelerating declines in home prices, rising home foreclosures, increasing weakness in the banking sector, stubbornly high unemployment and the Fed's attempts to gut the dollar of its buying power, the fact that the second phase of this great double-dip recession is clearly beginning. NOW.

And sure enough, the stock market is cratering.

 

 

 

Urgent Self-Defense

 

 

 

So what should you be doing now to protect yourself and profit as this great crisis returns to hammer Wall Street?

 

 

Step 1.

 

 

If you're uncomfortable with the risk you're taking, if you feel you're overloaded with stocks, sell approximately HALF of nearly every stock position you have right away.

(There may be some exceptions. But I'll leave that up to you and your advisor.)

One reason I don't recommend selling entire positions right now is because you may be able to get better prices on an intermediate rally, which leads me to the next step.

 

 

Step 2.

 

 

Determine which stocks are probably the most vulnerable by checking their rating.

• If it's D+ or lower, I would seriously consider selling the rest on any significant rally in the market. But if it's a B+ or better, it has a much better chance of holding up a lot better than the rest of the market.

 

 

Just be aware that the rating is not the ONLY factor to consider. There may be some exceptional stocks you may want to hold for special reasons.

 

 

 

Step 3.

 

 

No stock, no matter how highly rated or how special, is risk free.

 

 

All can be vulnerable to stock market crashes, as investors dump the baby with the bath water. So to protect yourself against that risk, consider inverse ETFs as a hedge.

 

 

You can buy inverse ETFs for protection against a decline in the S&P, the Dow or the Nasdaq.

Plus you can buy them to hedge against declines in various stock sectors.

 

Any investor can add inverse ETFs in any stock brokerage account; you purchase them like any stock. And you can often tailor your selects to approximately match the kinds of stocks you have left in your portfolio.

 

 

The goal: The more your stocks fall, the more your inverse ETFs rise, helping to offset your losses and give you pretty good protection.

http://www.proshares.com

 

http://www.direxionshares.com

 

 

Step 4.

 

 

Buy investments designed to multiply your money BECAUSE of this crisis:

 

Moving money to inverse ETFs, not just as a hedge, but as a major profit opportunity.

 

Given the chaos now all around you, I think it would be a huge mistake not to watch inverse ETFs from start to finish:

 

 

http://www.proshares.com

 

http://www.direxionshares.com

 

 

In 1991 'everyone' in Soviet Union (USSR, СССР) wanted Capitalism, now everybody complains about the crime, drugs, no jobs, corruption, too rich individuals, .... - the answer is 'that is the package called Capitalism'.

 

http://www.youtube.com/watch?v=yYGLvbqAK_c

The crisis in USA (and EU) represents the failure of the system, it is not 'financial crisis' as they like to call it. That part of the world is deep into the latest stage of Capitalism which is called Financialism - the stage where only profit counts.

For that reason they do not produce (or export) anything of any importance, as everything is more profitable to be produced in China or else.

 

Because of that millions of Americans and Europeans receive food coupons, and the rest of the population uses digital USD., EUR. which are made out of thin air.

 

America and Europe are BANKRUPT! It is a real DISASTER!

 

News Flash August 5, 2011

 

 

 

S&P Downgrades U.S. Credit Rating from AAA

 

 

 

http://www.time.com

http://www.time.com/time/business/article/0,8599,2087170,00.html

 

 

Dow plunging! Banks crashing! What to do?

 

 

Bank stocks are crashing!

 

And remember: This is AFTER the hundreds of billions of dollars the government has wasted bailing out these banks. It’s an epic disaster!

 

Junk bonds imploding!

 

European stocks, currencies, and bonds tanking! The apocalypse is not just American — it’s also European. The sovereign debt crisis is exploding, and attempts to contain it are a TOTAL failure!

 

ECB President Jean-Claude Trichet tried to calm investors, but they responded by dumping the euro like there was no tomorrow. Spain and Italy are blowing up. Their interest rates skyrocketing.

 

The entire European continent is coming unglued, and now the contagion is breaking out on BOTH sides of the Atlantic at the same time!

 

That leaves you just two choices: Sit idly by while your wealth is destroyed. Or take urgent action to protect it — and PROFIT from the disaster striking all around you.

 

 

http://www.proshares.com

 

http://www.direxionshares.com

 

 

http://www.trendfund.com

 

 

100 Reasons to Invest in Ukraine

 

Macroeconomics

1)       Corporate tax rate in Ukraine is 25%, compared with 35-41.6% combined federal-state in the US

2)       Ukraine’s new tax code implemented in 2010 established zero taxation for small businesses for a period of five years and for the hospitality sector and light industry for 10 years

3)       Income tax rate in Ukraine is 15%, compared with up to 46% combined federal-state in the US

4)       Budget deficit in Ukraine is projected to be 3.5% of GDP in 2011, compared with 10.91% in the US

5)       Government external debt in Ukraine is projected to be 25.3% of GDP in 2011, compared with 102.63% in the US

6)       Current account deficit in Ukraine is projected to be under 3% for the second year in a row (actually a surplus in January 2011), comparable to that of the US

7)       Ukraine’s GDP was over $300 billion and its per capital GDP was about $6,700 in 2010, and its GDP growth is projected to be over 4% in 2011 for the second year in a row

8)       Ukraine is a leader in GDP growth rate among the CEE nations

9)       Ukraine has a population of more than 45 million, and a labor force of more than 22 million

Debt & Equity Markets

10)   The market capitalization of the Ukrainian PFTS Stock Exchange is over $25 billion

11)   More than 800 securities are traded on the Ukrainian PFTS Stock Exchange, and 38 securities are traded on the Ukrainian UX Stock Exchange

12)   In 2010, the PFTS index rose 70.2% and the UX index rose 67.9%, outperforming all major global indices

13)   The Ukrainian stock exchanges (PFTS, UX) are projected to increase 30-40% in H2 2011

14)   The ratio of total market capitalization of Ukrainian companies to their total sales is 30% lower than comparable countries (Russia, Kazakhstan, Central and Eastern Europe, Turkey)

15)   Shares of Ukrainian banks are traded more cheaply than stocks of similar banks in Central and Eastern Europe

16)   Investors resumed buying several ? billion of Ukrainian corporate and sovereign Eurobonds in September 2010

17)   Ukraine reached an agreement with the International Monetary Fund for a new $14.9 billion loan in July 2010, which Ukraine has begun to drawn down in tranches

International Trade Organizations

18)   Ukraine is a member of the WTO

19)   Ukraine plans to enter into a free trade agreement with the CIS in May 2011

20)   Ukraine plans to enter into a free trade agreement with the EU in 2011

Investment

 21)   Ukraine led Europe in 2009 with a 48% growth year-over-year in foreign direct investment projects 

 22)   Ukraine received about $6 billion in foreign direct investment in 2010, a 7% growth rate year-over-year

 23)   Ukraine expects to receive $21 billion in foreign direct investment in 2011-2012, 40% of it from foreign investors

24)   The Government of Ukraine has approved 163 investment projects worth a total of $46.6 billion

25)   Ukraine’s infrastructure investments for the European Football Championship Euro 2012 include $2 billion for airports, $4 billion for high-speed rail, and over $1 billion for highways and stadiums

26)   Ukraine plans to develop the Northern European model of highways within 5 years

27)   At an International Economic Forum in September 2010, German and Swiss companies pledged to invest ?185 million in the Kharkov region of Ukraine

Ukrainian-Russian Economic Cooperation

28)   In November 2010, Russia and Ukraine agreed to a 10-year program on economic cooperation, that included 19 joint projects costing a total of $48 billion

29)   Ukrainian-Russian trade exceeded $35 billion in 2010 toward a long term target of $100 billion

30)   In 2010, Ukraine signed a nuclear power plant deal with Russia valued at $5-6 billion

31)   In 2010, Ukraine signed a new gas deal with Russia, saving Ukraine about $3 billion per year

Privatization

32)   In 2011, Ukraine intends to accelerate the privatization of industrial enterprises, such as telecom providers, power utilities and power distribution companies, chemical manufacturers, and seaports

33)   In the first privatization of 2011, Austrian investment firm EPIC bought a 92.79 percent stake in Ukraine’s main fixed-line operator Ukrtelecom from the Ukrainian government for $1.3 billion

Energy

34)   Ukraine produces about 100,000 barrels of oil per day

35)   Ukraine produces over 20 billion cubic meters of natural gas per year, and has proven reserves of over 1 trillion cubic meters

36)   Ukraine has five nuclear power stations with fifteen reactors with a total power output of 13.6 thousand MW, 47 thermal power stations with a total power output of 32.4 thousand MW, 6 large hydraulic power stations on the Dnieper and 55 small stations on other rivers

37)   Ukraine is a member of the EU Energy Community

38)   Ukraine’s energy strategy is for 20% of energy to come from renewable energy sources by 2020

39)   Ukraine’s feed-in tariff for renewable energy is nearly twice that of some G8 members

40)   Ukraine offers VAT exemption for importation of capital equipment used in renewable energy projects

41)   Ukraine has high average wind speeds, a good solar radiation profile, plentiful biomass raw materials, and numerous dams on the Dnieper River, all ideally suited for renewable energy generation

42)   The World Bank has pledged $200 million to Ukraine to develop energy efficiency projects, and has pledged to buy 10 million Ukrainian carbon credits

43)   Ukraine plans to sell 50 million ERUs for $1 billion

44)   The EBRD has already provided ?5 billion for about 200 projects in Ukraine, and continues to provide funding of about ?1 billion per year for projects in Ukraine

45)   Ukraine plans to raise $6.5 billion to modernize its gas transport system

46)   15 wind power parks with ?7 billion in planned investment are in progress in Crimea, Ukraine, and two solar power plants have been commissioned in Crimea, toward a goal of 750MW of wind energy and 1000MW of solar energy in Crimea

47)   Ukraine plans to build 52 hydroelectric power plants in the Ivano-Frankovsk region

National Innovation Project

48)   The Government of Ukraine plans to apply the best practices of Silicon Valley, Singapore, and Skolkovo in its National Innovation Project

49)   Ukraine is planning to construct a Technopark in Borispol, Kiev Oblast

50)   Ukraine will create a University of Innovation and Nanotechnology

51)   Ukraine created a new Council of Domestic & Foreign Investors that includes the CEOs of Microsoft and other multinational corporations

IT Outsourcing

52)   Ukraine has the world’s 5^th largest and fastest growing IT outsourcing services market in the world, with revenues in 2011 expected to reach $1 billion

53)   There are over 4,000 IT companies and about 300 ISPs in Ukraine, employing over 100,000 hardware, software and IT consulting professionals

54)   Ukraine has about 20 major IT educational centers producing about 30,000 IT-graduates annually with bachelor, MSc or PhD diplomas

55)   The cost of employing a software developer in Ukraine, or outsourcing IT business solutions development to Ukraine, is still about one-half of the cost of doing so in the EU or the US

56)   The IT industry in Ukraine is trending from system integration and development of “turnkey” information systems to Build-Operate-Transfer (BOT) and IT business solutions adapted for a long-term perspective

Telecommunications

57)   The telecom services market in Ukraine has annual revenues of more than $1 billion

58)   There are more than 55 million mobile telecom subscribers in Ukraine (higher than 100% saturation)

59)   Ukraine has an internet penetration rate of greater than 33%, or over 15 million users

Transportation

60)   Ukraine has 425 airports and 7 heliports

61)   Ukraine has over 20,000 km of railways, nearly 17,000 km of roadways, and over 20,000 km of waterways

62)   Ukraine has pipelines for gas – 33,327 km; oil – 4,514 km; and refined products – 4,211 km

63)   Ukraine has over 150 merchant marine ships, plus nearly 200 additional merchant marine ships of foreign registry

64)   Ukraine has ports and terminals in Feodosiya, Illichivsk, Mariupol, Nikolaev, Odessa, Yushny, and Sevastopol

Metallurgy

65)   Ukraine produces about 30 million tons of iron and steel annually, accounting for about 5% of GDP, and is the world’s third largest exporter of iron and steel

66)   The metallurgy sector in Ukraine, its largest key industry, includes 14 integrated steel making plants, 7 pipe plants, 10 plants producing metallic articles, 16 merchant-coke plants, 17 refractory production plants, 3 ferroalloy plants, 20 non-ferrous metallurgical works, 35 factories reprocessing ferrous and non-ferrous scrap metal, and other enterprises

67)   Ukraine has about 27 billion tons of iron ore deposits

Machine Building

68)   Machine-building is the largest Ukrainian industrial sector, and the largest machine-building subsectors in terms of their employment are instrument-making, tractor and agricultural machinery building, electric engineering, automobile building, chemical and petrochemical engineering, and machine-tool construction

69)   Ukraine also manufactures science-intensive and highly technological machines and equipment, including the development of the rocket and space industry, aircraft building, production of advanced tankers and large-tonnage vessels, fabrication of turbines for nuclear power plants, highly-efficient gas-pumping installations, equipment for high-voltage power transmission lines, etc.

Automotive Manufacturing

70)   Ukraine produced about 70,000 cars in 2010, and total car production in Ukraine is expected to grow 20-22% in 2011 and reach 271,600 units per year by the end of 2014

71)   ?koda’s Ukrainian arm Eurocar alone is expected to produce 100,000 units in 2011

Aircraft Manufacturing

72)   Ukraine is one out of just nine countries worldwide currently designing and building transport aircraft as well as top-class civil aircraft

73)   The Antonov Aircraft Plant manufactures the An-124 Ruslan, the world’s most power aircraft, and the An-225 Mriya (Dream) aircraft, which has been recognized by the International Aviation Federation as having scored 124 world records

Shipbuilding

74)   The Ukrainian shipbuilding industry is a complex of colleges, universities and research centers; experienced design bureaus; 9 shipbuilding yards with different capacities and specialisation; and a number of ship repair yards

75)   Its close geographical location to European Union, combined with availability of up-to-date design bureaus, powerful production facilities of shipyards, experienced labor force, presence of strong national metallurgic industry make the Ukrainian shipbuilding industry very attractive alternative to distant shipbuilding centers

Agriculture

76)   Ukraine, once “the breadbasket of the Soviet Union”, has the potential to become “the breadbasket of Europe”

77)   Among all the European countries, Ukraine is a leader in growing of sugar beet, buckwheat and carrot; second place in growing of wheat (after Russia) and of tomato (after Poland)

 78)   The market for wheat, barley, sunflower and canola, also grown in Ukraine, has been excellent

 79)   More than 60% of Ukraine is covered in Black earth top soil

 80)   28% of the population work in or are involved in agriculture, and labor is inexpensive

 81)   Ukraine plans to allow the purchase of farm land in 2013

 Chemicals and Petrochemicals

 82)   The multi-branch chemical sector of Ukraine includes chemical, petrochemical and chemical-pharmaceutic sub-sectors with over 1,600 enterprises and structural units

 83)   This sector in Ukraine produces mineral fertilizers, non-organic acids and soda; synthetic resins, plastic masses, chemical fiber, man-made caoutchouc and threads; and car and motor-cycle tires, hoses, and consumer goods

 Pharmaceuticals

 84)   At the present time there are 58 companies manufacturing drugs in Ukraine, mostly producing lower-priced products, such as generic drugs and vitamins

85)   Two of the countries giants in the Ukrainian pharmaceutical industry, Kyivmedpreparat and Halychpharm received the Ukrainian Government’s approval to merge and form Arterium Corp, which will be involved in the research, marketing and distribution of new medical products

86)   Nonetheless, pharmaceuticals imported into the country accounted for 62 per cent of the Ukrainian drugs market; therefore, there is a huge market potential for drug manufacturers willing to establish research, marketing, manufacturing, and distribution in Ukraine

87)   The compound annual growth rate (CAGR) of generic medicines is projected to be 31% in Ukraine in local currency between 2011 and 2013, and by way of comparison, the innovative drug subgroups will develop on average by 14% per annum

Fast Moving Consumer Goods

88)   The fast moving consumer goods industry in Ukraine includes over 3,000 enterprises producing textile, knitting, clothing, leather, footwear; basic foods, such as sugar, salt, oil, alcohol, confectionery, etc.; meat and dairy processing, sugar refining, flour milling and cereals production, oil extraction and starch and molasses; and other products

89)   The FMCG sector In Ukraine has considerable production, research and labor potential, but its production capacities are not fully utilized; thus, vast reserves of the sector are potentially available to strategic investors

Retail

90)   The Fozzy Group, the largest retailer in Ukraine, increased their revenues by 37.5% in 2010 on a 6% y-o-y increase in retail trading space

91)   Grocery retailers on the Ukrainian retail market increased their total retail trading areas by 6% y-o-y in 2010 to 2.1 million m?

92)   The Ukrainian ATB-Market retail grocery chain reported the highest growth in operated retail space – a 16% y-o-y increase, after opening 71 new stores in 2010

93)   The Ukrainian retail industry is still unconsolidated, with the top 10 retail operators accounting for less than 25% of the total share, and thus M&A opportunities exist for strategic investors

Hospitality and Tourism

94)   More than 12 million foreign tourists visit Ukraine each year, to see the Carpathian Mountains, the coastline of the Black Sea, the Dnieper River, vineyards, ruins of ancient castles; ancient churches, cathedrals, and monasteries; world-class opera and ballet, and more

95)  In the Ukrainian resort and hotel industry, demand greatly exceeds supply; there are many resorts and tourist places which are up for sale and many of them have put out proposals for investments

96)   The Government of Ukraine is still seeking investors to build hotels for the one million football fans anticipated to attend the European Football Championship Euro 2012

Political Stability

97)   Ukraine has a popularly elected President who is favored to win re-election in 2015, and a ruling coalition in the Ukrainian parliament headed by the President’s party that is expected to solidify their majority in the next parliamentary election in 2012

Anti-Corruption Law

98)   In March 2011, the Ukrainian parliament, the Verkhovna Rada, passed a tough anti-corruption law that was praised by the EU

Crime Rate

99)   With the exception of software piracy, Ukraine’s crime rate is below that of many industrialized nations

100)  Ukraine has anti-money laundering controls approved by the global Financial Action Task Force (FATF)

 

Sources: Over 100 various sources of information, too numerous to list. No originality of thought in the content herein is claimed.

 

http://bearmedia.com.ua/news/100-reasons-to-invest-in-ukraine/

 

 

 

The Economic Integration of Russia  and Ukraine

 

 

Recommendations :

 

The first step that the Government of the Russian Federation   and the Government of Ukraine  should take, to facilitate the continued integration of their economies, is to jointly adopt President of Russia   Dmitry Medvedev's 10-Point Modernization Plan outlined in his speech to the World Economic Forum in Davos, Switzerland on January 27, 2011.

 

In some of these 10 areas, Ukraine  already has a corollary to Russia's  , and in some of these 10 areas, Russia   and Ukraine  are already coordinating their respective activities.

 

However, what is needed is an integration of Russia's   and Ukraine's  economic modernization plans that is so seamless that Ukraine  functions as Russia's   84th federal subject.

 

Russia   should offer Ukraine  100% inclusion in its modernization plans, never failing to do so in an effort to promote Russia's   prestige above that of Ukraine's .

 

It should be left entirely up to Ukraine's  domestic political calculations whether Ukraine  can participate in 25%, 50%, 75% or 100% of a joint Russia-Ukraine   modernization plan.

 

Detailed recommendations in each of the 10 points follows:

 

1. Privatization

 

Russia : President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated, "Shares worth a total of tens of billions of dollars in leading banking, infrastructure and energy sector companies will be privatised over the next three years."24

 

Ukraine : In September 2010, it was reported in the Kyiv Post that Ukraine had received less than $53 million from privatization, far below its projected revenue from privatization of $820 million in 2010.27 In October 2010, President of Ukraine Viktor Yanukovych stated that he intends to accelerate the privatization of industrial enterprises, such as telecom providers, power utilities and power distribution companies, chemical manufacturers, and seaports.28

 

Russia-Ukraine Integration Recommendation  : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to compare the list of enterprises targeted for privatization by Russia and by Ukraine, identify potential synergies from mergers of Russian and Ukrainian enterprises, merge the lists of enterprises to be privatized into one list, and then hold a joint Russia-Ukraine Privatization Forum for international investors.

 

2. Sovereign Fund

 

Russia : President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated that Russia "will soon establish a special sovereign fund that will share the risks with foreign investors by carrying out joint investment in economic modernisation projects in Russia."24

 

Ukraine : In December 2010, President of Ukraine Viktor Yanukovych issued Decree of the President 1119/2010 which calls for the Cabinet of Ministers to issue financial support to a domestic enterprises development bank within one month.29

 

Russia-Ukraine Integration Recommendation  : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan to create a joint Russia-Ukraine sovereign fund that will match the equity investments of foreign investors, and to create a joint Russia-Ukraine domestic enterprises development bank.

 

3. Financial Sector

 

Russia : President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated that Russia plans to "develop Moscow as an international financial centre that will become not just the nucleus of Russia's financial system but also a catalyst for developing financial markets throughout the post-USSR region."24 Back in July 2010, President Medvedev had signed a decree instituting a working group to
establish an international financial center in Moscow, which Moscow authorities indicated at the time would require $150 billion in investment.30

 

Ukraine : In April 2010, it was reported that there were 10 Ukrainian companies planning an IPO, and that only 22 percent of companies in Russia and CIS including Ukraine that were planning an IPO had chosen one of the two Moscow-based exchanges (MICEX or RTS) as a preferred destination.31

 

Russia-Ukraine Integration Recommendation  : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan to encourage companies in Russia and CIS to select either a Moscow-based exchange or a Kiev-based exchange (PFTS or Ukrainian Exchange) for their IPO, and to determine means by which Russia and Ukraine can cooperate to increase the competitiveness of the Russian and Ukrainian financial markets and attract more foreign and domestic capital to the national economies.

 

4. Trade Organizations

 

Russia : President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated that Russia plans to join the WTO, join the OECD, build a Common Economic Space (CES) with the EU, and advance the Customs Union with Belarus and Kazakhstan to a CES.24

 

Ukraine : In November 2010, President of Ukraine Viktor Yanukovych stated that Ukraine, already a WTO member, may join the Customs Union of Russia, Belarus, and Kazakhstan.16 In December 2010, President Yanukovych signed a Presidential Decree ordering the Cabinet of Ministers to take additional steps toward Ukraine's signing Free Trade Agreements (FTA) with the EU, Russia and CIS, and Canada.32

 

Russia-Ukraine Integration Recommendation  : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan for Ukraine's geopolitical support of Russia's accession to the WTO; Russia and Ukraine's joint building of a CES or joint establishment of an FTA with the EU; and Ukraine's subsequent accession to the CES, or joint establishment of an FTA, with Russia, Belarus, and Kazakhstan.

 

5. Innovation

 

Russia : President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated that Russia is continuing its "active efforts to develop new possibilities for innovative business and venture investment," of which "the Skolkovo Innovation Centre is our biggest project+"24

 

Ukraine : The Chairman of the Kiev Regional State Administration, Anatoly Prisyajnyuk, stated in July 2010 that Ukraine was planning to construct a Technopark in Borispol, Kiev Oblast.33 In January 2011, Prime Minister Mykola Azarov indicated that Ukraine will create a University of Innovation and Nanotechnology20; President Yanukovych promised to apply the best practices of Silicon Valley and Skolkovo in a National Innovation Project in Ukraine21; and President Yanukovych created a new Council of Domestic & Foreign Investors that includes the CEOs of Microsoft and other multinational corporations.22

 

Russia-Ukraine Integration Recommendation  : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan for the integration of Russia's and Ukraine's innovation initiatives as they relate to Universities, Technoparks, laws, and attracting foreign corporations, investors, and scientific and managerial talent.

 

6. Renewable Energy and Energy Efficiency

 

Russia : President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated, "Given Russia's important place in the energy sector it is essential too to make this sector one of the main driving forces behind innovation."24 Back in May 2010, President Medvedev had directed the Government of Russia to develop incentives for renewable energy development and use.34 In June 2010, it was reported that the Federal Grid Company of Russia sought to invest $30 Billion in a smart grid for alternative energy and energy efficiency projects.35 In August 2010, Russia's renewable energy and energy efficiency road map was revealed.36

 

Ukraine : Ukraine already has incentives in place to attract investment in renewable energy projects, including a Green Feed-in Tariff that provides one of the highest returns in the world for generation of energy from renewable sources, VAT exemption for importation of capital equipment used in renewable energy projects, membership in the EU Energy Community, high average wind speeds, good solar radiation profile, plentiful biomass raw materials, numerous dams on the Dnieper River, and so on. The largest impediment to energy project development in Ukraine is the nation's continued distressed
sovereign debt rating and plans to assume more public debt, and the resultant unavailability to private developers of international sources of finance for large infrastructure projects in Ukraine.

 

Russia-Ukraine Integration Recommendation  : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan wherein Russia's and Ukraine's renewable energy and energy efficiency road maps can be integrated; the optimum blend of energy from all sources including coal, gas turbine, natural gas, CHP, nuclear, wind, solar, hydro, and biomass can be determined; Russia can adopt laws and incentives for renewable energy comparable to Ukraine's; and financing for development of energy projects in both Russia and Ukraine can be provided.

 

7. Joint Ventures

 

Russia : President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated, "We will make full use of technology transfers to modernise our industry. Joint ventures and technology exchanges are important in all sectors+"24 In October 2010, Russia and Ukraine signed 10 contracts, and discussed the prospective Gazprom-Naftogaz merger, during the visit to Kiev of Prime Minister of Russia Vladimir
Putin.14 Specifically, Ukraine and Russia agreed to projects in nuclear, oil and gas, aerospace, aircraft, shipbuilding, transport, and agriculture.15

 

Ukraine : In November 2010, Ukrainian Deputy Economy Minister Valery Muntiyan stated at a meeting of The Intergovernmental Committee on Russia-Ukraine Cooperation that Russia and Ukraine agreed to a 10-year program on economic cooperation. He further stated that the program might include 19 joint projects costing a total of $48 billion.17

 

Russia-Ukraine Integration Recommendation  : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan to ensure that JVs and technology transfers involving either Russia or Ukraine separately benefit both nations; that all potential JVs and technology transfers between Russian and Ukrainian enterprises have been considered and agreed to when feasible; and that insufficiently funded JVs between Russian and Ukrainian enterprises be presented to international investors at a joint Russia-Ukraine Investment Forum.

 

8. Broadband Internet

 

Russia : President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated, "We are carrying out an extensive programme to develop broadband internet throughout the whole of Russia."24 In June 2010, it was reported that the Internet penetration rate in Russia had reached 37% overall; in Moscow and Saint Petersburg, over 60%.37

 

Ukraine : In July 2010, it was reported that Internet penetration in Ukraine had grown to 25%.38

 

Russia-Ukraine Integration Recommendation  : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan to ensure that appropriate incentives exist for telecom operators to provide affordable fixed and/or mobile broadband internet services to the entire populations of both Russia and Ukraine.

 

9. Talent

 

Russia : President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated, "Our task is to make Russia a more attractive place for the world's brightest minds. This is why we are ready to take the unilateral step of granting automatic recognition to diplomas and degrees from the world's top universities. I note too that we have simplified the immigration rules for highly qualified specialists coming to Russia."24

 

Ukraine : In 2005, in anticipation of an influx of visitors for the Eurovision Song Contest in Kiev, Ukraine took the unilateral step of repealing Cold War era immigration policy by allowing citizens of the following countries to visit Ukraine without a visa on short-term tourist, business or private travel of up to 90 days: USA, Canada, Japan, EU nations, Switzerland, Liechtenstein, Andorra, Vatican, Iceland, Monaco, Norway,
San Marino, Mongolia, Lithuania and the countries of the CIS (except Turkmenistan). Although Ukraine's immigration laws were tightened in Q4 2008 upon the onset of the global financial crisis to preserve jobs for Ukrainian nationals, it is still a relatively simple procedure to obtain immigration sponsorship for employment in Ukraine from a Ukrainian enterprise.

 

Russia-Ukraine Integration Recommendation  : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to discuss the possibility of further simplifying Russia's immigration policy to make it aligned with Ukraine's; and to acknowledge that attracting foreign talent and arresting the Russian and Ukrainian brain drain is as much a matter of perceptions and emotions as it is of Governmental policy, and to discuss the potential role of public relations in shaping perceptions and emotions to ensure that Russia and Ukraine secure the talent necessary to achieve their joint modernization plans.

 

10. Infrastructure Projects

 

Russia : President of Russia Dmitry Medvedev, in his speech in Davos in January 2011, stated, "We have begun carrying out big infrastructure projects, especially as we have been chosen to host major international sports events. These projects will all be carried out on a public-private partnership basis."24 In June 2010, it had been reported that Russia had embarked on 10-year, $1 trillion construction program to upgrade its infrastructure.39

 

Ukraine : Also in June 2010, It was revealed that Russia's |2 billion high-speed electric train project would include the Ukrainian cities of Kiev, Kharkov, and Simferopol.8 In July 2010, it was reported that the heads of the CIS countries, including Russia and Ukraine, had agreed to cooperate on free trade, joint investment, transport and tourism infrastructure, and sports.40

 

Russia-Ukraine Integration Recommendation : The Intergovernmental Committee on Russia-Ukraine Cooperation should meet to formulate a plan wherein Russia's and Ukraine's infrastructure development road maps can be integrated; Russian and Ukrainian enterprises can be awarded contracts for infrastructure development for UEFA Euro 2012, Sochi 2014 Winter Olympics, and World Cup 2018; and infrastructure projects can be financed by a combination of the joint Russia-Ukraine sovereign fund, the joint Russia-Ukraine domestic enterprises development bank, and international investors at the joint Russia-Ukraine Investment Forum.

 

Conclusion:

 

The premise promoted in Western  capitals that Ukraine  needs to choose between economic integration with the European Union , a trade bloc with a population of 500 million, or economic integration with Russia  and the Russian-speaking nations with a collective population of 250 million, is a false dichotomy.

 

Ukraine  can instead choose to both enter into a Free Trade Agreement with the EU , and join the Customs Union among Russia, Belarus, and Kazakhstan after Russia's accession to the WTO anticipated to occur in late 2011.

 

Equally flawed is the Western  premise that Ukraine  must choose between modernization or return to the cultural and spiritual heritage it has shared with Russia since the 9th Century.

 

The better choice is for Russia  and Ukraine  to go forward together into the 21st Century, modernizing and integrating their economies to ensure their mutual prosperity, without ever compromising their common cultural and spiritual values that have made them great nations for over one thousand years.

 

Sources:
1 - http://en.rian.ru/business/20100419/158648733.html
2 - http://en.rian.ru/world/20100517/159050692.html
3 - http://bit.ly/cjl4yG
4 - http://delo.ua/vlast/politika/na-kakie-obekty-nacelilis-rossijane-140566/
5 - http://korrespondent.net/business/1077923
6 - http://korrespondent.net/ukraine/politics/1078895
7 - http://en.rian.ru/news/20100609/159356520.html
8 - http://tinyurl.com/2b89uk4
9 - http://tinyurl.com/2ck3b4x
10 - http://bit.ly/cmadg9
11 - http://bit.ly/dabK3y
12 - http://bit.ly/bJGFSM
13 - http://ow.ly/2GZmm
14 - http://bit.ly/dyZKsZ
15 - http://bit.ly/b1v6lj
16 - http://bit.ly/fscIIv
17 - http://bit.ly/geR0XA
18 - http://bit.ly/gOW3OO
19 - http://goo.gl/fb/GdbIV
20 - http://bit.ly/fZ4FwI
21 - http://bit.ly/hID31l
22 - http://ow.ly/1b2DbI
23 - http://goo.gl/fb/8ZkvG
24 - http://forumspb.com/en/news/2161
25 - http://bit.ly/gMaMrv
26 - http://bit.ly/g7wYZO
27 - http://www.kyivpost.com/news/business/bus_general/detail/80889/
28 - http://bit.ly/dtOPVz
29 - http://bit.ly/frbW2z
30 - http://bit.ly/dpzvBj
31 - http://www.pbnco.com/eng/news/release.php?rid=67
32 - http://bit.ly/hCtHBO
33 - http://bit.ly/bIUAYk
34 - http://en.rian.ru/russia/20100527/159185774.html
35 - http://goo.gl/fb/03kZa
36 - http://goo.gl/fb/cLSjB
37 - http://bit.ly/aawUsO
38 - http://bit.ly/bNS1bt
39 - http://tinyurl.com/2dyfnka
40 - http://bit.ly/cAi806

 

Russian President Dmitry Medvedev delivers a speech during the opening ceremony of the 15th St. Petersburg International Economic Forum in St. Petersburg, Russia, June 17, 2011.

 

 

http://eng.kremlin.ru/

 

 

http://www.president.gov.ua

 

 

http://eng.kremlin.ru/news/2411

 

 

 

http://www.forumspb.com

 

 

 

 

Chinese President Hu Jintao delivers a speech during the opening ceremony of the 15th St. Petersburg International Economic Forum in St. Petersburg, Russia, June 17, 2011.

 

President Hu said, "During my trip to Russia, President Medvedev and I have decided to boost our bilateral trade volume to 100 billion US dollars before the year 2015. And double the number to 200 billion by the year 2020."

 

Johan de Broyer
Kyiv Capital
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Ask for more @ E-Mail: johandebroyer@russia.ru

 

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