Saigon National Bank get a piece of the pie

Yay for the Vietnamese community bank getting a piece of TARF. In fact, Saigon National Bank is getting about $1 million! Saigon National Bank Approved for Preferred Shares Sale of $1,200,000 to the U.S. Treasury. Now they can lend money to more local Vietnamese businesses in the Westmingster CA community.

With it market cap of only $3M, the fed is literally now owning 1/3 of the company! The stock has been down from $12 a share at IPO to $2 a share now.

Want a loan?

I can help you out!

Got to love these ads:

Time to shop till you drop

A lot has happened since the last post in which a MS analyst claim that the bear market has ended. Yes indeed it is just beginning. Let's summarized some points

• Election rallies ended with 800 points drops the next two days
• China to spend almost $600B in stimulus to their own infrastructure
  
• Paulson changed his mind to use TARP money to help consumer credit. Spend baby spend!
• Use trade deficit felt to $56.5B, China trading surplus hit another record.
• Unemployment number shoot over the roof. Continued claims are now at 3.897 million, the highest level since 1983.

So what is next, gov is reacting but not being proactive in solving problem. Buy toxic security "seem" to be such a great idea and now it is totally abandon because the economy's health has deteriorate significantly. Fundamentally, it is as bad as a month ago, only worst because of what the gov did. So, what do I see in the horizon:

• Retailers get clobbered this xmas, regardless of what the gov might do
  
• A consistent drop of appetite for US treasuries, rate has to increase up to 8% (now at 3.7%)
  
• Pension fund is smacked with a $5B lost in US treasuries holding.
• The next bubbles! the BOND bubble - corporate, tax-exempt state, city and gov bonds
• Food crisis!
  
• Frozen international trades.
  
• Hyper inflation
  

Are the gov addressing any of those problems right now. In fact, they are making them worst for when it might occur. Tons of US bonds are being sold and money being printed. Again, they are only reacting and chasing after a problem. Paulson definitely earned his PHD (Permanent Head Damaged)

Morgan Stanley says: "Bear market has ended"

Analysts at the US investment bank Morgan Stanley are recommending that clients start to buy shares again after more than a year of falling markets. In an investment strategy report, analysts at the bank said that all four indicators they use to gauge the equity market outlook have started to indicate a turn in the downward trend.

"We have now come full circle: our market timing indicators are giving us a full house buy signal," said the statement. "Each of the four indicators – valuation, capitulation, risk, fundamentals – tells us to buy."

"These models tend to work some 80 to 90 per cent of the time," they said. "And in the 10 to 20 per cent that they don't work, the move the other way can be spectacular."

Source: http://www.independent.co.uk/news/business/news/bear-market-has-ended-says-morgan-stanley-992370.html

Unfortunately the model tends to NOT work this time.

Alaska is on sale soon!

A two-day Asia-Europe Meeting (ASEM) of 27 EU member states and 16 Asian countries was set to open on Friday.

The front-page commentary in the overseas edition of the People's Daily said that Asian and European countries should banish the U.S. dollar from their direct trade relations for a start, relying only on their own currencies.

A meeting between Asian and European leaders, starting on Friday in Beijing, presented the perfect opportunity to begin building a new international financial order, the newspaper said.
(Naked Capitalism)

FYI: U.S. private consumption peak at the rate of 9.1 trillions dollars a year with a population of 300 millions. The rest of 1.3 billions Chinese and 1.2 billions Indian combining about 2.5 billion Chindian only consume about $1.8 trillions dollar. The abrupt vacuum of U.S. consumer slow down is not easy to be replaced anytime soon. The world leaders need to get over the denial stage and admit that we are in at least a deep recession if not a looming depression.

US might be facing with limited choice in paying off its $10 trillion dollars debt = 620 miles of $100 dollar bills stacking side by side.

1. Facing default of the USD
2. Selling off Alaska

Put it in perspective

A few pictures of the day to pull us back for a few min, slow down, reflecting on our life, appreciate what we had and put things in perspective.


Left: A cobbler waiting on the street of Afghanistan. Making a humble living day by day. The psychological emotion he has to go through each day waiting for customers. Hoping that he would make enough to earn a meal for his family.

Below: a Chinese farmer harvesting his hard earn vegetables. Hard labor with little pays. Their earnest wishes are just to have a nice meal and some saving. Our over spent and over consumed society. Living outside of our means as becoming the norm and the way of life. It is sickening to see how materialistic the society has becoming the past decade. Now as we are entering a hard economic time, people would have to learn it the hard way and experience a period of much reduced standard of living.

So, from time to time, take a few min, be grateful. Live within your means. Do not chase after material as a source of happiness. Find it from the inside.

So what's next?

The master plan to privatize profits and socialize losses is now stall. This $700 billion dollar plan is massive. Can you imagine how much that is?

Say you have lots of $100 dollar bills, stack it up in front of you. 

It would be 3.9 inches high to be $1 million dollars. 

It would be 327 feets high to be $1 billion dollars.

It would be 43.4 miles high to be $700 billion dollars

That is about 3/4 of the Washington DC beltway loop or a bit longer than the distance between DC and Baltimore

This will cost every American family $10,000 

WaMu is seized by FDIC and sold off to JP Morgan for $1.9 billions. But the major cost would be the $30-54 billion dollars of write down on toxic loans