Wow. What a day. The Fed didn't step in to support the stock market to the extent that I expected, but then again who knows how much intervention it took to prevent the Dow from falling 1000 points...Now the corporate and municipal bond ratings downgrades will pile up like paper marks during the Weimar period in Germany, beginning with downgrade of Fannie Mae and Freddie Mac debt to AA+ (this is, after all really Treasury debt) and Warren Buffet's Berkshire Hathaway put on watch for further downgrade. Isn't this fun? (It is if you own physical gold and silver).
Now Bank of America is on death watch, as bankruptcy rumors are starting to circulate. Here's why:
(click on the chart to enlarge)
Here were my thoughts on BAC to some colleagues earlier this morning:
BAC was set up to be the garbage disposal for all of Goldman's and JPM's fraudulent mortgage and derivatives underwritings related to Countrywide plus to cleanse the footprints of Merrill Lynch and the people who made $10's of millions ripping off investors in that area. I know from someone who worked at Lehman at the time that MER's balance sheet was as ugly as Countrywide's and MER was working on securitizing all of it and dumping it into their high net worth account base (that should make all of you who trust your financial advisor and big Wall Street brokerages feel good!). It's no coincidence that John Thain was moved from Goldman to MER in order to merge MER into BAC. I mentioned in one of my blog posts 2 years ago that BAC was set up as an entity designed to wash Wall Street's dirty laundry and cover up the footprints of fraud left by Goldman, et al. Next on deck: the taxpayers will monetize BAC's balance sheet.
Rest assured, fellow Taxpayers, Tim Geithner, Ben Bernanke and William Dudley (NY Fed President and ex-Goldman partner) will devise a way to move all of Bank of America's liabilities - and all of the related legal liabilities of those running Bank of America who made $10's of millions off of that fraud - onto the Taxpayer balance sheet. They did it with AIG and all of the Too Big To Fail Banks in 2008 and it worked so well with no public opposition that there's not reason to think that it won't happen again...
And the most "precious" news of the day: the biggest illegal manipulator of silver, JP Morgan, has now revised its year-end target for gold from $1800 to $2500, as reported in zerohedge.com:
Before the downgrade, our view was that cash gold could average $1800 per oz by year end. This view will likely now prove to be too conservative: spot gold could drive to $2500 per oz or higher, albeit on very high volatility LINK
It doesn't get any better than that! I don't think the master of the English language himself - Shakespeare - could create a farce this beautiful...