wpe50.jpg (1913 bytes)     TigerSoft News Service    10/26/2008      www.tigersoft.com      

                                   Million in Corporate Bribes
                 Stop Congressional Oversight of Housing Bubble

                                         Part 1 -  An On-Going Saga            

                  OBAMA DID NOT CAUSE

 Karl Rove Blames Obama for Market Crash!

       What Arrogance!   The Real Causes of The Market's Collapse:
(1) Housing Bubble Fueled by Low Interest Rates, Lack
         of Regulation of Mortgage Lenders, Abolition of Glass Seagall
         and Rampant CEO Greed.
        (2) Bush's Failure To Regulate Investment and Commercial Bankers,
        (3) Dangerously Over-Leveraged Hedge Funds and Banks,
        (4) Untrustworthy Bond and Mortgage Rating Agencies,
        (5) SEC Allowing Unregulated and Undisclosed Short Sales,
        (5) Bush / Paulson's Scare Tactics,
        (6) Pervasive DIstrust of Bush White House,
        (7) Pauperization of The Middle Class and Working People,
        (8) Hugely Wasteful, $3 Trillion Iraq-War Blunder and
             Vastly Expensive Military Industrial Complex.
        (9) Wall Street Greed and Incompetence among CEOs
        (10) Unregulated, Unmeasured Trillion Dollar Time-Bombs!
                  Credit Default Swaps - now owned by C, JPM, BAC

and the US Government.
       (11) Congress - The Best That Money Can Buy.
               Million in Corporate Bribes Stop Congressional Oversight.
12/7/2008 -
                      How Much Money Is Needed To Bribe A Congressman?
                      How Bribes Stopped Earlier Congressional Oversight of Fannie Mae

All These Factors Are To Blame! Not Omama.
  Each of These Subjects We Have Researched.

-----------------------------  And there's more in this Blog ---------------------------------

                       How The Market Treated Democrats FDR, JFK and Clinton
                          in The Presidential  Election and the Following Year. 

                                            UNREGULATED - No One Knows How Big Is The Bomb.


                                                               by William Schmidt, Ph.D.   

                                                    Author of TigerSoft, Peerless Stock Market Timing.
                                                                  Nightly HotlineTigerSoft Blogs and www,tigersoft.com

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 Do You Really Trust Karl Rove?     

             Democrats Coming Moving into The White House: FDR, JFK an Clinton


by William Schmidt, Ph.D.
                                                               (C) 2008  www.tigersoft.com  

Fox, host Neil Cavuto asked Karl Rove to explain the “very volatile markets.”
                  (What a euphemism!)  Rove replied that it was a result of people’s uncertainty over an
                   Obama presidency:

"ROVE: But we have to be a little bit careful here, because markets try and predict the future. And what they may be doing here, this volatility may be people’s concerns about what would happen if Barack Obama, who has a lead in the polls and has been deemed by the media to be the likely next president of the United States, what would happen to their economy and their portfolios if he were to become president?"   (Source: http://thinkprogress.org/2008/10/23/rove-market-obama/ )

             Now compare this with Herbert Hoover's warning about FDR, right before the election
of 1932.  if Roosevelt were elected, then "the grass will grow in the streets of a hundred cities,
a thousand towns; the weeds will overrun the fields of a thousand farms...."

              Certainly, the extent of 2008 decline rests with Republican malfeasance and failure to regulate.   Admittedly, there is a pattern of Republican investor nervousness in the Fall, but in JFK's and Clinton's cases, the market's bottoms were reached in the fourth quart decline by November 1.  In FDR's case, the final bottom was not reached until a week before his innauguration, in early March 1932.

                       What really caused this mess was and is totally the inadequate regulation
           of  financial institutions under the Bush administration, the protection of cronies
           and special (powerful) interests,  the collapse of the housing bubble and the
           growing lack of faith by investors in the safety of their investments.   I have been
           documenting this regularly.   The evidence is massive.  Sadly, each day more comes
           out.   We need all to use our God-given brains and look for the truth, especially
           when traditional views don't square with the realities around us.

Example, When Moody's or S&P give triple AAA ratings out to the public,
            but internally say the dangers of a financial collapse are very great, who is the
            investor to trust. This was  what was revealed in Congressional hearings this week.

                       A financial house of cards.  The fall of one bank led to the fall of the next,
           each made vulnerable because of wildly imprudent use of leverage in an environment
           dominated by falling housing prices and commodity prices and rising  foreclosures and
           forced sales
.     1) Fannie Mae and Freddie Mac had to be nationalized because of
           they backed $5.5 trillion in mortgages; beyond the reach of private capital and
           backed by an implicit government guarantee
.  2.) Lehman Brothers failed and
           the US Government did not back them up.  

Paulson clearly didn't understand Lehman's involvement. Lehman is a leveraged brokerage
                  shop that was the counterparty to trades sized in the $hundreds of billions, including interest rate
                  swaps, commodity futures, corporate bonds, international equities and real estate loans, currency
                  swaps, and private equities. The counterparty risk created fear and triggered domino selling. Banks
                  refused to lend to one another fearing the other end to be infested with Lehman's positions. Insiders
                  claim that it could take over a decade to fully unwind Lehman's positions.

                        "What's more, Lehman was one of the largest prime brokers to international hedge funds.
                  Lehman's bankruptcy immediately caused wholesale panic within the hedge fund industry as funds
                  tried to close/transfer/pull their money out of their Lehman custodian. Today over $60 billion is still locked
                  up in Lehman's London brokerage unit. Given the leveraging nature of hedge funds, the effect on global
                  equity markets was catastrophic as trillions of dollars were wiped off global equity markets.

                       "With hundreds of billions of dollars of positions that need to be closed fast, we witnessed
                  the most dramatic equity downturn outside of 1930 and 1987."  The world's second largest
                  stock index - the Nikkei - has fallen 30% since September 1st. 
                       ( http://seekingalpha.com/article/101732-deflationary-depression-where-do-we-go-from-here?source=email )

                         wpeF7.jpg (12462 bytes)|
                        The collapsing housing and stock markets were too much for the World Bull market!
                   Consumer spending and business investment dried up and shrank dramatically once
                   the turn downwards was widely perceived.

                        In my opinion, the accelerated downturn in October was a direct result of the scare tactics
                  that the Bush Adminstration and Henry Pauslon (Treasury Secretary) chose to use to get a
                  $700 billion for banks.
The Dow Jones Industrial Average was higher on 9/25/2008 than
                  it was on 9/15/2008 when Lehman announced their filing for bankruptcy. 
But, in order to get
                  the $700 billion bailout for banks, Paulson had to start scaring Congressmen and the public
                  about how dire the situation was.  That is what killed the stock market!  And brought about
                  a terrible wave of across-the-board selling.

                                      Date                                                                             DJIA

                                     9/15/2008   Lehman Bankruptcy announced.  10918
                                     9/16/2008   AIG saved by US Gov't.                    11059
                                     9/17/2008                                                                   106106
                                     9/18/2008                                                                    11020
                                     9/19/2008                                                                    11388
                                     9/22/2008                                                                     11016
                                     9/23/2008                                                                     10854
                                     9/24/2008                                                                     10825
                                     9/25/2008                                                                     11022
                  9/26/2008 WAMU bankrupt. JPMorgan takes over.                11143
                                     9/29/2008   Paulson Plan rejected by House of Rep.                10365
                                     9/30/2008  Paulson scares Congress.  House passes Bailout.    10851
                                     10/1/2008   Senate passes $700 Bln. Bankers' Bailout                    10831
                                     10/2/2008                                                                      10482
                                     10/3/2008                                                                       10325
                                     10/6/2008                                                                        9956
                                     10/7/2008                                                                        9447
                                     10/8/2008                                                                        9258
                                     10/9/2008                                                                        8579
                                     10/10/2008                                                                      8451

                                        Collapsing Commodity Prices and Collapsing Hedge Funds

                          The collape of over-leveraged and over-invested hedge funds has devastated
               commodity prices more than the decline in world wide demand.  The collapse
               of Lehman's derivative positons and its hedge funds send the ball rolling downhill
               much faster.  "
demand for Oil and Copper had never slacked yet Oil and Copper
               prices were cut by half in 4 months. Inventory levels remained near historic lows
               and there was no projected slowdown in commodity demand from China, the world's
               largest consumer
...Chinese, Asian, Middle Eastern, and Latin American banks had
               minimal exposure to US subprime debt or to the collapse of US banks. The debt level
               of the Asian consumer, the key driver to the next phase of global growth, remains low.
http://seekingalpha.com/article/101732-deflationary-depression-where-do-we-go-from-here?source=email )

                      Look at the charts of Crude Oil, CDE (Coeur D'Alene - the world's largest
               silver producer and NEM (Newmont - the world's largest gold producer.)  
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                     The Time-Line of The Financial System's Collapse

                     Look at the events that led to this debacle.   Keep in mind that I contend
             that you can see what insiders are really thinking by the levels of accumulation
             (they're buying) and distribution (they're selling) for any given stock, index or
             commodity..   And the Tiger Closing Power shows what big institutions are expecting,
             because it shows what they do after the opening.

          May 5, 2008 - DJI bearishly falls back from its 200-day ma
          and is unable to get back above.   This is longer term Sell
          for many insitutions.
          June 20, 2008 - DJI closes below 12,000

           July 11, 2008: IndyMac Bancorp Inc., the second-biggest
           independent U.S. mortgage lender, is seized by federal regulators
           after a run by depositors depleted its cash.

           July 31, 2008: Nationwide Building Society, Britain's fourth-
           biggest mortgage lender, says U.K. house prices declined the most
           in almost two decades in July and consumer confidence fell to a
           record low as the economy edged closer to a recession.

           August 8, 2008 - Foreign Stcok Markets (made into a
           composite made a new low.

           Aug. 12, 2008: UBS AG, Switzerland's biggest bank, announces
           plans to separate its investment banking and wealth management
           units after mounting subprime writedowns prompt rich clients to
           withdraw funds for the first time in almost eight years.

          September 2, 2008 - Crude Oil fell 5.48 to 109.71 and
          broke is key longer term 200-day ma (which a lot of

           Sept. 7, 2008: The U.S. government seizes control of Fannie Mae
           and Freddie Mac, the largest U.S. mortgage-finance companies.
           term institutions use to buy and sell.)
            Sept. 15, 2008: Lehman Brothers Holdings Inc. files the largest
            bankruptcy in history, and Bank of America agrees to acquire
            Merrill Lynch for about $50 billion.

             Sept. 16, 2008: American International Group Inc. accepts an $85
             billion loan from the Fed to avert the worst financial collapse in
             history, and the government takes over the company.

             Sept. 21, 2008: Goldman Sachs Group Inc. and Morgan Stanley
             receive approval to become commercial banks regulated by the
             Fed as tight credit markets forced Wall Street's two remaining
             independent investment banks to widen their sources of funding.
             Sept. 23, 2008: Goldman Sachs says it will raise at least $7.5
             billion from Warren Buffett's Berkshire Hathaway Inc. and public
             investors in a bid to quell concerns that pushed up the Wall Street
             firm's borrowing costs and hurt its stock.

             Sept. 26, 2008: The SEC's inspector general releases a report
             asserting that the agency failed in overseeing Bear Stearns
             because it knew the firm had ``high leverage'' and was too
             concentrated in mortgage securities before its forced sale to
             JPMorgan Chase & Co.
             Sept. 26, 2008: Washington Mutual Inc. is seized by government
             regulators and its branches and assets sold to JPMorgan Chase in
             the biggest U.S. bank failure in history.

             Sept. 27, 2008: Washington Mutual files for bankruptcy protection.

             Sept. 29, 2008: The House of Representatives initially
             rejects Paulson's $700 billion plan to rescue the U.S. financial
             system, sending the Dow Jones Industrial Average down 778
             points, its biggest point drop ever. Citigroup agrees to acquire the
             banking operations of Wachovia Corp. for about $2.16 billion after
             shares of the North Carolina lender collapsed under the weight of
             overdue mortgages. Bradford & Bingley Plc, the U.K.'s biggest
             lender to landlords, is seized by the government. The Dow closes
             below 11,000.

             Oct. 1, 2008: The U.S. Senate approves a revised version of the
             rescue plan that was refashioned to entice enough votes for
              Oct. 3, 2008: The House passes the revised version of the rescue
              plan. Wells Fargo & Co., the biggest U.S. bank on the West
              Coast, agrees to buy all of Wachovia for about $15.1 billion,
              trumping Citigroup's government-assisted offer. U.S. President
              George W. Bush signs the rescue plan into law.

               Oct. 5, 2008: BNP Paribas SA, France's biggest bank, will take
              control of Fortis's units in Belgium and Luxembourg after an
              earlier government rescue failed to ensure the company's
              stability as the global credit crisis worsened.

              Oct. 6, 2008: The Fed says it will double its auctions of cash to
              banks to as much as $900 billion and is considering further steps
              to unfreeze short-term lending markets as the credit crunch
              deepens. The German government and the country's banks and
              insurers agreed on a 50 billion euro rescue package for
              commercial property lender Hypo Real Estate Holding AG after an
              earlier bailout faltered. The Dow Jones Industrial Average falls
              below 10,000 for the first time in four years.  

              Oct. 9, 2008: Citigroup walks away from its attempt to buy
              Wachovia, handing victory to Wells Fargo. The Dow Jones falls
              below 9,000 for the first time in five years and briefly dips below

              Oct. 11, 2008: U.S. Treasury Secretary Henry Paulson indicates
              that pumping government funds into banks is a priority, saying
              financial markets will remain volatile.

              Oct. 12, 2008: European leaders agree to guarantee bank
              borrowing and use government money to prevent big lenders
              from going under, trying to stop the financial hemorrhage and
              stave off a recession.

              Oct. 13, 2008: The Fed leads an unprecedented push by central
              banks to flood the financial system with as many dollars as banks
              want, backing up government efforts to revive confidence and
              helping to reduce money-market rates.

              Oct. 13, 2008:  Royal Bank of Scotland Group Plc, HBOS Plc, and
              Lloyds TSB Group Plc get an unprecedented 37 billion-pound
              bailout from the U.K. government as Germany, France and Spain
              prepare similar rescues. Germany says it will provide as much as
              500 billion euros in loan guarantees and capital to bolster the
              banking system, the country's biggest government intervention
              since the Berlin Wall came down in 1989.
http://www.bloomberg.com/apps/news?pid=20601208&sid=aleqkSjAAw10  )

                           The stock market is nervous when a Democrat takes over the
                 White House from a Republican.  But declines usually stop by November
                 and very good rallies follow.  The case of FDR is an exception, because
                 he was not innaugurated until March, even though elected in November
                 and because of the severity of the economic circumstances, which
                 kept getting worse and worse in 1932.

  The Market and The Presidential Election & Innauguration

                             DJI When Democrat Was Going To Win White Hous:
                           Aug 1    Sept 1     Oct 1    Nov 1    Elect'n   Dec 1     Jan 1       Inauguration
                                                                                                                                      FDR 3/4/32
                           ------------------------------ ----------------------------------------------------------------------------
       FDR            54.90      73.70       71.60   60.20     64.60     58.00        60.22      
53.80 then up strongly. 
          (The 1929-1933 bear market reached a final bottom on 2/27/32, just a week before FDR was
           innaugurated,  By July 19th, 1932, the DJI stood at 103.60.  This was nearly a 100% gain!

        JFK          617.80    626.10    
580.10  585.20  597.6    594.50    615.90       632.
          (On 6/3/1963 the DJI had rallied back to 726.30(

         Clinton   3379       3266       3254    
3226     3294        3301      3242        3256 
          (On 6/22/1995, the DJI reached 4589.64)

          Obama 11326  11715      10831


                                        UNREGULATED - No One Knows How Big Is The Bomb.

                       Credit Default Swaps are insurance policies sold by financial institutions to protect
                the policy holder in the event of a failure to pay a mortgage debt by a financial insitution.
                With housing prices falling sharply, these "Swaps" became a heavy burden for big banks.
                They were not regulated or reported.  So no one knows the size of the problem.  But many
                were sold by the financial institutions that are now out of business or very troubled:
                Bear Stearns (bankrupt and sold to JPMorgan for pennies on the dollar._
                Lehman Brothers (bankrupt)
                Merrill Lynch ("Lost a ton of money on these" and now owned by Bank of America.)
                AIG (bankrupt and bought by US Government)
                CitiGroup (provided $25 Billion by Paulson in recent bailout.

                      No one knows how many more are out there or who owns them.  This is a big reason
                 why one bank does not trust another.   They are a ticking time-bomb for as long as home
                 prices keep falling.  And there is no sign yet of a bottom in that realm.  So, the financial
                 market in the US is at serious risk of self-destructing and insiders are properly fearful
                 that there will be more forced selling of assets, bankrupcies and failures. 

                       Self-destructing, I say, because these SWAPS were willingly sold to add to revenue by
                  financial institutions who were willing to bet their entire existence to get some extra
                  cash.   Untempered greed has brought Wall Street down.
                                    "They're supposed to be the smartest investors in the world. And they
                               did it themselves...They did it all on their own.  That's the most incredible thing
                               about this crisis is that they pushed the button themselves. They blew themselves up...
                              The truth is that on Wall Street, a lot of people just weren't very good at their jobs.
                               It's as simple as that.  These people were being paid $50 to $100 million a year.
                               Some of them, the guys that were running the places"

                                    "A trainee making 45,000 a year would have had the common sense not to bet
                              the firm on mortgage contraptions that no one in the firm actually understood. That
                              is not a deep point to comprehend. Somehow, through, I will call it a criminal neglect
                              and incompetence, the people at the top of these firms chose to look away,
                        to take more risk, to enrich themselves and to put the shareholders and,
                        indeed, the country, itself, ultimately, the country's economy at risk.
                        (Source: Comments on 60 MINUTESA Look At Wall Street's Shadow Market )


                      See comments by viewers of this 60 Minutes' Show.

                 12/7/2008 -
                      How Much Money Is Needed To Bribe A Congressman?
                      How Bribes Stopped Earlier Congressional Oversight of Fannie Mae

Internal Freddie Mac budget records show $11.7 million was paid to 52 outside lobbyists and
             consultants in 2006. Power brokers such as former Republican House Speaker Newt Gingrich were recruited
             with six-figure contracts. Freddie Mac paid the following amounts to the firms of former Republican
             lawmakers or ex-GOP staffers in 2006:

                    --Republican Sen. Alfonse D'Amato of New York, at Park Strategies, $240,000.

                    --Republican Rep. Vin Weber of Minnesota, at Clark & Weinstock, $360,297.

                     --Republican Rep. Susan Molinari of New York, at Washington Group, $300,062.

                     --Republican Susan Hirschmann at Williams & Jensen, former chief of staff to House Majority Leader
                     Tom DeLay, R-Texas, $240,790.









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