I’m not sure how far down the Dow has to go in what period of time to be considered a ‘crash’. Is it the 4,000 point/30% level? Is it a thousand point volatility in two trading days? hardly seems to be a point to asking except to note that as the Dow’s short-term rally seems to be toast for the moment, the Time Monks have sent ups this update to their subscribers which we’ve been given exclusive permission to post:”
Sorry this email is so late. It was a trying night with very few hours of sleep. And since then waaaay too many phone calls…
well, Igor informs me that we shifted over into release language sometime around 6:15 am UTC this morning.
We have ‘pegged’ several circumstances which were ongoing at the time of the shift. These are not necessarily proximate causes, but they do provide the flavor of the moment, and may be guides for the continuing release language that will wash over all of us these next few month.
Russia Buys Iceland 1) the major banks in Iceland had failed. The Icelandic government had rather foolishly, but out of necessity, guarantee *ALL* bank deposits. This had developed prior to this morning. What occurred this morning was the announcement that the banks in question had deposits that ran several times the Icelandic GDP. 1.a) Subsequently, *after* being informed that the EU will not/cannot help them, the Icelandic gov’t has turned to Russia for assistance. Russia has agreed to provide the Icelandic gov’t with necessary funds of sufficient amount to help them out ‘for a few days’. The language around the Icelandic currency failure went from ‘worry’ into expressions of ‘dire’ and ‘calamitous’ very rapidly early this morning.
EU Splinters 2) a meeting in France this morning of the EU official ‘finance ministers’ was a dud. It was such a dud as to produce a sudden, precipitous change in language around the whole of the EU as a context within our modelspace. This single meeting may be the actual pivotal point for the EU as an organization of nation states. Basically what happened is that the EU politicians in the meeting agreed to take actions which are /were meaningless, such as a ‘deposit guarantee’ that is now raised, but still is far less than any of the member countries individual deposit guarantees. Thus effectively taking no action at all. Further it is rumored that the attendees of the meeting expressed agreement with the idea of *not* coordinating rate cuts with the Federal Reserve Bank of the USofA. This likely will be seen in the future as *the* moment that the EU began to only crumble back into Europe. (rather than the spectactular Irish vote to kick the EU elite in the crotch). BBC reportedly saying that the “EU is in the shitter…can someone please flush”. Other reports have the attendees of the meeting actually running with their aides in tow to avoid having to face any press.
RBS Clearinghouse ‘failing’ 3) The Royal Bank of Scotland reportedly, this morning, begun seeking a ‘recapitalization’ so that they may continue their clearinghouse functions. The story coming out via rumors is that RBS is/has run into liquidity issues regarding their ability to handle transactions from other banks. This is also, according to rumor, affecting the currency trades globally. There is now some small substantiation that several of the governmental agencies approached have ‘kicked the problem upstairs’ as being beyond their ability to accept. The language within the articles and rumors of the RBS capitalization issues is decidedly in the release category.
France to guarantee deposits for its citizens/banks 4) yet another country within the EU collective has had to declare is own intention to guarantee is own banking struture and its citizens deposits separate from the EU. This is *potentially* another Iceland problem as the total insured deposits are rumored to be several times the GDP of France. Yet another nail in the EU coffin.
5) LIBOR rates are still screwed, and banks are still failing, globally, and pretty much any and all banks which got into the SIVs, CDOs or other ‘specialty vehicles’. Note such headlines… and the timing… http://www.marketoracle.co.uk/Article6666.html
6) various military components are also expressing themselves. This includes Iran and airplanes as well as Israeli TeeVee and their open discussion of the ‘attack on Iran’ being ‘vetoed’ by TPTB due to fears of huge losses of American soldiers and mercenaries in Iraq should Iran retaliate.
7)…other economic details piling up….
….so where from here.
Firstly there were many emails from people who, in their minds, heard 9/11 and disregarded what we are saying about the emotional tones. They were of the opiniion that 9/11 meant some form of attack, probably nuke-lar, and they were disappointed?!…
What we maintain, is that from this point forward, the release language grows, daily, and at intensity levels which are greater than 9/11. We are already seeing this. Go read some of the icelandic media, and the release language is clearly there to be seen. There are several millions of people globally already affected by the crumbling of the icelandic banking system/currency, and that will grow as the currency disease spreads about the planet over these next weeks and months.
We have shifted into release language. It is dominant now (marginally) and as the days progress, and bank after bank, country after country begin to topple as the currency dies beneath their power structure, the expressions of the release language will grow. By the time that we (the planet) reaches February 19th, we will all be totally sick of the release form of language.
Oh, and given our track record of being a few days early, it would not surprise us to find that this is another situation as in Pakistan and the capitulation of Mussaref where in the ‘negociations’ were done on the day we had chosen, but the announcement and the implementation came the following day.
Our best guess as to scenario goes to a continuing, inexorable, grinding down of the global economy as a result of the dying of the usofa dollar. We expect that each day brings more release language, and more behavior alteration which begats even more release langauge as it all piles on…day after day after day for months. With a few exciting release gasps thrown in just as seasoning on the mix.
Oh, and by the way, the military component is now rising as the ‘rumors’ of a ‘pending biologic weapon/disease attack’ are appearing. AND there are some levels of confirmation that the officialdom of the US is already responding to the ‘information’. Hmmm.
So hopefully we can get a few minutes away from the phones here to examine the data streams. We do note that we have had a large, and continuing increase in data since about 11pm last night.
Part Five will bring in the first of the new data sets.
Vale, clif and a very tired igor. “
Depending on how the rest of the week goes, this could either turn into “crash week” or the week the “Euro busted” or any number of other economic events.