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Bernanke's "twist" falls flat! Dow plummets! What to do ...

From: Money and Markets (eletter@e.moneyandmarkets.com) Sent: Fri 9/23/11 12:21 PM To: emiliortiz1@hotmail.com
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YOUR BEST SOURCE FOR THE UNBIASED MARKET COMMENTARY YOU WON'T GET FROM WALL STREET

Bernanke's "twist" falls flat! Dow plummets! What to do ...

by Mike Larson
Friday, September 23, 2011 at 7:30am

Navigating Europe With ETFs

With the European sovereign debt crisis entering a more ominous phase, Ron Rowland offers three tips to ETF investors: The euro currency is at a crossroads, no European stock market is safe, and inverse and leveraged ETFs may not work like you think. Click here to view []

Folks, 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?

Europe is imploding NOW! What to do ...

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., home construction just fell 5.3%. 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! We've just posted a presentation on how you can harness this situation to grab huge profit potential! Click here to watch now.
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Believe it or not, THIS is the calm before the storm! What would happen right now if our federal government was no longer able to find more willing lenders, no longer able to borrow money? [More ] This new debt crisis will impact almost EVERYONE! The "American Age" in which the United States ruled as the world's richest country and dominated the global economy, is about to end. This free report reveals steps you can take, NOW. [More ] A Gold Explorer from Toronto Sean Brodrick spoke with Ralph Fitch president, CEO, chairman and director of High Desert Gold. High Desert Gold is so small ... [More ] Lloyd's of London abandons European banks! Without warning, Lloyd's the world's oldest insurance market announced on Wednesday that it has withdrawn its money from European banks. The reason? [More ] Will there be a run on your bank? Not if it's financially strong! Check ... [More ]

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!

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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, the suspension of civil rights, and even martial law enforcement by the U.S. military ... But while the vast majority of Americans will suffer, a select handful will use this crisis to build substantial wealth. If you act on the easy-to-follow recommendations I'll give you in this presentation, you could be one of them.
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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 ... [More ]

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!

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UNCOMMON WISDOM
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.
A Gold Explorer from Toronto by Sean Brodrick Last week, I went to the Toronto Resource Investment Conference, sponsored by Cambridge House International. It's a gathering of ... [ More ]

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So why do I call these moves a bunch of "nothing sandwiches?" Well, short-term interest rates are already near zero percent, and

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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.

The Fed's latest move won't do diddly squat for the ailing housing sector.

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 priceto-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. My specific recommendations are contained in the Safe Money Report, and you can get all of them at a cost of just 13 cents per day. Click here for more details. Until next time, Mike

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