8/27T8:07 News...

New credit hurdle looms for banks - WSJ
WSJ reports U.S. and European banks, already burdened by losses and concerns about their financial health, face a new challenge: paying off hundreds of billions of dollars of debt coming due. At issue are so-called floating-rate notes -- securities used heavily by banks in 2006 to borrow money. A big chunk of those notes, which typically mature in two years, will come due over the next year or so, at a time when banks are struggling to raise fresh funds. That's forcing banks to sell assets, compete heavily for deposits and issue expensive new debt. The crunch will begin next month, when some $95 billion in floating-rate notes mature. J.P. Morgan analyst Alex Roever estimates that financial institutions will have to pay off at least $787 billion in floating-rate notes and other medium-term obligations before the end of 2009. That's about 43% more than they had to redeem in the previous 16 months.



August 26, 2008 -- Big, Big Picture -- The world is now going through the deleveraging of the greatest credit mountain in human history (the credit build-up started right after World War II). What are the implications?The first -- there's a dash for cash throughout the world. Big, sophisticated money sees what's going on, and they want cash, all the cash they can a accumulate.Second -- Today, all cash is fiat junk currency. When this realization hits, the next big move will be into the only reliable cash outside the central bank system. That move will be to -- gold. There will be a rush for gold somewhere ahead. Even now, I suspect gold is in a bottoming process (but not the gold shares).That's the BIG picture. Now for the secondary picture. On January 22, 1134 individual stocks broke to new lows on the NYSE. On that day 3209 stocks were traded, -- which means that 33.8% of all the stocks traded on the NYSE on that day hit new lows. This ghastly performance was so bad that I immediately labeled January 22 as the "internal low" for the market. The Dow closed that day at 11971. Later on July 15 with the Dow higher at 10962, an incredible 1304 stocks on the NYSE closed at new lows. On that day 3209 stocks were traded on the NYSE. This means that an amazing 40.6% of all the stocks traded on the NYSE closed at new lows. July 15 was arguably the single worst technical day of any day in NYSE history.I took July 15 as a second critically important "internal low" day. Conclusion -- the Dow MUST remain above 10961 on a closing basis. Breaking the Dow level set on July 15 would be catastrophic