The election of Mr. Sarkozy as President of France brought expressed satisfaction from Richard Perle as was reported in LeFigaro over the fact that France would now finally be liberated from the Gaullist obsession, to want to be different from the US. The three days Sarkozy spent on Vincent Bollore’s 200-foot yacht was to discuss the interests of Lazard Freres, which is controlled by the Rothschilds. It should be noted that in the 1930s Lazard and the Harriman interests, which included the Walker, Prescott, Bush gang, all supported Hitler. Rumors in Paris say Bollore will buy up the first channel of the French television station TFI from Sarkozy’s friend Martin Bouygues, and he in turn will obtain the right to buy up the nuclear energy firm Areva, which Sarkozy wants to privatize soon.
We see also as a result of this combine a very hardening attitude toward Russia. That means we could well have another cold war episode that could last for years. We know that the Bush neocons want to invade Iran and we know that European Illuminist interests want to stop an Iranian invasion. The Europeans know that an attack using low yield nuclear devices against Iran would lead to global nuclear war. No nation would be left untouched.
The US is demanding missiles, radar and US troops be stationed in Poland and the Czech Republic as well as in S. E. Asia. In Europe, the election of Sarkozy has opened the door to an aggressive stance against Russia that Schroeder and Chirac would have never allowed. Thus, the Anglo-American neocons are ready to move forward in their next step of perpetual war for perpetual peace.
The globalization and free trade agenda in the final analysis has made the world ungovernable. It could be that Scotland might split from England as well as Wales. Only war can hold this entity together. Or perhaps a Cold War. In England, Gordon Brown’s new government will be a minority government, so the British may have some serious internal problems.
There has already been strong reaction to the US-NATO policy of wanting to make Kosovo a sovereign state. Radical Party leader Tomislav Nicolic is speaker of the Parliament in Serbia, and he says if this Kosovo effort is pushed he will wage war. Europe is in political tumult and polarization particularly in France, England, Belgium and in Serbia. We wonder what Europe and the neocons will do when the financial crash plunges the political structures into chaos. Europeans, like Americans and Canadians, do not understand that the financial system has to be purged and that big political changes have taken place in Europe. There are serious problems ahead and three of the largest most important European countries are being controlled by the Illuminati.
The easy ride for some municipal bonds may be over. Michigan is a victim of the offshoring and outsourcing of the auto industry. The state’s credit rating was lowered by S&P for the third time since 2003 last week and it looks like it could be worse. In fact an advisory board said they were facing a fiscal train wreck. The state’s politicians are still trying to figure out how to balance the budget, which has holes in it totaling $1 billion. In Texas the state legislature passed a law allowing the state and its municipalities to weasel out of a GASB rule requiring them to calculate how much they owe retirees in so-called past-employment benefits. If the government signs the law, there will be a two-tired market. One group who adhered to the rule 45, of the GASB and those who didn’t. this is because the two states refuse to recognize their obligations.
Goldman Sachs is the world’s most profitable securities firm. They have added seven bankers in this past year, boosting its group to 61. Blackstone is about to become the world’s largest publicly traded buyout firm. Both are starting corporate restructuring groups in Europe.
These and other firms are paying as much as $3 million a year for bankers who advise bankrupt companies and traders who specialize in defaulted debt. Restructuring groups are growing faster in Europe than in the US as companies in the UK, France and Germany pile on record amounts of debt. European companies borrowed a record $252.6 billion in loans and bonds rated below investment grade. These companies had debt equal to 6.2 times earnings before interest, tax, depreciation and amortization in the first quarter. That is up from 5.1 times in 2004 and 4.8 in 2003. There has been only one major default in Europe this year, so as yet there hasn’t been much business, but Goldman and others must believe it is on the way. People have been forecasting a meltdown in credit in the next 12 to 18 months. This is the same time frame we received in the Carlyle memo we referred to a month or so ago. There obviously is trouble coming as real estate buckles.
The latest madness is that Bear Stearns Asset Management and Highland Capital have sought regulatory approval to list on US stock markets. They own credit assets including equity tranches of CDOs, collateralized debt obligations, better known as junk, subprime and ALT-A loans, etc. These are investments that carry high returns, which can be wiped out by the first few defaults in the portfolios of underlying debt that back them. Bear is dumping their garbage on the public, as usual.
Data shows the speculators are now aggressively selling the lowest yielding currencies, such as the yen, Swiss franc, Taiwanese dollar and a basket of some 20 currencies that have low interest rates. The game has started fresh and anew and the specs cannot borrow fast enough.
The month of May will probably top the charts for global mergers worldwide; at least $496 billion in deals have already been announced for the month with mergers in the US alone at $191 million. Year-to-date, companies have announced at least $2.2 trillion in deals worldwide and of that US volume is $830 billion. By June they will all have over $1 trillion in deals, which is inconceivable. The madness, cartelization and job loss will be beyond imagination.
A slowdown in US productivity growth poses a long-term challenge to the US dollar and is adding to the difficulty of financing a gaping trade deficit. As productivity growth declines, the most important incentive to invest in dollar denominated assets, besides yields, is no longer in place. US economic growth was 1.3% the first quarter, the slowest of all 43 countries. That is caused by lower wages in other countries and the American workers no longer produce the best because they know their jobs may be shipped out of the country tomorrow. This bodes ill for the dollar, which has tracked growth in productivity over the longer term. The short-term has been distorted by free trade and globalization, massive market manipulation and a massive creation of money and credit. The Fed is trying to prolong a dying cycle. They have done just that with the dotcom boom, the real estate boom, and now the money and credit boom. This could be reversed by instituting goods and services tariffs and electing Ron Paul as President. The experts see a 5% dollar devaluation this year and next. That would take the dollar to $1.46 euros. We see it at $1.50 to $1.60.
Mortgage applications fell 7.3% last week. The 30-year fixed rate mortgage averaged 6.32%, said the MBA. The purchase index fell 2.5% and the refi index fell 13%.