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Internal Carlyle Group Memo:
Market Good For 12-24 Months
Bob
Chapman
International Forcaster
Friday April 27, 2007
Now hear this! What we are about to tell you comes from deep within
the bowels of the Illuminati. This information runs parallel with
what we have been forecasting in our issues of the IF.
In February, via an internal memo, the Carlyle Group said they
see another 12 to 24-months or more of “excess liquidity,”
which will drive further profits and growth and that the current
liquidity environment cannot go on forever; and, that the longer
it lasts the more money our investors will make; but also that the
longer it lasts, the worse it will be when it ends”
In the missive it was stated that Carlyle’s fabulous profits
were not solely a function of their investment genius, but have
resulted in large part from a great market and the availability
of enormous amounts of cheap debt. In fact, there has been and is
so much liquidity in the world financial system that lenders, even
their own lenders, are making very risky credit decisions. This
sea of money and credit has allowed deals to be done that could
never have been done otherwise.
They do not expect the Fed to reduce interest rates anytime soon.
What could bring this global liquidity to an end? Just that business
would diminish their borrowing or could it be higher interest rates?
Could it be a terrorist attack; $100 per barrel oil; trade protectionism;
the absorption of excess skilled labor into the global economy;
the US elections; Russian energy policies; a multi-billion dollar
bankruptcy; a tightening by the Bank of Japan or the Fed; an end
to the yen carry trade as a result; or perhaps the collapse of several
hedge funds or a derivative collapse? All are possible and at least
one is probable.
The strategy should be to take lower risk deals and earn lower
returns rather than higher risk deals at only small incrementally
higher returns. We should redouble our focus on deals with downside
protection, asset coverage, multiple and early exit paths, strategic
partners, debt pay down, government protection, consumer needs,
controllable capital expenditures, defensible market positions,
etc.
Carlyle is being careful because they know what is coming, just
as we have been telling you here in the IF. Carlyle is the insider.
What we have been busy doing for years is figuring out what these
elitists will do before they do it.
This is exactly what we have been forecasting. If we and Carlyle
are correct, we can expect more than ample liquidity until February
of 2009. During the year to 1-1/2 years that follow liquidity will
decline and inflation will diminish. After three months of declining
liquidity or declining use of liquidity we will know it is time
to sell all assets except gold bullion coins, quality gold shares
and for those of you who have to have some liquidity, Swiss francs.
Now that foreclosures are going wild lots of crooks are defrauding
homeowners. Here are some tips. Don’t pay upfront fees to
any person or organization promising help. Don’t sign anything
without have an independent lawyer review it. Seek out accredited
financial counselors, using lists such as those kept by the Department
of Housing and Urban Development. Wild rescue offers that are too
good to be true are just a scam.
This week the Supreme Court stepped into the subprime lending crisis
with a potentially far-reaching ruling that limits the power of
individual states to regulate mortgage lending. The elitists have
to control everything in our lives.
The Supreme Court is allowing banks to offer new terms on mortgages
in violation of the law.
This will have a big impact on the ability of states to act independently
on predatory lending and throws the spotlight on federal authorities.
The Consumer federation of America said, “This is really
disappointing news, it could work to the detriment of consumers.”
Applications for mortgages fell for the 5th straight week as ARMs
fell to 18.1% of applications, the lowest since 7/03. A year ago
they accounted for 30%. Refis were 2.5% lower wow, but they were
up 10% yoy. Refi apps fell 0.3% and accounted for 44% of applications.
The volume of loan applications to buy a home fell 4.2%, but purchase
loans were down 3% yoy. US home sales are off 5.5% yoy. The average
30-year fixed rate mortgage rose from 6.16% to 6.22%, the highest
in nine weeks. The 15’s rose 1 bps to 5.92% and the one-year
ARMs rose 1 bps to 5.89%.
US foreclosure filings rose 47% in March yoy. That was 149,000
as California’s filings rose 31,434. Nevada and Colorado had
the largest percentage gains. Those making late payments are at
a four-year high and the failure of 55 subprime mortgage companies
has tightened the supply of money for lending. Nevada’s foreclosures
were triple yoy. That is one foreclosure for every 183 households,
which is four times the national average. Colorado’s rate
was one for every 292. Nationally it was one of every 775. California
had 6 of the 10 metropolitan areas with the highest foreclosure
rates, Stockton being the highest. The others were Vallejo-Fairfield,
Modesto, Sacramento, Riverside-San Bernardino and Bakersfield. Greeley,
Colorado and Detroit and Denver were also up near the top.
INFOWARS:
BECAUSE THERE'S A WAR ON FOR YOUR MIND
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