A Pat On the Back?

http://credoip.blogspot.com/2007/11/i-am-not-bottom-fishing-on-financials.html

I said I was skeptical then, do you believe me now?

LOL, granted I'm only 1 out of millions out there who believed this sh** wasn't over.

http://biz.yahoo.com/ap/080316/jpmorgan_bear_stearns.html

JP Morgan pulled the biggest bank robbery in the century. Kudos to Jamie Dimon. Because of his and the company's conservative strategy, which now helped to bank to reserve enough capital for strategic acquisition. JPM is in fact, being run like a distressed hedge fund, except it has many other less risky businesses. The Bear Sterns acquisition and TGT credit business will bring JPM a good chunk of profit in the future. Jamie Dimon, in my book, is the best trader of 2008.

Billionaire vs. an idiot with a billion dollar

Steve Ballmer is definitely the latter.




BTW Steve, the Motorola Q sucks a**. Not that iPhone is any better. But as far as competing for business users. Dream on! What you think Blackberry wasn't invented before your Motorola Q?

Banks' business model is NONSENSE

As we already know, most bank stocks are suffering from this slow down in mortgage underwriting and anything related to it (RMBS, CDOs, CLOs, CMOs....good stuffs). Anyway, this got me thinking about the banks and why I would almost NEVER invest in one.

Banks generate profit by borrowing money and lending it out. So if a bank borrows at 5% and lend the money out at 7%, it would make 2% on the capital.

Lets take a simple example:

Neighborhood Bank (NB) receive financing from deposit ($50), short term and long term credit facilities ($42) and issued equity ($8 - 8% capital requirement). The bank total capital is $100 ($92 liability + $8 equity). And the average cost of capital is 5%. So every year, the bank has to pay $5 to its investors. The bank will take this $100 and lend it out to Neighborhood Business Corp. and charge 7%. The bank will receive $7 and pay out $5, netting out $2 each year. This extra profit would go to the equity holder, so the equity holder is rewarded handsomely (100% ROE). Obviously in this example, we didn't factor in administrative cost and such, if we did, the equity holder of the bank would probably make about $15-20% ROE. Not too shabby.

The bank essentially is a over leveraged corporation (92% debt 8% equity). Now imagine the bank has to pay its administration expenses and other fix costs. A typical bank probably has net interest of 1.5%, so to cover its fixed costs, they need a HUGE capital base. And if part of their assets (portfolios of loans) start to go bad- the first loss would hit the equity holder. So the equity holder is essentially investing in an over leverage corporation that allow them to invest a small amount and make what it seem to be a significant gain - because of small initial investment.

This is what is happening to the banks now. Some of the banks might even trade "under" book value. The reason is simple: the book value of the bank is simply A - L = E. The problem is the market value of the Asset can be significantly different from the book value asset- so when a bank is trading below book value- it doesn't necessarily means that its cheap.

On top of that, the banks can buy "insurance" or credit derivatives on its loan portfolios. By doing so, they can lower their capital requirement- further allowing them to leverage up over 92%. Since most banks do over leveraged, they would face capital squeeze when the market value of their assets go down the drain... which is exactly what is happening now. In a sense, the banks are always walking on a thin line with equity holders at risk. That and a huge capital base that require to run the bank- make it a very unattractive business for me to invest in. Now, if we are talking about investment banks and brokers....that's a different story....

Long FOOD

My play for 2008 is clear. It is to long agriculture related securities. Why? Because we all have to eat, recession or not. And as emerging markets are growing, more people can afford food. The acreage of land for agriculture isn't getting any bigger neither. Hog prices in China are rocketing, corn and wheat prices in U.S. are the same.

I'll be looking to buy Agricultural ETF (symbol: DBA) for the long term (2-5 yrs).

I can't figure out anything more then a sure play as this. What's the downside here? Are we going to stop eating? Since the ETF invest in futures and agricultural derivatives, there will be no risk in related to rising in energy prices (which squeeze food producers' margins).

Long DBA for 2008!

Rome

How can you tell the U.S. is a falling World Power? Forget about the war, the huge budget deficit, the leader that can't really speak, or the huge household debt. Let's look at something real simple:

NYC:
http://www.youtube.com/watch?v=Lb-6bFqDSi8&eurl

This is an event called "Pillow Fight Day" where as the productive citizens and residents of the city came out to a place and smash each others with pillow. Above video is the video of NYC Pillow Fight Day in 2007- notice the amount of people showed up and feathers on the ground.

The similar event is hosted in Shanghai, China.

Shanghai:
http://www.youtube.com/watch?v=cobYJQ0iGzw

You can clearly see much less people participated in Shanghai (also a very crowded city). Also there are much less feathers on the ground- nearly none.

So this is what our country has became. Smashing each others with pillow in the middle of the day, leaving massive amount of feathers for people to pick up and go to waste. Good job, NYC!

I wish I can understand how "fun" it is, but I just don't. Save your pillow, donate it to someone that need them. All jokes aside - Pillow Fighting day is stupid.

Wall St. Tech darlings

"Opps, I paid too much for growth"

The R word

Aren't we already in a recession? I mean if you take nominal GDP - CPI = real GDP. Which at this point is close to 0%- the economy already "recessing" from the more normal 3-4% long term GDP growth. Strong employment was the only thing that held up in this economy and that picture is looking bleak, figuratively and literally.

However, the international industrial companies are doing quite well. Honeywell, 3M, GE, United Technologies, Textron are all doing quite well. The weak dollar definitely help the exports and international business. Could it really be that the rest of the world are "decoupling" from the U.S.?

China has built quite a huge foreign reserve in the last couple years- now all of those reserve are being deployed in finding energy resources (look how aggressive the Chinese oil companies are in acquiring foreign oil companies- Sinopec/CNOOC) and infrastructure building- these are capital investment that flow back to the economy. Can it be that China and other developing economies can hold up (because of infrastructure investment) while U.S. is slacking?

Bush's Stimulus and the Super Bowl

I'm going over 2 seemingly unrelated topics in this post but in the end I will discuss how they will be similar.

Bush's Stimulus

Disasterous plan that is only delaying the inevitable. Somehow this plan will save America from recession (if it already isn't in one) along with curing AIDS and finding alien lifeform in outer space. Let's get down to it ... all this plan does is to stick more debt onto the future. By issuing bonds to pay off the $150 billion stimulus package (could be more once the Democrats throw in all the additional programs to increase food stamps and bigger Medicaid budgets), you are really paying for immediate gratification and temporary salvation and getting in return a big blurry future. Of course America knows this really well as our nation is one of the poorest in terms of savings and having millions of consumers close to max on lines of credit. Way to go on that plan Bush / Paulson. And they even have the nerves to propose a bill to add personal finance classes will now be offered in a government program for the poor. Yeah, start those classes with a lesson on fiscal restraints won't you. It's going to be my generation and future generations that will shoulder all of this heavy debt. It's no wonder the young nowadays are averaging only 2-3 years on the job as we all know there is little job security left and what's left of Social Security will only go towards the baby boomers. Generation Y should be re-dubbed Generation Debt.

Another item that has been tugging at me is this notion of a recession. Why is that "r" word so heinous? All the meaning of a recession is 2 straight quarters of a decrease in the GDP. 2 quarters ......... only 6 freaking months !!!!!!!!!!! Where exactly is the shame in that? Everyone needs a bit of a down time to calm their nerves. One cannot fully appreciate the good unless there is bad. It's like wishing for sunny skies everyday and then seeing all the plants die due to lack of rain. This is exactly how fickle this country has become due to the "r" word. Now if it's the "d" word as in DEPRESSION, then I would be scared. Before then, don't tell me 6 months of downtime is bad. That is how bubbles are corrected and believe me, there is still a real estate bubble especially in NYC and LA.

And speaking of real estate, if the proposed bill to up the limits that Freddie Mac and Fannie Mae may accept on loans with limits to vary depending on the U.S. city, it would cripple a rational economy. All this bill would do is to tell the world that U.S. real estate speculation is okay and that speculators can continue to drive up the prices on housing. Yeah, that's right, let the regular Joe rent while I speculate and try to make a bundle knowing that I have a floor to fall back on. This is total BS. By allowing say the NYC market to have limits of $716K, which is more than 3x the national average, is to allow for a continued real estate bubble. At the end of the day, if Congress really wants the American dream to come true, then leave the limits as they stand and perhaps expand on housing mortgage programs like NY State's SONYMA. Why should there be such a high cap on housing which all but ensures that everyday consumers be priced out of a house they can call their own?

Alright, enough of this economic ranting, it's already making me depress. Now for some fun sport analytical stuf:


Super Bowl

There are going to be several things to look out for this Sunday's Super Bowl matchup between the Giants and the Patriots. Key among such matchup would be the line battle, namely the awesome offensive line of the Patriots, the real success to the Pats, against the amazing defensive front 7 for the Giants. The O-Line of the Pats really deserve the MVP this season and not Brady because any QB can throw behind a line that allows them like 2-3 minutes to throw. Watch any Patriots game and one would notice that Brady just stands in the pocket, calmly waiting for Moss to get deep before throwing the deep ball (or if he's well covered like the SD game, then chuck to Donte Stallworth/Jabar Gaffney. Trust me, any QB would do well standing behind the Pats O-Line. As for the Giants, who lead the NFL in sacks, there has rarely been a team so fearsome in their defensive front 7 where there are 4-5 legitimate pass rushers. It's going to be an amazing battle in the trenches and one that I'm going to be looking at deeply.

As for the keys to each of the team's success they are:

Patriots

If the O-Line can keep the rushers from touching Brady for at least 45 seconds, then the Giants are done. Their secondary is very suspect and trust me that Wes Welker/Stallworth (Moss will be covered well) will shred them. Also look for the Patriots to pound the ball early and then throw late in the game as the Giants will get frustrated with stopping Maroney. In the beginning of the season, Belicheat abandoned the run in favor of the pass to go against conventional wisdom (it worked!) and once everyone buys into the Pats being such a pass happy team, he immediately switches gears and turns Maroney loose. It also helps that Maroney is now free of injuries that was bugging him in the 1st half of the season. It was then no surprise that Maroney has been averaging well over 100 yds in the post season. Giants, be wary!

Defensively the Pats will try to blitz all day as they know they can befuddle and faze Eli with movement. The key reason why they were able to come back from 12 pts down in the last game of the season against the Giants was the fact that Belicheat finally decided to rush and not allow Eli all the time in the world. Once this occurs, Eli became the old Eli, which is just a younger version of Jeff George, and the Pats will have their undefeated season.

Giants

Blitz, blitz, and more blitz. The G-Men must unsettle Brady and not allow him to sit in the pockets all day. Stick Pierce on Welker, double team Moss, watch out for the run and the Giants may manage to survive.

Eli must be the Eli that he was in the playoff run thus far and not make any mistakes. THE GIANTS MUST TAKE RISK meaning no punting once they are in Patriot territory. There is no need to make conservatively. If they are in the Pats' 40 yd line and facing a 4th and long, GO FOR IT. Throw to Toomer who has been on a resurgence this season and is the most reliable Giants receiver. Against the biggest offensive force ever in NFL history, now is not the time to play timid. This is the final game in the biggest stage so be bold, be very very bold.

Of course this is all a big test to the G-Men which is why they are currently 12 pt underdogs. And expecting a conservative Coughlin to take risk in the big game is also going to be tall order.

Good luck Giants, I'll be rooting for you since I hate the Patriots (hate hate hate hate hate Belicheat and Brady).


Now as for how the stimulus plan and the Super Bowl fit, it's easy. With the $1200 families will get (minimum), they can easily afford to pay off the big flat screen HD televisions they purchased with those 12-24 month 0% interest financing store cards. I mean there is a reason why the tv makers such as Sony and Samsung are upping their sales estimates in this supposely downturn in the U.S. economy.

China ripes for future growth

In with the new (capitalism), and out with the old (communism).

After reading Jim Rogers' book on China, I couldn't agree more.

China in its current state, is a producing country. Because of its vast cheap labor and geographic location, China became an ideal location for all types of manufacturing activities. The rise in economic activities brought urbanization to the country. I can't help but think that China in its current state is much like the U.S. back in 1920s. The U.S. then was producing cars, oils, steel, and other commodities. And after WWII, the U.S. slowly became a consumption based economy as everyone moved into the big cities, standard of living rises. And that is exactly what is happening in China now.

Urbanization and economic prosperity will create the new middle class in China. China will then turn into a consumption base economy. As the standard of living rise in China (which will cause a rise in workers' compensation), even the Chinese companies would have to look elsewhere for cheap labor (southeast Asia- Vietnam, Cambodia, or Eastern European countries). This type of economic activities will continue to pass on as companies continue to seek cheap labor. Countries with political stability will follow the footsteps of China- just as how China followed the U.S.

This economics "pass-thru" from country to country is nothing new. There was the Dutch before the period of colonization. Then there was the British during the period of colonization. After the British, it was the U.S.- I can't help but think China would be the next stop. This is a cycle, a capitalism cycle if you will. As companies seek cheap labor and resources to produce, they will go to the countries with the best conditions (political stability). And once the investment pours into that country, the country would prosper. As the country prospers, the standard of living rises- which will cause an upward swing in wages and prices for resources. That country will no longer be competitive for manufacturing activities and it would then turn into a consumption based economy- the manufacturing activities would then move to its next target- benefiting that country the same way it did for the previous country.

Cheap cell phone plan: Sprint SERO

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For email add. use: savings@sprintemi.com
Plan : $30 + tax
500 daytime min + unlimited weekend weekend and night start at 7 PM
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This is the cheapest plan in the country. If you use any type of data plan or text messages, this is the plan for you.

I personally endorse this plan, however, I can not say the same about Sprint's stock.

No frills

Click to enlarge

The disastrous financial meltdown of the global market on Monday can appear to be quite scary. But whenever such panic or excess volatility exists, it can turn into some buying opportunities.

Using a simple method, we bought SPY (S&P 500 tracker ETF) when excess volatility is presented. This is a well known method call "dollar average down". And the result of the method was quite successful as it managed to have a 46% capital gain over span of 6-7 years- that's not including dividends!

Of course, hindsight is always 20/20. I wonder if we did this in 1987-88, would it work out ok?

$600 rebate! No thanks?

http://ap.google.com/article/ALeqM5h19_YeGzwzlmJhx42iIA7nJF0_UAD8UCF6J80

If you didn't make more than $75k last year, you can get a tax rebate for $600. You might be thinking: "600 bucks. w00t!". This $150 billion injection along with low interest rate would cause the good old greenback US Dollar to become even more worth less. Flood the economy with cash and hope people would spend it. The catch is that general prices of everything you buy would become more expensive. How much more expensive? Probably 4-5% more expensive - and that's a conservative estimate.

So if you spent $20k of your discretionary income last year (which is normal for a sub $75k income guy), since the prices of general goods will go up 4-5%. You are expected to spend an extra $800-1000 this year buying the same amount of goods this year! You think you are getting free $600, but you are in fact- in economics perspective, lost $200! The only way to stomp inflation is the raise rate - which should bring inflation back to a more normal level. On top of that, the money you leave in the bank will earn a higher interest (net-net, you are better off without the tax rebate and lower interest rate...unless you have $0 in your bank account).

Conclusion? The average middle-class worker is being F--KED up the A--. Yea, you know what I mean.

Charting health of the market/eocnomy

Charts are free, charts are quick, charts are easy. So why don't we use them?

To look at the health of the economy/market, simply look the health/strength of certain companies that would give you a big MACROECON picture:

The guy who lends you money to buy houses and other junks:


The guy who delivers the goods from the sellers to the buyers (B2B or B2C):
The guy who builds houses (if you have money, you probably want to own a house- it's The American Dream right?):
The guy who takes you from one place to another (vacation/business travelers):
The guy who helps companies raise money:
Overlay the chart of these companies with their competitors' and you can find who's doing better in that particular industry/sector. ie: When you overlay WaMu with other banks, you can see that WaMu is one of the worst performing bank in the industry- sometime this can means that investors are overly pessimistic on the company's outlook- value investors might pick these companies. Momentum traders would pay closer attention to the strongest of the pack- as they might be the first one to rally when the market does.

Give me back my FREE MARKET economy

Caption: **OUCH** What's that headache I'm getting? Adam Smith just gave me the biggest slap in the history of Capitalism.

I feel your pain Bernanke, but I don't understand you. Whatever happen to Laissez-Faire, free market economy and capitalism? Must we always try to intervene with the nature of the free market? The excess (of debt in general, subprime or not) was created by a low rate environment. So to fix it, shouldn't we do the opposite (raise rate)?

So you decided to lower the Fed fund rate just because the market was spooked for one day? Why can't you let the market work itself out? Isn't that the basic principle of the "free market" economy?

And why this doesn't feel like its the first time we have excess of capitalism injected in the economy and have it taken away by the central bank? See: Panic of 1907, Crash of 1929...etc

I hope you are right and I'm wrong, Mr. Chairman. Because if you are wrong, there will be a whole lot more bloodshed...

Thoughts on the Presidential Candidates

Although the previous post did an excellent job at analyzing all the presidential candidates and the potential economics ruckus each of them can cause. Let's step back as to what CAN a President do in term of bolstering the economy:

Government spending (expansionary fiscal policy)- The Federal Government's budget has to be approved by the budget committee in Congress every year. Although the President can propose a lot of different types of spending, the final say lies on Congress. Most often or not, the President has to compromise his/her plans with the Congress's (ie: Bill Clinton only got his increase in minimum wage plan for signing NAFTA in return) . Another way to boost spending without the Congress approval is for the President to move/invade country with our Army- defense spending would sure to shoot up. The downside to all of this is, of course, increase in budget deficit- which would required the government take out MORE debt- causing only one sure thing- INFLATION.

I'm not saying the President has no influence on the economy, but more often or not, the real power to "manipulate" the economy lies on the Federal Reserve. Even then, the economic/business cycle would often take on its course, ignoring the action(s) taken by the Fed or the President. The presidential candidates, of course, will promise a lot of CRAPS to their voters in order to get them voted to the office. That is why the candidate with the most campaigning money would have the biggest advantage (advertising 101?). I certainly think that the Presidential election is an over hyped event. We didn't care about the economy, abortion, death penalty, healthcare for the last 4 years. And all of the sudden, WHAM, the Presidential election is happening. All these issues get brought up. While most of us just live our lives with whatever problems throw at us ignoring those problems every 4 years. Hey, its not like the new President really has the power to get things done his/her way.

Voting for your favorite candidate isn't going to change much like I mentioned previously (he/she has limited power). On top of that, the electoral system furthers limit YOUR ability to vote in your favorite candidate- if you are in New York or California and you are a Republican that always vote Republican, your vote almost doesn't count since NY and Cali always vote Democrat. The real election battleground is the "swing" states such as FL and Ohio, they are the one who really have the power to decide who's our next president is (since the majority of the country is split up pretty evenly). So my suggestion is, move to one of these swing states, register yourself as that State's resident and vote there. Only then, YOU can make a difference.

I know I'm a skeptic. Look who we voted for the last eight years? Can you still put faith in this election system after what happened?

Don't even get me started with the rigged/broken voting machines/papers.

To end in a positive note, I've found the most useful tool for technicians and fundamentalists alike- AND ITS FREEEEEEEEE (can you complain?):

http://online.barrons.com/mktlab?mod=b_hpp_tools_screener

On a side note, I noticed that my blog posts have couple of grammatical errors. So to fix that problem, we are officially hiring an editor:

"Editor for a blog
Starting Salary: $0/hour, month, year
Interested candidates should post their resumes in the comment section"

$0 salary....ummm we used to call that...SLAVERY

2008 Candidates

Now is the time to discuss the MAJOR 2008 candidates for both the Democratic and Republican party and particularly from a business sense. I will also rate on how well their presence in the White House would mean for the economy and for Wall Street on a scale of 1-5 with 5 being the best thing that would've occurred since the invention of the internet.

REPUBLICANS

John McCain - 2.0
Very mixed, often flip flops on his economic policies considering how as a Senator in Arizona he is open to illegal immigrants and disfavors the Bush tax cuts. Now as a candidate, he is leaving the immigration issue to the states ("we must first secure our borders") and is on the side of the Bush cuts. Flip-floppers are not to be trusted.

Mitt Romney - 4.5
The best among the major GOP candidates as he was the founder of Bain Capital, an infamous PE-buyout firm. He is so Wall Street oriented, I'm not even sure if some of the existing CEOs on the Street can be even better, although Henry Paulson may beat him at that if he ever runs. In summary, if he was the U.S. president, the economy would be heavily tilted towards the upper middle and upper class, especially the 1%. Also, the temporary Bush tax cuts would be permanent so goodbye (or at the very least a major reduction) to the inheritance and perhaps dividend and capital gains tax.

Rudy Giuliani - 4.0
Second best Wall Street type presidential candidate. His liberal business policies speak for themselves while was the mayor of NYC.

Mike Huckabee - 3.0
Very mixed as I still do not have total understanding on where to stands on the economy except for the tax issue. He is the foremost candidate on presenting a "Fair Tax" and abolishing the IRS. Doing such will GREATLY BENEFIT THE RICH and of course be very adverse to the middle and working class.

DEMOCRATS

Hilliary Clinton - 3.5
Opposed heavy tax cuts and definitely opposed the Bush cuts. Of course this could be political ploys as she vies for the favor of her party as a NY Senator. In reality though, Hilliary is the 2nd most favored candidate (aside from Romney) on donations from Wall Street and in particular the private equity firms. I'm sure that any donation from PE firms would expect some return so look for Hiliary to be just as as ease with the economy as her husband Bill.

Barack Obama - 3.0
I'm most mixed on Obama not only because he opposed tax cuts as the Illinois Senator but also because he is open to extending the child tax credits and scale back of capital gains. Amongst Wall Street, he is a close 3rd behind Romney and Clinton and is actually looked upon more favorably by the private equity community especially from the venture capitalists. He is truly a mystery one and his ranking could jump to the high 4s so 2.8 is just my opinion at the time of this post.

John Edwards - N/A
Won't win, no chance, who cares .......


Now as for the best presidential candidate from the pool, Romney would be the best for the economy and big businesses. Small businesses would hurt especially if he extends and allows for more outsourcing of American services. Huckabee is the most dangerous candidate and I'm not even speaking from a business perspective as this ex-Baptist minister could split this country in half. His religious zealousness and fervent believer in a Christian nation will work to undermind the fabric of the U.S. culture and further blemish the tolerance of the other cultures/religions. If so, Civil War 2 would well develop and thus bye-bye to the U.S. economy/Wall Street. May this day never occur.

From a personal perspective, Barack Obama is the best. He is a moderate on the tax issues and favors the middle class more so than the upper. Obama pledges to increase technological R&D on clean energy and do away with unnecessary corporate tax cuts. At the same time, he wishes to push down the capital gain tax as to encourage investments and savings. Overall, his policies would do the most to bolster the middle and working class because lord knows that the federal deficit isn't getting smaller and that people's savings are growing any larger.

OBAMA 2008 !!!!!

Positive/Optimistic Market Commentary

I'm known for being gloom and doom for 2+ months now. My major portfolio position, which consists of 90% of my portfolio is SHORT (betting the stock will go DOWN) and I'm up 10%+ on that trade. Aside from temporarily oversold condition- which the market would bounce back up slightly on shorts covering. I really haven't read/see anything that's positive for the market. But I thought I found a piece of good news today. The headline read:

" Alcoa poised to open higher on 76% surge in quarterly profit"

Well, excellent. Alcoa, one of the biggest aluminum maker in the world reported a jump in profit! Alcoa is also a Dow 30 stock and its financial health is a good indication of the overall economic strength (if economy is expanding, we would use more metal to build shit - airplanes, buildings, cars...etc.). Reading deeper into the article, I've found the following:

"For the recent fourth quarter, Alcoa reported a profit of $632 million, or 75 cents a share, up from $359 million or 41 cents a share a year ago.

Total revenue fell to $7.39 billion from $7.84 billion due to lower aluminum prices and the exclusion of its soft alloy extrusion segment that is now part of a joint venture.

Excluding a favorable restructuring adjustment and a tax benefit stemming from the business sales, earnings would have come in at 36 cents a share."

So both revenue and earnings FELL from last year. However, because Alcoa has beat analysts' earnings expectation of 33 cents a share, the stock traded higher pre-open.

However, the overall picture Alcoa painted is NOT a good one. Well, I guess I would have to stay gloom and doom for the time being.

** As for the picture, it is the first pic that came out of Google image search, keyword "positive"

Predictions for 2008 and onward

I'm not in the prediction business. But it is certainly fun.

Here are my predictions for 2008 and onward:

1. Economy will deteriorate further. We will actually hit recession couple with 4%+ inflation. The Feds will start raising rates. Smaller banks that don't have access to capital will go bankrupt or getting roll up into a bigger regional/national bank. The Banking sector will consolidate. Congress might lift the 10% saving deposit cap any bank can hold. Bank of America, JPM, Citigroup, along with 4-5 other bigger regional banks will be left of this mess.

2. Obama, or Clinton might win the election, but it doesn't matter. A colored man, or a woman- this nation isn't ready for either- they would be unlikely to win in the first place- even if they win, I'm sure assassination attempts will follow. The safe bet? Mike Huckabee, he sits well with all the "red" states. The nation continues to suffer from the hangover from recession/stagflation. Any rescue plans by the executive branch of the government will fail- because the Central Bank is the one that's controlling inflation and we can't really stop an economic cycle.

3. Jeb Bush will run for president 1-2 terms from now (that's 4-8 years). And he will win. And we will go into war with either Iran (oil), or Venezuela (oil). Oil will reach $200+. Stock market, which suffered for most of last 4 years (2008-2012) will pick up again as oil companies and defense contractors prosper- similar to what happened in 2004-2008.

4. North American Union (NAU) will be form. This will create a almost border-less nation (combination of Mexico, U.S. and Canada). All three nations will use one currency- the Amero. Which is similar to what already happened in Europe. (www.spp.gov)

5. Ohh btw, I didn't really make these predictions. George Orwell already did, he wrote a book titled 1984. If you read the book, you would know how close we are to the society that George Orwell predicted us to be.

http://en.wikipedia.org/wiki/Nineteen_Eighty-Four

Quote from the book:
"WAR IS PEACE
FREEDOM IS SLAVERY
IGNORANCE IS STRENGTH"

Sound familiar?

The biggest scam in the history of mankind....(joke)