Ponzi Finance, Junque Bonds, and Buicks

• S&P Knocks GM Debt Deeper into Junk, Shawn Langlois, Marketwatch

• The Next Retirement Time Bomb, Milt Freudenheim & Mary Williams Walsh, NY Times

• ARMs start hurting as rates rise, Pamela Yip, Dallas Morning News

• US Money Printing to Continue!, Marc Faber, GloomBoomDoom.com [12-12-05]

• Market Commentary Archives Webpage, Mark Faber et al, GloomBoomDoom.com

• Real Estate Pyramids, Mish's Global Economic Trend Analysis, Michael Shedlock's Blog

• College Debts and Broken Dreams, Business Week and MSN Money

Ole Bear, Editor
Commentary

GM makes Buicks and plays around with asset backed securities as their bailiwick. Getting dropped from B to BB status isn't something that the car maker can put on a new Buick, now is it? This leads us to wonder about the quality of GM's ABS portfolio as well. Looks like Duluth, MN has a problem with their employees' and retirees' health plans -- it cannot afford it. Why would anyone want an ARM [adjustable rate mortgage] is beyond my comprehension. In the Faber article, we find a lot of good stuff, including the DOW/Gold relationship chart. Mish has some interesting commentary about a couple who have no real jobs other than kiting real estate and real estate loans as their means of existence. Works well as long as real estate continues to the Moon, Alice! Young folks including folks in their 30 and 40-somethings are into this instant gratification, I am not afraid of debt mentality. As long as the FED can helicopter money out of thin air, the Ponzi games will continue.

Looks like gold is getting hammered today, off about $6 FRNs as we are writing bouncing around $522 and change. We have been looking for a big hammer on the recent price rise to knock the metals back down before Christmas -- what we call a Gold Cartel stocking stuffer. Sharelynx has a couple of interesting free charts related to housing, and these fit in nicely with the other links for today, especially the Faber essay.

See: Link 1

See: Link 2

And you thought all the pyramids were in Egypt?

Happy Holidays!

Ole Bear, Editor
Columbia, Missouri

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