The Next Banks to Fail

I just received this list from Weiss Research and would like to pass it on. This is their list of major banks most likely to fail. They consider a "C" rating to be a "yellow light" and a "D" rating to be an indication that you may seriously want to consider moving your money somewhere else. They also say to be on the alert for the "C" rated banks to be downgraded to "D".

Depression Era Clothing Gives a Heads Up

There is more and more talk about the Great Depression, and still more denial that its 21st century version is fast approaching. The fashion trends for the fall are expressing what our collective unconscious "knows." The quote below from the New York Post heralds this new trend. Expect fashions to get much more plain and depression-era like in the next few years, as this year's is a "lighter" version of the 1930's fashions.

"The duds say it all-- and it's depressing. Taking a cue from the grim economy, this fall's fashions at Banana Republic, Gap and H&M are featuring a distinctly Depression-era trend of cloche hats, pencil skirts, conductor caps and baggy, vintage-style dresses. One of the most popular styles appears to hark back to the impish newsboy getup of the 1930s baggy trousers, caps, pinstriped vests, oxford lace-up shoes and utilitarian handbags."
-- The New York Post, July 28, 2008

August 2008 – A New Global Reality

August looks extremely interesting. I found it unusually puzzling to put the MoodCompass together for next month. Something big was clearly showing up, but I couldn't figure out exactly what it could be. It must be something outside of the current context, thus the title - A New Global Reality.

Here's this month's MoodCompass excerpt:

This month, something fundamental about our world changes. It may be the way global society conducts business, or perhaps a major revision to the geopolitical situation. Although the extreme scale is clear from the observed and projected social mood cycles, it is difficult to be more specific. While this focal period is only a couple of weeks away, it occurs in a context that is not yet apparent. It takes place in a different reality than the current one; the only one available to interpret the social mood configurations of the coming month.

Near August 8-11 is a global scale “safety seeking” configuration. It resembles the configuration in U.S. social mood at the time of the buyout of the investment bank Bear Sterns in March and the expressed intended bailout of Fannie Mae / Freddie Mac (institutions integral to the U.S. mortgage system) in July. However, what we are concerned with in August is more extreme in scale, and global in scope.

At this same time in U.S. society, we find the “survival focused” configuration. A mini version of this occurred near the end of June. This configuration is marked by a heightened aggressiveness in asserting survival interests or instinctual needs, and a lowered importance or general disregard for the factors necessary to maintain the “economic machine” our society depends on. If prolonged or extreme enough, this configuration can be accompanied by outbursts of civil unrest or disobedience. A public panic crisis event such as we have been urging preparation for would likely occur at or near this type of configuration (see the presentation available at: http://anewstory.org/documents/public_panic_crisis.ppt).

In summary, global society is about to enter a new reality. It should be quite interesting. Grab some popcorn and watch the news. Next month, we should all have a much clearer idea of what this global shakeup was all about.
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http://anewstory.org/markets/August_MoodCompass.pdf
(current issue viewable by subscription only; reprinted with permission of A New Story Foundation)

For the lastest updates on social mood see http://marketmood.net.

July 2008 - A Wild Ride!

Here's this month's MoodCompass excerpt:

June, we said, was the gateway to at least six months of increasing global chaos and disruption. Life in the U.S. and abroad would be outside of what we have come to know as “normal” in the second half of 2008. Well, we’re here now. After looking closely at the month of July, we are sorry to say that it still looks that way.

In July we should expect a global stock market sell-off, much worse than anything we saw in the month of June. Crude should continue to stay supported, even though global economies are starting to buckle under the weight of the high prices. With all of this turbulence one would expect high volatility in the currency markets. However, oddly enough, all indications are that the U.S. Dollar is unusually stable. It is unclear whether markets are simply non-directional for the entire month or whether some new type of external controls are added to currency markets to stabilize them in very volatile times. Behind all of this global distress appears to be extreme geopolitical tensions. The economic distress this month alone (and it gets worse as the year goes on), could be enough to cause surges in the unemployment lines. We again urge people to prepare for the possibility of a public panic event in the next few months. A presentation can be downloaded at: http://anewstory.org/documents/public_panic_crisis.ppt.

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For the lastest updates on social mood see http://marketmood.net.

June 2008 - Gateway to Chaos

Working for A New Story Foundation is interesting and exciting, but sometimes the work we do in looking at social trends and cycles can be a bit scary. What we see in our forecast for June and through the end of this year, I must say, makes me want to gather my family together and hunker down. Unfortunately, as with many Americans, family components are scattered across the country. I would like to share this excerpt from our latest (June) issue of MoodCompass:

"We recently prepared a long range forecast for the second half of this year for internal planning purposes. To sum it up, the entire second half of the year looks increasingly serious, chaotic, violent, and disruptive. The situations that individuals will be facing in this country and on the planet for at least the next six months should be extremely challenging. While we can’t know the specific events that will take place, what we do know is that the situations that present themselves will be perceived over and over again as far outside what “normal” is supposed to be. The second half of 2008 is a different world, in a sense, from the first half.

What that means is that June is the turning point, a one way door into a very different global context than that with which we have become familiar. Through whatever choices, decisions, and actions are made this month, the world will be set on a course that will bring increasing chaos, disruption, and distress for at least the remainder of the year. Although this is not the end of the world, what is likely, in the coming six months, is runaway inflation in certain sectors concurrent with extremely depressed prices in others; outbreaks of civil unrest in some locations due to disagreements with government policies or to general distress and frustration; outbreaks of public panic in some areas due to perceived or actual disruption of fuel or food (for more information on public panic events: http://anewstory.org/documents/public_panic_crisis.ppt).

The focal point for June itself is the third week of the month. There is a high likelihood of a geopolitical crisis and excessive losses in the stock market beginning early in the week."

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For the lastest updates on social mood see http://marketmood.net/.

Change is in the Air – and the Tone is Quite Somber

One of the topics in the news lately is concern over food shortages. While there is no real shortage, a public panic with hoarding behavior and outbreaks of violence can become serious. For more information on public panic and how to prepare for the possibility of this type of event, please see http://anewstory.org/documents/public_panic_crisis.ppt.

The following excerpt is from the May issue of A New Story's MoodCompass:

Change is in the Air – and the Tone is Quite Somber

As there has been much talk by various analysts in the media about the worst of the credit crisis being over, one might hope that this indicates a transition to a more upbeat mood. Our analysis of the social mood factors for the coming month, however, shows the global sentiment to have an extremely serious tone. Whether the fears that drive the global situation are based on real or imaginary concerns, by the end of the month there is a likely shared conclusion—that something is going seriously wrong.

For the lastest updates on social mood see http://marketmood.net/.

In Like a Lion - March 2008

If you watch the news or follow the financial markets, March may get a bit scary. If not, you may not notice the fallout from March for a few months. Because the mood configuration for March signals a likely severe stock market decline I strongly encourage you to consider moving funds in IRAs or 401(K)s from growth funds to guaranteed income funds. However, even this is not a sure thing in the current environment. The best investment is cash or U.S. Treasury bonds, regardless of how little interest that pays. The worst investment is almost anything else.

As far as later fallout, the Fed chairman Bernanke testified today that the economy is in serious trouble, that unemployment is likely to rise, and that some banks are likely to fail at some point. Some of this is likely to happen sooner than later. It is not hard to imagine people wondering whether the Great Depression II is upon us by the end of next month. There is little to do financially to prepare at this point. The best thing to do is to invest in mutually supportive relationships. When times are tough, independence is not an asset, it is a liability. Spirituality may be a source of strength for those who have such an understanding. Cherish each happy moment. Our basic values will be challenged in the next few years. We may have to reassess what the most important things in life really are.

The following excerpts are from A New Story's March MoodCompass

Geopolitical Tensions Escalate -- US Stock Market Crashes

The defining shift in mood for February was seen in the extreme change in the way that United States society views the rest of the world. Previously, the world was seen as a relatively stable place to transact business. Although there had been concerns about a slowdown in the U.S. economy, there was an assumption that growth in the rest of the world would well be able to compensate. The shift in February from high Directing to high Manic saw the view of the non-U.S. world change from a growth focus to one of uncertainty, chaos, and fragmentation. Geopolitical uncertainty propelled crude oil to new records in spite of the undue stress such high prices are placing on already fragile economies. In March, this theme of an unsafe world is continued. In such an uncertain geopolitical context, what else can global investors do, but make a massive move to "take money off the table?" Thus the global sell-off ensues. U.S. markets may lose in excess of 15% at the lowest points this month.

March News Highlights

The following is based on a combination of recent events, global trends, and the March oscillations of social mood

Following on increasing geopolitical crises from last month, tensions in Israel reach a high pitch, with violence in Gaza and a new war looming with Hezbollah in Lebanon. Peace negotiations brokered by the US forestall major Israeli retaliation, but tensions remain high all month, punctuated with increasing outbreaks of violence. Both Hamas and Hezbollah are increasingly vocal throughout the month, taunting and threatening Israel. Israeli forces and embassies remain on high alert. Syria may take up sides this round, and Iran reiterates its firm backing of Syria should Israel attack. Israel's PM Ehud Olmert continues to assert that Iran is conducting secret efforts to develop a nuclear warhead, in increasingly hostile tones.

The situation in the Darfur region of Sudan will have become critical early in March. The United Nations gives repeated warnings of a full-scale war spanning the entire region, encompassing neighboring Somalia, Eritrea, and Chad, perhaps spreading into DRC and/or the northern part of Kenya. Widespread starvation will reach critical levels, as food aid deliveries are intercepted before they can reach distribution points. Fragile Kenyan peace negotiations may break down as a result.

The United States will continue to have difficulty in reviving the waning interest of countries assisting its efforts in Afghanistan, even as Taliban resurgence advances on positions long secured by coalition forces. Continued post-election instability in neighboring Pakistan will further stretch the American forces, and may lead to a crisis near month's end. India may make a statement of caution toward the Musharraf government if the instability is not quelled.
Economic conditions worldwide deteriorate through March, resulting in a rapid decline in US stock prices across all sectors (estimated losses 15-20%). There may be scattered news and rumors of renegotiating global currencies agreements, resulting in several sharp drops in the USD. Continued high prices in crude oil will be driven by Middle East instability, tempered by recession indicators in the US, and coupled with record-high reserve levels. OPEC negotiations may be strained as various elements renew their push for a general acceptance of a "basket of currencies," heavily weighted with Euros and Yuan.

http://anewstory.org/markets/March_MoodCompass.pdf
(subscription required to view; reprinted with permission)