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GOLDMAN SACHS PAINTS THE PICTURe
Some clear indications are coming to light. The Wall Street firms are both banding together and at odds with each other. First a preface. The Bear Stearns kill job engineered by JPMorgan has numerous stories behind the public face story told. Some of my views have been shared. Here is more. Bear Stearns did not participate in the LongTerm Capital Mgmt emergency bailout rescue in 1998. They were punished ten years later. Furthermore, when the USFed opened the Bear Stearns books in March, they found a giant position that was short the USDollar. They found a giant position that was betting on a higher gold price. So Bear Stearns was killed, with the liquidation of their gold position responsible for a huge gold price drop, aided by the cover of their US$ position. See the mid-March gold price and US$ action. The Wall Street firms took notice of the message. If they bet against the US$ and bet in favor of gold, they would not have any further access to the USFed discount window or lending facilities. So now the Wall Street firms might be helping each other to stand up. If one fails, they all might fail and go bust. That is why the Lehman Brothers story and the Merrill Lynch story are so important. They are being propped up. Enter Citigroup. My guess is that a huge amount of mortgage bonds are to be sold soon by Citigroup, and maybe another big bank, in the initial stage of a bond liquidation scheme and exercise. Citigroup is busted, and will portray their bankruptcy as a restructuring procedure, complete with liquidation. We will have to wait to see what remains.

Goldman Sachs on Thursday downgraded Citigroup with a short stock recommendation. Why would they do that? They put Citi on their ‘Americas Conviction Sell’ list, which just has to evoke laughter for its name. They expect another gigantic bond loss to be admitted by Citi, more cash to be raised as they sell capital and undermine stock equity value, and even more dividend cuts. Up to May, the total amount of cash they raised by selling off capital to foreign entities was a robust $42 billion, thus undermining US control of the biggest US bank. One can only speculate. Perhaps GSax finally has a big short position in place against Citi, and wants the public to climb aboard the selling parade. Perhaps GSax has inside word of the big Citigroup bond liquidation fire sale upcoming. People need to remember that GSax is not a charitable organization. They make money by legitimate trades, but also by lying, cheating, and sometimes stealing, all legally. Just to prove that GSax remains a corrupt information source, they downgraded the entire brokerage sector from ‘Attractive’ to ‘Neutral’ in laughable style. The US brokerage industry is fast approaching extinction. Check their bond and stock issuance lately. Their ugly position matches the US banks, which on average are insolvent. Sanford Bernstein analyst Brad Hintz forecasted a $3.5 billion Q2 writedown for Merrill Lynch, matched by Bank of America analyst Michael Hecht. The Goldman Sachs analyst Richard Ramsden said just a week ago that the US banks must produce $65 billion more capital to cope with the destruction to their balance sheets before the peak of the crisis sometime in 2009. So have we seen the worst yet? No way! Once again, they are not raising capital. They are raising cash. They are selling capital in the form of stock equity and long-term debt. As they do so, control of the banks goes into foreign hands more so.

[color="Red"]What does this mean? Gold was poised to run away, the fed stepped in, but it will only delay. Look for $2000 gold this Christmas