http://www.kitco.com/ind/willie/sep112008.html

US BANKS READY FOR NEXT SHOCK

The end of the third quarter is coming, less than three weeks away. In Q2 the investment community was told that first quarter bank losses were the peak. Early in Q3, the investment community was told that again, bank losses had peaked, the worst behind us, the solutions have been forged. What a continuing crock! As we come toward the end of Q3, losses previewed by JPMorgan and Lehman Brothers will serve as opening salvos. Much worse news comes. Over a month ago, my chart analysis suggested the BKX bank stock pattern might soon reveal a pennant pause pattern as the quarterly end approached. We are here. The triangle pennant is forming, although it is a clear one. While all eyes are on Lehman, the big failure is likely to be Merrill Lynch. Both firms have failed to find idiots in SKorea to bail them out. The discovery phase was way too ugly, and they were too smart. Next the banksters from New York will turn to severe accounting distortions, sleight of hand, and other devious deceptions. The Lehman quarterly report was the biggest disaster imaginable, even though it was loaded with garbage methodology laced with hokus pokus. The last resort is liquidation, the dread by Wall Street banksters, since one failure could easily result in another rapidly. A liquidation fire sale of Lehman assets lies directly ahead, a huge threat to the congame. The Wall Street firms, since the Bear Stearns kill job, are all aligned in similar fashion, long US$, long USTBonds, short gold, short silver. A liquidation would force a big move in the reverse direction.