In June 2006, at the annual Bilderberg conference in Ottawa, Canada, Timothy Geithner, president of the Federal Reserve Bank of New York, predicted rising interest rates would result in many American families that obtained adjustable rate mortgages would lose their homes.
Bilderberg, the Trilateral Commission, and the Council of Foreign Relations is the brainchild of David Rockefeller.
These comments by Geithner prompted one unidentified Bilderberg attendee to say, "“stupid Americans deserve their fate.”
Almost two years later, the predictions Timothy Geithner have come true.
The current credit crisis, based on Geithner 2006 comments, obviously came as no surprise to the Federal Reserve. If the President of the Federal Reserve Bank of New York knew beforehand what was about to occur, then so did many others.
Before becoming the President of the Federal Reserve Bank of New York, Geithner worked under former Treasury Secretary's Robert Rubin and Lawrence Summers.
Surely if Geithner knew that US economy was going to take a turn for the worst, you have got to believe that Paulsen, Bernanke, and many others knew as well.
The annual Bilderberg meetings have enjoyed a virtual media blackout here in the U.S., but in other countries it's a different story;
My point here is a simple one. The power brokers testifying before congress yesterday (Bernanke and Paulson), probably knew months ago what the US economy would be facing today. They can put forth a face of concern and surprise, but you can't tell me they did not expect the inevitable.
As I watch this group of powerbrokers, I am thinking, if they knew an economic crisis was about to begin, then surely they know when it will end. This is why I watch insider trading so closely.
To date, net insider purchases of financial stocks have outpaced sellers for the first time in many years. Even stock vultures like Warren Buffett and Wilbur Ross are warming up to the financials.
A recent filing showed that Warren Buffett added to his massive holdings in Wells Fargo (WFC) in the quarter ending Dec. 31, 2007.
Here is a small list of bank stocks that have been bought by insiders;
CitiGroup (C)
Wachovia (WB)
Huntington Bank (HBAN)
Western Alliance Bank (WAL)
First Horizon National (FHN)
Regions Financial (RF)
Popular Inc (BPOP)
Market Notes:
Today is option expiration which combined with a three-day weekend will create some increased volatility.
Yesterday, Fed Chairman Ben Bernanke spoke to the Senate banking committee and said "the economic outlook had deteriorated and the Fed is prepared to lower interest rates further as the economy continues to deteriorate."
Since I believe the US economy is already in recession, by time the official word is handed down, an economic recovery will be underway.
Bernanke's rate cuts may not stop a recession from occurring, but the rate cuts will go a long way toward shoring up the balance sheets of many banks, and will reduce the severity of a recession.
The Empire State Manufacturing Survey showed that conditions deteriorated this month. Dow Jones News reported the reading fell nearly 21 points to negative 11.7. This is the first negative reading since May 2005. Analysts had expected a decline of 6.5 percent.
The Labor Department said that U.S. import prices rose 1.7 percent in January, caused by a jump oil prices. In December, prices slipped 0.2 percent.
The University of Michigan's consumer sentiment index fell to 69.6 from 78.4 in January. This is the lowest since February 1992. As a side note, consumer spending accounts for more than two-thirds of GDP activity.
Crude is trading up this morning supported by strong Asian demand. The March contract is trading up 36 cents to $95.82/bbl. China's January crude oil imports rose 1.8 percent over a year earlier, and 16.7 percent year-on-year.
OPEC, in its monthly oil market report, projected world oil demand would increase by 1.23 million bpd, down 70,000 bpd from its January forecast.
European markets were down overnight, but the Hang Seng market rallied.
Quote of the Day:
Calling an Illegal alien an "undocumented immigrant" is like calling a drug dealer an "unlicensed pharmacist" "Indecision may or may not be my problem." - Jimmy Buffett
