Just like Friday morning, gold blasted out of the starting gate as soon as Globex trading began in the Far East on Monday morning. And just like Friday morning, this price spike ran into a wall of selling that went on for about four hours. Then there was a respite until 3:00 a.m. New York time when another wave of selling commenced that lasted right through London…and until the Comex open. Then the dealers (mostly JPMorgan, I would think) pulled their bids for the third and last time…and the price of gold cratered another $10…for the third and last time. Silver really got it in the neck on the Comex open. There was nothing free market about this…this was the Gold Cartel…pure and simple. The US$ didn’t even start to rise until after all the damage was done, so you can’t blame it on that.

It was encouraging to see both

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Dow Chemical, Kuwait deal collapses… Nasdaq dragged by large-cap tech companies… Oil rises above $38 per barrel on Middle East tensions…  Dow off 1.6 pct, S&P off 1.6 pct, Nasdaq off 2.3 pct

Wall Street stumbled on Monday after a joint venture between Kuwait and Dow Chemical fell through, threatening one of the larger merger deals of the year and adding to fears about a faltering global economy.

Dow shares tumbled to their lowest since 1991 after Kuwait decided to end a $17.4 billion petrochemical joint venture amid slumping petrochemical sales and the global financial crisis.

The news ignited worries that the largest U.S. chemical company would not be able to buy rival Rohm & Haas , which Dow agreed to acquire for about $15.3 billion in July. Rohm & Haas (ROH) shares fell as much as 25 percent.

These declines were also exacerbated

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As we near the end of the year, and the end of eight years of Bush economic policy, I think it's useful to look back. The White House has recently tangled with the NYT regarding what got us into the current economic crisis [0] (see also [1]). This comes on the heels of the Paulson argument that he would not have done anything different, had he known the full extent of the looming crisis. This leads me to wonder how we should view the Bush Administration's stewardship of the economy.

Candidate Explanations

In particular, when one examines the mixture of policies and events that have led us to the brink of possibly the deepest and most persistent downturn since the Great Depression, one can see several suspects listed.

Fannie and Freddie Community Reinvestment Act CDO's and CDS's Global saving glut Monetary policy Deregulation Criminal activity and regulatory disarmament Tax cuts and fiscal profligacy Tax policy

Red Herrings

I've already dealt with

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As 2008 comes to a close, let’s take a look back at the predictions this pundit made a year ago. Let’s start out with some of my correct calls:

1- At some point during the year the price of crude oil will trade below $75 a barrel. This will be great for the consumer as they save a lot of money at the pump, and will cause a crashing of many alternative energy stocks, especially the Solar plays like First Solar(FSLR).

Nailed that one!

4- Late in the summer the current Israeli government headed by PM Ehud Olmert will fall, and new elections will be called.

Many will say that was a no-brainer.

6- The earth will cool, there will be no global warming.

Just look outside your window.

Now for some of the less accurate predictions:

2- There will be no recession in the US economy, despite the best

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Surprisingly enough, considering Blagojevich’s latest scandal, the political environment surrounding Obama as he prepares to enter the White House is rather calm. Leaders in the Republican party cite a “Honeymoon Phase” in which everyone would like to see Barack Obama succeed in his job has president. The seriousness of the country’s economic state seems to be kicking in, as shown in this New York Times article. Let’s hope that after a while this won’t merely be a honeymoon, but a continued spirit of responsible cooperation.

HIDDEN VALUE

Dear Value Seeker,

Christmas is almost upon us.

Business activity is winding down. In some cases, it’s stopping altogether.

According to the Financial Times, some of the biggest tech names in Silicon Valley will be shutting up shop over the holidays to cut costs.

Meanwhile, the bosses at Toyota have signaled that the automaker could post its first yearly operating loss.

Contrarian blogger Mish Shedlock warns that corporate losses may be the least of our worries. That’s because a new, highly-contagious fiscal virus is taking hold of the world economy.

“The primary symptom of FIV [Fiscal Insanity Virus] is irrational, often delusional fear of deflation. The virus has an uncanny ability to seek victims in positions of authority. Those afflicted with the virus start taking (or promoting) fiscally reckless actions guaranteed to damage the host country.”

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General Motors Corp. (GM) and Chrysler LLC will receive $13.4 billion in loans from the federal government as part of an emergency measure to keep the companies operating at least until the spring.

“These are not ordinary circumstances, in the midst of a financial crisis and a recession allowing the U.S. auto industry to collapse is not a responsible action,” said President Bush, who made the final decision to move ahead with the bailout after Senate Republicans last week balked at passing a House-approved rescue of the auto companies.

“Chapter 11 is unlikely to work for the American automakers at this time,” he added.

The $13.4 billion will be taken from the Troubled Asset Relief Program (TARP). GM and Chrysler will then get an additional $4 billion in February.

However, both companies are being forced to accept a number of conditions that include limiting executive

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Mentioned in this post are General Motors Corporation (GM), PNC (PNC) and National City (NCC).The Treasury Secretary stated today that as a result of the decision to provide $17.4 billion to General Motors Corporation (GM) and Chrysler LLC, the Treasury has effectively allocated the first $350 billion from the TARP funds.It is not very clear whether the current administration will ask Congress to release the remaining half of the TARP funds. While Secretary Paulson stated that he will discuss that process with the congressional leadership and the President-elect's transition team in the near future, there were reports from the White House that it would not necessarily ask Congress to release the second half of the $700 billion, implying that they would leave the decision to the incoming administration.  Even if the current administration makes a request to the Congress ...

Chrysler LLC stunned its employees and dealers early yesterday (Thursday), announcing it was suspending all manufacturing for at least a month, and tightening wholesale credit terms to dealers. By the end of the day, Chrysler was joined by its two other Big Three brethren – General Motors Corp. (GM) and Ford Motor Co. (F). – which also shuttered factories.

All told, the Big Three will idle about 59 factories over the next month as each of the three American carmakers struggle to wait on a rescue that the White House says is still under study. The announcement comes in the wake of a stubborn credit crisis and debate over the government bailout for the Big Three automakers.

The Chrysler announcement – because it came first – was the stunner.

“This is definitely out of the ordinary,” Edmunds.com

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We at Election Stocks not only keep track of stocks and sectors that are sensitive to Obama’s moves in the White House, we try and predict when these moves are going to happen. As for Obama’s plans for reforming healthcare, news from The Hill is that Congress may attempt to delay this action until 2010. Pete Stark of the Ways and Means subcommittee on healthcare is a respected expert in the field; he feels as though there are more pressing economic issues to address before Congress can turn to Obama’s priorities. Obama and the Senate would both rather do this sooner than later - perhaps their influence will hasten action from the lower house of the legislature. But until we see indication of that, it looks as though healthcare will not be addressed in the first hundred days.