The Next Wall Street Meltdown

It never ceases to amaze me how far Wall Street pundits will go to pull the wool over your eyes.

Right now, for example, they’re hailing Fed Chairman Bernanke as their “financial savior.”

They’re saying the “credit crisis is over.”

And they’re doing everything possible to get you to buy the very same investments they themselves want to sell:

• Stocks in big brokers vulnerable to the same kind of collapse that struck Bear Stearns …

• Bank stocks like Citigroup and Bank of America on the verge of another nosedive, and even …

• Mortgage company stocks like Countrywide that have been torn to shreds.

Not coincidentally, this is exactly what they said last July when Bernanke cut rates to supposedly “end” the subprime crisis.

It’s also precisely what they said a few months later when Bernanke pumped billions of dollars into the economy to supposedly “stop” the crisis from infecting other credit markets.

And now they’re at it again!

That’s surprising enough. But what’s even more surprising is the fact that some investors are falling for it. Meanwhile …

Even Alan Greenspan says we are facing the worst economic crisis since World War II.

Even Treasury Secretary Paulson admits the U.S. economy is sinking rapidly.

And when he tore up a half-century of Fed rules in order to bail out Bear Stearns last week, even Fed Chairman Bernanke himself implicitly admitted that Wall Street is on the verge of a financial meltdown.

Four Inescapable
Consequences That
You Cannot Ignore …

Consequence #1. The U.S. economy is in deep trouble. Just this morning, it was announced that home prices have suffered their biggest drop in recorded history.

Also this morning, the Conference Board shocked economists with the news that its consumer confidence index plunged from 76.4 to 64.5, the lowest reading in five years.

These are not trivial events. They have major repercussions, and those repercussions are just beginning to make their appearance.

Consequence #2. Bear Stearns was not the last major Wall Street firm to collapse. Others have similar — or greater — exposure to derivatives. And they have yet to feel the full brunt of the economic decline now beginning.

Consequence #3. The Fed will do everything in its power to prevent the next Wall Street meltdown. That means more Herculean rescue efforts, more massive injections of funny money into the banking system, and more rate cuts.

Consequence #4. The dollar will continue to fall. International investors are not dumb. They see the U.S. economy sinking into a recession. And they see the Fed creating an overabundance of unbacked paper money. Either is enough to prompt more massive selling of U.S. dollars.

Consequence #5. You can turn lemons into lemonade and use this situation to multiply your money at an unusually rapid pace. That’s what our entire team is dedicated to helping you do. And, since you are a loyal subscriber to Weiss Research’s services, we will give you specific instructions at each step of the way.

No, markets will not move in a straight line. There are bound to be sharp counter-trend gyrations.

But never let the Wall Street pundits dissuade you from your strategies aimed at potentially massive profits in this very unique market environment.

Good luck and God bless!

Martin

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Money and Markets (MaM) is published by Weiss Research, Inc. and written by Martin D. Weiss along with Sean Brodrick, Larry Edelson, Michael Larson, Nilus Mattive, Tony Sagami, and Jack Crooks. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in MaM, nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in MaM are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical in as much as we do not track the actual prices investors pay or receive. Regular contributors and staff include John Burke, Amber Dakar, Adam Shafer, Andrea Baumwald, Kristen Adams, Maryellen Murphy, Red Morgan, Jennifer Newman-Amos, Julie Trudeau, and Dinesh Kalera.

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