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Ref: 09-036A of 25-Dec-2009 (Merry Christmas Day) now revised and updated on 1 Jan, 2010

Steven Spielberg is considered one of the most gifted and visionary director in the world. He couldnot only visualize but also gave concrete shapes to the characters that became life size symbolslater. Unfortunately, he never handled a political, financial or economic theme for simple reason

that he could not visualize the complexities of current financial crisis engulfing his own nation United States of America.

President Obama, one of the rarest breed ofgifted speakers, has turned into a con man. Heis a successful diversionist not revisionistlawyer, Senator or President but to borrowthe phrase from Jim Carreys dictionary - Liarand Liar.

I thought the uneducated Indians in thevillages or woo doo tribes in sub-terrain

landscape in African continent were the onlybunch of superstitious religious zealots. Neverbefore I thought that the educated mass ofAmericans could rival them in the practice ofsuperstitions. If the Hindus, Muslims andAfricans could follow their religious leadersblindly, the Americans too follow theirpolitical leaders with same zest and vigor.They also believe blindly or superstitiouslythat their King or President could do no

wrong. They do not realize that USA is following a pattern of USSR and its days are now numbered

A good leader should be a good orator, but a good orator need not be a good leader. Sen. Obama, adistinguished orator, won his presidency not because of his strength but due to the weakness ofGOP or Republican Party badly bruised by erstwhile President George W Bush. He could use hisoratory skills to whip up the anti-GOP sentiment to win the democratic nomination defeating theHillary Clinton and then defeating John McCain to win the Presidency. In short, he won due to thedefault of the other.

Yes, he inherited the bad legacy of burning nation from the President Bush. Nothing new. Almostevery President inherits some or the other bad legacy from predecessor. Even President Bush

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inherited the regime of artificial low interest rate from President Clinton, Rupert Rubin (thenTreasury Secretary) and Alan Greenspan (Fed Chairman for 18 years by now) that sow the seedsof the massive derivative contagion.

President Obama forgot that he was appointed President for 4 years up to January 2013 latest.Having seen his inadequacy to address the immediate financial problems, he set upon himself aconvenient mode to divert the attention of the American people by any means. He adopted thefollowing diversionary tactics successfully:

1. He started showing moon to the American people. Having seen the oil prices zooming to $145 per gallon, he found convenient tool to exhort the American car manufacturers to gogreen and invest into green technology that would reduce oil consumption, pollution andcarbon emission.

a. Such cars to be commissioned by 2014 to 2016 when he will no longer be around.b. What is the point of talking such non-sense when the immediate need was to set the

financial house in order, stop the mortgage hemorrhaging, foreclosures and createthe jobs and help the local Auto manufacturers to dispose off the existing carinventory in the ware house and on assembly lines?

2. He then became champion of another green technology Solar Energy which will takeyears and billions of dollars before that technology became available at reasonable cost onmass scale. Again, he was showing moon to the American people by showing distantcalendar of 2016 to 2020.

3. He became then the champion of climate change by spearheading campaign for actionsfor control of carbon emission and reserving and doling out hundreds of billions of dollarsof unproven and non-focused technology or even concept.

a. He was trying to interfere in the automatic self balancing system of the nature.b. He went all the way to Copenhagen in freezing cold to talk about global warming.

Back home in all 4 North Eastern states from Washington DC and New York wereengulfed in 5 to 8 feet deep snow or ice in freezing cold when he was devotingalmost half the time of his presidency on global warming.

c. Hey, Mr. President, there is snow and ice all around where is the evidence of globalwarming?

d. In Afghanistan and Iraq his US army was exploding disastrous bombs that wereemitting more Carbon dioxide than one small plant in China. Did he end the warwith immediate effect

e. Osama and Al Qaida were blasting human and real bombs everywhere killingthousand of innocents and causing tons of carbon smokes from the bombing sites.Could he get the cooperation of Bin Laden for carbon emission control?

f. In short, he was rushing into abstract and non verifiable concepts just to divertthe attention of the American people.

4. He planned and created hundreds of billions of package called TARP Trillions to resurrectthe financial system.a. He was trying to kill the wealthy and efficient by chasing them all the way down to

UBS, Switzerland by calling for names of 52,000 wealthy Americans who werereported to be tax dodgers.

b. He was using hundreds of billions of new money thrown after bad money by lendingsupport to bankrupt Citigroup, AIG, Fannie/Freddie Mae, Bank of America, WellsFargo, Goldman Sachs, General Electric and host of other bad borrowers.

c. In short he was trying to extract billions from efficient wealthy and passing onnearly 100 times more to inefficient banks, brokers and insurers.

5. When he could not create jobs, he invented new slogans by equaling Saving of Jobs asCreation of New jobs.

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6. When he found his plans were no longer working, he invented a new weapon. Health CareReform which at the moment of this writing has almost become a law, spending over $ 1.3trillions extra.

a. Here again, he was showing moon again. He said that 33 millions of Americanswould be insured immediately by taxing healthy Americans to pay for healthinsurance they no longer wanted.

b. In short, he was hurting efficient wealth earners and healthy Americans. He did notlike efficiency in earning income or wealth and building health.

c. If you earn more, pay more to the state. If you are healthy, pay the tax or compulsoryinsurance or pay the fine ranging from $ 750 per person to $ 3000 per family of four.In other words, he became a blood sucker draining out the blood or pompoushealth from the healthy Americans.

d. He showed the moon again by showing distant calendar. He said that Americanpeople will save $ 1.3 trillions over 10 years. Hey, Mr. President, you are elected todo job to have immediate benefit during your Presidency that is for 4 yearslasting up to January 2013. Why do you indulge into actions that go beyond 10 yearswhen you will no longer be around?

7. He started chasing fat bonuses to Wall Street bankers which would affect at the most $ 5 to10 billions. But he embarked upon a journey to guarantee the worthless debt of $ 306billions of Citigroup. $ 306 billions amount to entire Corporate Americas tax collection forfull fiscal year. Was Citigroup as single big entity that important to demand the resources ofentire corporate world of America?

8. He was clamoring about the deepest financial crisis over last 70 years. Hello President.Have you seen the Dow Jones index on this Christmas Eve? It is at 10,554. During the 1987crash, the Dow dropped to less than 3000 which is about 22 years ago. If the financial crisisis of epic proportion, worst in 70 years, how come Dow Jones is still trading at 10,554 ( Up7554 points or up by 251%?) Does it mean that the Dow is artificially supported at higherlevel by printing more and more money and giving to affiliated banks, brokers and funds tosupport the market by artificial respiration?

9. It is evident that President Obama has been using his oratory skills to divert the attentionof the American people from core issues. He ignores the hard realities and pushing up theabstract subjects which can not be verified or justified by proper rational.

In short, the entire country of United States has gone to the dogs. There are no care takers. Theeducated Americans have become docile and weakened mass who are loathe to seeing the hardrealities.

They bother more about tiny Afghanistan than 3 times larger states at home. What is Afghanistan?No one heard its name in last 50 years until George Bush went into those rugged mountains tosearch the rats nicknamed Al Qaida. Afghanistan is a non entity just piss it off. And get out of it in

one week. When Afghans do not care about themselves, why should Americans or other NATOforces do? It is none of their business to be out there anyway.

In short the ordinary Americans have been blinded by their loyalty to their political leaders orPresidents, Senators and Congressmen. They are equally superstitious as the mumbo jumboAfricans, religious Muslim populace loyal to white or black robed Mullahs or Ayatollahs orignorant Hindus in villages loyal to the saffron robed politicians or priests.

The situation in the country is worsening in almost every sphere. The economy is still sliding, jobsare being lost, interest rates are convulsing with upward bias, frustrations among the populace isgrowing, town hall meetings are getting restive, the TV media finally gave the thumbs down and

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started talking against the administration, the deficits are bulging into trillions, the foreclosuresare now expanding canvas to high end properties, commercial properties are sinking further,

Freddie & Fannie Mae need no more bail outs but need blank checks from the government.The Citigroup is still oozing purple blood with additional hundreds of billions getting sour, no onewants to take the helm of Bank of America and the Fed is devising new ways of raising rates byresorting to Term Deposit lending, instead of normal Fed Fund and Discount windows. AIG is stillbasking under microwave heat and wilting further and further. Financial frauds are coming tolight with greater intensity.

The troubled banks are getting deeper and deeper in the mud. The FDIC is running out of funds,and almost all states find their finances stretched beyond sustenance. Nevertheless, the Fed andTreasury go on printing and also guaranteeing hundreds of billions of dollars as if there is notomorrow.

Even new IPO are being withdrawn at increasing ferocity. A leading company like National Beef, aprofitable company employing thousands, was unable to raise just $ 250 millions from the market,whereas bankrupt banks have been reported to be raising over hundreds of billions within 2 days.

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List of Failed, Withdrawn & Postponed IPOs 2009 in USA

Company Name Action Date Action File Date Underwriter

National Beef 12/17/2009 Postponed 10/13/2009 BofA Merrill Lynch

Ellington Financial LLC 12/10/2009 Postponed 7/14/2009 Credit Suisse

Trony Solar Holdings 12/9/2009 Postponed 10/30/2009 J.P. Morgan

Chesapeake Lodging Trust 12/8/2009 Postponed 9/28/2009 J.P. Morgan

Edgen Murray Limited 12/8/2009 Withdrawn 9/24/2008 Jefferies

Aviv REIT 12/7/2009 Withdrawn 6/30/2008 Morgan Stanley

Birds Eye Foods 11/20/2009 Withdrawn 10/8/2009 J.P. MorganHealthPort 11/19/2009 Postponed 8/17/2009 Deutsche Bank

Gomez 11/9/2009 Withdrawn 5/7/2008 Credit Suisse

PlainsCapital 11/4/2009 Postponed 8/26/2009 J.P. Morgan

AEI 10/29/2009 Postponed 8/18/2009 Goldman Sachs

Rexnord Holdings 10/16/2009 Withdrawn 7/18/2008 Goldman Sachs

Ladder Capital Realty Finance 9/29/2009 Postponed 7/17/2009 J.P. Morgan

Mistral Acquisition Company 9/25/2009 Withdrawn 1/18/2008 BofA Merrill Lynch

Foursquare Capital 9/24/2009 Postponed 7/9/2009 BofA Merrill Lynch

China Growth Alliance 9/16/2009 Withdrawn 3/18/2008 Jesup & Lamont

Orbit Acquisition 9/8/2009 Withdrawn 2/27/2008 J.P. Morgan

Open Link Financial 8/31/2009 Withdrawn 5/12/2008 Credit Suisse

Sutherland Asset Management 8/7/2009 Postponed 5/21/2009UBS InvestmentBank

Vought Aircraft Holdings, Inc. 7/24/2009 Withdrawn 5/16/2008 Lehman Brothers

GCL Silicon Technology 7/17/2009 Withdrawn 7/18/2008 Morgan Stanley

Galiot Capital 7/7/2009 Withdrawn 3/12/2008 Deutsche Bank

Rhino Resources 6/17/2009 Withdrawn 4/16/2008 Morgan Stanley

GF Acquisition 6/17/2009 Withdrawn 4/21/2008 Pali Capital

ASM Acquisition Company Ltd. 6/4/2009 Withdrawn 1/9/2008UBS InvestmentBank

Noble Environmental Power 6/3/2009 Withdrawn 5/8/2008 J.P. Morgan

NextG Networks 5/22/2009 Withdrawn 6/5/2008 Merrill Lynch

Source Photonics 4/15/2009 Withdrawn 12/26/2007 Cowen & Company

Current Media 4/13/2009 Withdrawn 1/28/2008 J.P. Morgan

Alimera Sciences--old 4/9/2009 Withdrawn 7/1/2008 Credit Suisse

RAI Acquisition Corp. 3/26/2009 Withdrawn 1/7/2008 J.P. Morgan

Valor Computerized Systems 3/24/2009 Withdrawn 1/11/2008 Thomas Weisel

McJunkin Red Man 3/16/2009 Withdrawn 8/20/2008 Goldman SachsMadison Square Capital 3/13/2009 Postponed 4/25/2008 FBR Capital Markets

SMG Indium Resources 2/27/2009 Withdrawn 2/27/2008 Maxim Group LLC

O'Gara Group 2/17/2009 Postponed 8/22/2008 Morgan KeeganChanging World Technologies 2/13/2009 Withdrawn 8/12/2008 WR Hambrecht

Are derivatives dead? I do not think so the Fed and Treasury appear to have been usingderivatives with increasing ferocity through JP Morgan Chase and HSBC to short the gold/silverand buying $ index to retain the foreigners interest in the country. Attempts are now being madeto weaken the United Kingdom by arranging downgrade, so that the Asian reserves do not getdiverted to British Pound. Further, British pound is having less weightage ( %), so the risk inphysical delivery is relatively less than Euro ($ Index Weight %)

The above summaries are derived from the detailed analysis of the following specificdevelopments in every sector/company.

1. Citigroup:

Ever since losing billions of dollars in Latin American countries around 1992, this bank withChase (now JP Morgan Chase) has been refining its balance sheets by using exotic derivativesin US and mostly offshore centers. It really has no core business. It is one of the larges assetsshufflers in the world. Its balance sheet size, about $ 92 billions in 1992 pre take over of

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Travelers group, Citigroups balance sheet has grown 22 times to $ 2.1 trillions before currentmeltdown.

a. The official lending was $ 45 billions in TARP funds; its worthless bonds wereguaranteed $306 billions by US administration under great Hank Paulson (ex- GoldmanSachs) and Ben Bernanke, making it investment grade AAA securities overnight. Thatcould be the main reason for Goldman Sachs massive surge in profits. They probablyknew earlier what was to come.

b. US-A (= US Administration) reported that Citi paid back $ 25 billions of TARP money.Did Citi have cash to repay? No, so how did they pay back? They converted $25 billionsof TARP Debt into equity shares. That is, they repaid by book entry one pocket toanother.

c. US-A further reported that Citi would pay back $ 20 billions from new capital raised.How did they raise the capital in such worse financial scenario? The identities of newinvestors were not known who paid such humongous sum, who are those idiots orWhite Knights willing to invest billions into this bankrupt bank? Why their names arenot disclosed when they have taken substantial stake into this group. This is mandatorydisclosure.

d. Even Abu Dhabi Investment Fund (Sovereign funds) served notice on Citigroup tocancel their financial arrangement or refund them damages of over $ 4 billions.

e. A New York Times article recently said that the banks moves will result in a $10.1billion hit to Citigroups fourth-quarter results... (Source: American Banking News)

f. So, the Citi is losing in billions and has no public profile to raise $ 20 billions. Why doesit want to repay the TARP billions even on paper? Because they want to avoidanswering Senate and need permission to pay millions of dollars of pay packages. InIndia, there is a popular saying Behti ganga me haath dho lo that is rechristenyourself by taking a dip in flowing holy Ganges even if it is dirty and polluted.

g. There are further reports that Citi has sold almost all saleable business. Its onlyremaining subsidiary is reported to have billions of dollars of worthless assets.

2. AIG

a. Steel bleeding to death. No one now knows its true liability or assets. Even afterconsuming $ 200 billions of state funds, this Insurer could not insure itself from otherlosses. It needs re-insurer in the form of Fed and Treasury. Geithner is very kind to thisinstitution.

3. Bank of America

a. It is reported on last day of 2009 that the bank is expected to report massive loan lossesin 2010 stemming from its aggressive lending in credit cards, mortgages and otherbusiness lines. At one point, BofA was offering credit lines of up to $100,000 to startupsbacked by nothing more than the entrepreneurs signature. And mortgage requeststurned down by the bank as too risky during the credit bubble were eagerly made by

Countrywide Financial Corp., which BofA acquired in 2008.b. It is reported to have repaid $45 billions of TARP money. What is the source? It ismaking that much money? No one knows. Who financed them? No one knows.

c. No one wants to become CEO of this company. Finally, they found one from inside thecompany.

d. A recent move by John McCain in the Senate on line similar to Glass Steagall Act in thepast will force BofA to sell off Merrill Lynch. No one really knows what is happening inthe boardroom of such banks. One day they acquire, use up hundreds of billions ofdollars under TARP or some other names, and then in less than 12 months, they will besold off. What happens to state aids? - Confuse if you can not convince anyone.

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4. Fannie Mae/Freddie Mae:

a. They are acutely distressed. They are not beneficiary of direct state guarantees, but itseems that they are. Between them, they own or guarantee almost 31 million homeloans worth about $5.5 trillion, or about half of all mortgages. Considering about 20% to27% default rates, the bad loans may be running into $ 1.1 trillions.

b. These two companies have already received over $ 110 billions of state aid so far. Call itTARP or otherwise. Instead of approaching Senates for bail out time and again, theTreasury on Thursday gave a blank check to these institutions to sidestep the Senate

authority required for bail out. The upper cap of $ 400 billions is now removed. Inother words, they can borrow even $ 1 trillion without approaching Senate or Congress.(That makes both stocks good buy. They will never be in trouble).

In other words, the Senate or Congress no longer counts. The President Obama, Ben Bernanke andTimothy Geithner (last two are bureaucrat not appointed by the American people). In short, inworlds largest democracy, two appointed bureaucrat, NOT elected representatives (100 Senatorsor 500 Congressmen) will rule America and the World Financial System. The whole world will behostage to this trio one elected, two appointed.

The other banks like Wells Fargo, JP Morgan Chase, General Electric, General Motors and Airlinesare so vulnerable the economy and entire financial system in the United States is pushed downseveral fathoms deep. The derivatives in Forex trades, oil, gas and precious metals like gold andsilver is bulging at alarming rate.

And yet, Dow and Nasdaq are rising to record value. They talk about recession almost comparableto 1930 or 79 years ago, but the Dow is still trading at 10,500+, about 7500 points higher than in1987 when the massive crash took place 22 years ago. Free money is ruling the entire worldtoday. Here is something interesting I could pluck out from the internet (these are not my views)

The level of risk the U.S. government is taking on with many of the FHA loans is insane. TheU.S. government is taking miniscule down-payments on these mortgages, over 90% of the

time less then 4% down payment is out down and with the other hand the U.S governmentis handing out an $8,000 check, paid for by the U.S taxpayers.

The net effect is that for virtually every new mortgage which these government entities areinitiating of $250,000 or less there is zero (net) down-payment. Given that a large majorityof current sales in the U.S. are below this level, this means that most of the home-buyers inthe U.S. this year are putting up zero down-payments.

The Federal Reserve also allows the banks to "borrow" money at 0%. The banks then"deposit" this money with the Federal Reserve as a "savings account" for which they collectinterest, while paying no interest on the "loan". In other words the Federal Reserve is

simply giving the banks free money. But the money doesn't actually sit there; the Fed usesthat money to buy U.S. mortgage bonds to keep the U.S. mortgage rates artificially lower

We are therefore heading towards massive fall. We have never been so close to the death thananytime before. This time around the pain will be much severe than 1930 because the stakes andmoney supply is almost 50 to 100 times higher. The Gold and Silver derivatives will explode soon.Fannie/Freddie Mae will outperform due to unlimited guarantee from the state.

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Would USA Collapse on its own default? Shouldnt the World rush to its defense?

The current indications are that US will fail on its own. Its supremacy in practically everyfield is seriously challenged and will be at stake. Some nations are happy to see the UnitedStates fall due to its years of military adventurism, hegemony and arrogance. Its shatteredeconomy will have delayed effects all around the world. After years of supremacy, US is atthe receiving end today.

There is a saying thatthose who are unbeatable abroad are finally defeated on their own turf

by their own people. The next war will begin in US itself when the disappointed people tryto vent their anger against US administration for not being able to create enough jobs orturn around the economy.

The efforts by US-A so far are totally in wrong direction. If they read my book Sub PrimeResolved they will know how to address each problem with convincing solutions. Thepresent problem in USA is lack of demand, not supply. Instead of promoting $ value bypaper trading in dollar index, the US-A has to gear up the efforts to jack up physical demandeverywhere. That is what makes money and creates jobs.

Should the world remain silent spectator and let the United States flatten before everyoneseye? I do not think so.

I often hear from many quarters in Asia that they (Americans) deserve it (collapsingeconomy and virtual defeat in Iraq and Afghanistan). May be the actions of recentPresidents were egoistic and smacked of arrogance. But that should not take away all thecredits and good will built since the World War II. The whole world became prosperousand democratic only because of United States of America aided actively by Britain.

It was US who saved us from the clutches of Hitler and the tyranny of Japanese imperialism.It was the single biggest contribution to the world. It was again US who saved the worldfrom Communists and Authoritarian regime all around the world, gave the world thecomputers, internet, free trade, and new inventions. It was US who espoused the cause ofdemocracy everywhere. The surfeit of knowledge that the world finds today owe its originto United States. We have to be thankful and equally grateful to this wonderful nation. TheKnowledge has migrated across the world from the soil of United States.

It is therefore payback time. However, US-A lead by Obama have to be receptive to thenewly emerging wealthy countries in Asia. One can not clap with a single hand, says an oldadage. When two hands come together, then only we get the sweet sound of clapping.

Instead of encouraging manipulation in the value of dollar by paper trading, US should ask

the sovereign funds to invest into US property markets and import wealthy businessmenwho can create jobs for the Americans. To buy the property in USA, they have tonecessarily buy the dollar which may enforce real demand. My book Sub Prime Resolvedprecisely addresses to these core issues which continues to be ignored by US-A. Let us hopethat the wiser counsel prevails from the beginning of Year 2010.

Kalidas (Anil Selarka)

Hong Kong, 25 Dec, 2009 - Revised and updated on 3 Jan, 2010

Blog: http://www.anilselarka.comBook Web: http://www.subprimeresolved.com

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The author has also published a book SUBPRIME RESOLVED which offers totalsolutions to the entire gamut of thefinancial problems facing the United States.Take any problem facing the country, youwill find the precise solution in the book.

The book has met with rave reviews fromthe readers. Please visit the Authors blogor Book Web site to read the reviews.

Please visit the above sites and buy thebook on line.

If you wish to check the Chapter Contents,please visit Authors blog, side bar, andclick the image Chapter Index. You willbe taken to website to display chapter bychapter contents with Authors comments.

You may also check the contents in textform on book web site as above.

The book is now available on Amazon.