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Rush Limbaugh

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RUSH: The Dow Jones Industrial Average is down nearly 300 points today, nearly 600 points for the week and counting. A lot of people are saying, ‘What’s going on out there?’ Well, what’s Obama focused on? Ripping Arizona to shreds, giving amnesty to illegals, ignoring Tennessee, 12 days late on a major ecological disaster in the Gulf, thinks Greece is a role model, and the markets are tanking. We’ve got incompetence on parade out there. As I say, it would be fascinating to hear Obama tell us all where Greece went wrong. It was an expired passport, Snerdley. But that raises other questions. They found an expired passport in his trash, but he did have several other passports from other countries, just like any other suburban Connecticut father with money woes. So he could be in trouble with the IRS, too, because there’s some tax records he threw away in there that were not seven years old. So his troubles may really just only be beginning.

Now, let’s talk about this Greece business. Everybody knows what’s going on in Greece. They’re underfunded; they can’t pay for the commitments they’ve made; there are riots and fires breaking out because all those people, the freeloaders, are faced with having their goodies taken away from them, they don’t want any part of it. Don’t be surprised if Angela Merkel said we don’t have the money to bail ’em out. Do you know that the IMF, which is funded by us, has bailed Greece out a little bit, too? You people, all of us taxpayers have participated in bailing Greece out when we don’t have any money to begin with. But the European Union, the euro is now down to 1.264. This is going to have a dramatic impact, negative impact on corporate earnings in this country. Remember it wasn’t that long ago that the dollar was weak against the euro. All of that’s changed now because of what’s happening in Greece. The dollar is strong, the euro’s in big problems; Spain, Portugal. The European Union as constructed and put together appears to be at risk of falling apart.

Then there’s a story today that nobody is focusing on. It’s from the Financial Times: ‘Chinese Property Developers Begin Price War.’ Thursday, today, it’s already over in China, they lost 4% of their stock market in Shanghai. ‘Chinese developer Evergrande Real Estate Group on Thursday started to offer a 15 percent discount on prices of its 40 property projects across the country to promote sales amid government tightening measures to cool down the red-hot sector.’ They’re worried about a real estate bubble bursting in China. ‘A 15 percent discount on current projects is pretty unheard of. According to the original source, properties being offered by China’s top 10 real-estate companies have until now defied any drop in value. … China is drawing up a new curb on property developers as part of a host of measures to cool the country’s red-hot property market, the state-controlled China Securities Journal reported on Thursday. The plan would ban developers from investing revenue from pre-sales of uncompleted property developments in new projects.’

So it’s not just Greece that has everybody in the stock market troubled and panicked. There’s ongoing concern of a potential bursting real estate bubble in China that, if it happens, according to the Financial Times, would make Europe’s implosion look minor. Now, China’s stock market has been selling off for months. Wall Street’s not been paying much attention to it. They were down 4% today, or overnight. Alone, 4% alone. And you won’t see it mentioned much on CNBC or a lot of American networks, but it’s a serious problem.

The LA Times: ‘Greece’s Lessons For Us — The mistakes that led to its financial crisis should serve as a warning to the governments in Washington, Sacramento and closer to home.’ And from the story, it says, like Greece, the US has committed to benefits it cannot afford. Right, except this story is in the LA Times, and I would say to the LA Times, ‘You called for every damn one of these commitments to benefits.’ The LA Times demanded every one of them. Editorially putting pressure on politicians locally and in Sacramento to give these unending pensions and benefits, and now all of a sudden, all of a sudden, it’s unaffordable.

Then the Washington Post: ‘Debt woes in Greece turn violent as fears spread to other European countries.’ And we told you yesterday, government employees killed three bankers in Athens. And I would ask, what world figure has been ginning up hatred for bankers? That would be Barack Hussein Obama, mmm, mmm, mmm and members of his Democrat Socialist Workers Party in the United States of America. Angela Merkel is warning that the crisis in Greece is leading the European Union future imbalance. So there’s tumult and chaos financially all over the place. That’s why I would love to hear Obama tell us where Greece went wrong. And you’re right, Snerdley, he would blame the Republicans over there. The tax rates not high enough on the rich and so forth.

BREAK TRANSCRIPT

RUSH: Oh, man, oh, man! There’s something going on. This is more than Greece. The Dow Jones Industrial Average now down 700, and there’s still an hour and 13 minutes to go for the — oh, my God, we’re below 10,000, it’s down 966! Man, oh, man, the NASDAQ is no better, it’s down 206. So you got riots in Greece, riots in Vienna and Germany probably soon, Spain and Portugal next, killing our markets, and this is Obama’s market, folks. 894, 900 it is down. This is a big F-ing deal, as Joe Biden would say. Just like taking on an entitlement, when we’re worse than broke. Now down 945 — folks, they’re going to have to suspend trading here. It’s in a plunge. It’s in a free fall, 950 points the Dow is down now. And Obama is talking about Phoenix Suns uniforms. He’s out there saying he was first on the case in the oil spill, and he’s gonna blame Wall Street. You wait, tomorrow he is going to blame Wall Street for this. And he’s AWOL, he’s nowhere to be found. This is right up his alley, this kind of tumult and chaos.

I’ll tell you, the rioting in Germany because the people there don’t want the German government to bail out Greece or anybody else. They’re in deep enough excrement already in Germany without having to bail anybody out, just like we are. You watch, we’re gonna get called on to bail out Greece before this is all said and done to prevent this kind of plummet, now 968. Now, there’s something else to consider out there about this. I mentioned to you the strong dollar and the weak euro a minute ago. One of the sell-off aspects, one of the reasons for the sell-off is not just Greece, there’s a Chinese component, but the rising dollar is also a factor here because for the past year, investors around the world have been able to short the dollar because it’s been plunging. As we all know they have been able to borrow money at virtually 0%, buy things like stocks and commodities and so forth, so when the dollar rallies these people are on the wrong side of the market because they’ve been shorting it. They have to liquidate their short dollar and whatever else that they’re long in because this is disaster. Now it looks like it’s coming back a little bit, down 691.

So it’s more than just Greece here, folks, people going short on the dollar. You remember the stories all year long, the dollar is losing, they talked to Geithner about it, ‘What about the dollar?’ ‘The dollar will find its own level, we’ll be fine.’ There were talks of getting rid of the dollar as the worldwide currency for oil, because it was plunging. So people were shorting it left and right, meaning betting on it to lose value, and now with what’s happening over there in Greece and the European Union, versus the euro, the dollar is on a rebound, and so people are getting out. You couple that with the riots in Greece, and Obama being AWOL, and tomorrow it’s predictable he’ll blame Wall Street for all of this. Amazing stuff. Now back over 10,000, down 692.

BREAK TRANSCRIPT

RUSH: Look, the market is coming back. This plunge today, half of which has been regained, this can’t all be tied to the Greek riots because the Greek riots are still going on and obviously the plunge protection teams moved into gear here. I said they’re going to have to suspend trading, I didn’t know you can’t suspend trading after 2:30. You gotta live with whatever happens. Now Nouriel Roubini at his website in November 2009 is talking about: ‘Mother of all Carry Trades Faces an Inevitable Bust.’ It’s just another theory. Not enough time left in the broadcast here to give you the details of this. But essentially a massive rally has been going on recently in a lot of risky assets: equities, oil, energy and commodity prices — a narrowing of high-yield and high-grade credit spreads, and an even bigger rally in emerging market asset classes. The dollar has weakened but now it’s coming back. I’m sure that’s a factor here today with the dollar rallying versus the euro and all the short sellers, people with short positions in the dollar clearing out. Now they’re only down 380. So something happened here to stem the tide. (interruption) Well, I don’t know where Soros is. It doesn’t matter where Soros is. It’s what is he doing? We’ll find that out, report tomorrow.

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