The House of Cards Collapses Again, We Lead The Cheers

We mentioned in passing that we had left "the market" entirely. All markets. No more self-whoring in the world of employment. No financial instruments. No investments, other than in meals & clothing. Y'know, living under the radar, off the grid & in a state of eco-oneness w/ the planet, if not the world of hate, pain, fear & rage that's been constructed atop the planet. So we were quite happy to see what we'd avoided.

Giant blue-chip financial institutions swept away in a matter of days. Banks refusing to lend to other banks. Russia closing its stock market to stop the panicked selling. Gold soaring $70 in a single trading session. Developing countries' currencies in a free fall. Money-market funds warning they might not be able to return every dollar invested. Daily swings of three, four, five hundred points in the Dow Jones industrial average. What we are witnessing may be the greatest destruction of financial wealth that the world has ever seen -- paper losses measured in the trillions of dollars. Corporate wealth. Oil wealth. Real estate wealth. Bank wealth. Private-equity wealth. Hedge fund wealth. Pension wealth. It's a painful reminder that, when you strip away all the complexity and trappings from the magnificent new global infrastructure, finance is still a confidence game -- and once the confidence goes, there's no telling when the selling will stop.

Yep, the whole thing based on humanoids & their simian emotional responses. That's an excellent idea, isn't it? We can't tell you how happy we are that many have lost trillions of $ (on paper). If only there were a way to extract lbs. of flesh from these con men & women. Hell, let's start w/ kilograms rather than lbs. How's the entire ugly mess going to end? Not well.

In the end, however, there is only so much the government can borrow and so much the government can do. The only other choice is for Americans to finally put their spending in line with their incomes and their need for long-term savings. For any one household, that sounds like a good idea. But if everyone cuts back at roughly the same time, a recession is almost inevitable. That's a bitter pill in and of itself, involving lost jobs, lower incomes and a big hit to government tax revenues. But it could be serious trouble for regional and local banks that have balance sheets loaded with loans to local developers and builders who will be hard hit by an economic downturn. Think of that, says Dugger, as the inevitable second round of this financial crisis that, alas, still lies ahead.

Are you ready to suffer for your sins yet, AmeriKKKan sheep?