That was amazing today, watching the dow plunge 1000 points in 20 minutes. Reminded me of late 2008 when the Ponzi first started to die.
4 reasons for the market plunge
(1) Greek debt crisis spreading
(2) Financial reform and ending of too big to fail
(3) trading glitch from proctor and gamble and 3m.
(4) The high frequency trading desks selling/put buying/ shorting at milisecond speeds
The market thereafter rebounded and closed down a good -350. The talking heads in the media are pointing solely at the trading error. Nevertheless, the ponzi was dying at a rapid pace. The fact that so much wealth can disapear within minutes shows how unstable the system has become. Ive blogged about this before and will continue to blog until the Ponzi dies (the monetary system is unstable).
Greece has 300 billion in gov debt outstanding, with about 150 billion of it sitting on European bank balance sheets. If/when Greece defaults these banks take a loss which causes american banks to take a loss and the ponzi dies. Of course, the powers that be wont go down without a fight and the ECB (european central bank) will fold its hands and buy buy buy as much gov debt as it can preventing the death of the ponzi. This will only be another temporary fix but the ponzi demands more work, more money, more production, more debt. In the end this will all end with a inflationary holocaust around the world.
Many see the collapse of the current system as a bad thing but i welcome its demise. The sooner the ponzi dies the better for all of humanity. We are all more or less enslaved to digits on a computer screen, with these digits representing money, or "wealth" that is created out of thin air. Of course, borrowers in a healthy system can use the digits to create wealth or loss if mismanaged. However, when the ratio of digits to actual wealth is so large it becomes impossible to service the digits and we all go broke eventually. The crash of 08 was the begining of the correction, the death of the ponzi. However, because the powers that be created more digits to bail themselves out, the ponzi only got bigger. Thus, the wealth disparity continues to grow wider.
Whats happening in Greece will eventually happen to other industrialized nations. People are slowly waking up to the ponzi. We here in America are completely and totally enslaved to the ponzi, with household debt close to 100%, with federal debt at 93% and rising rapidly and total debt at 375% of gdp. How much longer to will we continue to be slaves to the ponzi. We juris debtors have felt the ravages of the ponzi up close and personal. With congress approval rating at 9% historic low, its only a matter of time.