Heavy selling taking place worldwide as Eurozone bond spreads blowout. Dow was down as much as 357 points before retracing. One by one countries around the world will sink as a result of their unbearable debt loads. And to think that the Department of Education refuses to give relief to heavily indebted student loan borrowers with terrible job prospects.
Absent more monetary magic stimulus expect all stock markets to crumble under the weight of trillions in debt. Of course the central planners will continue to shower the world will digital fiat in order to postpone the true day of reckoning which will further push silver and gold to the moon. Eventually the current monetary system will fail and will either lead to a fragmented world where globalization retraces or a monster global currency will be born.
Here is a good take on the latest market action from Business Insider:
Well, it's deja vu all over again.
For anyone who followed the market crashes of 2000-2002 and 2007-2009--especially the crash of 2007-2009--the 512-point drop in the Dow feels awfully familiar.
And as those market crashes reminded us, the downdrafts can last a lot longer and be a lot more severe than most people initially think.
(They can also reverse themselves quickly and unexpectedly, and maybe that's what will happen this time. We can always pray.)
But there are also several very important differences between this market crash and the ones a few years ago:
* The Fed has fired most of its bullets (interest rates are already at zero)
* Our budget deficit is already out of control, and Congress has had it with "stimulus"
* The public has had it with bailouts
That means the government's ability to do anything about this market crash is severely limited.
Yes, we'll almost certainly have a "QE3." And maybe that will prop things up a bit. But it won't fix the fundamental problems clogging the economy, just as QE1 and QE2 didn't permanently fix anything. (The only thing that will fix our economy is debt-reduction, discipline, and time.)
To get a good sense of how hamstrung the government is, you need only look as far back as last week, when Congress was so paralyzed that it almost put the country into default rather than raise the debt ceiling.
And you also need only note that, when the 2000 crash began, the US federal budget was running a surplus, and when the 2007 crash began, the deficit was only $200 billion. Now, the deficit's about $1.4 trillion.
http://www.businessinsider.com/heres-the-problem-with-this-market-crash-2011-8#comment-4e3b52d369bedd8835000035
Personally, whether or not the market plunges or rips higher tomorrow is of no real concern. The significance of the recent action is the effect on confidence of the big players (governments and corporations) and whether or not the Eurozone will descend into a full blown banking crisis. If a financial crisis erupts out of Europe (very likely) then all bets are off for the fall and next year. Poor Obama couldn't even enjoy his birthday today as the blackberry screen showed blood red across all sectors.
I'm curious to see how the Eurocrats will try to put humpty dumpty back together again. It took us from September 2008 to March 2009 to stabilize the banking system and the USA is the biggest baddest country in the world. The Eurozone is comprised of 17 different nations with no central taxing authority and a central bank that has limited powers with the Germans commanding great influence (the same Germans that are horrified at the specter of hyperinflation).
The poor boomers and their 401k's. Too bad stocks are at 1997 levels and when adjusted for inflation are at 1980's levels. One good thing about the recent plunge is the crash in the price of crude oil as it closed at $85.50. At these prices this translates into a 30 cent discount at the pump. Wow some bones for us proles! Personally I'd rather see the S& at 400 and crude at 30.
Subprime JD: A blog dedicated to exposing the law school and higher education scam.
Showing posts with label Ponzi. Show all posts
Showing posts with label Ponzi. Show all posts
Thursday, August 4, 2011
Thursday, May 6, 2010
The Ponzi died for a few minutes today (Dow -1000)
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.
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.
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