الثلاثاء، سبتمبر 30، 2008

Going Down a Financial Black Hole

When Markets go Crazy

Well, markets are tumbling and the Dow will probably fall another 2000 points. The 2002 low looks like the best support for a bottom on the technical charts. The financial cannibalism also continues on Wall St.

Wachovia bank was gobbled up by Citicorp. Wachovia almost ate up Goldman Sachs just a few weeks ago. The concentration of more wealth in fewer and fewer hands continues.

Congress revolted today because it has lost a lot of political power since Bush took office. First with limits on foreign policy and judicial oversight. Now with even more limits in the financial sphere.

Bush, McCain and Palin are now seen by many Americans as a joke. But Obama will have a hard time governing when he wins in November because he will inherit a nation in serious decline.

The US is saddled with huge amounts of debt and most of it is owned by foreigners. It was a nice party while it lasted. Americans are now going to wake up in a world where they are no longer number one.

It's nothing to cry about. Usually one single power has a hard time running the world. When there are multiple powers its hard to run things too, but it forces nations into international cooperation. It's an unstable system, but history shows these two options are the only ones in town.

We are in the middle of a historic shake-out.

See you on the other side of the historical black hole....

  • Comments from Michael's Readers

    Financial Chaos
    Yes. It was a nice party while it lasted.

    But I am afraid there are going to be many chaotic repercussions until things settle again ...

    Our global financial system is seriously flawed ... fundamentally screwed up ... simply because it is built on rewarding speculation not hard work ...

    Brokers, rather than producers or service providers, making the bucks .... this is good in a gambling casino for a weekend in vegas, but can not be the basis for a solid financial system to govern the lives of 6 billion people and many trillions of dollars ...

    On capital gains, achieved by inflatting stocks rather dividends coming from actual operations ... on P/E ratios in the hundreds or throusands when they should be should be 5, 10, 20 or even 30.

    That kind of correction requires major major change of mind ... I do not think that it is even going to happen this time ... but it is going to be painful as hell ...
    ( Posted by: wael nawara [Member] On: September 30, 2008 )

  • Too Easy

    Might have guessed it would be all too easy for Government to buy up all the bad debt.... After all unlike the people that buy debt at vastly reduced prices the government wouldn't have a clue how to "Chase it UP" and would write it off or the tax payer would pay it in full?

    I remember the big Lloyd's insurance scandal...well not really a scandal they just called in commitments from high interest account holders or whatever (much to their disgust) to meet a big loss....as per the agreement...

    Yep far too many fat cats taking money that isn't there to be taken...why should the tax payer be hit....... of course everyone knows the money will come from "The Man (or Woman) in the street) at the end of the day..... It will just be different highwaymen taking a turn at robbing him/her.

    Is there is no way of making the rich poor.....?

    ( Posted by: Fairplay [Member] On: September 30, 2008 )

  • Well....

    This happens in cycles. The empire starts running on acts of financial hocus pocus rather than real and self-generating invention and production. Spain, Holland, England got hit by this and now the US....

    ...the ponzi scheme has reached its mathematical limits and now everyone is fighting about who gets screwed the least. Many rich are falling, but the survivors of this rich spat will always come out on top....

    I hope you have cash.
    ( Posted by: gamblerman [Member] On: September 30, 2008 )
  • Just have to Wait : Cash would be fine though it would have to be in Gold...... or at least something other than notes with pictures of people on them....We are living in a word of make belief it seems...Babies are now getting born with no teeth no hair no clothes and an outstanding loan... Eric
    ( Posted by: Fairplay [Member] On: September 30, 2008 )

  • Uh.... All is digital illusion:
    Just like paper illusion in days gone by, but the effects on economies are REAL...I see someday a totally automated society with only digital cash and no big bureaucracies....this transcends left/right arguments.It's sci-fi right now....but it won't be for long. This current economic creative destruction will get us there. Who will rule this new world is not clear.Also the demographic bubble that has been building since the 1400's will pop in 30 years. China and India are the last to have a baby bust. Less people less green problems....Russia, Europe, and Japan cannot even replace their populations....without immigration neither could the US. Michael

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