Yeah. Nice. Fixed income investors are going to eat this and then come back for a second bite? Oh yeah, right. You want to lock up the entire mortgage and housing industry?
Sounds good to me! Let's tank all of it and get it over with. That's where we're headed.
Christmas sales? What Christmas sales? Do you believe the claims of 8%+ increases? Been to the Mall in the last week? I have - several times. Guess what - you could walk in and spray an Uzi around without killing anyone. That's how dead it is. Restaurants in the area are singing the same song. They love me, since I'm still eating their food - but all this week, I've been pretty much the only one.
Oh, and "Black Friday" weekend? We drove home past a half-dozen malls Sunday. The parking lots were empty. Sunday night, well, you be the judge - here's one of a dozen pictures I snapped of local retailers on Sunday evening. Yes, there's a timestamp on it, and no, the store wasn't closed (duh):
Where are the customers? The only person in that store is the clerk behind the counter!
This is NOT an aberration. In fact, if you head over to the forum in this thread you can look at all of the pictures I snapped.
THE ENTIRE CITY WAS DEAD!
Guys and gals, I live in one of the "richy bitchy" areas of the country. If we're dead the rest of the country has to be in various states of decomposition!
Oh, and anecdotes related to auto sales say that showroom traffic is down 30% in the last month alone. I suspect the numbers early next week are going to suck severely.
The consumer is ok?
Look, the market pumpers want you to go buy stocks. That ought to be obvious. They own a lot of them - too damn many in fact, and need someone to unload them to.
They know what is coming! Did you see Kudlow last night? He, and the rest of his crowd, were clamoring not for a rate cut but for 100 to 150 bips of rate cut - right now!
Because they know what's coming. A massive recession. Bank failures - lots of them. Perhaps even a DEPRESSION.
But, you sputter, can't The Fed fix this? Save the day? Ride to the rescue?
No, it cannot.
What has to happen?
The Fed needs to step in right now and force all of their "bank customers" to take ALL of their off-balance sheet crap back onto their balance sheet and mark it to the market.
If this forces some of them out of business, then so be it. The FDIC will not fail in this situation, contrary to some of the doomsayers. The FDIC's "formula" is to merge the insolvent organizations, using whatever value is left to make those with under $100,000 in deposits whole, while throwing under the bus the common equity holders, any preferred equity holders, and everyone else who happens to have a putative "claim" on the bank.
This is the only way to fix the problem, and whether Bernanke (and Paulson) like it or not, it is what is going to happen.
Lending will not return to normal until confidence returns and confidence requires transparency and truth. So long as market participants continue to lie and obfuscate, lending will remain locked up. PERIOD!
The only choice is to either force transparency now in a manner that is somewhat controlled or we will continue to spiral downward into the dirt, with the disclosure and cleaning out happening through bankruptcy as we reach the depths of a DEPRESSION.
Yes, I used the "D" word.
If The Fed doesn't quit screwing around and act NOW, we're headed for one.
Ben, wake the hell up. The answer isn't playing with system liquidity.
YOU ARE FIDDLING WHILE ROME BURNS.
The problem is that everyone involved in this mess on the banking and "investment" side has been lying through their teeth. E*Trade is just one example - not two weeks ago their CEO said "we could suffer $1 billion in writedowns and remain well-capitalized", strongly implying that the damage was less than that.
Well, guess what - less than two weeks later they sold $3 billion "worth" of loans for $800 million. That is $2.2 billion in direct losses, or more than double what they claimed their maximum exposure was just two weeks before!
IT IS ALL LIES!
Let's count a few of them:
I'm tired of this crap, you should be tired of this crap, and those who are buying this "rally" when every institution that has made claims that they have their exposure under control ends up being shown to be a LIAR as soon as a week or two later, are just plain fooking stupid!
(Oh, and don't look but metals are getting SMASHED today. I told you so.)
Deflation is in our future - the worst-case scenario for anyone in debt. Why?
Because our government is refusing to do its damn job of regulation and has refused to get the handcuffs out and slap 'em on the CEOs and others who have made these insanely-rosy projections and statements, while at the same time encouraging and enabling the hiding of liabilities!
As such confidence has collapsed between parties in the market, and this WILL lead to a collapse in lending and credit - the destruction of money, which is the definition of deflation.
It has already started and is going to get MUCH worse.
If you're in debt and can't get out, you're finished. Sorry; that's how it is.
If you can get out of debt in the next few weeks and months, do so. If you have cash, conserve it. Save. Keep your powder dry. Do not be stupid and listen to people like Cramer who said last night that "cash will be the biggest losing asset class."
Those who believe him are going to suffer ocular penetration by a Stallion - and soon.
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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