Archive - Sep 2011 - Blog entry

If history is any indication, the most likely outcome of the FHFA suits against some of the biggest banks on Wall Street could be settlements without admitting guilt.  

No one should be surprised that this shit just does not want to disappear quietly.

Not an easy story for me to tell.

But largely ignored -- what with the dramatic Euro crisis and a threat of double-dip American recession –   is the more important emerging economy, India, now slipping back into its traditional morass.

Evidence suggests that the conomy has already been in recession, mainstream conomist pundits continue to argue about whether the conomy will have a double dip or not. While they are trying to figure it out, the damage to the financial markets is fait accompli, and will get worse.

Perhaps this is the denouement of a week of scary market rumors that seem to have been designed to stop the markets from breaking too high.

You know those movies with the bomb set to a timer ticking down to øø.øø where the sweaty hero nervously cuts one wire at a time while holding his breath and then at øø.ø1 he stops the bomb? Well Europe is like that except that the bomb goes off and kills everyone.

Put this in the category of it ain’t over until it is over.

F.O.M.C. gang signs and the Ponzi event horizon...

I will be blunt here. Systemic risk is higher today than it was in 2008. Anyone who claims that the financial system is stable can look at either Treasuries or the credit markets. Look at Europe where the entire banking system is collapsing. 

The long-term problem in the horrendous jobs report is the strangely inconspicuous "Employment-Population Ratio" that has been nosediving for over a decade. It's the definition of a comatose economy.

Hot labor market trend even in a recessionary environment and jobs to avoid at all costs.

Note that the Fed is now suing its favorite firm, Goldman Sachs. This move is not without context. Bernanke and pals are aware of the political tide turning in the US. They’re also aware of what’s happening in Greece and Europe. And they’re going to try to pin the blame on Goldman and others.

This time, an "I told 'ya so" simply will not suffice. The amount of pressure the big banks will come under will reverbrate around the globe, yet many in the sell side are still recommending big bank "buys"!!!