Three Charts Explaining the Financial Crisis


So what is going on in the markets? We had Fukushima, but that was all good for the economy, because we had to rebuild Japan (with printing money).Then those guys in MENA wanted freedom (and lower food prices). NATO started Operation bomb Libya to stone age, but that was all good, that needs rebuilding too. Greece suddenly discovered it had no money left. Ireland joined, and Spain, Italy etc are still knocking on the same door. But we will save those guys too, just bail them out, or? The Germans taxpayer is getting rather tired of the bailing out the rest of Europe, but what will happen IF Germany gets downgraded, or is that impossible in this world, where we get Black Swans every two days? Then we got the downgrade of the US credit rating, and everybody living in total denial was suddenly shocked. Obama says the US will always be AAA, irrespective of rating agencies… During the past week, some renewed fears from Soc Gen being leveraged by 50 times, to Philly Fed plunging well into recession levels, have pushed the markets lower. The HFT Machines are the only ones trading the broken market, while the short gamma bankers desperately try hedging the “unhedgable”. We still have not heard of any Derivatives blowing up, but that should be on the agenda shortly. Despite all these “fundamental” reasons for the market falling, there are 3 important charts to understand. Firstly Goldman’s fresh GDP cut, yes the Economy is falling, second chart shows many markets are in Bear territory, meaning the bull is gone despite pundits claiming the bull is intact, and lastly, Long’s chart of what actually is happening and the ultimate end result, a currency crisis. Welcome to Irrational Exuberance 2.0 and yes watch for QE3 soon, so we can get the last ones to join the long trade. Before studying the below charts, don't forget WHO sold the TOP again




and the "kicker";