The Heat is On!

I will be fairly brief tonight because I am BEAT.

I had to turn off CNBC several times as I travelled today because I just couldn't take the "green shoots" talk anymore. Thank god my Sirius has so many other channels that I can switch too, although my selection was limited today because Howard Stern is on vacation.

Oh well.

The desperation that I see everyday as I watch our bubble economy fall apart is beyond what I could ever have imagined.

Its going to take at least one generation before people ever trust Wall St again. I believe we will see the first signs of anger from the public when this bear market rally fades.

I say this because I see a lot of people struggling all around me.

Everyone that I know in sales says they have never felt so much pressure. Everyone of my contacts on Wall St says that things are deader than a doornail. There are no credit markets anymore. Securitizations are non existent. Trust me when I say this because one of my sources worked in the credit markets until his company literally evaporated in a matter of weeks when the credit markets seized up in 2006.

The crap the press is slinging around these days is shameful. The old "grass roots" reporting that helped keep our politicians honest has now been replaced by "green shoots" reporting. The airwaves are filled with false hopes and blatant lies. Our markets are now manipulated by the crooks on the street who created this financial catastrophe.

With one day left in my poll above, the majority of you say you won't touch these markets again until they are cleaned up. The miniscule volume seen daily in the markets pretty seems to be right in line with how people are feeling here on THTB.

What's dangerous about everyone leaving the market and sitting in cash is it shrinks the stock market. This makes it much easier to manipulate on a daily basis.

Markets tend to crash when they run dry of liquidity. This is what happened in 1987. Folks, I don't think we could have any less liquidity versus where we are trading at then we have right now. We have seen a 30+% bounce based on absolutely NOTHING!

The Russell is up 45%. This makes absolutely ZERO sense as we watch the consumer tank as they lose their jobs. We saw more evidence of this in the consumer numbers today.

In other news, it was reported on CNBC that the PPIP may only take about $50 billion off of the banks balance sheets. I laughed hard when I heard that one. What a joke! That's like a fly on an elephants ass! There are trillions of losses in the banking system that must me MARKED TO MARKET before we can even think about a recovery.

The PPIP is turning out to be nothing more then just another piece of hype.

The ONLY thing propping this market up is the Fed's balance sheet.

Making matters worse:

We have less and less transparency everyday when it comes to our accounting rules. When you hide the losses and ignore all of the rules that were designed to keep the markets honest, you are asking for a total disaster. There are practically no regulations in our capital markets at this point. Its all about hiding the losses and kicking the can down the road!

The bubble analysts love to point out that "Our banks are now profitable".

I say so what? They have been allowed to hide their trillions in losses so whats your point?

Do any of you on here want to own a stock that makes millions per quarter that has billions in bad debt? I already know your answer and oh by the way: No thanks, I'll pass as well.

The reason we are seeing so little transparency is because its becoming increasingly more difficult for the Fed's to hide this godawful economic disaster.

The Fed's Hoenig said it best today as he trashed the Ben's approach towards fixing this mess:

"WASHINGTON (MarketWatch) -- Thomas Hoenig, the president of the Federal Reserve Bank of Kansas City, was critical of the government's "ad hoc" rescue efforts during the financial crisis, saying that the actions have institutionalized the concept of too-big-to fail in our economic system. Fed chief Ben Bernanke has argued that he, and others, acted like the emergency crew that saved a burning home before it destroys an entire neighborhood without asking whether the fire was started carelessly. In response, Hoenig asked "if the fire was started by a homeowner who ignored fire codes and smokes in bed, should the neighbors be required to rebuild the home at twice its original size at their expense?"

Bottom Line:

Here here Mr. Hoenig. Perhaps you can speak up and try and talk some sense into your counterparts at the next Fed meeting.

I don't know how this will all end folks. All I know is it's going to be very painful. We cannot hide the skeletons in our closet forever.

Plug your ears and ignore all of the recovery talk. Things are bad and getting worse.