Life has almost become surreal at times as I watch this economic collapse slowly spiral completely out of control. The wheels are off the tracks at this point folks. All you need to do is open the newspaper today(that is if you still have one in your city) and just read whats going on in the world.
I mean think about what we have seen in the last few days:
- We have watched two Japanese Nationals get busted smuggling $134 billion of bonds into Switzerland. Can you say bizarre?
- British Airways is asking their employees to work for free. Gee, where do I sign up for that job? I think I could do that job out of my house! (scarcasm off)
- Iran is spiraling out of control as Aljimajoke won an obviously rigged election.
BTW. Why can't our people learn how to protest like the Iranians? They take to the streets with torches when they see fraud on an unprecedented scale. Meanwhile over here in the USA, we just sit on the couch and watch American Idol as our country swirls down the drain following an unprecedented financial fraud.
- This report out of Drudge on ABC takes the cake for me:
"ABC TURNS PROGRAMMING OVER TO OBAMA; NEWS TO BE ANCHORED FROM INSIDE WHITE HOUSETue Jun 16 2009 08:45:10
ET On the night of June 24, the media and government become one, when ABC turns its programming over to President Obama and White House officials to push government run health care -- a move that has ignited an ethical firestorm!
Highlights on the agenda:
ABCNEWS anchor Charlie Gibson will deliver WORLD NEWS from the Blue Room of the White House.
The network plans a prime time special -- 'Prescription for America' -- originating from the East Room, exclude opposing voices on the debate.
The Director of Communications at the White House Office of Health Reform is Linda Douglass, who worked as a reporter for ABC News from 1998-2006.
Late Monday night, Republican National Committee Chief of Staff Ken McKay fired off a complaint to the head of ABCNEWS :"
Jeez....Am I taking qualudes and not realizing it, or am I really reading this ABC news story? What planet are we on? Since when does the media start broadcasting out of the White House? Is this a goddamn dictatorship that's now in office?
Will Obama be appointing his own version of "Baghdad Bob" that comes on air on ABC everyday and tells us about how wonderful a job the government is doing? Perhaps he could also give us a daily recap around all of the green shoots that are beginning to sprout up all throughout the economy.(sarcasm off AGAIN!)
What is going on here folks! Has the world gone mad????
I think investor's are now dazed and confused. The volume has been extremely light for weeks now. I don't believe anyone was really that confident around the economy when this bounce got started. Now that this rally has stalled in the last week or so, it appears that investor's are quickly losing confidence as we begin to roll back over. This is what happens when so many things remain so unclear.
I post this graph a lot but I think its critical to remember:
The pattern that is developing right now appears to look a lot like the pattern we saw above in The Great Depression. There will be ebbs and flows throughout this crisis as we see conflicting signs around an economic recovery. I don't think we are headed straight down from here. I expect a lot of volatility , and you are going to have to be nimble in order to catches these bounces and sell offs.
However make no mistake about it, there is no recovery in sight. As a result, the long term trend will be straight down. Its just a matter of time before we break the March lows as this brutal recession/depression continues to wreak havoc on the economy.
The biggest problem that we have in this country is that there is no catalyst in the near future that will be able to pull us out of this.
Think about it, where is the next economic catalyst going to come from? Tech? We already blew up that bubble. Wall St/Finance? HA! These companies will be drowning in debt for a decade or more. Possibly a generation. Housing? Been there done that. Manufacturing? HA! From who Government Motors? How about healthcare? Yeah right. Obamacare will wipe out any hopes of growth in this area.
Green energy is just about the only thing that I can see that is promising. However, its a decade or more away. We simply don't have the infrastructure set up to get this game going to any large extent. We may create some jobs in this area but it won't be near enough to replace what we are losing.
Without an economic catalyst there will be no recovery. Without a recovery, there will be no consumer which is what drives the economy in this country. Practically everything in the US is geared around us emptying our wallets. We make and export hardly anything anymore. We have become a nation of debt slaves that no longer has the ability to spend.
The future sadly looks very grim. An economic reset is now inevitable at this juncture. Consumption has collapsed and our industrial production has collapsed along with it(we got more bad numbers today).
The longer we deny the fact that our cost of living must be dramatically lowered to affordable standards, the more we will sit here and and simply suffer.
Our debts must be cleared, and our consumers need to deleverage themselves off of their Ponzi spending lifestyle. THERE IS NO OTHER ANSWER TO THIS PROBLEM. This will result in a lot of economic pain in the form of massive bankruptcies, but it is essential if we ever care to see an economic recovery.
At this point, a depression is unavoidable. Lets accept it before it morphs into an economic collapse.