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It's not the stock markets I am worried about. As a former stock and option trader. Stocks fall and rise all the time. Actually they are heading for lower zones soon. Regardless of the bail-out.
What worries me is the credit markets. The credit squeeze is worsening and now many banks are failing in Europe, China, and India...also Russia. This shows how inter-connected these credit markets are and how little we understand about how bad the mortgage derivatives were---and how widely they were traded.
Like radioactive poison, the bad loans are weighing down not only the surviving banks, but also the money market funds which loan money to the banks and major corporations. Investors are fleeing now to T-bills with no interest simply to stash cash under the mattress. A negative spiral is now accelerating. This down-wind will effect main street a big way.
Indeed what we are seeing is the dawn of a financial Chernobyl. The 36 hour period between September 16-17 saw credit markets on the brink of collapse. This collapse is still staring us in the face and alas the winners of this collapse will be super titans in the end.
A massive redistribution of wealth in fewer hands is now a certainty and it is these few hands who will have enough cash in four years to make trillions in the next bull market. A bull market that will make the last ones puny and this bull market, I believe will be America's last hurrah.
Stay tuned.
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The Looming Cap and Trade Scam
