season to taste.

Roubini nails it, again.

At this point the risk of an imminent stock market crash – like the one-day collapse of 20% plus in US stock prices in 1987 – cannot be ruled out as the financial system is breaking down, panic and lack of confidence in any counterparty is sharply rising and the investors have totally lost faith in the ability of policy authorities to control this meltdown.

This disconnect between more and more aggressive policy actions and easings and greater and greater strains in financial market is scary. When Bear Stearns’ creditors were bailed out to the tune of $30 bn in March the rally in equity, money and credit markets lasted eight weeks; when in July the US Treasury announced legislation to bail out the mortgage giants Fannie and Freddie the rally lasted four weeks; when the actual $200 billion rescue of these firms was undertaken and their $6 trillion liabilities taken over by the US government the rally lasted one day and by the next day the panic has moved to Lehman’s collapse; when AIG was bailed out to the tune of $85 billion the market did not even rally for a day and instead fell 5%. Next when the $700 billion US rescue package was passed by the US Senate and House markets fell another 7% in two days as there was no confidence in this flawed plan and the authorities. Next as authorities in the US and abroad took even more radical policy actions between October 6th and October 9th (payment of interest on reserves, doubling of the liquidity support of banks, extension of credit to the seized corporate sector, guarantees of bank deposits, plans to recapitalize banks, coordinated monetary policy easing, etc.) the stock markets and the credit markets and the money markets fell further and further and at an accelerated rates day after day all week including another 7% fall in U.S. equities today.

The audience was not all that large. In fact, there may have been about as many members in the band as in the audience. It was like a night club with tables and stuff. But all eyes were on the stage.

Bob in HI

The best reference I ken give ya is to the history of the fall of the Wiemar Republic and the rise of the Nazis…the families of the oligarchy and the industrial magnets thought that they could control Hitler and the mob of unwashed unemployed that he controlled…and they were OK as long as Hitler kept his little street army occupied with the Jews, Gypsies and Queers. By the time he had used ‘em ta rearm and rebuild it was too late and the great unwashed army was too big for the usual methods of social control.

As to who is gunna go after who…well think about it, the lefties, intellectuals and the blacks are gunna be the targets for the frustration of the great white mob directed by the corporatists. The American oligarchy learned from the Hitler experience…after all they funded ‘im.

Aloha to all the departing pups! I shall join ‘em! Aloha Oe!!!

Now, I’m no professional musician, but I’ve been close enough to it several times that I’ve been on both sides of the microphone. So I know a little about what its like. And I really love watching the interactions among the musicians as well as hearing the performance.

Oh yeah. He had an acoustic upright bass player, not an electric bass. I would have loved to have that gig.

Bob in HI