01.22.08
Well, that was a Waste of Ben’s Bullet….
Well, it doesn’t take a full day’s trading to realize that that was a waste of Benron’s bullet. The 75 basis point cut is now being heralded as a savior by the permabulls and an assassination attempt on the bears. Sadly for the bulls, the bears simply covered their shorts, took their money home and refused to come out to play by lunchtime. It would appear that the “sell into any rally” message pounded into the sheeple’s heads is taking hold. The realization that this does zero, zip, nada, nothing to help people who are delinquent on their mortgages, nothing to revive the corpse known as the “consumer”, and nothing to entice foreign money to buy our treasuries as when they rally they are selling their holdings into the rallies. This is the makings of an ongoing financial disaster. Instead of a one day crash and attempt to rebuild a new base with some of the crap taken out to the curb, we have opened Pandora’s box and a long slow grinding market is upon us. We might finish in the green today, but I doubt it. Once the financial world grasps that Benron has used his Barney’s Magic Bullet, the eventual impact will be total and abject panic at the thought that we may indeed have to follow the Japanese model. The problem is the citizens have no savings, too much debt and a horrible societal structure unlike the Japanese where fifty percent of the population expect the government to pay for everything and wipe their butts. That is the formula not just for a nightmare version of France, but the opportunity of an old fashioned 1920’s Italian style leader to emerge as things get fouled up.
You know, like the guy who guaranteed the trains will run on time……
More tonight after the market close.
Joejoe the Bigrig said,
January 22, 2008 at 5:43 pm
We are turning into Japan. A close near the lows would be the worst possible scenario after filling the gap down this morning.
Let’s get familiar with the following terms as our next decade could look similar:
In the 1990’s in Japan, the time after the bubble’s collapse (崩壊, hōkai), which occurred gradually rather than catastrophically, is known as the “lost decade” (失われた10年, ushinawareta jūnen.)