by John Galt
August 2, 2007
Despite the Fantasyland tickets being issued by the Bubblevisionistas, there is an extremely harsh reality sinking in to many war rooms across the other amusement park known as “Realityland” which is slowly hitting Mainstreetland. That harsh reality is that credit bubbles do actually go “pop” and can actually impact the day to day operations of the financial markets. The recent announcement that Bear Stearns has stopped redemptions on a third hedge fund is only one more indication that the game is almost up. It’s only a matter of when, not if until one of the major houses announces a cessation of all redemptions on all funds and operations, including day to day brokerage business, which will trigger the “big one” that everyone speculates about. The proclamations from the pompous propagandist hucksters that “Goldilocks” is alive and well will soon be seen for what they are: Reminders of a bygone era when the elections created they hybrid socialist monster under the leadership of a President named Roosevelt.
Larry Kudlow, you are entertaining as an infomercial on any of the two hundred cable channels being broadcast at 3 a.m. but I think I shall pass on your version of reality. If Goldilocks is alive and well, then what’s that smell being emitted from the autopsy table? I don’t think it’s just the flavor of Tobasco sauce the bears used to flavor their snack. It was not enough for the bears to just eat Goldilocks, now they are eating the creators of the myth. The credit markets are being declared in “turmoil” by many members of the mainstream economic media. The blame for every failure, every major individual real estate stock price or credit price decline is now all the fault of “subprime” and the various evil purveyors of the related instruments. The sad part is their proclamations do nothing to address those of us responding by pointing out those terrifying “facts” which indicate that the problems now are coming from financial instruments directly related to the Alt-A, prime lending and commercial real estate markets. The other shoe is in the process of falling, this time not to the floor but through it. The input I am getting from friends in the markets is that the commercial market is plummeting as banksters withdraw financing for projects that were set over a year ago and the impact of that problem has not even been recognized at this time. In many cases, where the projects are nearing completion in Florida, you can set up bowling pins at either end of these projects and start a new league as they resonate with the echo of poor planning. The buildings are up but activity, as long predicted, is non-existent. The worse part of this new phenomenon is that when these projects fail, they become nothing more than shelters for the newly homeless former real estate speculators that just lost all their homes and of course the rodent populations of our communities, which appreciate the storm shelters.
So with Goldilocks dead, gone, zero, zippo, nada, it would be appreciated that the mainstream media start doing the required autopsy on her remains. The obvious information is there for everyone to see but the doctors of doom are the only ones announcing the true cause of death. For those who think we are going to revive her and parade her around the world to show the American economy is still strong, pretty and vibrant, fawgetaboutit! The mannequin they will be parading around may look pretty but it’s stuffed full of worthless U.S. dollars and will only spew a pre-recorded message when you press her buttons:
“Please mail the delinquent payments to your bankster or else we will turn your account over to our legal department.”
That phrase could become the new national mantra or part of the NAU national anthem once they finish destroying our economy.
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