Are we there yet?

May you live in interesting times. ~ old Chinese curse.

My, my, my.  Things have been interesting lately, haven’t they?  I admit that I’m finding it all very entertaining, in a rather horrified gleeful rubbernecking manner.   That’s one of the perks of taking your ball and going home: one can look at the 600 pt swing in last nights futures market, giggle, and say, “This will end well.”

The top two questions on everyone’s lips today are, “Is this the big crash?” and “Will Bank of America go under?”  Let’s talk about that.

I expected that right now we’d be selling off to Dow10k.  (I missed the cause, and so lay no claims to prescience.  Sometimes an educated guess just gets lucky.)  Why 10k?  It would mark a significant loss, but much more than that could take us into panic selling and both panic and HFTs are very hard to control.  I expected the slide would be both political and organized behind the scenes.  The banksters would make money on the way down, and then would make more money on the way back up as they siphoned your money away.

I don’t think this is our big crash.  The Feds still have too much wiggle room*, and much of the markets are under the control of huge corporations and banks.  They will not be the bagholders here, trust in that.

So.  I don’t know where the bottom is.  Today could well be our newest Black Tuesday.  All I know is that anyone who claims they know what this market is going to do today is a lying little tit.  Wherever the bottom is, I’m pretty sure there is one and we’ve got a few months before the market goes Mad Max.

And if that isn’t chipper enough, moving right along to Bank of America.  I don’t think they’ll go under.  Yes, shocking.  We’ve seen this play too many times though.  Remember Citibank?  Bernanke will finesse a last-minute deal to save their bacon.  TBTF.

On the one hand, I can almost see the rationale for a sticksave.  Which would cost the feral government more, a bailout or the cost of BofA collapsing?  ‘Specially keeping in mind that BofA is much too big to go down alone – they WILL take others out on the way down.  To the left… I said “almost.”  Bailing these insolvent little pricks out when they overreached and crashed the economy is what puts us on the razor’s edge right now.  That governs best which governs least.  They should have just let it alone.  It’s what they should do now.

They’ll paper over and bail out and print money and sticksave until they can’t.  There’s an election coming up, after all.

* If by “wiggle room” you mean that Americans are not yet rioting in the streets en masse over the price of bread, and I do.  I’ve long maintained that while $5 gas would be awful, it’s $5 ground hamburger that frightens me.  People don’t riot over the cost of a commute; they riot when they’re hungry.

Published in: on August 9, 2011 at 7:35 am  Leave a Comment  

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