It’s abundantly clear now that too much borrowing and spending in recent years is at the core of the current economic crisis. But what perplexes Bill Bonner is that government policy still assumes that more of the same is the only way to get us out of this mess. And Wall Street is only too happy to go along with it…
Nations do not purchase their prosperity, says Eric Fry. Since this crisis started last year, the government has thrown around $8 trillion at the problem. But these are banknotes that it has manufactured for itself. And that’s why we may soon face a severe threat from inflation.
Oxford Club’s Alex Green explains how Wall Street’s supposedly safe structured products became an investor’s nightmare. In reality, they were just a gimmick. Alex says this just underscores why investors should be cautious of any product that comes with “guaranteed” returns.
This is no ordinary slump, says Bill Bonner. We face a “balance sheet recession”, where banks, businesses and investors are forced to cut back after suffering huge losses. Bill says this will take years to sort out. And government efforts to delay the inevitable will just draw out the ordeal.
“We have never seen such a foolhardy effort on the part of the world’s governments to prevent a correction,” says Bill Bonner. The market is not being allowed to work as it should. First Wall Street told us we could borrow and spend forever. And now messieurs Bernanke and Paulson tell us they can fix this mess. Bill says all they will succeed in doing is creating the next major monetary crisis.
New home sales rose by 2.7% in September, according to the Commerce Department. Andrew Snyder says this is an important sign of a rebound in the property market. And that means adjusting your portfolio to include real estate investment trusts (REITs) like Post Properties (NYSE:PPS) and American Campus Associates (NYSE:ACC).
There’s blood on Wall Street today.
Here is the latest top news and commentary about the crisis on Black Monday:
Oil and Commodities Prices Plunge (FT)
Turmoil Boosts Yen and Swiss Franc (FT)
Gold Surges $25 as Financial Crisis Deepens (Market Watch)
AIG shares fall 52 percent (Reuters)
Pimco, Vanguard, Franklin Are Biggest Bond Fund Losers in Lehman Collapse (Bloomberg)
Don’t play chicken with Wall Street! The current market rally is a trap technically identical to the bear rally of May 2001, and just as dangerous.
“Sagging fortunes.” Can’t get away from that catch-phrase these days. It’s a favorite of both sports and finance writers alike as in…The sagging fortunes of the Seattle Mariners (in baseball) and Roger Federer (in tennis). Or as in…
The CBOE Volatility Index is designed to be a measure of volatility in the overall market. Without getting too technical, it is based on the volatility of S&P 500 options. The options are rotated in and out, as one month’s options expire and then a new month is added on.
