Life Isn't So Beautiful for Wall Street

Give the Bulls credit for pretending to be alive. For a moment there on Monday, my jaw dropped as I thought I was watching Roberto Benigni’s tragicomic portrayal of life in Fascist pre-WWII Italy in the Oscar-winning movie Life Is Beautiful.

I, for one, don’t buy the hype I witnessed (Monday) on Financial Entertainment Television. That was a reality show episode where the Street team was falling all over themselves in hysterics. On Bloomberg, there was even one young woman, who I cannot fathom carried an ounce of credibility in any boardroom that matters outside of Wall Street, absolutely gushing, “This is such a good news day. Everything is good.” …I am embarrassed for Bloomberg.

Maybe you recall the movie.

”Guido (Roberto Benigni), a clever Jewish-Italian waiter, successfully courts Dora (Nicoletta Braschi), a beautiful local woman. His life, however, is turned upside down a few years later when he, Dora, and their young son, Giosué (Giorgio Cantarini), are sent to a Nazi concentration camp. Refusing to give up hope, Guido tries to protect his son's innocence by pretending that their imprisonment is just an elaborate game, with the grand prize being a tank.”

It is time to face the reality: this is a Bear market and the US, European and Japanese economies are in Stagflation. Our wealth, not our innocence, needs protection.

This week there were only two sectors that “popped” with significant moves to the upside. That can be explained by the realization the Fed was backing Wall Street by putting up billions of dollars of the People’s capital, surely a defeat for fiat currency if we have ever seen one. For a couple days, at the start of the week, commodity prices soared. But by week’s end, the reality of Bears and stagflating economies had set in.

On Friday, everything came crashing down. The US equity market indexes dropped an average -1.0%. Commodities ($CRB -1.4%), Crude Oil ($WTIC -1.8%), Precious Metals ($GOLD -1.8%, $SILVER -3.3%) and Base Metals ($COPPER -1.1%) all fell on Friday. Yields on US Treasuries also dropped as liquidity withdrawals hit the equity and commodity markets.

Apparently there will be no tank for Giosué; but you knew that already.

If you paid close attention to the wonderful editorial of Don Coxe this week, you can almost hear the clowns crying. The jig of Wall Street is over and done. The music has stopped.

Sure, the handful of people who run these banks and broker-dealers can blame anyone and everyone; and the Friend they sent to Washington, Henry Paulson, can speak for a lame duck Administration as these bankers try to take control of the People’s treasury, but I don’t think either Congress or the People are listening.

In fact Congress now is demanding records and may soon commence criminal action on several fronts. The People who have lost in the aggregate unimaginable trillions have started class-action lawsuits.

Life may not always be beautiful, but it sure is interesting.