Marty

Historic Financial Collapse Underway?

Great article! I wanted to add some stuff .

- In 1999 the Nasdaq was 5000 its 2200 or so now. In 1989 as the Japanese real estate bubble burst the Nikeii Average was 40,000 its 18,000 now 20 years later. Their real estate market retraced 20 years of gains as well. I feel it is not totally out of the realm of possibility that a much longer recovery trend like that in Japan can happen here.

-Regardless of the economy there are other factors -HUGE outflow of investment funds to baby boomers retiring. These people were able to save more than the next generations AND had the benefit of company pensions (also invested) that will now be coming out of the market just as new money in gets tougher as people cant save.

-Additional Risk - State and Local revenue -People are not driving on toll roads as much and they need to raise tolls. Property taxes are going to be a nightmare to collect, and sales taxes are down. There are some serious risks in that environment to state and local Govt spending (and related bonds etc)

-Not sure if I agree on the gold thing. The last year has shown you might have been better off buying food that you can store , things like rice , flour etc LOL But there is a valid argument in the currency collapse market.

THOSE THINGS SAID...

As a CPA in the northeast part of the country I have seen this mess coming for over 2 years. Just like the signs were clear to me 2 years ago I am seeing some limited signs of the seeds of recovery taking place. It could very well be far off but let me tell you about the few positive things I have seen..

1- The small business credit crunch seemed to ease when the Fed lowered rates. I dont know why but between Oct 07-March 08, it seemed like noone had money, now people seem to be hanging in there .

2- Some clients are reporting better sales (surprising even themselves). In the last 2 years I have not had a handful of people telling me anything good the same day but I am starting to get those reports.

3- Some new business formation is going on.

4- Looked into details of some financial stocks reports. IT appears to me that places like Citibank and Merrill Lynch are 6 months away from a turnaround. For example, Merrill has reported 40 billion in some odd losses already. They only have 4 billion or so left in CDOS in total.

5- Private people (like Boone Pickens for example with the Energy plan) are starting to step up to the plate with ideas.

There is an all bets off death scenario though. That is if we get involved in another war. Then I think its over.

Id like to state one more thing..

from a year ago to about 6 months ago the Govt essentially lied about inflation, unemployment and the jobs market.

Now the facts are out there. At least people are playing cards with the reality deck now. The risks are out there. Just articles like this one might show a bottoming process.

I have been very negative on things but call it as I see it. I do see some things moving in the right direction. It might be a dead cat bounce as they say but I am hopeful that we are wrong and things will turn, everyone makes out better that way and ill eat crow anyday over not having anything to eat!

Marty