I TOLD YOU SO!

BANKS, INVESTMENT BANKS, NOW INSURANCE – AND WAIT MUCH MORE TO COME

I am not a Monday morning quarterback although I have been saying for months this meltdown is going to keep coming and get worse. Of course the insurance industry that re insured many of the mortgage packages sold by banks through brokerage firms like Lehman and Merrill will be hard hit and it’s only just begun with AIG. Everyone is culpable and everyone will get hurt badly and keep getting hurt as I have been saying. I have been a month or two ahead of this curve consistently and not blowing a horn of mine just a trumpet I hope is loud enough to get attention around the issues today and definitely those coming like a train wreck.

But is there more to come? Yes of course! There will be many more bank failures and the imminent horrifying retail season coming up. What will that bring to American businesses? More of the same but worse! The cascade of this meltdown and our national and personal credit addiction is coming home to roost presently. The people out there are limited in their spending power now and this will tighten belts and leave our economy in many sectors dangling on the brink even worse than it is already. We are dependant on consumers to support the various US business by buying services, products and of course Christmas presents. We are also dependant on foreign nations to purchase the paper we issue to run our country backed by the “Full Faith” of our government.

A recession or depression? We are teetering on the brink of not only a Depression but the loss of our credibility as an investment grade nation. What does that mean? Well how can we pay our astronomical debt and interest if the US can’t roll over its interest and issue new debt to pay our creditors? The US is doing exactly what the banks did and for years it has done so. I can’t believe that all involved raiding the American bank didn’t know this was going to come home to hurt our nation. We are extremely vulnerable and the politicians are simply treating each instance but have no plan to cure the cancer our nation suffers from. I put forward the 10% solution again to solve the underlying issue with our economy – the mess that is and is coming is much worse than the daily headlines and can’t be stopped now.

We are at WAR. The day is upon this nation that is unavoidable and we can not continue to do business as usual. Unless our markets and debt is addressed massively, urgently and with massive force the rattling of the banks, insurance companies and soon retail will be the beginning. The end will come when we get cut off or our borrowing rates get so out of control that the US itself gets caught in its own death spiral.

Economy bonds like war bonds! 10% of asset allocations in the pensions, 401k’s etc.. to buy back all US debt? Is this too simple to make it to Washington or am I missing something? Incremental solutions and fixes can no longer hold off the Visigoths – we have a Clear and Present danger to our nation and on TV all I see is pandering and sales pitches that cant possibly be the solution. I hope listeners can really hear the facts and solutions before it’s too late.