Wall Street WARZONE
28 Leading Wall Street Gurus Break Ranks: Consensus Predicting a Global Collapse and Great Depression II Could Ignite Around 2012 Elections!
by Paul B Farrell, JD, PhD
| Discuss | Print | 9/12/2010

Don’t say we didn’t warn you this time … another, bigger meltdown is dead ahead! Yes, coming in 2012: Another meltdown of Wall Street’s “too-greedy-to-fail” banks. This is no fanatical warning about that Dec 21, 2012 end-of-days prediction from the 5,000-year Mayan calendar. Nor a preview of that apocalyptic film, “2012.” History is repeating, you dismiss these predictions at your peril. Denial won’t save you from destiny. Wall Street’s soul-sickness is setting up a new meltdown. Dead ahead. Be prepared.

One: Predicted the 2000 crash: My forecasting track record speaks for itself. Back on March 20, 2000, my column headline read: “Next crash? Sorry, you’ll never hear it coming.” Bingo: The dot-com bubble popped at 11,722. The economy collapsed. A 30-month recession. Markets lost $8 trillion cap. Today the market is still below that 2000 peak. Factor in inflation and Wall Street’s “too-greedy-too-fail” banks have lost about 30% of your retirement nesteggs in this decade. Incompetent? Clueless? No, Wall Street is a bunch of crooks without consciences.

Two: Predicted the 2008 meltdown: Since 2000 my columns covered many warnings of major debt accumulations, market meltdowns, and the psychological failings of Wall Street’s greedy, myopic brains. In June 2008, months before Wall Street’s meltdown, we reported on twenty predictions made between 2000 and 2007, twenty warnings of a subprime meltdown coming. Oddly, no one seemed to be listening to all the warnings of leading minds like Buffett, Grantham, Gross, Faber, Shilling, Roubini, Levitt, Fed govenors, and many more. I wondered, was this a repeat of 2000 with “no one listening?” Then … suddenly it hit me: Not “nobody.” Just the opposite: Everyone was listening, everybody knew a crash was coming. Yes, everyone. But we were in a trance. Including Washington’s bosses; Bernanke, Bush, Paulson, Greenspan. They all heard it coming. They knew. So did Wall Street. And Main Street.

Three: Now, predicting the new 2012 collapse … and everyone hears this one too!

Unfortunately America’s collective brain is addicted to the adrenaline rush of gambling in a risky bull. The euphoria’s intoxicating. You’re caught up in a game of musical chairs, squeezing out every last dollar of return, blind to the catastrophe ahead … until it catches you by surprise … unfortunately, Wall Street lacked a moral compass and started stealing trillions from American taxpayers … today, the only lesson Wall Street learned is “greed is good” … now, the beginning of the end has become a moral tragedy that is setting the stage for a implosion of Wall Street, of capitalism and our economy ca. 2012. (More)

America Needs a “Good Depression!” 7 Reasons a “Good” One Beats a New “Great Depression!” (Hint: Wall Street Now Losing 20% More of Your Money)
by Paul B Farrell, JD, PhD
| Discuss | Print | 8/17/2010

Yes, a depression! Spelled: D-e-p-r-e-s-s-i-o-n. Wake up America, recessions don’t work any more. Why? Get serious folks. We had a 30-month recession not long ago. Ten years later the market’s still below its 2000 peak of 11,722. That’s a 20% loss in your retirement portfolio, after inflation. And they’ll do it again in the next decade.

Worse, we’re back in a new recession. But Washington politicians are smothering in with happy-talk, feeding us doctored feel-good statistics as legendary political historian Kevin Phillips wrote in “Numbers Racket: Why the Economy is Worse Than We Know.” So we blindly refuse to bite-the-bullet and stop our out-of-control spiral into collapse. America needs a big wake-up call … and it’s coming soon, whether you like it or not!

In November 2007 we posted “17 reasons America needs a recession.” Today it’s far worse, and getting worser: Most economists noe predict it’ll take till till after 2011 to burn off the excess housing inventory and foreclosure. RGE Monitor say Fannie and Freddie bailouts aren’t working, they’ll soon be “profoundly insolvent,” need to be “nationalized.” Yet here it is three years later and they’re still kiccking that can downhill.

Lessons learned? Zero. Why? Wall Street, Washington and Corporate America are a one-trick pony with one narrow-minded strategy: Economic g-r-o-w-t-h, bull markets, mega-bonuses. In good times they tout “free markets.” But when greed bombs, these big babies throw free market “principles” under the “Reagan Revolution” bus as their lobbyists go whining to Congress for mega-billion taxpayer bail-outs and access at the Fed casino’s discount window to siphon off more taxpayer money. What hypocritical wimps!

Wall Street and its co-conspirators are doing such a miserable job, America needs a new strategy: Stop all the short-term “hole-plugging.” Let go and let an old-fashioned “Good Depression” do the job that our happy-talking leaders refuse to do. Let it clean house and reawaken America to basic values. Otherwise a “Good Depression” will turn into a new “Great Depression.” Here are seven strong reasons favoring this alternative strategy:

One: Yes, an honest diagnosis, “soul-sickness” in American Capitalism
America’s problems are not the economy, not markets, nor even politics. The endless bickering campaign is distracting us from facing our real long-term problems. Yes, our economic pains are real, but they’re just symptoms. Since 2000 America has seen had a relentless, sickening overdose of bad news: stupidity, deceit, corruption and even evil behavior. Americans are n-u-m-b, suffering Post-Traumatic Shock Syndrome. The real problem is our thinking, our brains, minds, something deep in our cosmic soul says Jack Bogle’s The Battle for the Soul of Capitalism. We lost our values, our moral compass. (More)

Black Swan Winners: Are You a Left-Brainer? or Right-Brainer? a right-brainer? Who Makes More Money? This Year? Long-term?
by Paul B Farrell, JD, PhD
| Discuss | Print | 5/4/2010

Yes, there’s a test. We call it the “Black Swan Test.” It can help you predict your chances of making money on the next big meltdown, which will be far more damaging than the combined impact of the 2000 dotcom crash and the recent 2007-08 subprime-credit meltdown, which so far has cost American investors over $10 trillion and left the stock market with assets worth less that half their 2000 value. The ‘Black Swan Test’ will help you predict your chances of making money in what many are now reluctantly saying may turn into the “Great Depression 2.” Nassim Taleb, an options trader, mathematics professor and author of Fooled By Randomness and The Black Swan, says “Black Swans” are rare events with three defining characteristics:

1. The event is highly improbable and unpredictable
2. It will have “massive consequences”
3. And, afterwards experts invent reasons why it was predictable, not random.

Taleb also hints to a fourth characteristic. There are “two kinds of these rare events: (a) the narrated Black Swans that are present in current discourse and you are likely to hear about on television, and (b) those that nobody talks about … that you feel ashamed discussing in public because they do not seem plausible.” (More)

“10 Principles for a Black Swan-Proof World” … But Will Taleb’s Solution Save America From the Next Meltdown of Wall Street’s “Too-Greedy-to-Fail” Banks?
by Paul B Farrell, JD, PhD
| Discuss | Print | 4/19/2010

Here’s how the “Happy Conspiracy” of banks, lobbyists, their well-paid pals in Washington and throughout the federal bureaucracies, regulators and The Fed, plus their Trojan Horses in the White House, are driving America straight into the new meltdown Robert Shiller warned us about: Our “vulnerability to bubble thinking is greater than it’s ever been … We recently lived through two epidemics of excessive financial optimism … the dotcom and the subprime … we are close to a third episode.” … Wall Street’s already back to “business-as-usual” less than a year after their 2008 near-death experience … so quick, so sneaky. From insolvency and bankruptcy to a brilliant raid on the Fed and Treasury for cheap money (again), while off-loading trillions of toxic debt on taxpayers, so brilliant. Yes, that “third episode” is dead ahead, as this massive conspiracy drives us headlong into another bubble cycle, a new meltdown, another “Great Depression.”

The rapidly-approaching “third episode” became painfully obvious in reading Black Swan author Nassim Nicholas Taleb’s idealistic “Ten Principles for a Black Swan-proof World” in the Financial Times. Idealistic, yes, but drenched in satire. Satire because we know the new Dillinger Gang, the Goldman Conspiracy and their allies all across Wall Street, could never steal as much money from taxpayers in Taleb’s utopian “Black Swan-proof” world. So Wall Street will surrender nothing, and, therefore, every one of Taleb’s 10 Black Swans remains intact, 10 time bombs, 10 disasters waiting to happen. Here are Taleb’s 10 Rules for a “Black Swan-Proof World:” (More)