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
| 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.

Yes, another meltdown’s coming, it’s inevitable. So this time, I’ve decided to do more periodic updates, a watchlist of alerts, warnings and predictions. Like all the updates done the prior  decade, except this cycle, we’re now more aware that few in power will listen, not Wall Street, not Washington, not Corporate America. But you must. Here are some headlines that tell a fascinating story by themselves, an editted montage blast from 28 experts warning of a disaster dead ahead for Wall Street, America and the world. Read fast, “feel” the power of this prediction:

Financial Times … “Second Great Depression … Still Possible.”
The economy’s “spiral is captured in a Titanic metaphor … unsinkable.”

BusinessWeek … “Next bubble could come sooner than you think.”
From Reinhart and Rogoff, “This Time is Different.” But, it never is.

Bloomberg … Citi’s ‘Near Death’ Hoard Signals Lower Profits.
Citi hoarding $244 billion in cash, ‘as if another crisis were on way.’

Wall Street Journal … “Three Decades of Subsidized Risk”
Gasparino’s “The Sellout:” Greed, mismanagement killed financial system.

SeekingAlpha … ‘Crisis Lessons Forgotten in New Speculation.’
We prop up ‘trash stocks’ Fannie Mae, Freddie Mac, AIG; learned nothing.

USAToday … “Wall Street Bailouts … Business As Usual”
Warning: ‘Too Big to Fail’ protections guarantee another crash down the road.

Boston Globe… ‘Why Capitalism fails … why it will happen again.” ‘
Economist says American capitalism “contains seeds of own destruction.”

MarketWatch … “Einhorn bets on major currency ‘death spiral’.”
Hedger bet against Lehman. Now against dollar. Says ‘break up too-big-to-fail’ banks.

Forbes … ‘Be Prepared for Worst … repeating Great Depression’
Expect “GD2” says Congressman Ron Paul, author, The Revolution, End The Fed

New Republic … ‘Next Financial Crisis coming; we made it worse.”
Former IMF economist: ‘Bernanke’s soft landing, sowing seeds of next crisis.’

Wall Street Journal … “The Economy is Still at the Brink.”
Moral hazard: No CEOs of failed banks indicted … even paid millions.

BusinessWeek … “What Happens if the Dollar Crashes?”
Trade wars break out, banks collapse. Why, cheap dollars are killing us.

Pimco Investment Outlook … “On the ‘Course’ to a New Normal”
Gross’ ‘New Normal:’ spending, stocks down, savings up, banks riskier.

Economix, New York Times … “Finance Gone Wild”
Simon Johnson: Wall Street’s “pathological” power over Washington.

Vanity Fair … “Wall Street Lays Another Egg.”
Ferguson: ‘Math models ignored history, human nature,’ failed, repeating.

Clusterstock … Warning … “10 Bubbles in the Making”
Fed’s toxic debt; Gold; emerging markets: ETFs; China; securitization; more!

Rolling Stone … “The Great American Bubble Machine”
Taibbi: Goldman’s a giant vampire stealing trillions with ‘gangster economics’

Temasak Hedge … Roubini predicts bubble, hates equities …
Economist sees “bigger bubble than before” as Fed’s wastes taxpayer trillions

CNN/HuffPost … ‘Wall Street Made Mess, Big Bucks on Clean-up’
Michael Lewis says ‘they’re too powerful … we’re in for day of reckoning.’

Vanity Fair … ‘Wall Street’s Toxic Message: Capitalism Failed’
Stiglitz: Wall Street writes self-serving rules, puts global economy at risk.

MarketWatch … “Wasting our chance to fix the banking system“
America’s got a “banking system that’s just a ticking time bomb.”

MotherJones … “Could Cap’n’Trade Cause New Meltdown?”
Yes, and Goldman sees huge profits if this $1 trillion market is created.

Fortune … “We Owe What? The Next Crisis; America’s Debt”
Yes, “chronic deficits are putting America on the path to fiscal collapse”

Time … “America & Its Deficits: Are We Broke Yet?”
Justin Fox, author, Myth of the Rational Market: “We’ll soon find out.”

HuffPost.com … ‘Main Street Jobs? First Kill Wall Street Jobs’
“Looting of America” author: Wall Street got rich destroying Main Street.

The Nation … “Creative Destruction on Wall Street”
Greiner: They treats problem as ‘psychological,’ solved by ‘happy talk.”

Kiplinger’s … New Black Swan Triggers Next Financial Crisis
Money manager Bob Rodriquez: “Next bubble already growing.”

The Atlantic … “Why Wall Street Always Blows It”
Blodget learned hisa lesson, but Street CEOs still clueless, no lessons learned.

Tell us: Do you believe a new crash will hit around 2012? Will it trigger the “Great Depression II?” WWIII? And how big a factor is Wall Street’s greed and lack of morals the cause?

original: MarketWatch 11.09

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