Says It All

Imagine that there were no stock market. If you wanted to buy a stock you simply went to a stock store and paid the par value of the stock.

If you can understand the problem with that, then you can understand the current problem with banks. They claim their assets are worth par when, in fact, everyone knows they’re more likely worth ten cents on the dollar.

The banks are up the creek, and we are up the creek because you, dear reader, are being forced to indemnify about two dozen sink holes. All of your assets, and all of your potential future earnings (which diminish on a daily basis), and those of your children, have been pledged to fill those holes. Holes that any sensible person knows cannot be filled. No matter how much money is poured into them, the money just disappears.

Residing at the bottom of the sink hole is the derivatives beast which has a limitless hunger. Its name is Washington.

Unfortunately, there are other sink holes besides banks. They have names like national debt, social security, medicare and many, many more that you don’t know about because Uncle Sam keeps multiple sets of book. If banks are sink holes, then these leviathans are black hole of cosmic proportions.

For years people have called me a doomsayer. Soon they may be calling me a master of understatement.