Obama's Bull Against the Tsunami

As I watch the events in Europe unfold, it’s like observing a slow-moving train wreck.

Everyone knows the 800lb. gorilla in the room is Germany, and that Greece, Italy, and the rest of the PIIGS must tighten their belts to receive any kind of financial aid whatsoever.

Transcribing proposals on paper and discussing them in parliament is one thing, implementing those ideas in the real world is something completely different.

All the theatrics of meeting after meeting, general pronouncements, and dramatic conference calls can do no more to stop the inevitable than a lifeguard raising their hand trying to stop a tsunami. Or the Pope's bull against Haley's comet.

Because it provides investors with an overwhelming false sense of security to be able to quickly react and save themselves, I am extremely concerned about the sluggish nature of the proceedings in Europe.

It has often been said that bull markets go up by using the stairway, while bear markets take the elevator. Given the monumental impact a European collapse will have on the whole world, you would think most investors would be making accommodations for the impending doom.

Nearly everyone remembers the dot-com bubble crash of 2000 which materialized over a couple of years, or the even the credit crisis of 2007 that played out over months.

I would point to the two weeks preceding August 9th of this year when the stock market erased all the gains of 2010 and 2011.

From years, to months, to weeks, to ________. Do we fill in the blank with days or hours?

Regardless, the European credit crisis is the straw that will finally break the market’s back.

Waiting for that to happen is as foolish as saying the proverbial “this time it’s different,” or “don’t worry, it will come back.”

Investors believe they can respond quickly enough. Unfortunately, it never happens that way.

People who survived a near death experience sometimes report seeing their “life flashing before their eyes” during the accident.

During a car (or train) crash, the person may report time slowing down, and their entire life replayed in flash images in their mind.

Today, the warning signs of the impending crash are painfully obvious. Please don’t be mesmerized by the slow motion of the inevitable wreck.

I don't get what this guy's saying. The Germans just sent their kid's retirement money to the Greek Black Hole and the Krauts are so brainwashed with the Euro thing they are basically saying "thank You Sir, can I have another?"

If the Euro is not immediately devalued, the PIIGS are going down and the Germans and French aren't about to take a 20% loss on anything, let alone everything...so GO FIGURE! All debt was monetized into the Euro rate on that fateful January day back when, most prices doubled including the cost of debt and the Euro value rose over the dollar value forthwith. Mathematics and common sense tells me everyone loses in this deal. If you owned the Titanic and found out it sunk, would you cry because you lost all of your money, or would you cheer because you didn't lose you life?

So much of what is occurring on both sides of the Atlantic these days strains credulity.

Insofar as we still have an equities "market" worthy of the name (and that's a stretch), traders appear to be banking (LOL) on Big Ben and Turbo Timmy to come to the rescue once again, underwriting European debt while continuing to finance our own.

The average investor wants no part of any of this, as both daily trade volumes and market breath indicate. "Buy-and-hold" is dead in a market like this, where currency carry trades and exotic forms of risk arbitrage dominate, all driven by high-frequency computers whose sole purpose appears to be (a) the manufacture of price dislocations, and (b) feasting upon them before an actual human being ever has time to respond to a bid.

We have a long-term disconnect between market fundamentals (whatever are those?) and equity valuations, where bad news is often good news and vice versa, dependent upon the relative extent of short positions at a given moment. Any number of news items this week alone would in the past have risked crashing the market; instead, it melts upward on the vague promises of QE2.1 or 3.0, Fed rate "twisting" or a fantastic European "vacation" from the consequences of socialism, loss of sovereignty, and bad monetary policy.

That's why I'm 100% in cash, gold, silver and... other metals.. until this madness ends. And to your point, if I had owned the Titanic, I might well have prayed to thank the good Lord for not taking me down with it, and then looked about the office for the copy of my insurance policy from Lloyd's.

The US and Europe will rack up such mind-bogglingly huge debts that the ChiComs and the Saudis won’t be able to afford to let us go under. Otherwise they lose all their customers and their own people come after them with pitchforks.

There is all kind of incentive here for a shady deal based on a massive corrupt lie.

Hey, it’s what’s kept Donald Trump going all these years.

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