Suddenly, the two recent waterboardings on Wall Street make some sense. The stock market could, indeed, fall apart tomorrow ... but, like I said yesterday, I think there's one more trip into new, post-3.17.08 high ground before the fireworks begin.
Were it not for clues indicating things under the covers are just not right ... and were it not for other indications suggesting the stock market is near to turning over ... I might be wise to consider other credible possibilities as we approach the final month of this year's second quarter.
Yet, here we are once again with hopelessly bankrupt financial institutions facing the challenge of convincing vested interests to swallow still greater helpings of fudge baked at the Fed. Yes Larry, credit may be easing, but do you know what the trouble is? No one but you and your Tory crew is believing it will do any good ... and this is a HUGE problem defying spin. The crisis of confidence simply cannot be shouted down, sir.
So, is it any surprise, then, the group leading today's decline was the still-leveraged-to-the-teeth financials? This group is not just one of many. No! Indeed, for the past couple decades (up until last year) financials were the very engine of earnings growth for corporate America. And that engine has seized up. Wall Street structured finance — the real-life wicked witch of the West — is dead.
(FYI: former JP Morgan/Chase CEO John Lipsky called Structured Finance "the lynch-pin of the U.S. economy" back in '02 when he testified before a Senate Committee investigating the collapse of Enron. The accuracy of this statement is testified to by the extraordinary nature of measures taken by both the Fed and the Congress since the so-called "credit crisis" began last year.)
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