Crash Alert! ~ The Risk Averse Alert

Monday, June 04, 2012

Crash Alert!

Let's be honest. The extent to which the European banking system's grave condition is being downplayed in the U.S. is off the charts. Truth is if the words "restructuring" and "debt write down" are not in the equation regarding how to recapitalize Europe's hopelessly insolvent banking system, there will be no solution able to stem the social explosion presently consuming the continent. Nothing alluding this objective has a snowball's chance in Haiti of delaying inevitable financial collapse.

Likewise, quantitative easing as a policy buying time pretending the debt burden saddling the trans-Atlantic banking system somehow is manageable now suffers the same disease as affects "systemically important" banks themselves. Three years into this policy and there can be no denying it has not worked. Thus, QE's effect has been to only further degrade confidence in what is otherwise recognized an increasingly hopeless situation.

We are at the point where policymakers are "damned if they do, and damned if they don't" per any further QE. Of course, this reality has been long recognized here, while in the mainstream denial and fantasy still hold sway, even as astronomically growing risk of a chaotic debt unwind otherwise is acknowledged, if only in an offhand manner attempting to diffuse concern among U.S. investors. Yet try as they may to pretend the U.S. banking system somehow is immune to Europe's woes, last week's (as well as last month's) technically well-justified throttling of stocks apparently finds Team Fraud in fact quaking, as last night's CNBC Special anticipating increasing market turmoil fairly reveals, making current efforts to keep investors frozen in fantasy land, first, rather transparent, and foremost, tragically despicable.

At this point with the partial eclipse of the moon occurring earlier today — this following on the annular solar eclipse of May 20, 2012 — a reread of "Is a Stock Market Collapse in the Stars" could be perfectly in order, as the market's current technical state no doubt elevates the probability of a crash occurring promptly.

Fast Money
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