My bearish tinted glasses about the stock market valuation are no secret to SI participants even that last weekend I pointed to a recovery in stock prices and was myself on the long side.
Many stocks I was vocal about their financial reporting in the past, are at lower levels even 2 or more years later of my remarks(LU, SIII, CA etc.).
As an side comment, for the year, my stock market accounts grew in value.
The issue I want to ponder has more to do with the continuous damage inflicted upon our global society by the formal policy this US administration, which is crafted for pure personal gain in disguise of benefit for the masses.
Several courageous souls posted various post on the Internet were they admitted that they lost all their savings or investing money, many more incurred losses but did not complain, several months ago a distressed trader killed several innocent people after arriving to financial ruin, other were ready to sell their kidney's and many other just vanished silently and for sure there were many incidents of suicide or deep depression due to financial losses, but did not make the daily headlines in the TV networks or on CNBC.
My Point
In aproximation to put the whole think in some perspective I would like to mention that a nation consisting of around 6% of the world population controls about 2/3 of the world's financial assets and is responsible for around 80% of the trade imbalances. As a guideline the world GDP is estimated around $35 trillion. US Stock market capitalization around $17 trillions, US National debt around $6 trillion and corporate and personal debt more than double this amount. Liquidation value of the assets backing those loans are around $8 to $10 trillion and will shrink substantially in forced liquidation.
So on balance we have a net excess of somewhere in the $22 to $26 trillion of HOT AIR or 3 times the US GDP, paid by hard earned money in the US alone. Those staggering amounts of money were contributed by people from the world over buying just HOT AIR
Those numbers by themselves are frightening and spell worldwide disaster. I am not sure how many SI participants had relatives in South East Asia or Indonesia or really grasped the violence and destruction in those countries during the 1997/98 financial crisis, but I do not think that the destruction there were short of a war with many atrocities resulting from financial ruin not even reported in the press and since long forgotten.
The repercussion against the Chinese minority in Indonesia due to the financial collapse was not less severe than the recent ethnic war in the Balkans were the responsible are WAR CRIMINALS.
Another great example is the collapse of Russian economy as a result of financial excess and corruption, again the Western Society was insulated from the nasty hardship and atrocities in Russia as it is not making great headline that Babushka Ivanova died of hunger or lack of proper nourishment stolen by the local organized crime.
In a nutshell the above mentioned financial imbalances are IMHO an total extreme type of financial exploitation not witnessed in modern human history. The notion of ROBBER BARONS is still alive and well in the US, just the characters are changing.
History has proven again and again that those balances ultimately will correct in a very brutal fashion as in SE Asia for example but due to the enormity of the imbalances orchestrated by this administration the results will be substantially more catastrophic.
Why the alarm?
Wen a terminally ill cancer patient needs to wait close to an extra hour of nail biting and emotional distress, to receive an answer if his cancer progresses or not, due to the mere fact the doctor is busy placing orders in the financial markets 7000 miles away, during regular working hours it is alarming.
If a social worker caring for the elderly is all shaking and frighten that her husband may loose his job, because some stock market 7000 miles away had a correction it is alarming
If a nurse is more interested in the prospect of the recovery of a stock market 7000 miles away, than the sick people waiting out side it is alarming.
If a family doctor evaluating some test results is more concerned about the financial health of a stock market 7000 miles away and mistakenly stops medication against a life threatening thrombosis it is alarming.
If the mood of a nation is influenced by the vagaries of speculation in a financial market 7000 miles away it is alarming.
I am sure that the few instances I witnessed are not unique and happen all over the world and the present precarious situation was engineered to hold in power a President and an administration immersed in financial and moral scandals since it's ascend to power, as no other administration before .
Wen leader of the world from the US to Australia must come out with speeches to calm the financial market it is alarming.
WE SHOULD HAVE NOT ARRIVE TO THAT SITUATION IN THE FIRST PLACE.
In the aftermath of a collapse some even more corrupt villain will come to power and use brute force to sustain it's power then people will have little choice but submit and humanity will blame that scoundrel for all the atrocities and those who brought him to power through their corrupt and selfish conduct.
A responsible government will look forward and evaluate the consequences and care for the people and people future and care only about "THEM STAYING IN POWER". Other wise there is no difference between democracy and totalitarism.
Since ancient time the Mississippi floods it's banks and seasonal storms devastate the South Eastern Coast of the US ....... Nature has it's own ways and no power is about it.
Same applies to financial markets.
Thanks for reading
Haim |
