I Am Looking Foolish Now...But...

Smart or smart-alec? You decide.

So three weeks ago I made a bold prediction of sorts. Not based on anything scientific or Biblical or historical, just on hunches, I made a statements saying I believe that the stock markets will take a tumble --- a dramatic tumble.

Really, I was torn as to whether or not to make such a statement. But I did, and even though the markets have not done a huge tumble to this point, I don't seem to feel that I need to back down from that statement based upon what the markets have been doing as well as the unemployment and job information that has been released by the Federal and State and Local governments since the end of July.

It appears that no one at the national level or on Wall Street seems to be willing to say there's a serious economic crisis ongoing, as obvious as it is --- yet it also seems nobody wants to place confidence on the future of the American outlook based upon any "indicators" which have been placed out for public consumption and diagnosis. Frankly that says to me enough that I am unwilling to back off at this point. I still think we're about to see one of the roughest periods of American economic decline at the TOP LEVEL --- Wall Street, AMEX, NYSE, and all of the foreign markets are about to find themselves unable to control the long-term free fall of the "stock market" and the inevitible failure of the largest of the large conglomerate banks.

What can they do to stop this? Nothing. It is not something they can "fix" with another bailout. This is not something that anyone in the 21st Century can prop up with words or money that is not there. This takes a systemic failure of what the market system --- and especially those who worked in the U.S. Government who must have felt they knew what they were doing in enacting "controls" over the market systems --- which will continue over a period of weeks. Sure those controls will stop an instantaneous failure. But they won't halt the overall fall from grace that has been coming for years.

I hope you figured out that money in the mattress is a greater idea than the bankers (are you listening you poor people with money in CitiBank and the other gigantic bailed out corporations?) would have you believe. When it comes down to it, a mattress filled with hundreds or thousands of dollars will look good to some who have so much unable to be cared-for "stocks" in the market today. I hope you have a diversified portfolio --- something other than straight stocks and promises from the banks.

Keep in mind that if what I am saying does come to pass, the banks underwriters - FDIC - probably won't have enough money for the banks to stay afloat this time.

Ugly? You betcha.

How foolish we will all feel if this happens. I'd be happier to see it pass without the dramatic drop, but I keep looking at the parking lots on a Monday morning and seeing no customers parking their vehicles and then going in for a buying spree. Today, those who are in one of the "best" parts of St. Louis were not on the parking lot just before 9 am. That showed to me that I haven't lost my touch at figuring out where everyone is at any one point in time. Today they were either home saving their money, out looking for work, or if they were fortunate enough they were actually at a job making money while they can.