Ask the millions of Americans without jobs if they feel like there has been any kind of "leveling out?" Not likely. The duplicity of how the panel can immediately follow a false positive statement with the reality that "economic activity is likely to remain weak for a time" completely bursts whatever bubble of optimism they were trying to portray. How these supposed experts can seriously submit that they have somehow forestalled an economic calamity is sheer lunacy.
The reality is, just as during the Great Depression, the market meddling and mindless manipulation by the Fed to "do something...do anything" has in fact only temporarily confused the market and in that confusion merely diverted a trickle of a flow that is soon to be followed by a crushing torrent of true market correction.
There is a flood coming, pent up and boiling. Just like with Mother Nature, the raw correction of the natural markets will not be put down and no amount of intervention or "stimulus" is going to prevent what is as natural as the Second Law of Thermodynamics.
The wheels were long ago put in motion and the consequences cannot be put aside. There will be a correction and we have not seen it yet. There are undisclosed foreclosures at a level that will shock the country when the reality is revealed. The ramifications of the coming collapse, not only a further collapse in the already battered residential markets, but the even bigger implosion of the commercial real estate markets. Shortly after that will come the collapse of the dollar once our population realizes that the financial market has not corrected.
People do not comprehend that there have been 94 bank failures so far this year, with over 200 projected failures in total for 2009. That means we are going to see over a hundred more bank failures in the 4th quarter of 2009. Along with these failures will come a vortex of consequences and just like water down a drain, unstoppable. We are about to be witness to the creation of "Ghost Malls" that become problematic for cities trying to secure these new wastelands of retail glutony.
The reality is we need to allow the markets, as painful as it may be, to go through the inevitable correction. It is only in this negative painful learning experience of the true market correction that we will really understand what it is going to take to get back on the road to a sustainable recovery. I am the ultimate optimist and I believe in the power of our nation to overcome these market setbacks and to ultimately prevail in the preservation of the quest for life, liberty and the pursuit of happiness. I am just also a realist in that nothing ever comes for free, most of all freedom.
There is no doubt we are all changed forever and things will never be the same. You can throw out the old rules of the pie chart asset distribution for wealth management as those days are gone. There's not going to be a rebound to what we knew, and the paradigm shift isn't clear as to what the rules are going to be going forward, but we know that what used to work won't function anymore. Regardless of your enterprise, we all intersect with finance, whether borrowers, lenders or new ventures looking for investors. My personal brand is that I am cognizant of financial issues which are collateral to the running of any business. How you view your potential interaction with me is going to be a function of what you believe I understand about finance which is a reflection of my overall business acumen.
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