[Cid_Yama]

This was what they had been waiting for: total collapse. “The investment-banking industry is fracked,” Eisman had told me a few weeks earlier. “These guys are only beginning to understand how fracked they are. It’s like being a Scholastic, prior to Newton. Newton comes along, and one morning you wake up: ‘Holy shit, I’m wrong!’ ” Now Lehman Brothers had vanished, Merrill had surrendered, and Goldman Sachs and Morgan Stanley were just a week away from ceasing to be investment banks. The investment banks were not just fracked; they were extinct.

“As we sat there, we were weirdly calm,” Moses says. “We felt insulated from the whole market reality. It was an out-of-body experience. We just sat and watched the people pass and talked about what might happen next. How many of these people were going to lose their jobs. Who was going to rent these buildings after all the Wall Street firms collapsed.” Eisman was appalled. “Look,” he said. “I’m short. I don’t want the country to go into a depression. I just want it to fracking deleverage.” He had tried a thousand times in a thousand ways to explain how screwed up the business was, and no one wanted to hear it. “That Wall Street has gone down because of this is justice,” he says. “They fracked people. They built a castle to rip people off. Not once in all these years have I come across a person inside a big Wall Street firm who was having a crisis of conscience.”
link

[Revi]

Great article. It's interesting that it took 28 years of bubbles before they all collapsed. They did a pretty good job of holding the Ponzi scheme up all those years.

[dohboi]

You can keep all sorts of bizarre schemes in play when you're still riding on the frothy peak of oil extraction. But as we got deeper into the plateau, the energy that fueled the scheme, that kept the bubbles inflated, was no longer there in the ever greater quantities that people were used to.

The "economies" in the oil-rich gulf states have all sorts of "industries" that are artificially sustained by the local king's or emir's largess--if they run out of money because of a bad business plan, they don't change the plan, they just go to this deep "well" of seemingly bottomless cash to keep their unsustainable business going a bit longer.

This was/is the situation with the whole world economy. The constantly increasing amounts of energy inputs from ever rising availability of cheap oil created a whole world economy built on a bubble. That bubble is now deflating. Nothing will stop the deflation.

The question is: Can we start to structure an economy based on indefinitely long contraction rather than on infinite expansion?

Frankly, I think any such system would be so different from our current system, we will not even use the term "economy" to describe it.

What it will be almost surely is what we've seen from Paulson and co. so far--seat of the pants, ad hoc "rules" and "plans" made up on the spur of the moment to react to every new twist in the continuous crisis; rules and plans that are then changed radically days or weeks later with every new twist, as we have just seen with TARP.

We will just keep twisting in the wind, unless we start getting honest with ourselves about the true depth of our predicament, which we won't do. Of course, even if we do, we will only at best stay slightly ahead of the downward spiral that is the post-PO, run-away GW world we are in.

[vision-master]

The End

[vaseline2008]

(It starts with)
One thing / I don’t know why
It doesn’t even matter how hard you try
Keep that in mind / I designed this rhyme
To explain in due time
All I know
time is a valuable thing
Watch it fly by as the pendulum swings
Watch it count down to the end of the day
The clock ticks life away
It’s so unreal
Didn’t look out below
Watch the time go right out the window
Trying to hold on / but didn’t even know
Wasted it all just to
Watch you go
I kept everything inside and even though I tried / it all fell apart
What it meant to me / will eventually / be a memory / of a time when I tried so hard
And got so far
But in the end
It doesn't even matter
I had to fall
To lose it all
But in the end
It doesn't even matter
-Linkin Park, In the End

[ReverseEngineer]

The Nov 15th Deadline on the Hedge Funds has come and gone, and the Market still is being propped up at 8200 or so.

I would be interested to know if there is any way to find out how many Hedge Funds received requests to Liquidate before Dec 31st? Who is trying to get out of the market among the big money investors? What is George Soros doing?

When will we see evidence of Hedge Fund managers trying to offload their positions and liquidate capital? In what form would that evidence come? Any market pundits who can answer these questions please inform us.

Reverse Engineer