Within weeks, we will face financial Armageddon; an absolute Apocalypse and I don't see any way at all to avoid it.
The stock market continues to drop, companies continue to layoff employees or go out of business, banks continue gambling with derivatives and losing, Congress is throwing money at the problems hoping to make it all go away. Sorry to have to tell you folks, but the worst is yet to come.
Like a deer caught in the headlights, most average Americans have absolutely no clue whatsoever what's actually coming at them and it is going to kill a lot fo them. Here now, the blunt facts:
If Washington DC doesn't change policy (here and now) before the collapse in equities comes -- which could start as soon as today if the indicators I watch have any validity at all -- our nation will experience Financial Armageddon; the Apocalypse, within weeks.
For what its worth, those indicators are painting a picture of the Apocalypse that I simply can't believe, and they're showing it as an imminent event - like perhaps next week imminent.
- All pension funds, private and public, are done. If you are receiving one, you won't be. If you think you will in the future, you won't be. PBGC will fail as well. Pension funds will be forced to start eating their "seed corn" within the next 12 months and once that begins there is no way to recover.
- All annuities will be defaulted to the state insurance protection (if any) on them. The state insurance funds will be bankrupted and unable to be replenished. Essentially, all annuities are toast. Expect zero, be ecstatic if you do better.
- All insurance companies with material exposure to these obligations will go bankrupt, without exception. Some of these firms are dangerously close to this happening right here and now; the rest will die within the next 6-12 months. If you have other insured interests with these firms, be prepared to pay a LOT more with a new company that can't earn anything off investments, and if you have a claim in process at the time it happens, it won't get paid. The probability of you getting "boned" on any transaction with an insurance company is extremely high - I rate this risk in excess of 90%.
- The FDIC will be unable to cover bank failure obligations. They will attempt to do more of what they're doing now (raising insurance rates and doing special assessments) but will fail; the current path has no chance of success. Congress will backstop them (because they must lest shotguns come out) with disastrous results. In short, FDIC backstops will take precedence even over Social Security and Medicare.
- Government debt costs will ramp. This warning has already been issued and is being ignored by President Obama. When (not if) it happens debt-based Federal Funding will disappear. This leads to....
- Tax receipts are cratering and will continue to. I expect total tax receipts to fall to under $1 trillion within the next 12 months. Combined with the impossibility of continued debt issue (rollover will only remain possible at the short duration Treasury has committed to over the last ten years if they cease new issue) a 66% cut in the Federal Budget will become necessary. This will require a complete repudiation of Social Security, Medicare and Medicaid, a 50% cut in the military budget and a 50% across-the-board cut in all other federal programs. That will likely get close.
- Tax-deferred accounts will be seized to fund rollovers of Treasury debt at essentially zero coupon (interest). If you have a 401k, or what's left of it, or an IRA, consider it locked up in Treasuries; it's not yours any more. Count on this happening - it is essentially a certainty.
- Any firm with debt outstanding is currently presumed dead as the street presumption is that they have lied in some way. Expect at least 20% of the S&P 500 to fail within 12 months as a consequence of the complete and total lockup of all credit markets which The Fed will be unable to unlock or backstop. This will in turn lead to....
- The unemployed will have 5-10 million in direct layoffs added within the next 12 months. Collateral damage (suppliers, customers, etc) will add at least another 5-10 million workers to that, perhaps double that many. U-3 (official unemployment rate) will go beyond 15%, U-6 (broad form) will reach 30%.
- Civil unrest will break out before the end of this year, quite probably as early as this summer. The Military and Guard will be called up to try to stop it. They won't be able to. Big cities are at risk of becoming a free-fire death zone. If you live in one, figure out how you can get out and live somewhere else if you detect signs that yours is starting to go "feral"; witness New Orleans after Katrina for how fast, and how bad, it can get.
The good news is that this process will clear The Bezzle out of the system.
The bad news is that you won't have a job, pension, annuity, Social Security, Medicare, Medicaid and, quite possibly, your life.
It really is that bleak folks, and it all goes back to Washington DC being unwilling to lock up the crooks, putting the market in the role it has always played - that of truth-finder, no matter how destructive that process is.
Only immediate action from Washington DC, taking the market's place, can stop this, and as I get ready to hit "send" I see the market rolling over again, now down more than 3% and flashing "crash imminent" warnings. You may be reading this too late for it to matter.
(Editors Note: Credit for the above facts goes to
REVENGE IS A DISH BEST SERVED COLD
When the collapse above takes place, I and a whole slew of like-minded men intend to take revenge on EVERYONE involved in causing this.
So there is no mistaking what I actually mean, we intend to dispense vigilante justice.
You see, that's what should have happened when the "Great Depression" struck back in the 1930's. It didn't happen, so the scummy financial guys thought to themselves, "Hey, our grandfathers got away with it, we can too!" Not this time.
This time, we have all the knowledge necessary to apply the most vicious vigilante justice the world has ever seen. We know who the key players are in the big corporations, banking, insurance, stocks, bonds, mutual funds, hedge funds, money markets, real estate, derivatives and the like. We have all their home addresses too!
Did they really think we would let them utterly destroy all our years of hard work, planning and personal responsibility and walk away scott-free? Did they really think we would let them outsource American jobs and get away with it? Did they really think we weren't smart enough to know they ran up almost $60 TRILLION in derivative gambles and lost it all?
No, not this time. This time vigilantes like me will be coming for those folks. Vigilantes like me, with a whole slew of other men, armed with guns, equipped with bullet resistant vests, carrying ropes that will be tied into nooses and used to lynch the people who did this. Trees and lamp posts will be full of dead "masters-of-the-universe."
I envision so much carnage, that no one in the next thousand years will dare pull financial shenanigans like the ones that caused this mess, again.
Prepare yourself, America, the end is nigh. But have faith, vigilantes like me are ready.
One last thing: The Vice Chairman of the Federal Reserve testified before the US Senate yesterday. He told Senators that the fed refuses to reveal who got 1.9 TRILLION in loans and refuses to reveal what was pledged as collateral for that money because, he said, "It would stigmatize the entities that got the money."
Even though the fed Chairman promised "transparency" when he was on Capitol Hill begging for bailout money, he lied and now his Vice Chairman refuses to reveal who got how much. They won't even tell Congress!
Instead of worrying about stigmatizing others, maybe he should start worrying about someone giving him what he so richly deserrves: a rope around his neck. You can read what this arrogant bastard told the Senate HERE
