We Must Be In Trouble... By: Mark W Adams

...if Maureen Dowd gets it.

Just when I'd given up on MoD's juvenile analysis of political machismo as the touch-stone of American politics and pretended she still was behind the NY Times' old pay-wall, fittingly ignored -- she comes up with this winner.

Maybe if the president had spent the trillion he squandered on his Iraq odyssey on energy research, we might have broken the oil addiction.

Now it’s a race between Iraq, stupid, or the economy, stupid, to see which one will usher out W.

The country is engaged in a fit of nativism and Lou Dobbsism, obsessing about the millions of Mexicans who might be sneaking across the border when billions in foreign money are pouring into Citigroup. You figure out what might be a bigger problem.

The national boundaries that really matter are the financial ones: Who’s going to own the American economy?

If you want the unbridled scare-the-crap-outta-you take on the economy's prospects, read the Agonist ... at least there's some valuable, if rather bleak advice on which hatches to batten down.

Who’s next in this ongoing financial trauma? Clearly more pain is in store for Wall Street and commercial banks, but we haven’t yet come to the realization that some of these financial institutions will not survive. This will happen, and you will definitely know when that day arrives because it will be the cause of serious damage to the stock market.

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...But we are talking of a bailout in the trillions of dollars under worst case circumstances, and worst case circumstances have become the norm in this market.

Nor is time on the side of the U.S. government. The ratings agencies are already hinting that down the road, if nothing is done about social security and other growing federal entitlements, the U.S. will lose its Aaa rating. This may happen earlier than many suspect.

Somewhere in all this mess the U.S. stock market will collapse. At the moment the stock market is already in a correction, worrying about an economic recession. What it really should be worrying about is something much worse – a complete collapse of the credit markets globally, leading to a depression that will last 3 – 5 years. Once that is understood, the Dow will be trading well below 8,000.

So hold on to your job, whatever that may be. Pay down your debt and watch your expenses. Monitor the credit and market risks in your investment portfolio, and if you have any real concerns, U.S. Treasuries earning 2% will be a lot better than stocks or bonds that might collapse in value. As of now, the four horsemen of the apocalypse are mowing down the big players, but the little guy will be in their sights eventually.

WHEEEEEEEEEEE Indeed.