AGORACOM Small-cap Investor Relations Blog

• Negative Savings
• Negative Home Equity
• Negative Stock Markets
• Complete Fiduciary Failures

You may think the source of our economic problems stem from banks gone wild, or regulators gone missing.

Look again.

The source of our entire economic problem stems from the fact human beings over the last 20 years began valuing themselves by what they can buy and show.

Madison Ave has done a simply masterful job of selling the masses on glitz, glam and bling as requisites to being a complete person.  Paul Kedrosky cited Google Trends today as evidence that the masses appetite for celebs, cars, and TV crap is stronger than ever – even as the economy is on the verge of utter collapse.

WE ARE NOW LIVING IN A FINANCIAL MATRIX

We are living in a Financial Matrix. Where humans are used for nothing more than to power the sales of global corporations until their equity, savings and credit are completely dried up.

Now that the Financial Matrix can’t suck anymore out of humans, it’s time for the entire Matrix to collapse, leaving only a few strong and chosen people to re-build and then repeat the cycle.

Andy and Larry Wachowski are absolutely brilliant. Too bad they can’t provide us with our Neo.

Regards,
George

As all of my regular readers know from reading my posts over the last 12 months, the US Financial Crisis has NOTHING to do with short sellers.  I thought this point was so obvious that I never bothered addressing it…but when John McCain calls for the firing of SEC Chairman Christopher Cox because he allowed short selling I have to step in.

Why? Because McCain is wrong and he knows it.  This is classic misdirection for the purpose of political gain.  Americans need a villain to blame the crisis on and it’s a much stronger/easier sound bite to say “short sellers” than to explain the crisis as follows (Quote from Paul Kedrosky).

“Repeat after me: The trouble is not with short-sellers. The trouble is not with short-sellers.
The trouble is with an over-levered financial system built on a house of cards comprised
of under-collateralized toxic paper that was applauded all the way up by “housing is the
American dream” nutters who couldn’t see that vast expansions in thinly-traded credit are
a path to economic ruin.”

Now that I think about it, it is easier to say “short sellers” and “evil doers” afterall.

Regards,
George

I’ve been unequivocal in my predictions that US housing is doomed …. and that we still have yet to see its worst days. Until now, the market/pundit/banker/speculator solution has been “drop interest rates”. Again, something I have labeled as an exercise in futility from the outset.

Now that we’ve arrived at 2% interest rates and real estate only continues to decline, the proof is in the pudding.

Moreover, things have gotten worse. Lower rates have:

• Created a lower US Dollar that is >>>
• Leading to sky rocketing oil prices that are >>>
• Eating away at consumer wallets that is >>>
• Leading to corporate layoffs that is >>>
• Bringing the economy to a grinding halt that is >>>
• MAKING THE REAL ESTATE CRISIS WORSE

Bottom Line: Where once only sub-prime borrowers were terrified of losing their homes, we now have everybody scared of falling home equity, losing their jobs and even losing their homes. “Scared” is the operative word. Scared is the reason why otherwise secure feeling consumers just a year ago will no longer stretch their resources to acquire depressed real estate – no matter how “cheap” interest rates get.

It is psychological now. Look for home inventories to climb and prices to fall quite dramatically over the next 12 months.

Regards,
George