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Doomsday for banks

October 20, 2010

I understand that an ex-government official is not exactly the most credible source about anything (yesterday's post)

How about a guy from the private sector who can clearly do his arithmetic?

(That's all it takes, by the way. No advanced instruction in higher math needed at Ecole Polytechnique from Nicole El Karoui. No one can f*ck up a financial system as thoroughly as a Parisian. See the story of John Law...)

Anyway, scholarly references aside...

Note the looks on the faces of the news reader idiots as Chris Whalen, one of the best bank analysts in the business, explains reality to them.

It would be funny if it weren't a tragedy in the making.

I'm trying to wrap my mind around what it's going to look like when this house of cards comes tumbling down for real.

All I can see for sure is that it will be a party for those who have held on to their cash.

Everything's going to be on sale. There is NOTHING worth buying right now and no return is worth putting dollars at risk right now.

This won't last for ever, but that's the signal I'm getting until there is figurative "blood in the streets." 2008-2009 was nothing compared to what's coming.

Best thing Jim Rogers every said: Most investors always have to be "playing."

This is not the time to play unless you are a nimble short seller and this is definitely not a time to chase yields. Less than 1% too boring for you Try an instant 50% to 99% haircut when the junk bond that's paying 10% turns to sawdust.