This one is almost painful to post. These numbers are so utterly stark, so massively clear, and so utterly dismal, that it’s almost impossible to understand how the idiots running the US financial system, from top to bottom, could ever have led themselves to believe that things could end other than disastrously.

And this is why you don’t let zealots and extremists, aka: Free Market libertarian nutcases, neoconservatives, etc, into the halls of finance or power. They simply cannot even see reality, let alone understand it.

But first let’s take a look at what
Ambrose Evans-Pritchard at Telegraph.co.uk is saying today:

Stephen Lewis, from Monument Securities, says we have been lulled into a false sense of security by the lack of “soup kitchens”. The visual cues from Steinbeck’s America are missing. “The temptation for investors is to see this as just another recession, over by the end of the year. But this is not a normal cycle. It is a cataclysmic structural breakdown,” he said.
We need shock and awe policies to halt depression

No, even if you subtract a bit of exaggeration, this situation is looking downright frightening right about now.

But let’s take a look at what Doug Noland over at prudentbear.com is saying this week about our credit bubble (quote under the fold), you know, the one that ‘nobody could have predicted would deflate’. I mean, look, let’s be brutally honest. If you can’t predict a credit bubble must deflate, then you have no business working in finance, politics, or any other position of power or authority.
(more…)