Only panic is left

[Cruzan]

For years, greed has been the underlying force in the markets. Now fear is replacing it.

Once underway, fear is an even stronger force. While central banks try to hose down the market's fear-flames with money, it doesn't change the liquidity problem. Lenders fear to lend and borrowers fear to borrow. Money "in the system" is of no real help. Someone has to borrow it. Who will?

We're back to being unable to push a string. We're into the very early beginnings of the unwinding of the derivatives hurricane long forecast by Jim Sinclair and myself.

Only the innocent will fall for the line that two failed funds from Bear Sterns and one European bank fund were the only real problem, which caused the main central banks to massively push money into play, and repeat it and repeat it.

Shallow thinking. Into play they hope. The money just sits there waiting, hoping, to be used.

The modern financial world runs on credit, so if fear rises to a level where fewer are willing to lend -- and fewer are brave enough to borrow -- the situation can get a lot worse before it starts improving. In my opinion, we've entered that twilight zone and it will get worse and we'll see a torrent of foreclosures over next 12 to 24 months. The "other shoe" will be falling for a long time, so investors should stop waiting for the markets to "calm down."

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[PDJane]

1. It's spreading.

CIBC is taking a multi-million dollar hit from this too...Living in bubbles is simply unsustainable, and between Greenspan and the doofus in the WH, this is a mess that is bound to get deeper. I'm scared as hell right now, frankly.

[Skink]

2. Why should we care if the richest one percent are at risk?

The people reaping the profits from unregulated capitalism.

[MissMarple]

5. The very richest, and that isn't very many, are insulted, well insulated.

In the top 1% are people making 250,000-300,000 and up. The ones on the lower end are more likely to be still dependent on their salaries, not necessarily on investments. If things go south it will ripple all the way down the line. The few at the top will just hire more security. Lucky them. Maybe that is why the Bush's are interested in property in Argentina. Neither the Cheney's or the Bush's are invested all that much in the stock market. They are buffered from a falling dollar.

[Deja Q]

3. The solution seems simple.

If it is 'globalization', stop adding jobs to countries or at least give our own work to do. Peoples' ability to pay back is a big driving force.

None of us knows the future and I'm not going to waffle around watching tinfoil hat movies. The truth is, there is a correction underway. Eventually it'll even out and the future will turn good again. There's a lot more that needs to happen before an actual collapse occurs.

And even then, who will put it together again? What will the stipulations for prosperity be at that point?

[Hydra]

4. K&R

why are we still on a debt based system, since it's so unstable?

We should be on a work credit system.