They say that Bull Markets mask a lot of unpleasant truths...
If so, what new disasters await the US economy as stocks continue down and interest rates go up?
My hunch is that the long predicted implosion of FREDDY AND FANNIE may be the next shoe to fall...considering the wave of real estate foreclosures now starting to sweep the country.
And, with the Hedge Funds already posing a systemic risk ...the consequences could be unlike anything we have see so far.
The beauty of older "local markets" in the Pre-Greenspan/Global Era was simply that most problems could be localized...and the tidal waves were smaller then, but still damaging.
Today, the system of interlocking hedges and massive global money flows have created risk on a scale that is truly mind-numbing.
If current trends continue, and they likely will, some "event" of global significance could KD our global "house of cards" and "paper assets" faster than many people think...
P.S. No wonder the EU and US are "making nice" with Iran all of a sudden...
