I'm still waiting to hear that China has suddenly imploded, their demand for our goods is dropping like a stone, their factories that make all of our stuff cheaply are closing up in droves, they're selling their dollar reserves, and will stop buying our new debt from now on. Now that would be earth-shaking.

The US and advanced economies’ financial system is now headed towards a near-term systemic financial meltdown as day after day stock markets are in free fall, money markets have shut down while their spreads are skyrocketing, and credit spreads are surging through the roof. There is now the beginning of a generalized run on the banking system of these economies; a collapse of the shadow banking system, i.e. those non-banks (broker dealers, non-bank mortgage lenders, SIV and conduits, hedge funds, money market funds, private equity firms) that, like banks, borrow short and liquid, are highly leveraged and lend and invest long and illiquid and are thus at risk of a run on their short-term liabilities; and now a roll-off of the short term liabilities of the corporate sectors that may lead to widespread bankruptcies of solvent but illiquid financial and non-financial firms.

........................................

At this point the recession train has left the station; the financial and banking crisis train has left the station. The delusion that the US and advanced economies contraction would be short and shallow – a V-shaped six month recession – has been replaced by the certainty that this will be a long and protracted U-shaped recession that may last at least two years in the US and close to two years in most of the rest of the world. And given the rising risk of a global systemic financial meltdown the probability that the outcome could become a decade long L-shaped recession – like the one experienced by Japan after the bursting of its real estate and equity bubble – cannot be ruled out.

I just got a 10% paycut today, and I'm in the title business. Not a good time to have anything to do with real estate. At least they're just giving the cut by giving us 2 days off a month unpaid instead of making us work the same # of days but just less hours.

This being the start of a worldwide economic collapse and all, I figure I need more friends because among my friends, family, co-workers and acquaintances, I'm not aware of ANYONE who has:


Had his pay cut