Capitalist Freakout

The head of the World Bank yesterday warned that financial markets face a rerun of the Great Panic of 2008.

    On the bleakest day for the global economy this year, Robert Zoellick said crisis-torn Europe was heading for the ‘danger zone’.

    Mr Zoellick, who stands down at the end of the month after five years in charge of the watchdog, said it was ‘far from clear that eurozone leaders have steeled themselves’ for the looming catastrophe amid fears of a Greek exit from the single currency and meltdown in Spain.

    - The Daily Mail

Market indicators over the past two months in Europe have been signalling an economic slowdown, with the potential for total economic collpase increasing over the past few weeks.  The US markets have dropped more than 1000 points since their highs in March, and on Friday, all gains for the year were completely wiped out after the shocking jobs report was issued. Additionally, a new study from a former hedge fund manager on May 31st outlined that for the first time in the economic cycle, economies did not recover all their losses from prior recessions before going into a new one.  The conclusions point to the need for a complete reset of the financial systems, as capitalism and central bank intervention (money printing) no longer have any real effect on economic growth. When one company decides to cancel vacations, or impose additional workloads on their employees due to projected events, it is not considered relative news.  However, when several institutions, analysts, and even the head of the World Bank acknowledge a coming crisis, then everyone needs to come to the realization that something big is on the horizon that will have an effect on both Wall Street and Main Street.  The rumors out on June 1 regarding Pimco and JP Morgan should be a wake up call to all investors that Friday's market drops across the board are just the beginning of what could be a repeat of 2008, only much worse this time around.

AMERICAN KABUKI