...over at the Market Ticker blog, Karl Denninger is making some bold predictions. While they might sound somewhat over the top, the reality is that he has often been correct on these things. His disturbing analogy related to the economy and a drunk with a bad liver is especially apt.
Here's why: the Paulsons and Bernankes and Congresses of the world seem intent on flooding the markets with more and more money (liquidity) in the hope that doing so will restart the credit spending that has propped up the economy for the last 20 years. The problem though is that the markets are NOT starved for credit but rather engorged with it. They simply can't digest anymore and that's why they are hemorrhaging it. Forcing a drunk to drink more will only kill them. That's what is happening here.
Meanwhile, over at Portfolio.com, Michael Lewis is revisiting the origins of the current economic woes and such. An incredibly compelling read.