May 31, 2008

It was all fun & games when hot money hedge fund speculators jacked up home prices via unregulated lending. But now, the fun's over, as people starve

When you step back and take a look, all these bubbles were really just low-interest-rate-enabled hot-money speculative hedge-fund driven attacks.

First they went after the dot-com stocks. That was pretty fun.

Then they moved on to real estate and houses. You know how that turned out.

Then they moved onto gold, silver and the metals, and artwork and Euros too. And oh, that was quite the party.

After that, it was food - corn, wheat, soybeans, rice, etc. Which of course is leading to starvation and death and soaring food prices.

And then finally, they went after the oil. Black gold. Which of course is disrupting commerce worldwide and putting an "oil tax" on billions around the globe.

So what's next? Is there ANYTHING that hasn't been attacked yet by these locusts? Is there ANYTHING still in their way?

Maybe baseball cards? Cocoa Puffs? Zebras? Electricity?


Anonymous said...


Anonymous said...

This is what happens when you print money like a drunken whore.

Soon we will all be millionaires, then billionaires, then trillionaires.

See: weimer germany, Zimbabwe, etc.

Anonymous said...

Used condoms.

Next they'll try to corner the market on used condoms and destroy the world.

Anything to pimp a buck.

Anonymous said...

Sure buddy, I'll tell you the next bubble: Cleantech Industry. My ETFs are on fire since Mar 08. I'm the same guy who told you to buy COST and TIF three months ago, and who sold the house at peak in 2005.

I usually don't give tips, but I'll throw you a bone for the good of the blog. You heard it here first. Now run my children, run like the wind.

bearmaster said...

Yep, let's blame it on the speculators. How the heck did they get the easy credit to game this system to begin with, hmmm....

Anonymous said...

Oil is not a bubble. Speculators can bid prices up, but unlike with stocks, houses, and other commodities, a speculator cannot take delivery of oil, they must close their contracts before they expire.

They can influence prices short term but not long term.

Paul E. Math said...


Anonymous said...

CLEAN WATER is the next bubble!!

Anonymous said...

This is happening do to a weekening dollar and our economic problems. We are passing our mismanagement to the rest of thw world through a weak dollar/our inflation.

The party aint over for PM's and oil. They will take a big break soon but wil resume

Why wouldn't people buy commodities? It's an effective way to dump your dollars for a hard asset.

If you have dollars you can buy; over extended usa and world stocks, US bonds paying 3-4 percent in a huge bubble, or real estate which is freefall. Buying commodites allows people to get out of US assets without disrupting world markets(ei dumping dollars).

CNBC stated raising rates will kill commodities. Of course they dont recall greenspan raising rates from 1-5 percent. How high did comodites go during those?

Cleantech is a good call as someone else noted. Clean coal and uranium is a good bet as any.

Anonymous said...

They are not locusts; they are your pension and retirement fund managers doing their fiduciary duty trying to preserv your wealth in the face of reckless government confiscation through inflation.

Anonymous said...

solar power will be the next bubble.

Anonymous said...

anti-Bushco-Cheneyburton Bloggers.

They are coming for your thumbs next.

You think I'm kidding?

Anonymous said...

Well there still are the US Pharmacy companies who are quite yet done raping the US Consumer. With the Baby Boomers retiring health care costs are going to soar. AARP and the Pharmacy Companies are going to have a strong Pimp Hand ready for the boomers.

Remember when the US Pharmacy companies blocked HIV drugs being distributed in Africa for a little over cost by OTHER pharmacy companies? Results: millions dead of HIV in Africa.

Good times. Good times.

Anonymous said...

WAR, of course.

Anonymous said...

Any investor that believes in the evil "they" behind the curtain is going to lose a lot of money.
Ordinary people had a lot more do to with the frenzied housing push than any hedge fund. 100% financing meant almost unlimited practical leverage in comparison to the decade before the average householder/"investor".
As the social mood heads south you will see endless attacks on the heroes of yesterday i.e. Hedge Funds.
Keith your focus has shifted from observing the madness of crowds to becoming a participant.

Anonymous said...

Tree huggers fought oil drilling so Government turned to the path of least resistance, ethanol.

People in Mexico were struggling with a huge run up in the price of tortillas (corn = tortillas)more than a year ago.

It's finally making the MSM news now that the hunger/starvation is being felt across the globe. Sad.

Do something, Go sign the petition:

Good Time Charlie

Anonymous said...


The price of the world's oldest commodity will skyrocket. All the world's economies will collapse.

Anonymous said...

"...Remember when the US Pharmacy companies blocked HIV drugs...?"

Yes I do. I also recall the FDA intercepting Canadian mail-order(of mostly US-made drugs), to keep our poor elderly "safe."

IN the spirit of acknowledgement I would like to offer a small addendum to our pledge:

"...with liberty and justice for all...

...who can afford it; the rest of you get THE LAW."

Anonymous said...

Hybrid cars. Soon you see speculators going down to their local Toyota dealer and buying a dozen Prius's with the hopes of quickly flipping each one for a $10,000 profit.

Anonymous said...


Anonymous said...

How about cycling through those items endlessly?

Anonymous said...

can these same people figure out how to charge us for AIR. Remember that movie with Arnold Swarzenegger, the people were dying because there was no clean air, birth defects and so on and so forth. Yes, global warming and the problem with AIR. A bill every month for 50 bucks to pump you fresh clean Air.

Anonymous said...

Game over . The people don't have the money to feed the contrived bubbles anymore . People are feeling the pain now .

Anonymous said...

The music has stopped. It's time to pay now. or pray maybe.

Tom C said...

keith, i disagree. all these bubbles you keep spouting off without looking at the main driver. money. quite possibly, we have a decades long bubble in fiat money coming to an end? the beginning of mises' crack up boom would explain all asset types jumping higher and ever higher not based on so called 'fundamentals'

wait until the bond bubble pops, youll see some serious commodity and asset inflation like never before and people will be like 'wtfux!? goddamn speculators!'

Anonymous said...

Well, we could go back to collecting something silly like "Tulips". But I think we have to have "cutbacks". This is and will be World War 3.

Anonymous said...


"Yep, let's blame it on the speculators. How the heck did they get the easy credit to game this system to begin with, hmmm...."

I was contemplating this very subject last night. My feeling is that there is a hidden culture vicious violence against anybody who gets in their way. Many of us make similar posts, pointing to blatant corruption, hmmmm... how is it that no politician DARES to breech the subject?

I think that they must be frightened to death of what will happen to them. We are literally held in the clutches of vicious gangster criminals and any fool who gets in the way will be disposed of. I'll bet that nobody wants to have their loved ones threatened either.

Yes, we are a nation ruled by gangsters, criminals, FASCISTS.

There are some mainstream media commentators who point this out, however, look what at happened to JFK, recall his last speech about shadowy criminality that has metastasized our government.

This is a Nazi-esque nation.

Anonymous said...

Money never disappears; it only moves elsewhere.

Anonymous said...

I like what Tom C said about the fiat money bubble. The idea that all the Fed had to do was raise and lower interest rates a bit and we would have steady growth and prosperity forever has been current with the business community since the early 80's and with everybody else since the early 90's. I was a shockingly poor economics student but the macroeconomic idea that wealth doesn't depend on actual stuff seems a little sketchy to me. If wealth and economic growth depend on capital accumulation and technological advancement, they won't increase stedily forever, they will go in stops and starts. If you try to get around this you're like a bodybuilder on steroids or a tweker on meth, you are going to crash eventually.

Anonymous said...

As someone said, the biggest bubble has been in USA treasuries: they currently return well below the rate of inflation, never mind the rate of decrease in USA dollar exchange rate.

When the USA treasury bubble burst, really bad news for the USA.

Anonymous said...

Soylent Green will be next!

Anonymous said...

Grandma PKK here--
I thought it was interesting that the (President?) of Germany spoke of the markets [the New Capitalism more or less] had become a monster, like locusts...and I wondered if it would ever come to be called the Beast(synonym for monster)..

Other countries seem to be having stronger, quicker reactions.
I've read that India has stopped trading in commodities.European countries are beginning to consider such, and even here Congress has considered halting speculation where delivery is not taken. I have also read it is against laws of Islam to trade something not actually delivered. Early Christianity also forbade certain types of transactions and cancelled debts at the 50 year mark, as if realizing you can only take things so far.

I was watching article I think on BBC yesterday re outrage in Europe re high cost of fuel etc.
People are really up in arms, Big fishing boats take about $7000 per day for fuel, so fishermen are not fishing and are giving away what they had left of their catches to the poor. Farmers are dumping their milk and letting it run onto the cow's rations for them to lap up.Traffic is being deliberately slowed on freeways to register protest.

Why aren't we making similar statements: nothing violent, but strikes of a kind? Shop once a week if you can. Walk and wear something so it is known you are walking in protest. Picket a congressman's local office if appropriate. Maybe a ribbon of some color standing for fed up
with: and then it could be color graded like the Homeland Security
alert chart..One color for fed up with gas costs. One color for food costs. Another for lying politicians. A fourth for greedy lying CEO's. Those could be combined somehow I suppose. Fifth for being spoon fed insipid stories, excuses, with no one taking responsibility. In the old days that was called Pap. Bland,tasteless, lacking in substance. A short brainstorming session could come up with 5 levels of pisstivity.

Anonymous said...

PLEASE, Hedge funds have been around for ages and they still have alot less money than mutual funds. Its the retail investor responsible for the dot-com bubble and mortgage firms and lending banks for the real-estate mess. Blaming hedge funds means you have not done your homework. Lets keep this site professional please. Very dissapointed about this post

Roccman said...

Keith - and I thought you would have learned by now...

This has ZERO to do with bubbles and everything to do with a population in overshoot.

Enjoy the dieoff!!

Anonymous said...

These market-makers had no right to provide real estate loan money to borrowers and speculators that could not afford the payments. Wall street had no right to take high risk loans and re-rate them as AAA paper . Wall Street/lenders had no right to create low down stated income toxic loans .Wall-Street had no right to not have check and balances for fraud .

Wall Street had no right to hoodwink the investors on what the risks were with the fraud-ridden bad paper and bad appraisals they were passing on .

Wall Street had no right to lend money based on real estate going up . You lend money based on a solid appraisal ,the borrowers ability to pay ,and the fact that the borrower will pay down principal.
Wall Street had no right to allow a high % of speculators to buy real estate without at least a 25% down payment .

Lenders had no right to not underwrite loans and give the loan investors what they thought they were getting .

I can't believe that there is any acceptance at all of what took place in the financial markets in the last 7 years .

Anonymous said...

Fresh water supplies is a biggie.

Anything in the "Green Industries"

Maybe energy derived from nuclear plants as the cost of (insert commidity(s) here) are more expensive to ((fill in blank)).

How about Fresh Air and Sunlight?!?!?!?

Maybe the governments will begin a new tax called a carbon tax where the consumer will be taxed for consumption of energy. As all taxes this one will be insignificant at first. Maybe 50 cents per energy bill or whatever. The five years down the road it will be $5.00.

One things is certain, as the economy sinks governments will need to establish new inroads into your pocketbook in order to maintain their spending routines.

Anonymous said...

Green Energy, Water and uranium