Coming soon at a theater, workplace, school, household and every institution inhabited by humans.."We Refuse to Learn"
Starring - Goldman Sachs, Morgan Stanley, JP Morgan et al.
Directed by - The Federal Reserve
Produced by - The Department of Treasury
Not so long ago, I was reading this book, "The Big Short" and I believe in some time Michael Lewis will come out with a new one..."Tired of shorting and making money". Any sane, rational person will agree that we are seeing an asset bubble, and the best part is we all know it, we just refuse to do anything about it. Everyday I see on CNBC and every other business channel, market experts talking about this bubble, but still we do nothing. It reminds me of something the Ex Finance Minister of France said about the housing crisis.."We can see a tsunami coming, but we are busy deciding what swimsuit to wear"...
And interestingly the time period between such bubbles is reducing dramatically. Some time ago there would be a bubble once a decade, now its every couple of years.
If the last one was about housing prices, the next one will be about "social networking". All the Facebooks, LinkedIns and Twitters will lead this meltdown. I sometimes wish I had enough money to short, It seems to be the easiest way to make money these days.
I am not against the concept of social networking, in fact I believe that it will be the next big thing. My only concern is that we are not yet prepared for it. Agreed it makes perfect sense to catch on to this wave early, but if too many of us try to catch it we might just end up destroying it.
To put it in financial perspective. Facebook is valued at around $100bn, at this rate Facebook might as well be a country in itself. It took Google, Microsoft and Apple years to reach that valuation and that is why today they have such strong business fundamentals.
And behind this bubble is again the "smart guys" in New York.......the Goldmans and the Merrills of the world. Remember these are the same people that gave us "AAA rated" CDO's. These are the same people who didn't even understand their own investments, and yet we trust them.
Around 200-300 years ago, the top executives at these organisations would have been publicly whipped if not hanged for what they did in the financial crisis, but in today's world we reward them with multi-mullion dollar bonuses...!!!!.....It's like trusting a serial killer when he says he's sorry and won't do it again...!!
As Steve Eisman said...."The moment I understood the depth of the crisis I shorted Merrill Lynch, because whenever there is a catastrophe Merrill is there. When the S&L bubble burst Merrill was there, when the internet bubble burst Merrill was there....". Unfortunately Merrill is no longer there, but its legacy remains.....and only time will tell.
"Gamble.......If you can afford to lose"
