THEN AND NOW

I grew up in the 60's, back then lots of families made do with one salary, and the mother could stay at home, raise the kids....perhaps later on getting a part time job.....the US $ was strong.

It wasn't hard to get a job, most recessions didn't last very long, 6 months on avg or less....there wasn't so much debt back then.

Technology and hosuing drove the economy into the 2000 top, FED policy in fear of Y2K threw gasoline on the fire. What began as a growing managable expansion ended in WILD speculation and over building of capacity.....debt beagn to grow but was still under control.

We had ENRON...we had WORLCOM, and we HAD INTEL (INTC) which now 10 years later is maybe 25% of what it was then....

FED didn't like slow down, but that is what heals for the next push, BUT instead FED(Greenspan) lowered FED FUNDS to then unheard of 1% and kept it there! INstead of healing they begot another, this time more wild speculative bubble (#2)....real estate....housing mortgage debt bubble.

Rather than let it heal, and take the pain so we could rebuild from the ashes, the FED again embarked on an even more insane gambit and lowered funds to 0%....and it's still there at 0% 2 years later!!!!

If the economy could stand on its own 2 feet, would rates be 0%? Would the tax cuts inacted to battle last bear (10 years ago) be extended another 2 years? WOuld another round of QE be needed? WOuld 20% of Americans need gov't assistance? Would the housing market still be barely off its worst levels of 2009?

We keep hearing of jobs growing, housing recovering, exports growing and GM rebirthing..etc.....so when will FED END THIS INSANE GAME? Where savers get nothing? Where speculation is fostered? Where margin debt as exploded again to new highs....where leverage is not a dirty word......my g-d haven't we learned anything?

SO adding even MORE DEBT to the system is the way to heal a bursted debt bubble?

But amidst all the pain and hurt on main street, there is a once in a lifetime rally on wall street....and HUGE bonuses are the rage again. And bullishness has come back to peak levels and beyond....and it only took barely 16 months to accomplish that.

Maybe they pulled a rabbit out of the hat, but not in any way I can understand. The US is now saddled with $14 TRILLION of debt and no end in sight.....how can that be good? and we are not adding in Medicare and Social Security some say could add $50 TRILLION more.

MOST States and cities are BILLIONS away from balancing their budgets, Municipal bonds have sold off sharply.....cuts have been announced, many police and fire fighters will be laid off.

SO who knows folks, paper assets may rise to the heavens.......on a wing, a prayer and a Ponzi scheme.

I have NO doubt, the actions of these foolish men, desperate to fool the people and maintain their POWER, will end badly.....what you see now is what seperates PHASE ONE from PHASE 2 of a secular bear market....thats my take....PHASE 3 is out there....waiting

Duratek