Meltdown

[traderb]

Wall Street analysts tell investors that the credit crisis is over,
and that a new bull market may have started. Of course, anything can
happen in the market, and sometimes it may even snow in the Sahara.
But to think that the unprecedented debt and leverage built up over 5
years can be unwound in 6 months is a somewhat ludicrous.

The leveraged financial instruments, i.e. derivatives grew to over
$700 TRILLION globally. To give some meaning to such an astounding
number, consider that world GDP is about $50 Trillion. Unwinding just
20% of that to ease the burden, would be $140 Trillion, or almost 3
times what the world economies produce every year.

The most serious problems are still ahead and will come to the
forefront later this summer and in the fall of this year. It's
important that investors understand the severity of the situation.
With all the crazy paper instruments invented by Wall Street over the
past 5 years, this becomes difficult. However, reading my book,
PRELUDE TO MELTDOWN, will help you understand why this huge bubble
cannot be reflated, no matter what the Fed does.

Bert Dohmen