Isn’t this the guy who recommended firing a few shots over the heads of the ‘brigands’ on your isolated farm after society has melted down in his book? Sure, if you want to play dodge the rifle bullets the next day, or night. It shows you how out of touch with the real world SOME of these billionaires are.
The problem now is the potential for bank runs in Europe, and the interbank lending freezing up. We have become as dependent on banks as we have on electricity. That is what caused most of the sell-off, not recession fears. The QE 3 is fuelling up. Ben might be warming up his chopper too.
It will be interesting to see how bad things have to get before they create some coin seigniorage funny money and use it to pay down the National debt. I’ve got a feeling that until they do, and suffer the resultant inflation, the economy will grow very little and might go into a depression. Eventually, governments reach a point where more and more debt can never be paid down as the economy shrinks.
I can tell you one thing, Europe had better get moving soon, or their banks will melt down. Money may not come from the Fed this time, like it did after Lehman. The Tea Party has arrived over here. Had they come up against a tough US President, instead of a college professor, the US may have defaulted and stocks would have been cut in half by now. As it is, 1/3 of the citizens of the US State of Alabama are now on Federal food stamps.
This is getting fun to watch. But not nearly as educational as watching ‘Inside Job’.

All this news out there today about how markets sold off but no news on who hit the sell button! Today’s drop was not triggered buy small investors or traders like us selling but by either the Fed or big fund holders. Media and government know something that they are hiding.

Background on Barton Biggs:
Back in the early 1990s, I used to read Barron’s regularly; every year, they featured a “Round Table Discussion of Potential Investments” for that Year. The characters on this Round Table were folks like Marc Faber, Felix Zulauf, Barton Biggs, Mario Gabelli, Abbey Joseph Cohen, and a few others whose names I can’t recall now. Each year, at the end of the December, Barron’s would show their “track record.”

Barton Biggs Track Record over the Past 20 Years:
As best as I can remember, those who consistently had the best track record for picking stocks were Marc Faber and Felix Zulauf. Gabelli made good calls about half the time. Barton Biggs used to provide his assessment of where the market was headed for the year, and he was CONSISTENTLY wrong for four years in a row! And Abbey Joseph Cohen, who held the titular title of “Chief Investment Officer” of Goldman Sachs, was CONSISTENTLY wrong on 90+% of her stock picks.

So much for the so-called “experts.”

@ Andy: What’s Happening In the Market?
Yesterday’s markets began to sell off prior to the European market open, based on bad news about Italy’s bonds. Of course, as you say, governments know something that they’re not tellin’

But what puzzles me about today’s market (5 Aug) is this. We all know that:
a) Global stock markets sold off big time yesterday, and
b) Cash positions of US mutual funds is near their all-time low of 3.5%,
c) Margin debt is at or near all time highs.

Given these facts, we know that both Mutual Funds and Hedge Funds absorbed huge paper losses, effectively losing their capital buffer . . .and that means they’ll have to make big liquidations on 5 Aug and that is happening in Euroland today, but not in the US.

The $64 question is: “Why aren’t there massive liquidations in the US stock markets today?”

Ed Note: The loss of the US triple-A rating is clearly your answer, see today’s commentary.

I am watching for a week from yesterday (Thursday 4) to see if bullion prices rise. Many investors will have a lot of cash on their hands, I presume, including what has come from gold and silver in addition to equities.

They will begin sweating over what to do with their cash since bonds and equities are wholly unreliable at the moment and cash, especially dollars, are losing value all the time.

Therefore, some of the cash from the stock markets will find its way into gold and silver but it will take about a week for this to be seen to be happening. So, silver and gold should correct upwards to above what they were before this downturn occurred.

An Update on Barton Biggs Predictions:

On 4 Aug 2011, Barton Biggs predicted a 7-9% market rally.
Reference: http://www.zerohedge.com/news/barton-biggs-appears-tv-opens-mouth-hilarity-ensues

Looks like Barton Biggs’ track record is perfect, just as he always has been. Perfectly wrong.

Update on Barton Biggs: 22Sep’11

I guess I’m not the only one who has been tracking Biggs ultra-poor market performance. Here’s a scathing commentary on the extent to which Biggs has made very bad calls. The most recent example here, as I cited in my prior remark, was his prediction on 4 Aug 2011 for a 7% to 9% market rally over the ensuing two months.
Link: http://www.zerohedge.com/news/notorious-biggs-flip-flops-again-bottom-ticks-market