Rana Foroohar, is far more credible in selling the Newsweek, "gloom and doom" scenario as this too is what provides us an English major's '101' take, on yet another dimension of HOW shadow bubbles work; from the publication's network of her staff and colleagues cherry picking, what's current and relevant to today's macro market economic trends, as is consistent with the cutting edge of its world literature. That said it's worth reading, in that it's fairly accurate, about what reflects present and probable near term capital market behavior(s). While it's to be noted, that its blind to the long wave wealth creation cycle, that ended with the 'division of labor' and what follows in history, that events about which she writes are compelling. And although she makes clear that the world's market(s) have already diecounted, the so called recovery, in her pointing out that the recovery is probably a mere shadow bubble, that has the US capital market(s) already in retreat. And this, indirectly, is implying a double dip recession is a real probability and this too others are predicting. What she''s missing, is where we're going, at the fundamantal level of global and G-20 wealth creation and why? Confirming that this is NOT, as yet, in her portfolio of strategic INFORMATION resources nor is it in Newsweek's nor for that matter in the White House's portfolio of options. At least NOT as yet and here I'm referring to what is the "long wave," wealth creation logic(s), that still below their common radar of the "official narrative" as is certain to affect a global transformation in wealth creation, based on the NEW supply side logics, being applied to the NEW economic paradigm model the "Integration of Labor(sm)" ONLY when executed as new Global Technologic Infrastructure-GTI for generating tens of millions of "platform ready" JOBS, for realizing a real and sustainable recovery and growth. And too ONLY after the present shadow bubble bursts, and the lessons are institutionally and individually learned and applied to new serious comprehensive joint industry and government cooperative ACTIONS, as new policy, legislation and national programs, that derive from Humanomics(sm) in general. And its "Receiving, to give(sm)" NEW central organizing principle in particular and its "Integration of Labor(sm)" new economic paradigm model; AGAIN, only after the market's DJIA retreats to the 7K to 9K DJA range, and all demand to know what's next? As ONLY then will people listen, and ONLY then will it become clear that ONLY a macro supply side major national initiative will create, achieve real and sustain real growth (not another bubble) Shalom, Jerusalem's Yehoshua

We're about to discover a whole lot MORE bad loans out the borrowers couldn't pay back! It's part two of the Frank 'n Schumer Monster!
At what point do Democrats in the USA decide that ACORN, SEIU, CAIR, the New Black Panthers and the Frankn'Schumer monster are BAD? Bad for your personal economy. Bad for your kids! Bad for the nations future?

1973? Carter? Carter was not elected until Nov '76, and not sworn in until 77.
The inflation boom was caused by a decade of defecit spending on Viet Nam.
Kind of like now, some imbeciles borrow money for a war, then blame it on a Democrat. Nixon kept the war going.
Ford kept printing money to pay debts.
Republicans are usually wrong. They certainly are ignorant of their history. Get to school.

Agreed. The top 1% are bidding up prices in options markets.
Until they are taxed senseless for speculations, the markets will lurch from bubble to bubble.

I agree that big business lobbied Shumer and Frank into guarantees and laws that allowed the crash.
They bought the rights to speculate us into oblivion.
None of those laws have been repealed, and the Goldman Sachs people still run fiscal policy.
They own both parties, lock stock and barrel.
You point out two whores. The problem is far far wider, and includes hundreds. Go look at opensecrets.org and see how much money members of congress get from lobbies and fronts.
Don't be so simple. It is huge. The two parties are deeply enslaved to their cash fonts, to buy the media to keep getting elected. Most bills in congress are not written by members, but by the same lobbies who produce the copy and deliver it to congress for passage.
Point at two of 535 in the 1st article branch of government and you do not show any knowlege whatsoever.

Spot on. The last 30 years of supply-side and outsourcing have destroyed the middle class.
I believe in unishing them with the paradox of thrift.
Until the rules are returned to the markets and enforced, save. Old School banking.
Pay down all forms of debt.

how about some good news instead of constant doom and gloom....seems the media is hung up on bad news......if you want to keep this so called bubble from happening again, put controls on the oil traders who constantly run up the oil futures,,,,,we should regulate or set a market cap on the price of foreign oil so the balance of dollars out is fixed.......continual run up in oil pricing is hurting everyone in this country, and helping create a middle east that is drunk with American Dollars

Of course tax credits for first-time home buyers and other stimulus programs are causing spikes. Real and lasting improvement won't occur for awhile. In the meantime, Obama and the Treasury Secretary keep threatening to put regulations back in place for the financial sector, but so far it's just been a lot of talk. IMaybe it's because of focus on HCR, but they better not wait too long to arm-twist Congress to regulate Wall Street big-time.

After all, it is the so-called free market theory (invisible hand superstition--gagh) of Republicans that caused this Great Recession. Sorry Ron Paul -- I like most of what you have to say except the free market garbage. Yet there's good ole Boehner and other GOP leaders still preaching about it in an attempt to stop HCR. There is no evidence that free market theory works (to the contrary), yet they act as if they have evidence that socialism doesn't work. What proof? Look at other democracies and European allies. Things are looking better and better there, and I for one don't want to work at a one-world order known as Wal-Mart.

Exactly right.

During the great depression a law was enacted (Glass-Steagall Act) to make sure banks and wall street where separate and basically couldn't use the public bank accounts to gamble with. In 1999 Congress did away with that protective law and the casino we know as Wall Street started to really play.
It Seems that the ???average??? person in the street will ascribe to the notion that all their politicians and Corporate ???leaders??? have this ability to have extra insight and thought processes more powerful then themselves, and as much the public is conned into believing it, it is not necessarily so. Yes. some of them may have high I Q's but if you pay close attention, you begin to see that they abilities are more like actors instead. I have lost count of the so-called captains of industry having their pictures in the newspaper and on the cover of magazines(the CEO of Enron, World com, etc). But if your easily impressed I guess it works.
Now, Bank of America has made a decision to do a test case of 800, 000 customers to agree to an annual fee on their credit cards or lose ???the privilege??? of their use. The amounts range from $29 to $99 a year. This is a test of course, and B of A wants to find the right amount that people will put up with. To me this means that the decision to pay will be consumer driven. And if that is true, why would consumers even go pass the $29 limit. For that matter, why would anybody put up with the injustice of the fee in the first place. It just strikes me that the statement from the banking industry, -that they would bring back annual fees if congress passed a bill that they passed last August concerning gouging of customers-- the trip up tricks to change rates, change due dates(to induce late payments etc.), was not only a retaliation but a statement to the affect that WE(B of A) will not stop our life styles because of what you(the public) want. We will find ways to keep profits high and continue to enjoy the bonuses and perks. Even if this means using your(public taxes) money!
And of course Congress is moving at a snails pace to ???prevent??? this abuse. And our own Treasury Secretary Geithner wants to make ???too big to fail??? behavior OK. Seriously, do the people of America NEED to perpetrate this type and way of doing things(bailouts, but no regulation of derivatives) and all these hustles and practices that will lead us to another collapse in the capital system.

It's all about financing campaigns; only the rhetoric changes. When the rubber hits the road campaign bundlers get all the traction in Washington. That's why a Democrat controlled Congress and White House, which should obviously be pursuing populist economic policies, for both practical and political reasons, aren't.

That is a very good point. GDP is measured in dollars. When gas prices and food prices, for instance, go up, so does the GDP. Those commodities are inescapable; consumers have to buy them. In the process the GDP can go up even as unit production falls.

People forget that oil prices went through the roof about then. That's when the U.S. auto industry was forced to downsize. Anybody remember Chrysler's K-cars. They were finally forced to get away from the Hemi's and lead-sleds like the 300.

What people need to grasp is that "bubbles" always exist. Over speculation in the course of the business cycle is a bubble that "pops" and the market corrects itself naturally as those who over speculated are "punished" and resources are allocated elsewhere. But, on their own, bubbles in the past never tended to be huge, and the corrections not extremely painful, unless of course there was some sort of government action fueling the over speculation (such as the effect of settling the Louisiana Purchase). And since the founding of the central banking system, the government has been the root cause behind massive over speculation. The Great Depression was preceded by a massive influx of money into the supply and loose credit policies. We've done the same thing again.

So, yes, a player in the scenario is Big Business. But it is preceded by Big Government. And both have now been around so long, and have grown so interdependent, that we now have a corpora-fascistic system that confiscates massive amounts of labor from the dying middle class, and has indebted them even more through the incredible $55 Trillion accrual basis debt. All this brought about by Statism. Statism of the Left or Statism of the Right or Statism of the (supposed) Moderates it's all the same, because Statism means Force. And Force is necessary to get people to act than they otherwise would (which is fine if the person is acting unpeacefully). But if a person is acting peacefully and is Forced to act other than they wish to, then a misallocation of resources has taken place by defintion. And all those misallocations mount up and all come back at once. And the Statists artificially support others with what they have confiscated and people who should have disappeared have resources allocated to them that they shouldn't have, which compounds the collapse.

So instead of a free market with its inevtiable ebbs and flows, we have Statist thugs misallocating at will. But economic laws are immutable. Misallocations will be corrected. And the more Force behind the misallocations, instead of free markets, the more likely the collapse and economic purging of misallocation is going to be by Force rather than peaceful.

Braes, you are intriguing. "the paradox of thrift". An accountant perhaps? The icing being you dont throw stones at either party. How wonderfully refreshing. go on, please.................................