Let's hope Rubini is wrong...we want the global meltdown to result in stagflation....NOT stagdeflation. Where is our F'n permit?

PS: Have a great day!

"...Of course it wouldn’t matter if was derivatives led meltdown or not. (i.e. don’t let this guy fool you.) The main criterion that will usher in the Great Depression II is that the larger credit cycle has peaked, which in turn will trigger all the standard emotional responses from the public and bureaucracy alike. You see the credit cycle was extended by the creation of quadrillions in notional value of derivatives that supported the ILLUSION value was present in the financial markets when there was far less. So, despite the size of the numbers involved in our financial system, because it’s all an illusion, as you can see in the case of the stock market, a great deal of fictional wealth can get wiped out very quickly. In this respect I do think Roubini is right about one thing, Monday could be a very interesting day in the stock market – a very interesting day indeed.

Turning to the charts to support this view, of note is the fact the Dow / Gold Ratio has sliced right through large round number support at 10 with ease, meaning unless the fall is arrested soon, it could continue sliding in fractal fashion as stocks plunge / gold explodes higher. Further to this it should be pointed out that mirror image structural patterning expectations associated falling stock markets should be abandoned at this point given the degree of irregularity already witnessed in this regard, which supports the view the Dow / Gold Ratio could collapse rapidly. Add to this escalating derivatives related counter-party risk considerations, which was touched on the other day, potentially causing panic buying of gold (and silver) by US banks and hedge funds, and it’s not difficult picturing exacerbation in the move.

Need more proof things could get worse from here? Well, in addition to checking out the fact the Rydex Ratio (see Figure 3) is nowhere near a top, one might want to check out this attached Daily VIX chart. Here, one should notice that in addition to more room existing on indicators before peaks should be expected, that the ADX (DI+) reading has now broken out. So what? It’s only this implies life as you know it has now changed forever as a result, where volatility will rule in many respects, and few will be able to insulate themselves from growing turmoil. Thus, don’t be surprised if the CBOE Volatility Index (VIX) continues up over 100, bank / market holidays ensue, and a bunch of people waking up very quickly. (See Figure 1)..."

http://www.financialsense.com/fsu/ed...