Did You Ever Think A Financial Crisis Would Feel Like This?
The credit crunch has already been more damaging than any of the financial crises of the past two decades.

Mr. Hull's Giant
“There's a sucker born every minute."

In the summer of 1868, Mr. George Hull of Binghamton, New York, decided to pull off a hoax. He had a gypsum block carved into the shape of a giant dead man, buried at a farm near Cardiff, New York -- and then later, he had it dug up. Thousands of people flocked to pay and see "Mr. Hull’s giant." And here we are, 140 years later...

Squeezing Stomachs and Financial Markets Down to Size

Today, Treasury Secretary Henry Paulson threw out his first pitch for a major overhaul of the way the U.S. financial system is regulated. – to an equal mix of cheers and boos. But the really big story and marketing pitch of the day belongs to the purveyors of something called gastric banding, which helps overweight people lose excess weight via elective surgery. It's the medical equivalent of the squeeze that the financial markets are experiencing right now, thanks to the credit crunch.

A Non-Guarantee Put to the Test (part 1)
The Ballad of Fannie & Freddie

Once upon a time, the U.S. government created the secondary mortgage market. (During FDR's New Deal, if you're dying to know). With help from the agency known as Fannie Mae, this government creation grew tall and strong. What's more, the government held a virtual monopoly over its creation for several decades -- and after all, the market was its creation....

Growing Trend in "Bank Failure" Stories?
"Experts say you shouldn't panic"

It's safe to assume that the "experts" really don't see this news as bad enough for me to jump out a window. So, when they say "don't panic," they probably mean something along the lines of: "Don't remove your money from the bank... or, for that matter, from the stock market either"....

Will "Stagflation" Stop My Home Price From Falling?

Have a good look on the chart for those insanely inflationary spikes from 1974 and 1979, and then at the comparatively minor increase of recent months. Does anything about the chart data itself recall the 12% to 15% inflation of the 1970s?? Apart from the WSJ and NYT planting the thought, would the word "stagflation" even come to mind?

Hey, Buddy, Can You Spare a Dime for the SIV Superfund?

Strange to see that Wall Street – which had no trouble raising money before the subprime mess and the ensuing credit crunch – is now scraping for "spare change." Here's why the superfund is a good idea for a few people but a bad idea in general.

How to be a Financial Journalist
It's easier than it looks...

The scene: A busy financial newsroom. A cigar-chomping editor gives a junior financial reporter the lay of the land. "If the stock market rallies on good news, or falls on bad news, you got an easy story, kid. But if the market rallies on bad news or falls on good news, then that's a tough job. On days like that, you earn your money -- you gotta get creative." That was the way financial journalism used to be. Here's an example:

How the Financial Forecast Looks Ahead
One eye open is better than both eyes shut...

The real estate price decline is accelerating in most of the U.S. Where prices are not declining -- like the Pacific Northwest -- price growth is decelerating. Prior to the peak in 2005, the Elliott Wave Financial Forecast described the mania and the collapse that was likely to follow. That anticipation is clear in this chart of the S&P 500 Homebuilder's Index from the July 25, 2005 Elliott Wave Short Term Update.

What's the Solution for Overborrowing? Borrow More!!

A late rally ensured a higher close in the stock indexes (Aug. 22).

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How crazy have things become? Good question. Let's see if I can give a one-sentence answer.

Step Right Up and Watch "The Amazing Disappearing Money"

Friends who know that I work for Bob Prechter’s firm always ask me questions about the markets. Yesterday I went to a small dinner party with my high school friend, and after a few drinks and appetizers the conversation quickly turned to subprime mortgages and the turmoil in stocks.

How to Dodge the Credit Collapse
Once you understand the game, it's easy!

Things are getting wild out there. The S&P 500 had its biggest one-day drop in 6 months on Friday (August 3), the same day Bear Stearns CFO said the "bond turmoil is worse than the Internet bubble." Cramer threw a tantrum on CNBC. Industries, funds, markets and individuals are hemorrhaging money. A million homeowners will enter foreclosure this year. You're probably wondering what will happen next.

Saturday Night in Boomtown
It's a shootout, but not in corral, and it's not OK

Global investors woke today with the bruises and blinding headaches of binge-drinkers after last week's wild-west bar-fight. In the heat of the action, the bartender left the saloon, and withered LBO prospects hid behind the piano and watched sullen credit markets shoot up the liquidity cabinet. The sheriff made himself scarce, and the undertaker, who has seen it all before, waited patiently at home. Another Saturday night in Boomtown.

Housing Hollowed Out
Never trust a muskrat

The housing market is beginning to resemble a watermelon I once floated in a pond overnight to cool. The next day a small hole was in one end and the red interior was completely gone, hollowed out to the sour green rind, sculpted by little teeth. Some muskrat had a feast.

A Family Portrait of Financial Mania
We're all in the snapshot.

I write from the catbird seat here at EWI, with access to the best technical market analysis in the world. In the space of an hour I can read forecasts of commodities, currencies, stocks, metals, and interest rates, and compare them to socionomic observations of news and events. Nowhere else can you grab such a broad, detailed snapshot of the clockworks of the “engine of history.” Today’s digital snapshot is a family photo of a resurging financial mania.

Searching for FWMDs
Well, financial markets actually found these weapons... in 2007 -- a bit later than we did.

Once-transparent global financial systems have become opaque, changing too fast to be visible. New varieties of financial contracts are evolving rapidly, such as credit derivative futures, credit default swaps, binary options, and soon perhaps, derivatives of credit derivatives, or even derivatives cubed (D³, perhaps?).

Deflation is a Process, Not an Event
And doesn't move in a straight line...

People tend to associate predictions with events, not processes. Because our culture-at-large encourages brief attention spans, it's confusing to be carried along in a long, unfolding process. If it happens slowly, it is much easier to deny. That is, unless you have lost your job, or house, or both.