Gloom Watch

JHK says,

“I’m concerned that the American people will hate the new president if he tells them the truth: that an old way of life is over and a new one has to begin now. We’re about to find out how much ‘change’ the public can really stand.”

Ambrose Evans-Pritchard has a new piece on the failure of the Federal Reserve’s rescue plan and the coming “financial winter.” Paul Farrell at Marketwatch on why Bernanke is in “over his head” and that stagflation is here. (Of course, Bernanke and Bush tell us not to worry our purty little heads.) The Fool’s Chuck Saletta says Bernanke’s actions are aggravating the situation. At a conference recently, former Fed chairman Paul Volcker said, “the Fed is not really in control of the situation.”

And, some frightening numbers on how quickly house prices are dropping – the Case-Schiller index for the last month of last quarter, extrapolated annually, paints a bleak picture.

As I suggested a few months ago, municipalities are already starting to worry.

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