The reality is that the consumers here are in lockdown financially. Those w/o jobs don’t spend. Those with a job aren’t spending in case they lose their job.

Toxic assets: There is definitely more than $1 Trillion out there and they are woven together and can’t be separated, thus they have less than zero value.

As the dominos fall, the economy will get much worse before it gets better. We’ve spent more than $2T and it stabled the Dow, but not the economy or the outlook. We will need $6-8T to recover from this mess and we don’t have it and I doubt we can get investors for that level of debt.

The economy is looking for confidence in the next move by the US, but it isn’t finding it and it won’t until the USA uses the media to explain to the voters how bad the situation actually is.

We’re in record breaking territory the past several months with some moves (treasuries) having the least value since the Great Depression. Other indicators, go further back than the 1930s, yet we don’t openly talk about a world wide depression.

It’s just about unavoidable at this point. In another 3-6 months, it will be here. The DOW was trading at 6800, a point of resistence and came back, but it is a big suckers rally and will go through that and on towards 5500 where the P/E ratios actually meant something.

Even now, the DOW is being propped up by removing AIG and replacing it with Kraft and again when we banned option trading of financials. The longer we prop it up, the worse the fall will be and it will take longer to restore confidence.

That’s what people aren’t talking about enough – Time, as in options, interest payments and the inertia and waiting period for any plan to work. We are burning through time as fast as we are money. Time is not on our side. How long until civil unrest on a large scale?