While the market collapse of 2008-2009 came as a surprise to me, in retrospect, the signs were there.
They weren't big things, but an increasing number of little things.
Over the past few weeks, we have:
- A stealth bailout of Wall Street by the Federal Reserve: Basically, they are shoveling money out the door using the Fed's repo (repurchase agreement) facility. Basically selling assets overnight and buying them back in the morning for quick cash.
- Private Repo is skyrocketing as well: Meaning that there is a multi-Trillion game of musical chairs without any chairs. Waiting for the music to stop.
- Home sellers are yanking their homes off of the market at an unprecedented rate, with listings falling to a 30 year low.
- Home buyers are walking away from signed deals at an unprecedented rate. ⅙ of all signed contracts were walked away from in December.
I cannot predict when, but we are careening toward a Lehman moment.
It will appear that nothing is happening, and then it will happen all at once.
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