Scary stuff

My wife is from Hungary and every once in awhile she will use an idiomatic expression with a word transposition that is incredibly unusual and yet insightful.  On occasion she warns me of being a "scarce monger" now the intent is most likely to ward off my "scare monger" bias, but being a scarce monger is more typically a truer reflection of the intent.  I have been bearish for 5 years about real-estate and money in the U.S. and for 4 years and 11 months, I have been wrong. 

Interestingly enough Alan Greenspan has been making allusions to the panic of 1893.  Now for those of you not aware of this panic....hmmm aren't that many people around who are over 120 years old.  This particular panic was real-estate based and created 20-25% unemployment.  Now any other person bringing up a historical anomaly like this, would rightly be written off as someone who has invested all of their funds and sanity in a " survival condo" in Idaho with 20 years of baked beans in the fridge and gold coins buried in the corner.

Alan Greenspan is different, he is not only a great central banker, but a musician as well :)  If you want to read a treatise of what happened in 1893 from a fresh 1907 perspective have a look here.  This is a book from the Stanford library that explains the whole mess.  Lets hope Mr. Greenspan's allusions are mere historical allegory than analog.  After all the 1% money provided by the fed after the tech bubble and the poor oversight in lending practices on his watch precipitated whatever may have been going on now.  Greenspan's retirement may look like another case of uncanny timing by the old fellow.  Who knows a decade from now people may be positing conjectural histories such as what if Greenspan had made it in the big band era?

For those of you not nervous about global financial risk, stop looking at the silly Dow Jones Index and watch the TED spread.  The smart money knows that if the Dow drops 300 points, its called Tuesday, i.e. a non-economic event.  However the TED spread is like watching global bankers anxiety levels.  When this thing jumps you can smell the fear.  The TED spread is hopping up pretty fast and liquidity is drying up.  This Wall Street barometer hopefully won't become a mainstreet event, but if it does, it will be very ugly, 1893 indeed.