Juggling Dynamite

6 years after the credit crisis first dawned on the mainstream, the derivative debt virus is still spreading. See this segment on the debt storm surging in Peurto Rico which has knock off risks for investment funds, bonds and banks around the world. Here is a direct video link.

The world continues to pay a massive price for taking its financial advice from the bankers. But so far, lots of people still do. Maybe when this leverage carbuncle implodes the recent paper gains of stocks for the third time in 13 years, the public will demand some serious prosecutions, separation of bank advisory from sales services, lifetime bans and imprisonments.

Gary Shilling, former Merrill Lynch Chief Economist and President of A. Gary Shilling & Company, says there is a “grand disconnect” between the robust stock market and the economic reality. His advice? Short stocks, buy treasuries and hold cash. Shilling also discussed the debt ceiling and the problem of gold with Pamela Ritchie and Paul Bagnell on The Street. Here is a direct video link to part 2 and here to Part 1.

This week’s podcast: “The dead weight of entitlement thinking”
Here is a direct video link.

This remarkable series of charts underlines some of the Fed-induced trends in income divergence that I speak about in this week’s podcast.

Tech note: Youtube apparently has a glitch today where many browsers are not hearing audio. If you are having the trouble a fix until this is repaired is to advance the volume bar on the clip.