The end of another bubble - consumptions.

It is declared by Ben Bernanke yesterday that “recession is over”. Wow, what a claim, what an injection of confidences. We shall party, we shall have toast, we shall start spending, and more importantly, we shall start borrowing!!

You see, debts are money to bankers. If they print money and you don’t borrow, where their profits will be on your interest payments?The million dollar (that is not much money those days and will be much less down the road) question is: Where can we borrow more?Looking at WXC’s TZLC, people are borrowing HELOC to purchasing cabage houses. They maxed out. For average US consumers, there is no where to turn to borrow more. And people start saving more while government spending becomes main stream consumption model. So the borrow to consume model is broken. It is irrepairable.

Today, banks are getting bigger, bad assets grow with its size. We have bigger crisis in the making. Just look at the number of bank failures that is the “Canary bird in the economy coal mine”. Bank fails because none payment of loans. With bank foreclosure on the rise instead of abeiting, it is the excellent indicator that economy is sliding to the edge of cliff. FED’s monetizing the debts and prop up the asset market only delays the inevitable.

Housing is facing another crashing wave. This time will be more severe since investors run out of cash to buy CABAGE house that supports this buying activities and price level.

Stock market on the other hand, is experiencing the big bounce up with lower volume. The SP500 may hits 1300. The next leg down driven by big events will devastate the small investors. One has to note the inside trading is picking up. And Dow to gold ratio is still in the low teens. It will eventually go down to 1:1.

Don’t be fooled. The artificial rally manipulated by PPT will have a bad end. Pray harder that you can get out in time.