Deep shit

So what happens on Tuesday ? Holidays and a vacation from reality is over boys.

The baboons who yank mindlessly at the financial levers face a grim choice.

The big bad boyz on the block, the banks, brokers and bullshit merchants from Bishopsgate to Canary Wharf - the crafty fuckers created and traded fraudulent "securities". The dozy, hedonistic, gullible, credulous losers , who borrowed too much money trying to get rich quick, or trying to live like the millionaires they admire so much on the idiot box in the corner of their heavily hocked hutch.

They can take the high road of moral hazards - let them sink (because sure as hell they are never going to swim against this tide of fiscal imprudence) suffer the consequences of their bad choices. Maybe they could (if they can find a dock big enough) prosecute some of the culpable bankers and corporate executives - starting with that bunch of criminals at Northern Wreck.

OR

Accept the never ending capacity for cowardice , let these losers off the hook, wreck the whole machinery of capital by debasing the medum of exchange.

The Treasury, the FSA, The Bank and their claques in the Press can't face the losses, so for now they've apparently decided to wreck the currency.

3 months ago 67 pence would buy a Euro, today you need 79pence - a devaluation against our major trading partners of 19%.

But these blinkered bankers and their cheerleaders in the press have had a temporary reprieve in the financial markets. This reckless gang of bankers have been able to lick their wounds and lick Lord Kings backside as he promises even more Niagara's of funds to stave off the meltdown.

Much has been made of the "false" rumour that HBOS were in trouble - my god, every scribbler on Threadneeedle Street was blogging, writing columns that these nasty shysters were trying to bring the market down - did anyone ask the dreadful question - was HBOS bust ?

Hell NO. The shock and the recognition that many big institutions, household names, are worse than flat broke and are therefore powerless to conduct normal operations is something that the boneheads in the City cannot, will not, dare face.

Flat broke, means that all those RMBS (Residential Mortgage Backed Securities) are slowly deflating ... that deflation has a quickening pace. The non-payment stage is moving inexorably to defaults and onwards to repossessions on a grand scale.

Even if Lord King with his helicopters drops more money every week £5Bn.. £6 BN... bailing out feckless mortgage holders, the "lie to buy" ...ers, everything will hit the buffers when we have to disassemble who owns what . Diced and scliced, mixed and re-mixed, in a toxic token of debt, shuffled around like a parcel at a party these "securities" off-loaded onto countless dupe "investors" ranging from municipal funds in obscure corners of foreign nations to countless public employee retirement plans.

All secured by the legal systems of Trusts held in those centres of financial probity in the Dutch Antilles, Cayman islands, Virgin Islands, and a little nearer home, the festering pits of money jugglers in Jersey, Gurnsey and the Isle of Man.

What do we do on Tuesday ?

As the margin call is made on the market, as the sucking chest wound absorbs the helicopter funds like the surgical swabs soak up the blood, the flat line buzzer will buzz as the folks in intensive care stare desperately at the flickering screen.

Businesses will shutter, payrolls, empty, families evicted.

There will be a lot of pissed off little people out there who put their faith in banks, big business and and prayed as they filled in their Lotto cards weekly.

This is what it looked like in Boca Raton last week when they couldn't be assured of housing funds ...



I tell you, the speed of this is going to astonish everybody.

UPDATE D Telegraph 24.3.08 Fed's rescue halted a derivatives Chernobyl by Ambrose Evans Pritchard