Oh Boy

As we've seen over the past few months, whenever Obama or Geithner open their mouth, the market takes a dump.  Message to Dear Leader: If you really want to help Wall Street, STFU.

Meanwhile, today I ran across the following stories which give more cause for concern:

First, "Dr. Doom" Nourel Roubini, an economist who's been bearish longer than most, is now saying the economy is even worse that he thought.

In sum, Buffett and much of the rest of humanity are just now coming around to Nouriel Robuini's way of thinking, the economist known as "Dr. Doom" is upping the ante on his longstanding bearish views.

A year ago Roubini was forecasting an 18-month recession with a U-shaped recovery; now, he's now expecting the downturn to last at least 24 months and possibly 36-months. He also sees rising risks of a Japanese-style L-shaped stagnation, i.e. a prolonged period with little or no economic growth.

Next, is this piece from Karl Denninger at Market-Ticker.org:

That's a snapshot of today's volume for June GE $2.50 PUTs.


That's over 52,000 contracts traded today, controlling 5.2 million shares.

They were purchased for about 30 cents, which means that the price has to be under $2.20 for them to go "in the money".

This is a bankruptcy bet on General Electric by the third week of June.

...

General Electric is a stalwart of our financial and industrial system. A bankruptcy by GE would be catastrophic for our economy and capital markets. The follow-on damage with suppliers and customers would be even worse.

IMHO, if you are not preparing for a long term economic downturn, even a repeat of the Great Depression, your head is in the sand.  It may not come to pass but so far the chances for a near-term recovery -- not that I think we'll ever get back to where we were -- are grim.