Roubini - Taleb: Twin Towers of Doom Enter the Mush Pit

[Post Summary]

His left hand is under my head...
—Song of Solomon

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Cogent perspective on the current financial crisis has a way of making easier one's visualization of the problem's resolution. Likewise, hearing remarks today from analysts who foresaw the current crisis calling for solutions originating with players who were not involved at the core of the crisis' making is all the more refreshing. Yet one ought not forget the fact that players who are responsible for this mess remain in the loop, and this reveals the nature of power such calls for credible change are up against.

Today on CNBC's Power Lunch Nouriel Roubini and Nassim Taleb were thrown into the pit of crazed Monetarist Monkeys who haven't met a derivatives bailout swindle they didn't love to pieces. How CNBC's crew of blind optimists must fret upon learning the likes of Bill Gates and Michael Dell stood in line for hours waiting for tickets to see these two gentlemen during their recent joint appearance in Davos, Switzerland. Apparently perplexed, Wall Street's cheerleaders — the scoreboard showing their team down big — could only chant on, revealing how the "Titanic is unsinkable" crowd dies hard.

A couple points I found interesting...

Mr. Taleb speaks of his cash position being poised to pick up the pieces. There's just shy of $4 trillion sitting in money market funds likewise waiting to do the same, I believe. Certainly, cash that has been consistently growing in money market funds ever since the securities-based financial system began quaking in 2007 substantiates the view of those who believe our financial troubles have only just begun. This capital is likely to continue lying in wait until — most likely — it is foolishly given away (Peloton Partners comes to mind).

Mr. Roubini, indicating that $1 trillion already has been written off bank balance sheets, estimates further write-downs in the vicinity of $2.6 trillion hang in the balance. Yet he forecasts the stock might move only 20% lower before a playable bottom is in. This seems a case of erring to the side of conservative estimate in my opinion.

—Tom Chechatka