There's a classic sequence near the end of the 1997 movie Titanic that depicts the ship's sinking.
As the bow of the ship takes on water and slides beneath the ocean, the stern of the ship rises out of the water and ends up vertical. There's a pause as the stern just bobs there in the middle of the ocean leaving the remaining passengers afraid and confused. Then, after a brief pause, the ship quickly sinks.
As I watch economic and political news unfold,
It's difficult to imagine an economic situation more dangerous than the one in which we find ourselves.
The collapse of the housing market has exceeded that of the Great Depression because we have too many houses and not enough demand, housing prices may yet fall another 25%, and there are still millions of houses in foreclosure. All the debt problems that caused the crisis in 2008 haven't gone away, they've just been transferred to the Federal Reserve or continue to lurk on the balance sheets of banks. Sovereign debt bailouts in Greece, Ireland, and Portugal are exploding.
In addition to out of control federal spending, we have states such as California and Illinois that may go bankrupt or seek a bailout--and both of those states are far larger than Greece.