It won't end in a whimper...it will just pop

International Asymmetric Biowarfare Correspondent for Abel Danger

Sir Oliver Klosov

- I got my pin ready

The stock bubble is now imploding again, after an 8-month reprieve in one of the market's largest bear-market rallies (but what can you expect in the middle of what will likely be the market's biggest bear market since the Great Depression?).

The bond bubble has been popping for a long time, reluctant to go where reality dictates it should. However, it seems to have "gotten the memo" at last, as Richter said in yesterday's Daily Doom, because it certainly has picked up speed.

And now the housing bubble is joining the cascade — at least in new home prices. Existing home prices, however, have been swept up in something much worse — a fire tornado created by the Fed where the Fed's tightening is causing shortages in supply that are actually driving prices upward, rather than taking them down.

That dangerous dynamic may bust at some point, but it means the housing bust will be more chaotic than if that dynamic were not happening. It is hard to say for sure because we haven't seen something like this before. If the tension doesn't break between sellers and buyers, the most bizarre housing freeze in a long time — if not ever — will soon look like a nightmare in Wonderland.

But I have a picture of the morning after...

It's not as if we weren't warned. There's only so far to kick the can down the road before there's no road left.

-Klosov