The Coming Economic Monolith

Usually, I'd dilute this kind of news with the following joke:

"Economists have predicted ten out of the last three recessions."

But this guy's really, really sure of himself when he says all financials will be owned by the government within a year:

It's not preferable, but all major U.S. financial companies will eventually be under government control because the alternative is so much worse, Hugh Hendry, chief investment officer at hedge fund Eclectica Asset Management, said Friday.

"All financials will be owned by the U.S. government in a year," Hendry said. "I bet you."

Nationalizations take dramatic losses from the private sector and places them on the larger balance sheet of the public sector, he said.

"It's not good," but society is vulnerable and society is going to have to intervene, Hendry said.

And when smart guys with hair that sticks up all over make these kinds of pronouncements, I tend to take notice. Not a good thing. At. all.

Video of Mr. Hendry's full comments can be viewed here.

-R