Hussman on Simplicity and Delusion

Note that this is yesterday's article. The warning was issued before today's stock market slide. As such, I think he deserves an honorable mention.

Overbought in an Unfavorable Market Climate
The problem is simple: people bought houses during a boom, at bubble prices that they couldn't actually afford. The money that was lent has already been dissipated to the sellers – the owners of the houses don't have it, and neither do the lenders. The excess money that homeowners can't actually afford to pay back will have to be written off institution by institution, lender by lender. Major loan losses are inevitable. To believe they are something less than inevitable is to stay at the party even as flames climb up the building, in hopes that water is on the way. The U.S. financial system is going to have a bad time with this – there will be large losses and major adjustments. Eventually we will work through it, but it is delusional to look for a bottom when the real losses haven't even started to emerge.