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I think everyone out there is going to find out about credit crunchesbefore this one is over. The crunch in 1974 took 50% off gold andalmost that much off the Dow. An alligator on your ass is easier than acredit crunch on the price of your assets.
There was a guy onCNBC today who told the truth. You don't get the truth on CNBC toooften and when you do, the guy is usually shut up by someone. Not thistime. This guy, whose name I can't recall, said the credit bubble wasbigger than the dotcom bubble. Yahoo still trades for 1/6th its peak orat least roughly that. Even though GOOG is here, most of their othercompetitors aren't. Never has economic activity gone up in a crunch norhas there been a hyperinflation launched during a crunch. There was amild crunch in the 1990 period that was eased by the Fed cutting ratesfrom about 7% to around 3%. It allowed banks to get fat on treasuriesand they eventually earned their way out of the crunch. Not this time.This trick was tried in Japan, but you just don't get fat on 1.5 to 3%treasuries. We should see inflation drop.
People confuse a lotof things the fed does. One of them is these funds rates. The bankscan't cash a check if the funds aren't in the system and the marketrate for funds would probably be 10% in this type of atmosphere. Thisarticle is good reading.
Credit Cracks, Markets Close, Bonds Yelp 'Help!': Mark Gilbert
Inany case, I bet there is a lot of firesale items before this one isdone. Houses at half price aren't going to conducive to gold at doubleprice, nor stocks at touble price or a healthy financial sector.Hopefully they actually audit GS and this POC folds and the republic issaved. People in debt are going to be crushed. I won't put my own 2cents on this one, but comments out of the Fed aren't in any way aboutpropping up the market. The idiots in it are too big to get out thedoor.
There was a guy onCNBC today who told the truth. You don't get the truth on CNBC toooften and when you do, the guy is usually shut up by someone. Not thistime. This guy, whose name I can't recall, said the credit bubble wasbigger than the dotcom bubble. Yahoo still trades for 1/6th its peak orat least roughly that. Even though GOOG is here, most of their othercompetitors aren't. Never has economic activity gone up in a crunch norhas there been a hyperinflation launched during a crunch. There was amild crunch in the 1990 period that was eased by the Fed cutting ratesfrom about 7% to around 3%. It allowed banks to get fat on treasuriesand they eventually earned their way out of the crunch. Not this time.This trick was tried in Japan, but you just don't get fat on 1.5 to 3%treasuries. We should see inflation drop.
People confuse a lotof things the fed does. One of them is these funds rates. The bankscan't cash a check if the funds aren't in the system and the marketrate for funds would probably be 10% in this type of atmosphere. Thisarticle is good reading.
Credit Cracks, Markets Close, Bonds Yelp 'Help!': Mark Gilbert
Inany case, I bet there is a lot of firesale items before this one isdone. Houses at half price aren't going to conducive to gold at doubleprice, nor stocks at touble price or a healthy financial sector.Hopefully they actually audit GS and this POC folds and the republic issaved. People in debt are going to be crushed. I won't put my own 2cents on this one, but comments out of the Fed aren't in any way aboutpropping up the market. The idiots in it are too big to get out thedoor.
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