Just print more money. Problem solved. Haaaahahaaahahaaaaaa!
Anyone who has cash has better hang on to it. In a credit collapse, when vast amounts of “money” suddenly disappear from the system, Cash is King, and Real Property is Queen. If the system hits the canvas, your stock options won’t buy you groceries, and all the commercial paper in your portfolio won’t keep the rain off your head if your bank goes under and takes your spending money down with it.
There have already been bank runs in the UK. It can happen here. To pretend that it can’t is to whistle past the graveyard of history. Of course, I’m hopeful that we can somehow get through this crisis, but let’s not throw out prudence in our distaste for panic.
I really DO hope this (minor) episode has scared the crap out of the right people. Because if it hasn’t - if a federal bailout has been incorporated as a more robust assumption in risk models but it is otherwise business as usual - then we will bear witness to a collapse devastating enough to make one pine for the days of even the Great Depression.
Good evening Mr. Phelps....
He urged policymakers to “think the unthinkable” and prepare now for what they would do if the worst case scenarios materialised and “low probability but high impact events” threatened to jeopardise global financial stability.”
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Unthinkable....well, a good start would be to kick all the bums off welfare, shut down the Endowment for the Arts and similar tax guzzlers, lock the border down, and let the greedy folks who knowlingly bought more house than they knew they could afford take their hits.
Make sure the people who took out the loans pay for them and the idiots who manufactured the CDOs be responsible for unraveling their GENIUS wonder products and settling their mess.
I did not get involved with over priced housing or sub prime loans so I should not have to pay for other's stupidity!
Oh yea, make sure the realtors, the appraisers, and every one else (including the billion dollar CEOs) cough up their fair share too!
Do I grab my ankles before paying, or after?
Last night, I was reading a book on technical analysis.
Chapter 7: Why the U.S. dollar Dictates the Longevity of an American Equity Bull Market.
The DJIA is looking like it could in very deep trouble.
Prices always revert to the mean and houses will fall back to traditional 3X income in a gradual decline over many years like Japan.
A harsh lesson for a bunch of spoiled brats.
Somehow, I missed this one.