Posted on 09/24/2008 10:06:00 PM PDT by TigerLikesRooster
This credit crisis is like the plague and nobody is safe yet
By Roger Bootle
Last Updated: 7:17PM BST 22 Sep 2008
Comments 112 | Comment on this article
A year since the credit crunch burst upon an unsuspecting world, the big questions remain unanswered. Where are we now? Is it nearly over? And has understanding finally caught up with reality?
The central banks' measures to return the money markets to normality by injecting massive amounts of liquidity have been at least partially successful. The spread of three-month interbank interest rates over the official policy rate - a useful indication of the willingness of banks to lend to each other - has narrowed from a peak of 1.2 percentage points to 0.8 percentage points now.
Before the credit crunch struck, however, this spread was regularly in the region of 0.2 percentage points. So although the worst may now be behind us, things are far from normal.
Moreover, even if the liquidity crisis may be past its worst, the housing crisis has only just begun. At the start of the credit crunch, house prices in the US had already fallen by 4pc. But over the past year they have fallen more rapidly, taking the total drop from the peak seen in 2006 to 16pc. My guess is that they still have 15pc to 20pc to fall.
(Excerpt) Read more at telegraph.co.uk ...
Ping!
That would be healthy, allowing people to better afford housing without propped-up loans.
How are more people going to afford housing when unemployment is up?
Wall street brokers will just have to get smaller houses.
Let’s consider the question of whether the DNC/media have conspired to cause this problem and time it to impact at the onset of the election.
Obviously, the AP, the NYT and other media have been pushing the notion of recession for most all of the GWB years. Now, with the election of his predecessor in the offing, have they laid out a grand plan for us?
Do you really think that the buyers targeted by these ill-conceived programs were loaded up with stock holdings?
Actually live within their means? Heavens, no! We need to bail them out!
</sarc>
Actually I am surprised that the crisis has been held off this far. Back in 2001, I thought that there could be some chance that economy would tank around 2004, giving Dems the opportunity to retake White House.
Perhaps Americans will do the jobs that Americans won't do.
Whatever jobs you are referring to, there will be far fewer of them.
True. And more average joes will end up in shacks. Nice.
TANSTAAFL
Continue on the same wrong path, or fix what’s wrong and feel the pain now to save the republic.
I would consider the latter to be far more honorable.
Yes, hammering the dollar and loading them with a $700B hit will not be good for the average joes.
Far better to keep the republic strong and then throw your socialist twist in afterwards.
Why is it such a difficult concept these days, to realize that it’s unsustainable to produce less than one consumes, and just make up the difference via credit or devaluation?
On the contrary. There's nothing else to stimulate the economy at the present time as the average joe sees his house value go down, down, down.
700B jolt will help old joe but better than a deep recession or possible depression even though many seem strangely titillated by the idea of the suffering which will ensue from a sharp downturn.
What about those who don’t have houses...I suppose you suggest they live on the street while you artificially prop up the housing market by taking money from their pockets, eh?
NO BAIL OUT!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.