Uh, yes, in fact it is.
If this were just limited to one market, it wouldn’t be a “sky is falling” situation.
But the markets all over the world are selling off hard, and there’s no resolution in sight to the banking crisis.
Too many people here on FR kept thinking that the signs in the markets for the last year were MSM doom-n-gloom. Some of us kept telling people here that they should be looking at the bond markets, that there were bad, bad signs out there.
Some people were banned from FR because they were deemed too “doom-n-gloom” and alarmist.
Well, get ready for President Obama, because what you’re seeing is a for-real market crash. Stocks, bonds, commodities, you name it. Everything is being sold and sold hard. McCain clearly is out of his depth on this issue and just hasn’t a clue how to respond.
What you’re seeing is a deflation as a result of de-leveraging. If this isn’t turned around soon and consumers are convinced to spend, you will see at least a very bad recession.
I've been following your posts for the past few weeks and you seem very knowledgeable - can you please explain what you mean by this.
That's exactly the root cause, but today's specific problem is that Europe has turned financially protectionist. Basically each country is trying to protect its own savers at the expense of other countries' creditors. In a spiral now that Germany flipped yesterday.
And Obama does??! That's not your implication, is it?
I doubt if the man could balance a checkbook. An economist he ain't.
Totally agree. Plus here comes deflation big time.
my worry isn’t the mortgage problem per se, it’s the cascade effect in the short and mid term markets. banks aren’t even lending to each other right now and THAT is very bad.
Totally agree. Plus here comes deflation big time.
“What you’re seeing is a deflation as a result of de-leveraging. If this isn’t turned around soon and consumers are convinced to spend, you will see at least a very bad recession.”
Yup. What you’re seeing is the massive destruction of debt by the capital markets.
Perhaps next time we’ll learn.