No. of Recommendations: 12
But a year and half into this mess, shouldn't we have more to show for it? A year and a half of waiting for the other shoe to drop, but where is the all-out collapse? The pessimists here will say we're already in a collapse (but they'll also be sure to tell you how it can get worse). The optimists (are there any?) would look at this and say - a year and a half of credit lockups and all we've got to show for it is some contained damage and stock market only off less than 20% from an all-time high?


I seriously believe we have only seen about 10% of the pain to date.

In each of the credit freeze-ups encountered so far, the problem has been averted by restructuring the bad paper onto the books of some other profitable entity or by MASSIVE liquidity injections by worldwide central bankers -- mechanisms the average consumer / citizen doesn't understand well enough to understand the implications or trigger any sort of fight or flight response. All they know is that

* they haven't gotten a raise
* "inflation's low" yet gas, food and monthly utilities are way higher
* homes on their street that use to sell in 2 months take 7-10 if at all
* their portfolio and 401k are treading water (if they're lucky)

The nationalization of the garbage on the books of Fannie and Freddie is another stone being placed on the chest of taxpayers who are being crushed under the weight of the unproductive debt America has racked up over the past 28 years. As I posted over on PA (#1), when international markets analyze the impact of the Federal government taking on at least $750 billion in bad debt, I suspect the dollar will drop significantly and interest rates will rise to compensate for the risk of holding USD denominated debt owed by a country with an economy that is leaving itself ABSOLUTELY ZERO margin for error in its economic policies and performance.



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