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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Andrew G. who wrote (96315)4/19/2001 2:02:36 PM
From: pater tenebrarum  Read Replies (2) of 436258
 
i expect bad loans on bank's books to increase sharply, and the banks as a result to curtail their lending...lots of high profile bankruptcies.. an increase in the savings rate, with the concomitant decline in consumer demand, and i also expect lots of money market fund assets to blow up due to the issuers defaulting. corporate bond defaults should also continue to increase, driving spreads to fresh highs and seizing up the capital markets. financial assets and real estate prices should either continue, or begin to decline, and unemployment rise.
eventually we should get to the point where a few big tax payer bail-outs of troubled financial institutions become necessary, and as an ancillary to all this i expect the budget surplus to become a deficit once again.
if you need further elucidation on how credit bubble busts are unfolding, i refer you to studying the '29 to '49 period, and the past decade in Japan.
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