The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: GST who wrote (84180)	7/26/2007 12:17:06 PM
From: John Vosilla	Read Replies (2) of 110194

I'm seeing an unprecedented REO mess here in Florida now much of which has been going on for years in many places in the heartland. This will take several years to unwind. I also see Citicorp, JP Morgan and Bank America stocks haven't collapsed like during the S&L fiasco of 1989-93 but then again NY hasn't collapsed yet either and a housing crash might be in the cards there as well. My read is enough of the risk of cramdown of receivables has been offloaded to hedge funds, individuals and foreigners and they can remain very solvent even in the worst case scenario? Certainly Paulson the mad scientist and Bernake have more to work with than last time when we also had Japan imploding and no global boom to bail us out. However this time we are working off record low rates and massive debts the likes of which has never been seen. Bottom line is no one really knows for sure where this all leads other than a persistent erosion in the value of your dollar over the long cycle.. Much higher long term rates are the big wild card IMHO that can lead to true armageddon not the Shedlock deflation..

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