MITT ROMNEY Message Board

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Politics : MITT ROMNEY

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To: Peter Dierks who wrote (2099)	2/20/2008 10:33:36 AM
From: Augustus Gloop	Read Replies (1) of 5586

I know you're not being critical of me. This is a good board with people from all walks of life. I'm going to skip over the body of your message and go right to the last line. <<I am not seeing the financial crisis. My stocks are up based on the predictable decline in the value of the dollar. My business is growing and I am reinvesting the cash flow back into it>> I'm doing alright as well. There are certain reasons why I expect that to continue. The problem is a crisis can become a house of cards scenario. When it finally goes it can go quickly - you know that - you're a bright guy. There's a level at which foreclosures, bad credit and people getting bounced from their homes would become a huge problem. I don't know what that number is but I know its a finite number. At that point our businesses start getting impacted as do our portfolios and cash flow. What I'm not saying is that we're destined to go there! What I am saying is that because this is a housing led slide its more dangerous than paper losses in equities. Paper losses can be recovered over time but time is not something you have in a foreclosure process. The result is a glut of cheap houses, homeless people with terrible credit and a whole host of different dynamics than come from say the situation we had in 2000 with the stock market. IF the perfect storm scenario comes to pass (and its gathering strength right now) there are a great many people that wont be able to flourish the way they think they can. Banks wont be loaning money, our currency will buy less and a little more of our security will be washed away. This loss of security will start moving up the economic scale because the lower and middle class will have already been swept away from the first wave. Now - I know I'm being gloomy but what I'm really trying to do is present a thoughtful case, possibility if you will, where what currently appears to be a contained problem blows up and starts to impact everyone regardless of class. It can happen! Will it? I don't know. What I know for sure is that the year 2000 marked a turning point in how I perceived things (money & markets). That was (because of my job) the first real brush with the spiral down that I had experienced. I've been in the same industry for 20 years + and nothing came close. The early 90's under Bush were a walk in the park. 2000, 2001 & 2002 were complete hell and those were merely paper losses. That didn't create a loss of housing and put people on the streets. I think what you're hearing from me is a healthy respect for what could happen if things don't go well. We need leadership right here - right now! We don't need universal health care or a guy who has no experience but can deliver a speech.

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