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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Keith Feral who wrote (92411)3/18/2008 1:37:51 PM
From: westpacific  Read Replies (1) of 110194
 
Americans simply don't have enough money... What does it mean? It means defaults, economic loss and a spiral of fear and more loss. It means more Bear Stearns. Time's article quotes David Rosenberg, an economist at Merrill Lynch: "I'm not saying we're going back to our parents' level of frugality, but what we have witnessed in the past 20 to 30 years - and especially the parabolic credit growth of the last five years - is going to be bursting in the next decade." If not back to our parents' level of frugality, then what? To our grandparents' level? How can anything less be avoided, in an era when most people are already working full speed, maxed-out and yet still need credit to survive? And now they're cutting off the credit!? The result for households will be the same as for Bear - massive liquidation. And the Fed is in no position to do anything about it. The Fed is currently operating in triage mode - desperately trying to aid the banks and save the global financial system as we know it. But what ammunition does the Fed have to save the average American working stiff, who is up to his eyeballs in debt?

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This statement is SO ON THE MONEY.

We are talking a domino effect, and nothing is going to stop it!

Face it, Americans did not save in the good times....instead they spent and spent some more.....and a price will be paid for that, no way to avoid it. Meanwhile, the world is a big place, and will go on without American consumers.

West
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