The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Think4Yourself who wrote (141058)	8/14/2008 12:11:46 PM
From: ChanceIs	Read Replies (1) of 306849

>>>The government may save them but their business prospects are pathetic. <<< Bingo. They will have little growth prospects. Just sit there turning over their loans for five years hoping that the yield curve stays steep. There will/can be no monetary expansion with the balance sheets so constrained. They have to delever, make some money off of the yield curve spread, bolster their equity, and then they can relever. I still can't believe that people are stepping up and buying these secondary offerings. Jim Rogers keeps saying "single digits." Can Bernanke keep the yield curve steep??? We have the inflation cat coming out of the bag. LT rates have to rise. Bonds will drop. Do these banks have any bonds in their portfolios which would further reduce their equity ratios as rates increase?? If Bernanke keeps printing, will ST rates stay low??? Certainly the TED spread says they will not. Doesn't keep the banks from claiming welfare at the discount window.Can banks lend long term at high rates required by inflation. Sure, if businesses can justify high rates in their expansion projects. At best we will muddle through.

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