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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: The Ox who wrote (6910)	11/6/2007 10:17:54 AM
From: jim_p	Read Replies (5) \| Respond to of 50725

The issue today is not if C will fail or not, we all know C is too large to fail and at some point it will be a great buy because of its earnings capacity. The issue today is the macro effect on the economy if the banking system no longer has the capacity to expand credit. What have been the three main causes of past recessions? 1. High energy prices Well today we are at an all time high on an inflation adjusted bases and are back to the prices that killed the economy back in the late 70's and early 80's. 2. Deflation of a bubble We are still in the early stages of unwinding the largest bubble in history which dwarfs the tech bubble of the late 90's. 3. Credit crunch. Today we are in the early stages of what will most likely be the worst credit crunch in history. There is no solution is sight. The credit system that allowed the economy to prosper over the last 10 years is broken and will need to be replaced with a completely new system before the economy can go forward and no one know how long that will take. We’ve only had two systems in history and this last one has only been around for 25 years. Any one of the above conditions will and have caused past recessions and just think…….we have all three today. Short the rallies and prosper!!! Jim