Carl Spackler

Making Sense of the Current Market Weakness

It is simple economics - because banks and financial institutions are reducing loans dramatically, we have been deleveraging on a worldwide basis. That is like sucking trillions of dollars out of the world money system. Less money to chase all types of assets means lower commodities, lower stocks, lower real estate prices etc....

Nothing the Fed can do about it - they have lowered rates 6 times and yet mortgage rates and other borrowing costs are actually higher now! This recession will behave differently as a result. We will not pull out of it like in past ones.