flatman

Why It's Time to Be Invested in the New Recession

I remember a time when sentiment said that a 200 PE or no PE was Ok if a company had a business plan that included the words 'dot com'. That didn't work out so well for a lot of folks. Unfortunately in the real world right now corporate profits are being juiced by a weak dollar at the expense of the consumer who will pay more at the pump and in the grocery store.

Financials Likely in Dead Cat Bounce, But Fed's Now a Wildcard

To me the big difference this time is that so many mortgages were interest only or no down payment. A down payment of 20% basically makes it pretty tough to walk out on your house. Even a 10% or 15% decline in house values leaves you with skin in the game. That may be why 'this time things are different'.

The Credit Crisis and Potential Shorts

The analysis of the problems seemed Ok to me, but I still can't see how banks will make the kinds of earnings they have in the past. They are less well capitalized and many of the techniques they used to earn income will longer exist ( i.e. sub prime and collateralized debt). So unless they revert again to overly speculative investments - they just look moribund at best.

Credit Market Mayhem and the S&L Crisis: Drawing Parallels

You fail to mention the Real estate run up in the northeast in the 1980's and the subsequent failure of the third largest bank in Boston - Bank of New England in the early 90's. It was also a time when Collateralized Mortgage Obligations were developed. Back then they were almost impossible to value and the models were extremely primitive. Sounds eerily familiar to me.