Chris B

Not Everyone Is In Trouble

Interesting point about the possible migration of banks, but in today's world of 100% electronic banking, distance probably doesn't matter. It might be wiser to locate wherever employees with the required skills and education can be found. NYC has that, but also crazy office rents. I expect some dispersal, but not all in one direction. It might be time to sell your NYC office REITs.

Yet like LifeSentence I appreciate the macro view. Turning off CNBC and looking at the big picture, long term, and questioning mainstream assumptions is the only strategy normal people can win at. So far, despite all the blood on the streets, this crisis has been limited to the participants who gambled in the mortgage industry and has not infected the entire economy aside from putting stocks on sale and inflating commodities and treasuries. Pure brokerages like AMTD and banks like USB can still make money, even today, in those traditional business areas. As consumers pull back, which they must, the reduction in banks probably won't be missed.

Looking beyond the headlines, the mortgage crisis will someday be resolved. Home prices will fall to historical levels and a certain percentage, but by far not all, underwater owners will have defaulted. At this point, perhaps in a year or so, default rates will become predictable, mortgage backed securities will have a known value, and life will resume.

At this future point, my long-term focus shifts to high levels of consumer debt impacting consumption, the expanding national debt, and overseas developments.