wagman

Bracing for Another Round of Credit Related Woes

As deleveraging of massive leveraged credit inflation continues things will get much worse. Deflation is the operative force now and PPT will not be able to stop this. I agree with the excellent post by wpdragon that the FED and U.S. Treasury actions are designed to prevent collapse prior to the election and definitely for the benefit of their insider cronies. Whidbey is also spot-on. The end for collapsing real estate prices in CA and elsewhere in U.S and Europe is not anywhere near in sight. History shows that bailout actions in bear markets bring lower stock prices vs bull markets where they do the opposite. This bear market has so far given us the Bear-Stearns bailout, opening of the FED discount window and several "suprise" target rate decreases. My guess is the Fannie & Freddie bailout will be the next shoe to drop and kick the banks, stock and real estate markets much further down.