adAstra

What was Buffett Doing in 1974? How About in 2008?

The 1975 chart might prove to be similar to 2009 market performance. However, the same doomsayers that stated subprime was a huge mess a couple years ago are doing it again. The next "bubble" is the alt-A and opt-ARM mortgages that will be resetting in 2009/2010.

I haven't seen many seekingalpha articles about the effect of alt-A and opt-ARM resets on the housing markets and stock market. I haven't done in depth research on the financial status of companies holding MBS, but I'd be very surprised if they already took losses on those securities.

We might see a several month recovery followed by along leg down - or a long-term W-shaped market.