Gaucho

The Worst Is Over ... Again ... And Again ...

Well boys I agree with the author on his efforts of a recipe for disaster. Ya gotta figure at least a 20% cost to the bank to foreclose. Your estimate of a 30% fall off may be correct but it will most likely overshoot by 20%. Now let’s add the arms not just the subprime and the Alt-A and the best of breed Option ARMS, no legs please(sic). Now let’s stir the pot with the layers of derivatives of over 400 TRILLION dollars with 45 Trillion in CDS exposure alone. Along with some tranches and other exotics such as VIEs of which CITI holds over 300 billion worth 27cents on the dollar.
But were are not done yet lets add the Commercial real-estate which is very bloated on its own and many new buildings are standing empty.
Add a little spice with the leveraged takeovers where management got huge bonuses for a lemon deal. But what the hell let the bank eat it.
A pinch of defaulted car loans and the real secret ingredient of commercial loans over bloated for when the times were good.
As icing on the cake are the credit cards defaults as the economy melts down and people pay their mortgages with them.
Stir vigorously with all time high oil prices, only the best inflation adjusted, to add thickness to the stew.
AND we serve with no savings on the side the dish best served cold Cream LA DEPRESSION.
Bona appetite

The Coming Crash of 2008: A Result of Overleveraging

There are three stages of a recession
1 Denial
2 Acceptance
3 Capitulation

Several people in the above messages are still at stage1. I agree this has the potential to be a disaster. The real-estate market will fall another 30% wiping out trillions in perceived and real wealth. This bubble in real-estate is the largest in the history of the United States. The leveraging/derivatives size is many multiples of the real-estate and leverage many times over. This is disaster waiting to happen. When it collapses the US will no longer be the financial capital of the world. It will take at least 7-10 years for us to recover. This country will never be the same.

Thursday's Rumor: Bear Goes Belly Up (Who's Next?)

YOUR an IDIOT. Second opinion your stupid to grab a falling knife.