The former chairman of the Federal Reserve has warned that severe hardship will result after a period of marketplace euphoria. see; http://news.yahoo.com/s/nm/20080804/bs_nm/economy_crisis_greenspan_dc;_ylt=AqRUddN8ycxvkDX1leW6nPkDW7oF
Worse, we have not one but two Presidential Canidates who are engaged in non materialistic commental talking points which add no substantive contribution to the present banking tusnami. They talk in “BERLIN” about world citizens and refer to Paris Hilton and Britnay Spears. The rhetoric is at a elementary school yard level.
That so many Americans are not outraged at the state of Banking and the failure of the executive and legislative branch’s to regulate such gross mismanagment confirms my belief that our millineum will be called the ” Car Wreck Age“. As we keep going faster and faster disregarding danger and when we predictably crash, we demand rescue,( cops and rescue personnel) restoration to our whole person ( medical treatment and medicine) comfort ( comfort from family and friends) , and punative damages ( The government is to blame ( not my selfish speed) for not placing speed bumps, traffic devices, coops and better lighting. Substitue bank failure, pumping out loans to non qualified buyers, rescue from the FDIC and Congressional aid to agency such as Freddie and Fannie.
As we all know in a Tusnami the water disappears before the wave hurls itself on the population and few if any avoid the severe and negative effects of the wave. And from Freddie Mac to Indy Mac the banking front is drying up but the tusnami has yet to hit. For a list of the present banks which have failed see; http://www.fdic.gov/bank/individual/failed/banklist.html . This past Christmas I talked with my dad’s friend who is now in his mid 60’s and retired as a senior, senior banking officer at Citibank. I asked him than what the hell was going on, as Citibanks stock was already tanking. He stated ” those bastards threw out every professional measure of prfofessional, responsible lending measurements. And the measurement is simple you can’t borrow more than you can afford.
The former head of the Fed said that until the Housing Market corrects more banks will go under. How far must housing fall. To reach the equilibrium required to correct the market, I belive that the income to housing cost of ownership must fall to the similar ratio’s that we saw in the 1950’s.
So that is my 2 cents, now add in the price of fuel ( home and transportation), increased food costs, high consumer credit debt. ” Americans carry $2.56 trln in consumer debt, up 22% since 2000 alone, according to the Federal Reserve Board. The average household’s credit card debt is $8,565, up almost 15% from 2000. Average US student emerges from college carrying $20,000 in educational debt. Household debt, including mortgages and credit cards, represents 19% of household assets, compared with 13% in 1980. Share of disposable income that consumers must set aside to service their debt has risen to 14.5% from 11% just 15 years ago. US savings rate, which exceeded 8% of disposable income in 1968, stood at 0.4% at the end of the first quarter of 2008, according to the Bureau of Economic Analysis.
Death and vulgarity are the only two facts in the nineteenth century that one cannot explain away. ”