Yes, we are a positive bunch. The realistic kinds.
I still want to know the direction of interest rates. Will the Fed be able to lower rates to alleviate the coming recession?
Will foreign investors demand higher yields to make up for dollar value loss, higher and the huge losses they are taking right now? If so, they’ll buy US debt at a discount resulting in higher interest rates.
I agree with bugs, the subprime meltdown is like the S&L meltdown. In the 1980s the S&Ls make easy loans to builders and land speculators. This time around the subprime lenders gave the easy loans to the buyers thinking that they could securitize away the risk.
Not only do we have the subprime market meltown, we also be faced with the bankruptcy of lenders to condo developers and converters. Think of the likes of Corrus Bank.
Yes, bugs, it’ll be worse this time around. But how much worse? Interest rates, the speed of the collapse in subprime lending, and the collapse of small lenders to developers, will determine how fast things will play out.
