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Author
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Topic: The coming bear?
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Charles
Administrator
Member # 7
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posted
According to one of the world's most renowned authorities in international credit, we're on the verge of a major bear market that will affect everyone, not just the US.
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Are we headed for an epic bear market?
The credit bubble is just starting to unwind, a credit-derivative insider says. And while U.S. borrowers are being blamed for the mess, they were really just pawns in a global game.
By Jon Markman
http://articles.moneycentral.msn.com/Investing/SuperModels/AreWeHeadedForAnEpicBearMarket. aspx
Some quotes from the article...
The cause: Massive levels of debt underlying the world economy system are about to unwind in a profound and persistent way.
He's not sure if it will play out like the 13-year decline of 90% in Japan from 1990 to 2003 that followed the bursting of a credit bubble there, or like the 15-year flat spot in the U.S. market from 1960 to 1975. But either way, he foresees hard times as an optimistic era of too much liquidity, too much leverage and too much financial engineering slowly and inevitably deflates.
Rather than joining the crowd that blames the mess on American slobs who took on more mortgage debt than they could afford and have endangered the world by stiffing lenders, he points a finger at three parties: regulators who stood by as U.S. banks developed ingenious but dangerous ways of shifting trillions of dollars of credit risk off their balance sheets and into the hands of unsophisticated foreign investors; hedge and pension fund managers who gorged on high-yield debt instruments they didn't understand; and financial engineers who built towers of "securitized" debt with math models that were fundamentally flawed.
"Defaulting middle-class U.S. homeowners are blamed, but they are merely a pawn in the game," he says. "Those loans were invented so that hedge funds would have high-yield debt to buy."
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Greg B
IE # 118
Member # 886
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posted
Right on Charles!
He's right on target! However he needs to emphasize how this all started when the usury laws were overturned way back in the 70's. That was the calling card. This all happening now is the effect.
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http://www.boonestoons.com
http://www.spacefool.com
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Greg B
IE # 118
Member # 886
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posted
Another thing, I'm glad I didn't take on any debt of a major kind. I should have the last bit of any financial nonsense wrapped up very soon. The past few years with the natural disasters and these wars really took a toll on me. However opportunities always pop up.
I'm at a point now that because I shut up and listened and studied I can retire again soon just by increasing my income take by a specific percentage by default. That opens the door to more investment capital.
It's not over yet, but at least I've made some giant steps. I've also learned that there're groups and companies piling up prepared to help people who've fallen into this debt debacle.
Like Charles has said, every dark cloud has a silver lining.
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http://www.boonestoons.com
http://www.spacefool.com
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BobV
IE # 119
Member # 392
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posted
quote:
...I can retire again soon just by increasing my income take by a specific percentage by default.
Hey same here! I just need to increase my income by, like, 1200% and I will be able to retire comfortably in two years!
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ApeLad
IE # 231
Member # 3186
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posted
BobV: "Oh, I get it. it's a profit deal."
Greg: You are right. No one is talking about usury laws. Probably because there is no going back at this point.
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Greg B
IE # 118
Member # 886
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posted
Apelad, the history of credit and debt in this country is nothing more than a history of the biggest criminal act against the livelihoods of Americans ever.
I can't believe how greedy, no I CAN believe how greedy and stupid we've become. There's no one-stop place to read all the data. We were putting it together on America Online in the late 90s because the judges who were astounded at the rise in debt then asked us to. When I was given the files by the judges to the history of credit and debt in the U.S. I almost fell over. Blame primarily goes to our lawmakers. The legislative branch AND the executive branches screwed us over especially with the usury laws.
In a nutshell, after WWII credit cards were established for certain occupations like teachers to make sure our educational system remained untainted by organized crime loansharking. That was the primary provision set before the law. Soon after it was passed, those provisions went south. That was the first step. Then Nixon got into office and the final blow was delivered. Eisenhower saw the problem but couldn't stop it. Kennedy tried. Johnson was too scared and was worried about his own ass. Nixon's administration saw the pressure and opportunity.
That's when the dam burst and hasn't stopped since.
Greedy people saw the American people and the fruits of their labor as a cash cow and from taxes to predatory lending they haven't stopped.
"It's you and your abilities the Emperor wanted..."
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http://www.boonestoons.com
http://www.spacefool.com
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