Comments on: Enron’s Second Coming? http://www.drinkingisbelieving.com/2007/10/01/enrons-second-coming/ The party doesn\'t have to end! Thu, 04 Dec 2008 04:12:03 +0000 http://wordpress.org/?v=2.2.3 By: John the Greek http://www.drinkingisbelieving.com/2007/10/01/enrons-second-coming/#comment-7 John the Greek Tue, 02 Oct 2007 15:48:53 +0000 http://www.drinkingisbelieving.com/2007/10/01/enrons-second-coming/#comment-7 It's true that we haven't seen the full effect of the sub-prime mess at hand. In the coming months and years we will begin to realize the full effect of this financial crisis. Let's see... major lending institutions involved in shady underwriting practices that are borderline fraudulent; personal credit stretched very far; minimum wages, fuel prices, and the cost of imported goods are all rising; consumer saving is low and spending is high. It seems as if a breaking point is near. The stock market is soaring, but a downturn is certain. Oh, did I forget to mention the crumbling Dollar and decline in foreign investment, further enlarging our trade deficit. Soon, as history consistently shows, significant declines are inevitable (buy low sell high right? That Countrywide guy knows what he's doing). When it is harder to get money to buy something of significant value (i.e. a house), less buyers will be present. Price adjustments should follow. The real estate giants love high property values; it's great for business. Combine that drive for profit along with a growing trend of sub-prime lending or interest only balloon loans, and the result is a bubble. Houses people can't afford. As the number of foreclosures has been rising, it's harder to get the cash needed for expensive homes. When house prices finally decline, things will be a little easier. Easier to pay for that $3.00/gal gas to fuel your H2 anyway. Trying to straighten out this mess under current conditions is hard enough, but imagine what a natural disaster, another major war, or numerous corporate scandals would do to our speculative financial markets. The only advice I can give is to either keep drinking the Kool-aid or wise up and BUY WAR BONDS. UNCLE SAM NEEDS YOU It’s true that we haven’t seen the full effect of the sub-prime mess at hand. In the coming months and years we will begin to realize the full effect of this financial crisis. Let’s see… major lending institutions involved in shady underwriting practices that are borderline fraudulent; personal credit stretched very far; minimum wages, fuel prices, and the cost of imported goods are all rising; consumer saving is low and spending is high. It seems as if a breaking point is near. The stock market is soaring, but a downturn is certain. Oh, did I forget to mention the crumbling Dollar and decline in foreign investment, further enlarging our trade deficit.

Soon, as history consistently shows, significant declines are inevitable (buy low sell high right? That Countrywide guy knows what he’s doing). When it is harder to get money to buy something of significant value (i.e. a house), less buyers will be present. Price adjustments should follow. The real estate giants love high property values; it’s great for business. Combine that drive for profit along with a growing trend of sub-prime lending or interest only balloon loans, and the result is a bubble. Houses people can’t afford. As the number of foreclosures has been rising, it’s harder to get the cash needed for expensive homes. When house prices finally decline, things will be a little easier. Easier to pay for that $3.00/gal gas to fuel your H2 anyway.

Trying to straighten out this mess under current conditions is hard enough, but imagine what a natural disaster, another major war, or numerous corporate scandals would do to our speculative financial markets. The only advice I can give is to either keep drinking the Kool-aid or wise up and BUY WAR BONDS. UNCLE SAM NEEDS YOU

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