Safety net or SAFEGUARDS (your word)??? What’s the differance, neither exists.
I think your assessment of the of the dot com bust is completely wrong.
THAT EVENT lead to the Feds decision to lower rates to a point were you have to go back 50 YEARS for equivalent numbers. That, and only that led a run up in prices LIKE WE HAVE NEVER SEEN. According to you, most of this was caused by people buying homes during the boom who didn’t know what they were doing. Do you think they would have been doing that if interest rates weren’t at half a CENTURY LOWS??? My guess is NO!
WE JUST TRADED ONE CRISIS FOR ANOTHER!!!
Greenspan himself said the dot com implosion created the housing bubble. So what we did was just DELAY the coming ADJUSTMENT.
Think for a minute…If interest rates hadn’t been lowered to historic lows, and these insane mortgage products were regulated, we would have endured some pain in the early 21st century. But …remember… our Goverment had a $2 TRILLION (with a “T”) SURPLUS!!! Do you think it would have been better to pay THEN or NOW?
We’re going to pay tommorow for what we should have done yesterday. It’s coming, and it’s going to be a lot worse than people think.
The Democrats take the White house in the next Presidential Elections. No doubt in my mind about that. My guess is you’ll also see the Republicans lose some more seats in the House and Senate. Add to that ANY type of Homeland Terrorist attack and you’ll see the Republican party DECIMATED. Then the Democrats will come in and PAY back the working man for all the sins of the last 8 years. THAT, will NOT be a good thing for this country right now. The investment choices people living in this world have today are GLOBAL. If the Dems decide to tax the hell out of Private Equity, Hedge Funds, Dividends, ect. what happens??? LIQUIDITY IN THIS COUNTRY DRIES UP, just when it’s needed MOST. Last month Greenspan warned “Markets should not under estimate how quickly excess liquidity could dry up in current markets” That’s reassurring
We’ll see???.. I have absolutley NO FAITH in our goverments ability to steer us out of this free fall. WHY??? Because THAT would require SPENDING what you TAKE in, making some very UNPOPULAR decisions with regard to Medicare and Social Security which are bankrupt, basically changing EVERYTHING in WAHINGTON. (not likely) But hey, you seem to feel that all the “SAFEGUARDS” are in place, don’t worry, some guy in Washington will step in and just erase all the money owed on homes that aren’t worth what they were sold for. IF THAT happens, we’ll see a price drop in housing that will be far worse than even I see coming. Roger, if they do a “forgiveness of debt” like you say? The U.S. dollar GOES THROUGH THE FLOOR. Think the CHINESE will hold that debt while the dollar disintergrates??? THEY WON’T!!
Oh, wait a minute? Didn’t you just say that right now “CHINA is in a postion very similar to the one the U.S. was in when the markets crashed in the 1920’s”
OOPS!!! Throw that “SAFEGUARD” theory out! Oh, but China IS our safeguard right now! They own more of our debt than ANY OTHER ENTITY ON THE FACE OF THE EARTH. I’m getting a warm and fuzzy feeling now. I think everything’s going to be alright!!!
You might want to rethink your theory?