Look, I have lived through 3 recessions. This one will be a knockout! We have 300 billion in bad paper. These people will default on their credit cards. Gas is 3+ a gallon....
you can’t be this obtuse. Stay out of the market, or short. Keep your debt down. You are either young, or not rational. I mean you no harm.
And what % of annual GDP is that? Will it all default? Will it default tomorrow or over the next 1, 3, or 5 years? How much of it will get settled? How much is hedged? How much is covered by default swaps?
I'm not trying to sound like a horses a$$ here, but I am getting sick of people tossing numbers that may or may not be accurate, are definately not placed in context, and make it sound significant. I hate to go so low on you my FRiend, but you sound like a journalist...
I remember a great quote: "The only thing we have to fear is fear itself." Right now, credit markets are pinched simply because no one knows what is lurking on each others balance sheets. Just MHO, but I think the paranoia is as overblown as the election year hyperbole. Most of what is "bad paper" is already allowed for, haircut, hedged, swapped, or able to be unwound, refi'd, or sold at a minimum hit discount over the next few months and years. Yes a few idiots will take some major lumps (i.e. Brookstreet Securities). But the vast majority of financial firms out there will come through with a couple of substandard quarters and mostly intact equity. Just my $.02 worth.
Many of the people posting here are cheerleaders. They do not want to understand. But it is not their fault. ‘Hip - Hip - Hurray!’ is all they know.