Saturday, March 08, 2008


One out of seventeen mortgages are deliquent

Think about that number for a second. 1 out of 17. I don't think most people have any idea how bad this financial crisis is going to become. We are just feeling the beginning of this with a lot more pain to come. The weak highly leveraged people have already been devastated but the credit crunch is going to start hitting the average person. The point of recognition, and panic, is coming very soon. I can feel it. Well more like see it in the performances of former darlings like AAPL and GOOG.

Credit is much more difficult to come by and a lot of our economy is grinding to a halt without banks being willing to lend or customers with solid credit unwilling to buy assets when they really don't know where the bottom is. We have years of stupid lending to unwind. If you think of it in terms of how long our economy has run on easy, cheap credit and how far asset prices have risen beyond normal growth would dictate then you will understand how much pain we are going to experience. Yup, this is only the beginning.

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