 In this bad economy, unemployment benefits are starting to run out. 401ks will need to be cashed in to survive. People will run up credit card debt fully knowing they won't ever pay it back. Can't blame them. I'd do the same thing. It's not any more criminal than the banks' illegal activities. Stick it to the banks.
Just as banks revalue their assets using their own mathematical flow models to suit their own purposes, the public have no confidence in the banks. The banks have leveraged themseleves off the edge of the cliff, and now they try to claw their way back, de-leveraging from 40 times to 10 times of assets. Of course there will be trouble ahead in the banking sector.
During this bad economy, be wary of the analysts, and their opinions. They are either clueless or in league with the evil banking empire. If the analysts were so smart, why didn't they predict the housing bubble? What about when analysts predicted that oil would be $200 a gallon? Analysts may try to present themselves as smart, but they are not. They may pretend to be your friend, but they are not. They get a commission if you buy or sell. They laugh behind your back as soon as they get off the phone with you. If they come into your home, check the silverware before they leave.
 And on the small business front, the unsecured lines of credit have dried up. Most business owners who use lines of credit, are in a credit pickle. The banks are not renewing these unsecured lines when they come due and want to give loans that are secured by personal assets like a home or portfolio, both of which have taken a beating in value.
So in this bad economy consumers strike back by maxing out their credit cards and defaulting on them. There is a huge bubble of individuals and small business owners who will blow the banks out of the water. Sure the banks will try to get back by going after personal assets, but they don't want to be owning real estate in the greatest depression ever. So when this bubble bursts you can expect several more banks to be out of business.
|
