More Financial Troubles for the USA...
I can safely (I guess) forecast the folllowing:
1) The 'sub-prime' mortgage crisis IS NOT over in USA.
1a) It will ONLY be getting WORSE.
1b) Most BANKS will NOT be getting better. For some INSANE reason, these banks have only been doing SMALL write-downs each quarter.
1c) There is STILL no liquid market for the bonds that these mortgages have been bundled into. And there WON't be one for a LONG time.
1d) Therefore, any bank who invested in these bonds will be forced (hee hee) to WRITE them off, when they come up.
2) The Exact same problem with sub-primes (the fact that they were taken, put into a group BUNDLED together into a (say) million dollar face value), and then sold ALSO happened with one other financial problem...
That is CONSUMER credit card debt. Yes. Your credit card balances with citibank, bank one, are ALL taken, and put together into
BIG bundles until someone can buy (say) a million dollars of receivables....
How does that create a crisis??? Can you say .... Depression? bad (really, really, really, really bad Recession) Depression?!
forcloseures rise, late fees rise, defaults rise, EXACT same problem... Too many defaults will trigger the SAME crisis, different FINANCIAL product.
Strike Two against the economy (strike one was the subprime, #2 the credit card).
Strike Three? who knows....
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