It won't be any different this time - a panic is a panic is a panic. And the bigger the bubble, the bigger the panic
And boy, this was a big one...
Watching and reading today's financial market reports of gyrating markets and swooning prices can scare even the most determined investor. "Financial Panics" have been around as long as there have been organized economies.
The terminology used to describe these periods of economic weakness and market turmoil has changed over the years and helps us to understand the nature of the economic cycle and policymakers' responses.
Our current vocabulary vogue shows the hopes of our time. "Soft Landing" and "slowdown" are current in the halls of power. The not too hot and cold "Goldilocks Economy" has powered the financial markets into their current frenzy.
Did anyone ever consider that a big bear scared poor Goldilocks out of her post-porridge comfortable bed and made her run away in terror?
Up to the early 20th century, economic setbacks were known as "financial panics". Booms ended with people stretched. Without central bankers to rescue them from their inevitable excesses, commercial banks failed. These shocks spread. More banks failed. Bank shareholders lost all their assets, as their personal wealth backed their bank. "Financial panic" ensued as people strived to save themselves, usually beggaring their neighbour in the process.
December 08, 2005
It's panic time... Call it what you may, but "slowdown", "soft landing" and "correction" are about one thing - panic.
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I continue to like "Crash and Burn" for this real estate mess. Below is another piece of wood on the fire.
Kerkorian's bid to be on GM Board.
By Dee-Ann Durbin, AP Auto Writer
"Analysts have said Kerkorian's presence on the board could lead to drastic restructuring measures such as plant closings and job cuts, in part because his shares have lost so much value. When Kerkorian acquired 18.9 million shares in June, he paid $31 apiece. On Tuesday, GM shares were up 65 cents to close at $23.04 on the New York Stock Exchange. They have traded in a 52-week range of $20.60 to $40.82."
Nissan is leaving California where half of the biggest bubbles are for Tennessee. Does anyone know how many California jobs will be lost?
AAAAAAArgh. im panicking!
Here is another boom leading to "Crash and Burn"
Toll Bros. 4Q Profit Soars, Tempers Outlook
Associated Press -- Toll Brothers Inc., a leading builder of luxury homes, reported Thursday that its fiscal fourth-quarter profit rose 72 percent and topped expectations, but said fiscal 2006 earnings could miss Wall Street estimates on a slowing housing market, and was uncertain of its outlook for 2007.
More to the "Crash and Burn."
By Les Christie, CNNMoney.com staff writer says:
"The Mortgage Bankers Association estimates that some $330 billion worth of ARMs will adjust in 2006 and $1 trillion worth will reset by the end of 2007.
"Since the average ARM loan is about $300,000, according to Freddie Mac, a trillion dollars probably represents more than 3 million homeowners who will face bigger bills in the next two years.
If you took out an 3/1 ARM for $300,000 back in late 2002, your initial interest rate was probably around 5 percent and your monthly payment has been about $1,610.
Keith Gumbinger, vice president at HSH Associates, a publisher of consumer loan information, says 3/1 ARM coming due today would readjust to a rate of 7.1 percent.
Your new payment: $1,995 a month -- a difference of $385, or more than $4,600 a year."
remember when greenspan weirdly this summer recommended homebuyers and homeowners take out ARMs vs. fixed rate mortgages - right when interest rates were going up?
hmmm.... strangest thing
but will now add fuel to the sell-off fire
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