Congress Dickers, while Detroit, Wall St and Main St Burn!!!!!!

Today, while Paulson and Bernacke were defending themselves and their actions, while Congress dickered about with leaders of the Detroit Three, Wall Street continues its persuit of gravity as the primary driver!!!!!!

Even with the billions being pumped into America’s banks, the 2 trillion dollars of injected liquidity, the stock and bond markets are telling us that these efforts will fail!  Citi Group and Bank of America led the decline.  Why?  Because investors believe that they can and will go lower.  That their problems are beginning, rather than ending.  That things will only get worse!!!!!!!!!! Wow, worse?

Defaults on consumer credit are just beginning.  Credit balancing (moving $ from one source to another) is now exhausted. No new credit is being issued. Existing credit is being reduced.  Interest rates charged are jumping to the hi 20’s to 30’s, with limited notice to the borrowers!!! Thus, unless they pay off the balances, the interest charges will continue to grow exponentially!!!!   If new cash flow, profits, etc. can not pay down the balances, and the balances grow exponentially (which we are already seeing), the only outcome will be massive defaults.

With structural changes being implemented by the banking system.  With credit in full crises, mass defaults and bankruptcies is the only out come.

I hope I am wrong.   Please tell me what I am missing….. Leave a comment.

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