Are we near a bottom?
I have been talking about the market mess daily on my blog but the news is important enough today to make sure everyone knows what is happening.
I have been through this before so i know that history always repeats itself but not always in the same way.
The media is hyping the bad news but so far the credit market has not budged.
“Burgeoning losses in mortgage-backed bonds fueled a credit crunch beginning last summer, as wounded banks and brokerages became reluctant to lend money. In recent weeks the crunch has spread well beyond the housing market, even affecting seemingly unrelated markets, such as municipal bonds.”. says Tom Petrano of the LA Times last week. “Some stock market pros say the credit turmoil is likely to lead to the failure of at least one major bank, brokerage or other financial company. Historically, market crises often have ended with a spectacular institutional failure that triggers a final wave of selling.”
This is what i have been saying all along. There is a total stalemate. Banks are not lending, sellers are not selling and banks are not dumping inventory yet. THIS HAS GOT TO CHANGE. We need to have a major calamity for the logjam to break. A major bank or financial institution has to fail. We need to see capitulation before things change.
Well folks here we are. Bear Stearns is really bankrupt but the fed allowed J.P. Morgan to take them over at fire sale prices and supplied the easy money to do so.
I’m sure that this is only the beginning. We need to see more disasters before anything will change. At the market bottoms you have to see blood in the streets. I think we are approaching that.
Once the stock market gives up, the banks and other financial institutions will have to dump the worthless junk they have. THAT MEANS DEALS FOR US!!!!
Please don’t bail out of the real estate market yet. Our time is coming, and for the ones who stick to their goals and don’t let anyone tell them they are crazy, the payoff will be significant. You guys should get Donald Trump’s book, “Thing big and kick ass”. (or something like that). I am reading it and it is so right on in his unique style. You may not like him but his advice is right on.
These are exciting times!
To your success!