Is the worst behind us in the credit crunch ?

I think they aren't going to cut because of inflation concerns and gas prices.

Per the MSNBC article I was reading every PENNY increase at the pump translates to a BILLION in lost spending power!

I bet I know Shelly's response. And what do you think the Fed does tomorrow. Cut a quarter point and be done cutting for the foreseeable future ? It seems as though most of the Bank write offs could be behind us as far as the toxic paper is concerned. At least in America......don't know about the rest of the world.

My guess is that they will not cut again, this week. As much as I hate to believe this, I do not think the worst is over with bank write offs.

I bet I know Shelly's response. And what do you think the Fed does tomorrow. Cut a quarter point and be done cutting for the foreseeable future ? It seems as though most of the Bank write offs could be behind us as far as the toxic paper is concerned. At least in America......don't know about the rest of the world.

Dear goofer44,

Thank you for this question. It is a question that deserves an answer. Is the worst behind us? NO, it has not even gotten bad yet. We are in for an economic meltdown that has not been seen in almost 78 years and we all need to be ready to prepare for the worst.

What should we do? Stock up on canned food and rice, flour, cooking oil.

Go and buy some fishing line, hooks, water filter systems, and get some seeds to plant a garden for your family.

Make sure the seeds you purchase are heirloom seeds so that you can get seeds from them and look into purchasing solar energy for your house if you can.

More than anything, watch your money and think about buying that new car and pay off all your debt. Be informed would also be a good idea and start thinking about your community.

In the depression, people survived because you could count on your neighbor.

Buy a gun and plenty of ammo! When the bottom comes and it is my belief it will come, have something that can protect your family from those who have not prepared.

If I am wrong, you got some fishing equipment you have been wanting to buy and a gun for protection and some food to feed your guest that come down to see you, but if I am right you and your family should have a fighting chance.

This is one time I pray I am wrong and would love nothing better than to be teased about in the future about how I was wrong, the problem is, I don't think I am painting the picture as bad as it is going to be.

Tonight, I'm gonna party like it's 1999!

And it's only a Tuesday in April!

Stock up on Alcohol, Tobacco, and Firearms!

Tonight, I'm gonna party like it's 1999!

And it's only a Tuesday in April!

Stock up on Alcohol, Tobacco, and Firearms!

Don't forget your .........

Don't forget your .........

I'll pick up some on my way to the state line...going to get firearms...I mean
fireworks!

I'll pick up some on my way to the state line...going to get firearms...I mean
fireworks!

Tell my cuz Buddy I said hi and he can point you towards the piggly wiggle too for your Spam hookup

Tell my cuz Buddy I said hi and he can point you towards the piggly wiggle too for your Spam hookup

Heyyyyyy, I thought I was the SPAM hookup.... {{Aleonard, I brought spam samiches to the luau}} Funny thing - they were gone pretty quick....

So, I have the spam, sunspotbaby is gettting the firearms, who can garden??

sorry goofer for jackin your thread...

Heyyyyyy, I thought I was the SPAM hookup.... {{Aleonard, I brought spam samiches to the luau}} Funny thing - they were gone pretty quick....

So, I have the spam, sunspotbaby is gettting the firearms, who can garden??

sorry goofer for jackin your thread...

Looks like Rita and DD can grow things. 'Bout the only thing I can grow is mold.

Heyyyyyy, I thought I was the SPAM hookup.... {{Aleonard, I brought spam samiches to the luau}} Funny thing - they were gone pretty quick....

So, I have the spam, sunspotbaby is gettting the firearms, who can garden??

sorry goofer for jackin your thread...

Sorry IBD. I guess I was thinking you're the south side spam hookup

I have one pepper on my plant, but I'll share.

Ditto Goofer

Looks like Rita and DD can grow things. 'Bout the only thing I can grow is mold.

I can grow iris. And herbs.

I have a bumper crop of Greek oregano, nasturtiums, and mint right now. I'm not sure how long I could subsist on those....

Goofer, you should get with JOE and see about starting a community garden on one of the greens so you all won't starve.

As for you question, I'm quite sure the credit crunch isn't over...

I've got rhubarb, parsley, and chives for the communal stew pot!

I'm thinking another 25 basis points tomorrow.

I also think there's going to be more and more toxic paper being 'discovered' going forward (both in the US and abroad)--it just means more stuff to off-load to the central banks for treasuries to shore up the banks' (& now non-regulated-banking entities') books.

Goofer, it's still a trainwreck out here. I'll ask you the same question I asked you months ago when folks envisioned the financial system had hit bottom (and gas was $2.50 a gallon)--just what do you see that will make the US economy snap back to normal?

The days of our 'booming' economy that centered on people selling real estate to each other, and buying tons of foreign-made junk, using money borrowed from the Chinese, is SO over.

.

I remember talking to a coworker in 1999. He was convinced Y2000 was going to be the end of civilization. He had bought a generator, stocked up on dry goods, fuel, guns, etc.

He lived on the outskirts of Atlanta. So I asked what was going to happen when electrical power is gone, the grocery store shelves are empty, and 2 million nearby people are crazed with starvation. And they see his house with a generator humming and the lights on with the smell of home cooked food. You could not buy enough ammo to protect yourself.

He did not have an answer.

Your scenario is a remote possibility. But planting a garden and buying some dry goods will not save you. Your neighbors won't just sit there and quietly starve to death as they watch you cook up your beans.

The only answer is to get completely and totally away from civilization. I would suggest buying a float plane and going to a remote Canadian lake and building a cabin.

As for me, I have already stocked up on the essentials (limes). You will find me spending my last few days on earth watching the sunset from my gulf front condo while enjoying my large stockpile of gin and tonic. And no one will really care if it was the bottom of the real estate market or not. But oh what a view.

JMHO,
Flyguy

Shelly and Goofer-I heard on CNN this morning that irregardless of what the US Fed does to interest rates it might not do much for domestic credit as a substantial factor in our banking is somehow tied to an interest rate that is established in London (it sounded similar to the US prime rate). Could you please expand and explain in layman's terms?

libor...libor....libor

Shelly and Goofer-I heard on CNN this morning that irregardless of what the US Fed does to interest rates it might not do much for domestic credit as a substantial factor in our banking is somehow tied to an interest rate that is established in London (it sounded similar to the US prime rate). Could you please expand and explain in layman's terms?

http://www.mtgprofessor.com/Tutorials2/libor_loan_tutorial.htm

.

I bet I know Shelly's response. And what do you think the Fed does tomorrow. Cut a quarter point and be done cutting for the foreseeable future ? It seems as though most of the Bank write offs could be behind us as far as the toxic paper is concerned. At least in America......don't know about the rest of the world.

The real issue is no one is getting access to wholesale funding so with the spiggot turned off it gets tighter everywhere from the larger banks all the way down the line. That is about to loosen up shortly in the next couple of months.

96 % of all mortgages are being paid on time so 4% in trouble doesnt sound like much of a problem
Except the amount in dollars is huge
Frankly as far as real estate goes, an adjustment has been needed for quite some time.
What goes up must come down, if even only temporary.

As for claims of doom and gloom and depression this and recession that
the GDP is still in growth, yes its .3 of a percent but with this low an unemployment level and actual growth, the sky is simply not falling

Note that every time the election comes around there is always the side no matter dem or rep that says "everything is terrible its such a mess and we are just the ones to fix it"
yeah right

Shelly and Goofer-I heard on CNN this morning that irregardless of what the US Fed does to interest rates it might not do much for domestic credit as a substantial factor in our banking is somehow tied to an interest rate that is established in London (it sounded similar to the US prime rate). Could you please expand and explain in layman's terms?

Libor is short for the London InterBank Offered Rate, the interest rate offered for U.S. dollar deposits by a group of large London banks. Historically, it runs parallel to our short term Treasuries. (Graph comparisons)

You may have heard more about it today; excerpt from Bloomberg

Libor Jumps
Yields on two-year notes also rose as the rate to borrow dollars in the London interbank market surged the most since August in response to a threat by the British Bankers' Association to ban members that deliberately understate borrowing costs.
Citigroup, the biggest U.S. bank by assets, reported a first-quarter net loss of $5.11 billion, less than analysts' most pessimistic estimates. Revenue fell 48 percent to $13.2 billion, compared with the $11.1 billion average estimate in a Bloomberg survey. The Standard & Poor's 500 Index gained a fourth straight day, by 1.8 percent.
The cost of borrowing in dollars for three months rose to the highest since March 11. The Libor rate for dollars climbed 9 basis points to 2.91 percent, the BBA said today. The two-day climb of 17 basis points is the biggest since August.
The drop in two-year notes ``is related to the issue with Libor, and it's forcing down the short end of the curve,'' said Theodore Ake, head of U.S. Treasury trading at Mizuho Securities USA Inc. in New York. ``People are really worried about the implications of the Libor mess; unlike the previous times when they didn't know what to do and bought two-year notes, this time they're selling two-year notes and trying to get into cash.''

In the event of global econominc melt down I propose the following:

We wall off sowal (after friends and family have arrived). We have the housing, those folks that speculated won't be needing their empty houses. As for food we have plenty of land in the form of empty lots that aren't selling. We should be just fine. I propose sowal.com stickers as currency.

Funny thing is that consumer credit for doesn't seem to be hugely affected so far based on how many credit card offers we're still getting at pretty favorable terms.

Funny thing is that consumer credit for doesn't seem to be hugely affected so far based on how many credit card offers we're still getting at pretty favorable terms.

They'll start to dry up once you miss 3 mortgage payments and your car is repossessed.

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