Financial Bailout=Economic Collapse
September 28, 2008
– Comments (14)
Get ready for dramtically rising interest rates and tighter credit leading to a dramatic slowdown in the economy. Yes Demon...I still think its deflation....but it still can go the other way.
From the WSJ:
The success of the pending rescue of the U.S. financial system probably depends as much on the central banks of China and the Middle East as on Congress and the Federal Reserve.
The U.S. is turning to foreign governments and other overseas investors to buy a good chunk of what could total $700 billion in Treasury debt expected to finance the bailout. Foreign investors also are needed to shore up the depleted capital of the nation's financial institutions, seen in the plan by Japan's Mitsubishi UFJ Financial Group to buy a large stake in Morgan Stanley, which is weighed down by bad debt and market distrust.
Sure....we will love to buy your $700 Billion worth of bonds just after passing a $600 Billion dollar spending bill....how about paying us double the interest rate? And guess what..... anyone that wants to borrow money...it is going to get a lot harder.
This too from the WSJ:
Lenders are tightening credit to restaurant franchisees in a shift that could make it harder for owners to remodel existing locations and buy new restaurants.
You think its tough to borrow now...just wait until the economy slows further and interest rates skyrocket. Congress and our president is destroying our economy in exchange for saving the banks.....does that seem like a fair trade off.
I know....nobody has told you yet that the economy will fall into a depression/deep deep recession even if the bill is passed.
Alstry just did......and his track record and a number of other CAPs players is a whole lot better then Wall Street's or this administration.
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