No More Money!!!!!!!!!
Are we shutting down due to a lack of money? Is someone artifically propping up the stock market to conceal reality?
In Jerry McGurie, it was "Show Me The Money"
“Remember that credit is money.” – Benjamin Franklin
NOW CREDIT IS SHUTTING DOWN
No more subprime, stated income, neg am, ARS, private equity loans, Helocs, business lines of credit..........its all shutting down at an incredible pace. It was the issuance of credit that drove our economy for the past seven years.
People borrowed on their homes and spent. Business borrowed and spent. Municipalities borrowed and spent. All that spending allowed our leaders to say how wonderful things were. And they were as long as credit was extended and people spent. Sorta like a junkie high on drugs will tell you how great he feels.
Now the banks, after making trillions loaning, don't want to lend anymore and want to be paid back. The problem, we don't have the money to pay back the debt. Yes we have some savings, but it is no where close to the debt.
We have lots of stuff....beautiful new houses, nice shiny shopping centers, and big bold schools......but we don't have much money to support those things. Without being able to borrow on a house to pay off a credit card or buy groceries, we are seeing spending slowing and loans defaulting. Without being able to draw down on a line of credit, a business can't float receivables....which may never come in anyway. Without being able to issue municipal debt, a city can't pay for all the projects now underway.
And they say the problem is subprime? What a joke....everything is subprime if it can't pay.
Without credit America can't spend. If America can't spend, the economy will slow. If the economy slows, more and more debts will default. As more debt default, it will create additional defaults and the loop gets bigger and bigger.
Until we find some money, expect this negative spiral to get bigger and bigger every week.
FloridaBuilder, this is not a "Macro" issue. It is an American issue. As an American I am very concerned. If you take money out of the system and the system is leveraged, it is no different than taking oxygen out of a room, and the room is airtight.....everyone dies eventually. We are all in the room and oxygen is depleting......FAST!!!!!!!!
Soon, more individuals will not be able to pay bills. Business will not be able to pay vendors or employees. Municipalities will not be able to pay workers. Banks will not be able to pay depositors. When things are leveraged, the unwind happens fast.......if you don't believe me, just go ask those that work at Bear Streans.
Right now we are well on our way down this path, the system is surpressing the truth. Last night, the banks told Clear Channel "NO MORE MONEY." Banks are telling people with Helocs "NO MORE MONEY." Banks are telling cities with auction rate bonds "NO MORE MONEY."
And they say corporate balance sheets are strong? Watch how that can reverse quickly when there is NO MORE MONEY.
Is it time to start screaming "Show Me the Money"!!!!!!!!!