If you have been around the mortgage industry for very long, you are aware of Robert Shiller. Shiller, a well-known economist and professor at Yale University, is predicting that the current financial crisis could go on for a good number of years. This is probably more reality than we really care to look at.
I looked at some figures and statistics before making this post to see what kind of list I would come up with concerning troubled entities and businesses. Here is what I find:
Even though we see the greatest rally in the stock market since the Great Depression, the Dow is down 34%, S & P 500 is down 39%, and the NASDAQ is down 42%. None of this rally is fueled by good retail sales, less unemployment or higher than expected earnings.
The GDP came in at -0.5 when the market expected -0.3. Consumer confidence is at an all time record low.
Citigroup has become another big corporation to receive bailout money. The Fed is now not only in the banking industry, as are taxpayers, but we are now also a nation of insurers, with the hand out to AIG.
I looked at some figures and statistics before making this post to see what kind of list I would come up with concerning troubled entities and businesses. Here is what I find:
Even though we see the greatest rally in the stock market since the Great Depression, the Dow is down 34%, S & P 500 is down 39%, and the NASDAQ is down 42%. None of this rally is fueled by good retail sales, less unemployment or higher than expected earnings.
The GDP came in at -0.5 when the market expected -0.3. Consumer confidence is at an all time record low.
Citigroup has become another big corporation to receive bailout money. The Fed is now not only in the banking industry, as are taxpayers, but we are now also a nation of insurers, with the hand out to AIG.
We have heard much about Freddie and Fannie, yet most news points to where they are not making the grade.
Debt from this process is running in the trillions. When you talk about printing more money, what is the standard that backs it up? Failed securities and paper not worth the ink on it? Remember the gold standard? Do we leave it to further generations to figure this out?
Looking at these things, and many more, we can see why Shiller states that “I think that we want a new deal now, something that makes fundamental changes in our financial institutions, and I think, ultimately, that is the kind of thing that will work best to restore confidence.” One would hope that at some time soon, someone begins to listen to Shiller. There is no light at the end of the tunnel as of yet.
Debt from this process is running in the trillions. When you talk about printing more money, what is the standard that backs it up? Failed securities and paper not worth the ink on it? Remember the gold standard? Do we leave it to further generations to figure this out?
Looking at these things, and many more, we can see why Shiller states that “I think that we want a new deal now, something that makes fundamental changes in our financial institutions, and I think, ultimately, that is the kind of thing that will work best to restore confidence.” One would hope that at some time soon, someone begins to listen to Shiller. There is no light at the end of the tunnel as of yet.
by Alden Smith
No comments:
Post a Comment