Hi MSGI -- in the 1920s, you could margin just about any stock with just 10% down. So of course everyone did. Which cause stocks to become about 10 times more than they were worth. The stock market spiraled down cuz of margin calls.
This time it was down payments that were leveraged. But home prices only doubled during the recent real estate boom. And they only doubled in crazy places like Las Vegas, Arizona, parts of California. Also there mortgages have mortgage insurance, which is real insurance, not some bogus Wall St. bullshit.
So the bottom in the real estate market will probably happen next year -- like in the spring. The credit markets will unfreeze when lenders can see that the housing market is stabilizing.
The dollar will drop (look at it vs. the yen now) our standard of living will drop (like it did in the 1970s) , but we won't repeat the great depression.
Although for many people it will sure feel like it.
Chris
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