Good morning...I slept in a bit this morning and just now having my first coffee and trying to gather myself.
I've been reading your comments on the credit card issue, but until now I hadn't been able to get my mind around it and couldn't find anything coherent to say about it.
First, I'm not sure exactly what you think the effect of a credit card "crash" will have although I suspect you're getting at the fact that it may require more Fed liquidity injections and will exacerbate the housing credit situation...
I agree that it will PROBABLY happen and that it will PROBABLY exacerbate the liquidity injection situation, but.....
As the article states, the credit card potential for default poses a MUCH SMALLER problem than the mortgages simply because it's only 1/10th the monetary amount.
Beyond that there are a couple of mitigating situations that we need to take into account.
First of all the Fed has stated that they will NOT STAND DOWN UNTIL the markets are stabilized meaning that whatever it takes they're going to be there for the banks, which by the way hold the lion's share of credit card debt, so another crisis for bank failures has been taken off the table.
Secondly, the candidates are both putting forward plans to allow people to take money from their IRAs and other accounts without penaties for the next couple of years. In fact one plan even suggests that they'll be able to use these accounts AS CREDIT CARD/REVOLVING accounts for the next 2-3 years.
Depending on how many are forced to take advantage of these plans (should they actually come into being) will partially mitigate the credit card defaults as this allows some Americans to tap into their LAST SOURCE OF WEALTH to cover current expenses.
By the way, the USD is still strengthening against the other currencies which has the effect of reducing prices of commodities(including silver/gold) as well as stocks.
Anyway...I "think" we've put in the bottom and are now in the process of quickly settling into what I see as a very long flatline for the market which will only fluctuate from the extremes of the 7700 bottom and probably somewhere below 9000 on the top side. It's going to get VERY BORING soon with sporadic intermittent short lived spikes and dips to test the parameters and gradually narrowing even further.
I think there's a possibility however that after the election and the inauguration of Obama(if he wins, and I think he will)that we'll slowly start to pull out of this shithole and begin to look ever more seriously toward the new green economy and infrastructure rebuild that will do wonders for the American psyche and in turn the market. And I think the world will again start to look at us less like a bunch of crooks and liars and more like the leaders that we should be.
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