Found an interesting article from Reuters, noting that investors specializing in distressed debt and bankruptcy believe that our current recession will "last at least three years and possibly longer absent a revival in credit markets." Michael Psaros, managing partner at KPS Capital Partners told Reuters, "This is going to be a three- to four-year disaster," and used the term "Great Recession" when discussing the current crisis.Another restructuring analyst, Holly Etlin, noted that the financial distress will "last three to five years" as well. She stated, "Stuff has got to start moving off the bank balance sheets ... Until banks start clearing off their balance sheets, they aren't going to be in a position to lend."
So, what can we expect from this "Great Recession?" With everyone in the Obama administration predicting the situation worsening before it gets better, I think we can expect more pain. I'm not sure that this administration had a complete grasp of how bad things are on Main Street, and I am not sure that indiscriminate spending is the way out of the situation.
As for the "big boys" on the Street, if you and I are reticent to spend money, how can they make money? I know that this is the thought behind the economic stimulus package, but we've participated in this dance once before ... and look where it got us.
Want to make money in these times? Etlin suggests that media may be the place to put money. If you follow the sector rotation model, one may look to services or energy to lead us out of this situation, of course oil was trading at nearly $35 per barrel last check.
What will lead us out? Again, I'm not sure - but I'm not sure that spending our way out of this is the way to go. If it is, let's get it going.
Closing Bell: Dubai sends jitters throughout the market (S, BBY)
Heinz looking good after the second quarter?
Why isn't Bank of America updating its shareholders on CEO situation?
Reader Comments (Page 1 of 1)
2-12-2009 @ 5:35PM
Saipeople said...
If the same situation continues till the end of this year, then it can be called as Greatest Recession.Hope we will recover soon !!
2-12-2009 @ 10:10PM
spugadiccio said...
I agree totally , lets say someone saved their whole life and bought a home for $450k with a $150k down payment . Their neighbor bought a $450k home with say 3% down . The values dropped to $300k . The responsible guy is stuck with the original mortgage and lost virtually his life savings ! The other guy lost a small downpayment has a 6 month freebie because of forclosure and can now refinance at a lower rate than his neighbor and have lower payments ! Who wins ? The irresponsible guy and the bailed out banks and the mortage company that writes the new loan . Who loses ? The responsible guy and the taxpayers that bailed out the mortgage companies and the banks . What a total crock of SH*T - this is just ridiculous !!! We should let EVERYONE refinance or have low rate mortgages !!!! Not just the irresponsible This is total bullsh*t total complete SH T . Anyone with a large equity position should be able to refi at the lowest rate possible - no qualifying , no questions - if hes not miss
2-13-2009 @ 9:54AM
BHarrison said...
To: spugadiccio's comment above:
I agree with your comment 100%. However, what about those of us who bought a house with our savings 15 years ago (and we thought THOSE prices were high at the time). What "equitable" resolution of all of this is there for us?
We've lived within our mrans, incurred absolutely no indebtedness; paid off credit charges on a monthly basis; and have lived modestly and prudently within our financial income. We've paid for the college pre-paid programs for the grandchildren, etc.
So far we've lost $20K - $30K in a few 401K and other stock investments; and have no indebtedness. So, why are we being required to "bail out" the corrupt and financially irresponsible corporations, FIs and individuals?
It is unfortunate that these major corporations (sic. stock holders) and the individual/families who have been irresponsible are going to be financially devastated; but that is just the way that capitalism "balances out these matters".
The REAL CRIME in all of this is that the CORRUPT corporate CEOs and uppermanagement have built horrific wealths via these fraudulent actions . . . AND 9 out of 10 of the CEOs of the failing corporations are STILL running those corporations. These CRIMINALS are now being bailed out by Congress at our expense.
This is totally unconscionable. For the most part, we still have the SAME Congressmen who blatantly "allowed and enabled" all of these corporate FRAUDS, are still in office. The "bottom line" is that our politics and business are being run by the corrupt individuals who created the economic melt down by their CORRUPT and fraudulent actions.
Isn't the FIRST STEP for recovery to purge our corporations and Congress of these INEPT, INCOMPETENT and/or CORRUPT individuals? Meanwhile, they are the one's who are running (sic. "gaming") the recovery efforts and the HUNDREDS of BILLIONS of "bail out" monies.
The American people MUST demand CHANGE to a reasonably and prudently REGULATED Free Market Economy. INTEGRITY must be instilled in our corporations and in Congress. Otherwise, nothing is going to change for the better.