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Forum Post: They'll Never Learn

Posted 4 years ago on April 13, 2014, 11:10 a.m. EST by schmoot (77) from Kerrville, TX
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"Gillian Tett of the Financial Times has also been taking up the credit mania theme of late. For instance, from today's newspaper:"

A few short years ago, 'subprime' was almost an expletive.

But the financial world has a short memory . . . In recent months subprime lending has quietly staged a surprisingly powerful return, not in relation to real estate, but another American passion - cars . . .

"The problem is that the authorities' solution to the credit bubble that led to the crisis was to reinflate it rather than restructure the debt (although they got more liquidations via foreclosures than they probably wanted as a result of the failure to rein in bank servicers). Unfortunately, it appears that they've succeeded all too well in this strategy." - Yves Smith . . .

"By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Testosterone Pit." ibid.

'Hidden in the IMF's just released 188-page Global Financial and Stability Report is a doozie of a chart that screams not only "credit bubble" but also flashes a red warning sign: "seek cover, implosion in sight." It depicts US issuance of covenant-lite loans and second-lien loans since 2001, including their phenomenal bubble that so spectacularly collapsed in 2008, and the even greater bubble currently underway - with an equally spectacular future.' . . .




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[-] 2 points by schmoot (77) from Kerrville, TX 4 years ago

I said timing. But all in all it's better to be lucky than to be good.


[-] 4 points by schmoot (77) from Kerrville, TX 4 years ago

The market is doing what it does. It cyclically tries to implement perpetual motion of money. The nadir follows the zenith religiously. It happens when the the bubble's inflated to the point where there are no morons left to suck the bull. By then the perpetraitors [yes, the usual suspects are traitors not trators] have sold out and are waiting in the wings with lots of cash to buy back in when the price is right. The short sellers may do OK. But they must have impeccable timing or they'll get burned too.