When is the next stock market crash?
Just around the corner, the stock market Doomsday could strike as early as sometime before mid April.
American housing prices had soared to nosebleed heights, homeowners lined up to get home equity credit lines. From large SUV’s, vacations to the playboy lifestyle. Americans have used their houses as ATM machines.
Living above their means had never been easier. Of course this money was borrowed, but virtually no one is paying it back! Housing prices have tanked and Banks are helpless to get the consumers to pay up. There are bond insurance companies who have insured the loans made by banks like, Wells Fargo Bank, U.S. Bancorp, Bank of America, Wachovia Corp., Citigroup Inc., and Washington Mutual Inc. But will these bond insurance companies like MBIA Inc. and Ambac Financial Group be able to meet potentially billions of dollars worth of claims.
Americans are drowning in debt. To make matters worse, the Federal debt is sitting at $7.2 trillion and growing by $1.71 billion per day! Much of this is fueled by deficit spending, which has been Bush policy for eight years!
The money is spent, both the American people and the American government are cash strapped. Now many people are pinching pennies and cutting back on necessities. The dollar is all but worthless around the world.
The credit bubble is ready to pop. Many of our banks will become all but insolvent from bad loans. The government will try to bail the banks out but there isn’t enough cash in the coffer to cover the problems. Shares of commercial banks had dropped a few points after after Bear Stearns Cos. agreed to be bought by JPMorgan Chase & Co. for $2 per share. Bear Stearns had traded as high as $159.36 in the past 52 weeks.
Recently, financials and banks stocks appear to be jumping back up after the AP Associated Press article “Ahead of the Bell: financial stocks” was released.
On March 20, 2008. Richard Bove, Punk, Ziegel & Co. analyst basically said that the financial crisis is over and that we should buy banking stocks. Bove himself worries that the Fed may not have the necessary resources to bail out the banking crisis mentioning that the Fed has about $921 billion in assets, about half of Bank of America’s assets and less than half of Citigroup’s. Brace yourself for the 2008 stock market crash.
Elvis Preston King’s advice, don’t do anything rash, like sell all of your stocks. The market will come back and you will be fine. I am not sure if I would buy any more bank stocks or bond insurance company stocks!
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