Slump Moves From Wall St. To Main St.

While there will be bull runs, this bear is far from over. The economic pain for Joe and Jane Sixpack has barely begun...

With Wall Street caught in a credit crisis that has captured headlines, the forces assailing the economy are now spreading beyond areas hit hardest by the boom-turned-bust in real estate like California, Florida and Nevada. Now, the downturn is seeping into new parts of the country, to communities that seemed insulated only months ago.

The broadening of the slowdown, the plunge in home prices and near-paralysis in the financial system are fueling worries that what most economists now see as an inevitable recession could end up being especially painful.

Indeed, some economists fear it will last longer and inflict more bite on workers and businesses than the last two recessions, which gripped the economy in 2001 and for eight months straddling 1990 and 1991. This time, these experts say, a recession in which economic activity falls over a sustained period and joblessness rises across the board could even persist into next year.

http://www.nytimes.c...ess/21econ.html

Agreed ! What surprises me is that so many are surprised by any of this. I've been saying for months now its all about trust. The trust has been broken. Just like this guy says: “If lenders and debtors don’t trust each other, that causes a power outage,” The lights are going out my friends. Get ready to enjoy the dark side !

Milbank, just when we see banks may have bottomed you want to talk about recession again. I bought some NRO, will look to buy more if it drops. Still looking into the private debt deal. Thanks for your comments on NRO and Mark, if you read this, thank you too. Have a good weekend. J

Milbank, just when we see banks may have bottomed you want to talk about recession again.

While there will be bull runs, this bear is far from over.

Milbank, just when we see banks may have bottomed you want to talk about recession again.

I bought some NRO, will look to buy more if it drops. Still looking into the private debt deal.

Thanks for your comments on NRO and Mark, if you read this, thank you too.

Have a good weekend.

J

Like I said, if you don't need the principal, you should do very well growing it through the monthly dividend reinvestment or, have a nice bit of monthly income in proportion to the principal, if you don't reinvest. Heck, if you bought right after you asked, you are probably up on the face value as of yesterday's close BUT, don't count on it staying that way, I expect it will go down again.

Good luck with it zigzag.

The point of putting up the article is to remind people not to get complacent or assume the worst is over if there is a healthy run up. As far as the banks, My FF is they haven't bottomed yet. As I said when the market started to drop, there will be volitility and swift run ups during the the bear. Nothing has bottomed yet IMHO except perhaps Fed rates which have to be bottoming as Bernanke and his crew have brought them a lot closer to zero.

Edited by milbank, 21 March 2008 - 08:27 AM.

i read that first thing this morning. there is also an article about a $4 billion project being slowed down in brooklyn. i am sure that is happening a lot of places, not as high profile. btw, son#2 has a job in nyc this summer and will be staying in brooklyn. is that a safe place to live ?

i read that first thing this morning. there is also an article about a $4 billion project being slowed down in brooklyn. i am sure that is happening a lot of places, not as high profile.

btw, son#2 has a job in nyc this summer and will be staying in brooklyn. is that a safe place to live ?

As safe as any place in New York City or maybe any place in America. New York City crime is down to 1960's levels. One should always keep a sense of where they are and what they are doing and be a little more aware late at night but, that is true in any city. I would not worry about him at this point in time. A few years from now, I expect crime will pick up in NYC as it will in all cities due to the rise in unemployment.

What neighborhood in Brooklyn is he moving to?

Edited by milbank, 21 March 2008 - 09:07 AM.

dunno the details yet, but thank you for your response. i agree with the rest of your analysis. regards, h1

The point of putting up the article is to remind people not to get complacent or assume the worst is over if there is a healthy run up. As far as the banks, My FF is they haven't bottomed yet. As I said when the market started to drop, there will be volitility and swift run ups during the the bear. Nothing has bottomed yet IMHO except perhaps Fed rates which have to be bottoming as Bernanke and his crew have brought them a lot closer to zero.

I'm in general agreement. I think your article is pertinent. I'm personally upset the Fed didn't just let this thing rip. The sooner we get this subprime thing over with the sooner we get rid of other concerns like inflation of food and energy (ie inflationary spread between food/energy and salaries) and the econ slowing. But since I'm no economist I can only offer MHO based on personal life experiences. One thing I'm sure of is that when everything looks noticeably better, equities will have long since bottomed.

I picked up NRO @ 9.8 but like you say that is irrelevant right now considering the scope of the investment. The chairman of Wells Fargo had some interesting comments on Bloomberg. It was recorded before the rate cut. He was expecting 50bp. The fact that we got 75bp makes his interview even more interesting reference commercial RE.

J