Will The Stock Market Crash Before The End Of 2008 - Part Deux

 

With a "high level of angst" in the financial markets about who will take the losses from more than $1 trillion in risky mortgages, we could be just one hedge-fund collapse away from a global liquidity crisis, said Zandi, chief economist for Moody's Economy.com.

 

A global meltdown is not likely, but the risks are growing, Zandi emphasized in a conference call with reporters following the release of a new study on subprime debt that concludes that the housing crisis could be deeper and last longer than investors now believe. Read the latest data on home sales.

 

And it could spread. "Mounting mortgage delinquencies and defaults now pose the most serious threat to the global financial system and economy," Zandi said in his report.

 

"If there is a fault line in the global financial system, it runs through the U.S. housing and mortgage markets," he said.

 

I think a lot of people have forgotten that the stock market crash of 1929 was directly related to the use of margin leverage and today, with these so called "exotic" real estate loans, the mortgage market is set up for the same thing. that, plus putting all of the "Dollar Debt" on the ChiCom credit card, sets us up for an economic collapse.

 

the current economy is a house of cards.