Thanks “black knight” for encouraging this line of thinking

moncler jackets mens How We Will Know That The Next Crisis moncler usa Is Imminent moncler jackets mens

moncler coats for cheap Sign in / Join NowSummaryThere will be a next financial crisis, and we all best moncler jackets would like to know when it will occur in advance.There are some likely early warning signs. This article seeks to explain cheapmoncler what they may look like.Each crisis looks different until it actually happens. Then the similarities appear.Therefore, we should seek to understand the similarities among past events.It takes chutzpah to write that title, but perhaps I can help readers to anticipate what the clues may look like.Commenter “black knight”, in response to an article I published on Seeking Alpha a few days ago, asked “Any guesses on what will eventually cause the “day of reckoning”? I had said that a financial crisis was not coming moncler outlet prices soon, but that eventually there would be a day of reckoning, perhaps in a couple of years.I responded to “black knight” in the only sensible fashion as follows: “The cause will be too much debt supported by inflated assets. But of course, that doesn’t tell you much of anything. The trigger could be any moncler sale outlet of a number of things, and thus cheap moncler jackets mens the timing is very uncertain.” But I also said that perhaps I would write about what the triggering signs might look like.This article is my follow up. Thanks “black knight” for encouraging this line of thinking.August September 2007 a Paradigm Case Let’s begin by putting ourselves into the economic picture that emerged in August 2007.Subprime mortgage bankers had begun to fail in late 2006, and by spring 2007, the largest of them all had failed. Big problems in the subprime market were well known. But Fed cheap moncler coats mens Chairman Bernanke had assured us all in May that the subprime market was not very large and that the problem cheap moncler jackets was contained. Like most people, I took some comfort from that, even though I was a bit spooked and had trimmed many equity positions moncler online store in May. moncler outlet Treasury securities (known as the TED spread) went wild. These events also caused the Asset Backed moncler uk outlet Commercial paper (ABCP) moncler sale online market to implode. mortgages.It turned out that the market for subprime mortgages was not quite what Chairman Bernanke had suggested it was. In addition to subprime mortgages, there were “Alt A” mortgages that were in many ways worse than subprime because they had been written at higher LTVs and without the usual documentation the now infamous NINJA loans. And in addition to that, the securities markets turned out to be holding “synthetic” mortgages as well that is, mortgages that did not exist but that had been synthesized to mimic the real subprime and Alt A mortgages, thus compounding the problems in those assets.The resulting foreclosure moncler womens jackets tsunami was becoming apparent even to the casual observer. Entire communities were going into foreclosure, the market was choked with properties for sale and more were in foreclosure just waiting to join in the market depressing selling glut.Thus by September, a brewing crisis was visible because there was nothing that could stop moncler sale the downward spiral of defaults, foreclosures, and consequent downdraft on prices, which in turn caused distress in the affected communities as taxes went unpaid, local moncler outlet woodbury services had to be cut, and people uk moncler outlet who wanted to move to take new jobs or for other reasons became frozen in place by the falling prices.By the end of September, I understood that as a result of this process, the nation’s economy was in crisis and that something had to be done about it. And by moncler outlet online mid October, I did act on that belief by selling half of my equity portfolio. But the point of this article is not that I knew but that the signs were there for all to see. And tangentially, we should observe that despite those signs, the government never even considered the one kind of action that could and would have prevented the worst of the crisis.There were many in government who saw that a crisis was brewing. The data were not lost on everyone. But what did the government want to do? It organized the Hope Now Alliance that asked banks to assist borrowers who were current but could not afford the interest rate resets that were written into many of the mortgages. That was hardly even a band aid. It helped almost no one, but at no cost to the government or the cheap moncler jackets womens banks.The government also considered an industry proposal for an M LEC (a Master Liquidity Enhancement Conduit) that would buy the underwater securities from the banks, with government backing. It was pretended that this would have no cost to the government, but it did not fly anyway because it was a fairly transparent bailout of the banks that had been the least prudent.So basically nothing was done in the Fall of 2007.There was one thing that could have been done successfully at that time: The underwater borrowers could have been assisted by the government to stay in their homes and avoid foreclosure by the government declaring a moratorium on foreclosures (yes, it would have been constitutional) cheap moncler sale and reducing their interest payments. The mortgage holders could have moncler outlet sale been protected in this situation by housing values not dropping as much and by the government assisting the homeowners to make some interest payments on their mortgages. The cost would have been quite manageable.That, in a nutshell, was my proposal at the time. Unfortunately, there was zero, nada, zippo support for such an action in the government. The American people were not in a mood to bail out the homeowners who had been most irresponsible by borrowing more than they could repay and in many cases having bought expensive cars and other things with the money they had received in cash out refis. That was the prevailing moral sentiment of the time, and we all especially the less affluent paid for it for the next half dozen years.”No Bailouts” Has Been moncler outlet store the Wrong Answer More Than Once Similar sentiments had similar results when the savings and loans were in trouble in 1981. The responsible government employees who had been appointed by the new Reagan Administration asked for more money to be made available to the S insurance fund (FSLIC), a government agency so that the government could liquidate the moncler sale outlet failed S and pay off insured depositors. The answer from Secretary of the Treasury Don Regan was “NO BAILOUTS”. So the responsible government employees could not do what they uk moncler sale were supposed to do, had to temporize as best they could, and the S debacle got worse and worse from 1981 until 1989. It was a 1970s phenomenon that became a 1980s phenomenon only because of the “no bailouts” sentiment.Thus, when at the onset of a crisis or potential crisis you hear “NO BAILOUTS,” please be suspicious. Bailouts may be the only thing that can prevent the worst from happening and usually, they become necessary at a higher cost at a later date anyway, as they did in 1989 and 2008. I wrote about that last August.How Will You Know it is September 2007 Again? But you want to know how you will know when September 2007 or something like it comes around again. Of course, it will not look the same. It will come in disguise.And when it is in disguise, how will we discount moncler jackets know what it is?First, we will know what it is because it will look different from anything that Chicken Little has been saying will make the sky fall moncler coats for cheap.