Wall Street banks and hedge funds helped fuel the massive bubble in subprime lending that prolonged the housing boom and now crashing on the economy
Fred Day
Mar. 12, 2007

It was perfect example of a classical blow off. Unprecedented level of bad loans was made. The history never saw anything like this before since the collapse of Roman Empire the Wall Street banks and hedge funds fueled the boom in bad subprime lending.

The net effect was super bubble in real estate that Fed finally called froth on the surface. The froth or bubble has finally blow off in a classic style. The homeowners just cannot make the payments. As these properties go on foreclosure, other properties are depressed. The able borrowers now decide to give up their properties because they are dealing with hefty monthly mortgage payments and negative equities in their homes.

The net effect on the economy is massive deflation. Te deflation will spread like wild fire across the globe. The effect on Wall Street will be nasty. Like the dot com bubble burst, the financial services companies will lead the nastiest bear market in the history of the world and themselves get wiped out.

The possibility of a serious meltdown is real. The biggest problem is that the Government and Fed will be of little help this time.

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Wall Street banks and hedge funds helped fuel the massive bubble in subprime lending that prolonged the housing boom and now crashing on the economy
Fred Day
The net effect on the economy is massive deflation. Te deflation will spread like a wild fire across the globe. The effect on Wall Street will be nasty.
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