How Far Down Is the Bottom?

The basic economic outlook for the last generation, from the deregulation boom of the Reagan years to the dotcom boom of the Clinton years to the real estate boom of the Bush years, has been to anticipate how high things will go. That's what the venture capital business, with its focus on the next big thing, and the private equity business, with its anticipation of buyers bidding ever higher prices for companies, have been based on.

The inverse now occurs. The basic economic operation becomes about anticipating--and speculating on--the depth of the bottom. (The hype that helped urged things up now urges them down.)

It's sort of a bubble in reverse. The Great Vortex.

Moody's, the credit rating service that once boosted the reputations of a set of companies beyond evident reason, is now, with equal enthusiasm, vilifying a set. With its list of 283 companies it believes are among the most likely to default on their debt, Moody's has started to imagine the new corporate landscape.

Continue reading at newser.com

Comments

[jerrypl]

Michael, you are correct. It is all about perception, and the perception is that many of these too big to fail or many NOT too big to fail corporations are going to fail. The consumer has been Ponzied. And, President Obama appears to be a Mid-Town Manhattan, standing in the middle of the pond, instead of making a stand closer to shore where many of his supporters are standing--on the progressive shore.

The consumer is now spent. Credit cards are going to bubble and burst. 1 in 5 homeowners are underwater. 1 in 10 are about in foreclosure or are in default. This is no perception. They cannot go out and buy Sparo's pizza, and fly to all places warm on USAirways, or shop at Ann Taylor like they once could. And the list goes on. This is no perception. Their retirement savings balance sheet is 50% gone. That is no perception. College tuition loan payments begin after graduation. That is no perception. 650,000 Pink Slips is no perception.

The US corporation will look very different when this crisis is all over. A new paradigm is ahead. That is no perception!

http://eye-on-washington.blogspot.com

[wdw505]

my retirement is just fine......­...i and most of my EMPs reallocated the funds to the cash side of the 401k on 11/11/2008­.......the day after 2 banks collapsed over the weekend...­.......now my EMPs are very happy with me........­.they are waiting for me to tell them i am getting back in and they will too.......­.a very cheap EMP benefit...­....only cost me 1 day for 2 EMPs to help everyone login and change the allocation

that day had to scare the fund managers..­........ab­out 75% of my EMPs did the move......­.

are you not capable of logging in moving funds.....­.a 401k is not managed without your input

[PDXKevin]

Thanks, boomers!