News about the results of the Federal Reserve's "Stress Test" got out, and
it sent a shock wave through the financial world. The news was quite disturbing.
Although with the caveat that it is not yet confirmed, I recommend reading the
summary at Hal Turner's web site.
Reader "NDSS" mentioned this bit of much-needed common sense from
Charles Hugh Smith:
Why
a 50% Drop in Housing is Not the Bottom. JWR's comment: Anyone
that thinks that the US real estate market will soon "recover" is dreaming.
The peak in
Alt-A and Option ARM mortgage
rate resets won't be until 2011. And since home mortgages are a major
asset of the American banking industry, it won't be until after real
estate bottoms that the banking industry will have any chance of pulling out
of its downward spiral.
