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  • zencowboe zencowboe Jan 15, 2009 10:05 AM Flag

    May break into 7000 level today but close near 8000

    BAC and C are falling hard. There is something fundamentally wrong with financial institutes that are not fully disclosed.

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    • Mr. Boe,

      From your post: "There is something fundamentally wrong with financial institutes that are not fully disclosed. "
      There is simply something fundamentally wrong with "all" financial institutions during recessionary periods whether they are fully disclosed or not.

      Fundamentally, they only make money when people and companies seek to add to their debt.

      Now, most financing is merely turning over existing debt. Nobody wants to take on new debt. People and companies tend to take on new debt during periods of growth. Buying a larger house, expanding a business, buying that new delivery truck, and so on.

      The demand for new debt must have dropped 75% over the last year.

      The problem with the financial companies isn't because of a lack of disclosure. The problem is that nobody is taking on new debt and a lot of folks have stopped making payment on old debt. The fundamentals of the financial sector is crumbling. If you think 2008 was bad, wait until this time in 2010. Everybody will get so tired of getting burned everytime they buy something they will stop buying. If they aren't going to buy, they don't need to borrow.

      With the loss of jobs, lots of folks will simply stop making payments on their old debt. They simply won't have the money.

      This is game reset time for the financial sector.

      What our government and the finance sector forgot, is that in the aggregate you can't leverage money. Not for long anyway. You can only leverage labor. That's the one true source of income to make interest payments with.

      Best of luck, and God bless us all,


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