MSN: Housing mess too big for a quick fix

[El Pinko]

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/HousingMessTooBigForAQuickFix.aspx


Housing mess too big for a quick fix
The bulls have come back out to suggest we've seen the worst of the credit crisis. But the real problem -- too many bad mortgages -- won't be easily solved.

By Bill Fleckenstein
Recently a friend, noting my firm belief that the credit side of our real-estate problem won't be solved anytime soon, asked me why I feel so certain about that.
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Simply put, too much debt
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Furthermore, insiders are not infallible. For instance, from everything I've read about the 1929-30 period, many "insiders" (the term was used differently then) correctly anticipated the problems of late 1929, both in terms of stock speculation and potential economic trouble. But after the crash, they believed the worst had passed and bought stocks through the spring of 1930, a move that was a disaster.

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Arguably, our country has experienced the biggest bubble ever: the real-estate bubble induced by easy credit. I cannot believe that Wall Street will escape with only the recent damage in stocks or that the economy will suffer no more than a modest downturn.
Folks would be wise to hope for the best but to plan for the worst.

[El Pinko]

1. kick

for da morning crowd.