"However I really don't think that it's more than a blip on the overall radar"
that is taking a really, really removed stance. i sure hope you're right, but i'm not so optimistic. let's count the blowups in the last 6 months or so. subprime. SIVs. monolines. now, bear stearns. if the "overall radar" is "major credit crunch", then yeah, BSC going belly up is just a blip. but if the "overall radar" is "economy is fundamentally strong", well, i would have to disagree. BSC is about as strong an indicator as you can find anywhere.
recession-wise, most economists would actually consider the US is currently in a recession--we'll need to wait till data another month or two away to know if growth is already negative this quarter. sticking to the "2Q negative" definition is at best academic, at worst denying the real situation. some economists think we'll be in a long, sustained recession, in the sense of essentially zero growth, but for perhaps 2 years.
i agree that debt level in the US needs to come down. this subprime thing should be a lesson. the massive derivative products issued by banks needs to be better controlled. bear stearns going under is a sign that i-banks do a horrible job at risk management, and it is an aspect that needs to be completely re-evaluated.
on tuesday, the fed meets. not sure if the rate cut is coming that day or wednesday. i think the markets already are pricing a 75bp cut, with many believing a full 100bp cut. perhaps even more.
i'm hoping for the best. which would be--drag it out. the more time the Fed can buy for the markets, the better off we'd all be.
the Wii is an epidemic.
