Is it panic time yet?

Mainstream media reporting via Steven Pearlstein in “Caught in Downdraft and Starting to Panic” (Washington Post) –  we’ve moved through the various stages of economic grief and moved into panic mode?  Hattip Reggie Middleton

• Willful blindness. (“Bubble, what bubble?”)
• Denial. (“House prices never fall. It’s only those speculators in Las Vegas and the Gulf Coast.”)
• Rationalization. (“Maybe subprime did get out of hand, but it’s really a small part of the market.”)
• Fantasy. (“Things should be pretty much back to normal by the second half of ‘08.”)
• Anger. (“If it weren’t for those yahoos up in structured finance…”)
• Capitulation. (“We might as well take these write-downs now and get it over with.”)
• Depression. (“This is going to get worse before it gets better.”)

and then….PANIC..culminating in unraveling of CDO situation.

My comment:  Never fear:  According to CNBC, this is all simply a self-fulfilling prophesy, not reality-based — and all we need is another Wall Street “innovation” like a new kind of CDO! 


2 responses to “Is it panic time yet?

  1. I think the Fed will get things going again. Forever an optimist! Six months from now, we’ll be saying “recession, what recession?”

  2. I guess we are all waiting for the clock to strike 12! Our carriages will turn to pumpkins and horses to rats. Only problem is there is no clock on the wall of this party. All crisis situations we need to understand that in case of a fire, exits are crowded. So whether it is the sub prime crisis, or the dollar crisis, or the real estate in UK, more people die in the stampede and less by burn injuries!

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