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The bear market has started led by deflation and mortgage banking collapse – 1929 all over again
Peter Oberois
Feb. 24, 2007
The bear market is equities have started. That does not mean a new high cannot happen. The sentiment and divergence indicators mimic the 1929 stock market before famous crash. The 1987 similarities are there too. Like 1929, the mortgage and real estate collapse is happening before the stock market trouble.
The banks are in deep trouble. The real test of FDIC looms in the horizon. The financial institutions are shivering in fear of the after effect of the real estate mortgage banking collapse. Small mortgage bankers and brokers are getting sued. They are slowly and steadily going out of business.
U.S. stocks dropped for a third day, pushing the Dow Jones Industrial Average to its worst weekly decline since August, as concern mounted that more Americans will default on home loans.
The collapse is far more severe than any one can even think. The ensuing deflation in the economic system will cause depression and challenge the entire global financial system. Gold is rallying looking forward to massive financial meltdown.
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