Forget Harry Potter, Die Harder, the Transformers, Lindsey Lohan’s car driving escapades, etc…this new article on the state of the economy sounds like the blockbuster of the summer in the making. The article’s title and the quote below sound sort of like a) a vampire or zombie movie or b) a natural disaster movie (floods, comets/meteors approaching the Earth at high speed) ….Note the dramatic language: lifeblood, drying up, shakiest, unravel, how far will the pain spread, when people get scared they tighten up all over, kills, spread globally…
The trouble started in one of the shakiest sectors of finance, home mortgages for people with bad credit, but it is spreading. As easy credit dries up, some huge corporate deals are being delayed and could unravel.
The question now is how far will the pain spread, and how many people will get hurt as it does.
“When people get scared, they tighten up all over,” said A. Gary Shilling, president of the investment firm that bears his name. He said he expects housing prices to fall significantly further. “This kills consumer spending,” he said of the credit crunch. “We think we’ll be in a recession as a result by the end of the year. And that will spread globally because U.S. consumers still are the buyers of first and last resort for the excess goods and services produced around the world.”
(art by NASA/Don Davis)