Second Mortgage Crisis Coming? How does it effect USD? | Forex Factory

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Second Mortgage Crisis Coming? How does it effect USD?

  • #1
  • First Post: Dec 15, 2008 8:48pm Dec 15, 2008 8:48pm
A friend of a friend of mine was on 60 minutes. He's predicting a second mortgage crisis. Is it good for the dollar sending the stock market tumbling so people by the dollar to avert risk, or is it bad for the dollar, because it has such a negative impact on the economy?

It's hard to tell. If you say the first mortgage crisis hit over a year ago, like summer of 2007, then we see the Euro rallied for almost 10 months. But then the stock market started sliding in April 2008 and the dollar has rallied since.

Here's the 60 minutes article.

http://www.cbsnews.com/stories/2008/...n4666112.shtml
  • #2
  • Dec 15, 2008 8:58pm Dec 15, 2008 8:58pm
3% for the first xMonths is now hitting the wire.
Those that could still hang on @ the "Introductory" are about to Bail or be Bailed. Second Wave of Dep...sion about to hit.

Pick your Targets.
  • #3
  • Dec 15, 2008 8:59pm Dec 15, 2008 8:59pm
Here's a more in-depth comprehensive article. In this article it confirms towards the end that the dollar should gain value over the next 5 to 7 years. This would indicate to me that any gain foreign currencies are making is simply a retrace and not a trend reversal - although possible the start of a significant retrace that lasts for a few weeks?

Who knows.

http://www.investorsinsight.com/blog...-schedule.aspx
  • #4
  • Dec 15, 2008 9:09pm Dec 15, 2008 9:09pm
Quoting Mr. KISS
Here's a more in-depth comprehensive article. In this article it confirms towards the end that the dollar should gain value over the next 5 to 7 years. This would indicate to me that any gain foreign currencies are making is simply a retrace and not a trend reversal - although possible the start of a significant retrace that lasts for a few weeks?

Who knows.

http://www.investorsinsight.com/blog...-schedule.aspx
Spoken like a True American.
Seriously; I hope the US Ecconomy survives this. After all, I live in your little sister's bedroom. {Canada} But I hail from the UK, which, by my estimation, was the last Super Power before the US grabbed it.

Can you explain to me why it is that you believe the US will remain {ad infenitum} "THE..."

Just askin'
  • #5
  • Dec 15, 2008 9:15pm Dec 15, 2008 9:15pm
I think the just of the article regarding the dollar is that the U.S. is a HUGE importer. Consumers are going to stop spending so the U.S. will stop importing which will hurt the economies of most other major nations with smaller economies which may not have the resiliency or at least the the size of tools the U.S. has to mitigate the problem.

It's the mentality "if the U.S. goes down, we all go down with them", and other investors in other countries will invest in the U.S. dollar as the last safe haven (and gold?)

That's my take. I think your question would be best asked to the author of the article.
  • #6
  • Dec 15, 2008 9:17pm Dec 15, 2008 9:17pm
Quoting Mr. KISS
A friend of a friend of mine was on 60 minutes. He's predicting a second mortgage crisis. Is it good for the dollar sending the stock market tumbling so people by the dollar to avert risk, or is it bad for the dollar, because it has such a negative impact on the economy?

It's hard to tell. If you say the first mortgage crisis hit over a year ago, like summer of 2007, then we see the Euro rallied for almost 10 months. But then the stock market started sliding in April 2008 and the dollar has rallied since.

Here's the 60 minutes article.

http://www.cbsnews.com/stories/2008/...n4666112.shtml...
It's really the original mortagage crisis the resets will continue for years to come. As you can see in the graph 2012 is about when almost all the resets from the bubble are finished and things are back to pre-bubble.
Attached Image
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #7
  • Dec 15, 2008 9:22pm Dec 15, 2008 9:22pm
Quoting Mr. KISS
I think the just of the article regarding the dollar is that the U.S. is a HUGE importer. Consumers are going to stop spending so the U.S. will stop importing which will hurt the economies of most other major nations with smaller economies which may not have the resiliency or at least the the size of tools the U.S. has to mitigate the problem.
Well there is a flip side to that coin. Other countries for example China will just consume their own goods vs. exporting them to you U.S. As the Chinese middle class grows and they want to live like Americans their own consumption will go up and offset what the U.S. was consuming. So, short term other countries may take a hit, long term they maybe just fine without the U.S.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #8
  • Dec 15, 2008 9:32pm Dec 15, 2008 9:32pm
Quoting Mr. KISS
I think the just of the article regarding the dollar is that the U.S. is a HUGE importer....
Bull$hit.
The British Empire had {legitamit?} control of Planetary Resources {the sun never sets on the British Empire.}
The Romans had thier Known World Underfoot.
The Greeks...
The....

Comes a time when, even if you are not ready, there is a shift of radical proportions.

Is it that Time for the US? I don't know. Do You?
  • #9
  • Dec 15, 2008 9:34pm Dec 15, 2008 9:34pm
Quoting Bemac
Spoken like a True American.
Seriously; I hope the US Ecconomy survives this. After all, I live in your little sister's bedroom. {Canada} But I hail from the UK, which, by my estimation, was the last Super Power before the US grabbed it.

Can you explain to me why it is that you believe the US will remain {ad infenitum} "THE..."

Just askin'
Simple. Because Canada and Scotland both suck.

Actually, this John Mauldin guy is normally just about right on the money. I receive his articles via email, and am very, very, impressed with him. Granted, most of the time he is talking about markets that I A) Cannot afford to be part of. and B) Don't understand anyways.....but it sure do make him sound smart-like and edumecated an all.

Oh, and Canada and Scotland both suck.



Clockwork
  • #10
  • Dec 15, 2008 9:40pm Dec 15, 2008 9:40pm
Bemac Clocks the Work with a "Glesga Kiss" Suck This!
  • #11
  • Dec 15, 2008 10:03pm Dec 15, 2008 10:03pm
Quoting Bemac
Bull$hit.
The British Empire had {legitamit?} control of Planetary Resources {the sun never sets on the British Empire.}
The Romans had thier Known World Underfoot.
The Greeks...
The....

Comes a time when, even if you are not ready, there is a shift of radical proportions.

Is it that Time for the US? I don't know. Do You?
Jim Rogers says, "the 19th Century belonged to England, the 20th Century to the United States, and the 21st Century belongs to China." Will be interesting to see if it plays out that way.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #12
  • Dec 15, 2008 10:21pm Dec 15, 2008 10:21pm
Quoting LasVahGoose
Well there is a flip side to that coin. Other countries for example China will just consume their own goods vs. exporting them to you U.S. As the Chinese middle class grows and they want to live like Americans their own consumption will go up and offset what the U.S. was consuming. So, short term other countries may take a hit, long term they maybe just fine without the U.S.
the soak up theory.

yes to a degree they can. but there have been a mass of factories opened to feed the worlds demand. take 1/2 of that demand away and you have millions of unemployed chinese workers. not to mention 1000's of compaines closing down. This is a problem and it's happening now! One thing that comes out of this is social unrest. China has some trouble building right now.
  • #13
  • Dec 17, 2008 4:56pm Dec 17, 2008 4:56pm
Well figures, find one prediction/viewpoint, you can easily find an opposite one. Here's a short blog entry quoting some heavy hitters predicting all the bailouts will hurt the dollar in the longer term.

http://bigpicture.typepad.com/commen...ut-plan-t.html
  • #14
  • Dec 17, 2008 6:02pm Dec 17, 2008 6:02pm
Quoting Bemac
Bemac Clocks the Work with a "Glesga Kiss" Suck This!
By the way, Bemac, can you still get deep-fried Mars Bars in Canada?

You must be missing them - perhaps there's an import market for you there. It would hit your balance of payments but think of all the pleasure you're missing.
  • #15
  • Last Post: Dec 17, 2008 11:23pm Dec 17, 2008 11:23pm
Quoting Mr. KISS
Well figures, find one prediction/viewpoint, you can easily find an opposite one. Here's a short blog entry quoting some heavy hitters predicting all the bailouts will hurt the dollar in the longer term.

http://bigpicture.typepad.com/commen...ut-plan-t.html
Every fiat currency that has ever existed has failed. The current FED is the 3rd central bank in the U.S. The previous 2 failed, this one will fail as well.

Unless the dollar gets backed by a commodity, it is doomed. At least that is what history shows us. Who knows, maybe this time it is different.
Don't wish it were easier, wish you were better. ~ Jim Rohn
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