Today Bloomberg reports that Bank of America CEO Lewis says the so called credit bubble of the past 6 years is about to break. Look out below. See Bank of America Lewis calls for lending 'Sanity': http://www.bloomberg.com/apps/news?pid=email_en&refer=home&sid=aT7p.papJIlA. In December Wells Fargo CEO Kovacevich said “history says this will blow up. It always has. And there will be some blood in the street.”
For those of us who have been worried about the abuse of credit for a while now, there is a feeling of hope that comes from hearing such admissions. Maybe not the whole world has gone stark-raving mad? Or perhaps its just as Charles Mackay wrote men go mad in herds while they recover their senses slowly and one by one.
Some of us have been feeling a bit helpless and co-dependnet as we watch debt-addicted masses spend their way to prosperity. Unfortunately, as we know, it seems most addicts must hit rock bottom and lose everything before they will turn their lives around. And so we wait for this crazy time to blow its brains out.
I have a few cousins in the UK who have also been sending me glowing reports of the realty markets over there in the past couple of years as regular folks quit their jobs to become land-barrons-over-night. Everyone is very excited and very impressed by remarkable returns. Again a little sparkle of sanity glimmered in the UK Observor this weekend: See The crash is coming and it could be soon. http://www.guardian.co.uk/commentisfree/story/0,,2073607,00.html
We look forward to this storm finally breaking and then blowing back out to sea. Then we can get back to work making real lasting money where skill and prudent habits are rewarded over the fleeting flash of dumb, reckless risk.