SL - Before and After

here is how we got to where we are:

1. low interest rates + super affordable loan options
2. super demand for real estate investment
3. numerous rate hikes
4. housing slows down, oversupply of houses
5. mortgage defaults
6. mortgage bonds go worthless
7. residential builders + loan companies get hit (remember countrywide?)
8. medium and poor ppl start to spend less
9. investment banks show big losses from mortgage bond write off
10. stock market takes down everyone with a 401k and even the wealthy...investment money is taken out of hedge funds...consumers become more frugal
11. people stop traveling, many lose their jobs, and gas prices freefall
12. retailers get hurt from low consumer spending + disapointing holiday season
13. people are optimistic and scared...hoping obama is the cure (now)

AND here is where we are heading...

13. more retailers go out of business
14. commercial real estate gets hit
15. more rich ppl lose money
16. gov't intervention fails
17. more money is taken out of the market, investors lose faith
18. economy goes stagnant. foreign investment in america stalls
19. dollar weakens
20. commodities get expensive (as dollar falls)
21. full blown stagflation (inflation coupled with stagnant economy)
22. doom and gloom
23. something new comes along and we rally again...

sounds bad...but it seems inevitable...the quicker we get through this cycle, the better...BUT, the more gov't intervenes, the slower it will be