Upload
mason-reed
View
221
Download
3
Tags:
Embed Size (px)
Citation preview
The Credit Bubble Big Picture
Daryl MontgomeryJuly 9, 2008
Copyright 2008, All Rights Reserved
A Multi-Decade Summary
• Massive credit bubble starting in early 1990s is evident on charts of financial stocks. Bubble almost exactly overlaps Greenspan’s tenure asFed Chair (1987 to 2006).
• This bubble is far more extensive and will be far more damaging than the tech bubble in the late 1990s that got all the media attention (was really just a side show).
• Many financial stock prices will return to the level where the bubble began. Many financial firms will go under, unless propped up by the U.S. Govt. (Japan used this strategy in the 1990s).
International Banks: Citibank(C)21-Year Quarterly Chart
Green Lines: 1998 and 2002 Lows
International Banks: Bank of America(BAC)37-Year Quarterly Chart
Green Lines: 1998 and 2002 Lows
National Bank: Wachovia(WB)37-Year Quarterly Chart
Green Lines: 1998 and 2002 Lows, 1991 Breakout
Regional Bank: National City(NCC)24-Year Quarterly Chart
Green Lines: 1998 and 2002 lows, 1992 breakout
Savings and Loan: Washington Mutual(WM)25-Year Monthly Chart
Green Lines: 1998 and 2002 Lows, 1991 Breakout
Mortgage Company: Countrywide23-Year Quarterly Chart
Green Lines: 1998 and 2002 Lows
Big Broker: Lehman (LEH)13-Year Monthly Chart
Green Lines: 1998 and 2002 Lows; Arrow 1998 High
Big Broker: Merrill Lynch (MER)36-Year Quarterly Chart
Green Lines: 1998 and 2002 Lows
Insurance: AIG (AIG)37-Year Quarterly Chart
Green Lines: 1998 and 2002 Lows
Bond Insurance: Ambac (ABK)17-Year Monthly Chart
Green Lines: 1998 and 2002 Lows
GSE: Fannie Mae (FNM)37-Year Quarterly Chart
Green Lines: 1998 and 2002 Lows
GSE: Freddie Mac (FRE)19-Year Monthly Chart
Green Line: 1998 and 2002 Low
GSE: Sallie Mae (SLM)23-Year Quarterly Chart
Green Lines: 1998 and 2002 Lows