We’re On The Eve Of Destruction: US Mortgage Crisis Ignites

“…but you tell me over and over and over again my friend, ah, you don’t believe we’re on the eve of destruction?”

It was back in 1965 when P.F. Sloan’s “Eve of Destruction” was recorded. And, while it was about the Vietnam war, which was gearing up, and the Cold War, which was years away from thawing out, it’s title speaks to this current generation through the expanse of time.

This time, though, the destruction we are talking about is economic in nature, the result of greedy mortgage bankers who loaned money to people who could not afford to buy the homes they live in and now, just like in Hitchcock’s “The Birds” - we are about to get a taste of nature’s (if you buy the notion that the economy is a force of nature onto itself?) revenge served up nice and cold, as all sweet revenge must!

“…Don’t you understand, what I’m trying to say? Can’t you see the fears that I’m feeling today?
…you don’t believe we’re on the eve of destruction?”

This from investor George Soros who did rather nicely from his speculative attack on the Bank of England: The U.S. economy, says he, is “on the verge of a very serious economic correction.”

And this, from one senior trader at Wedbush Morgan in L.A. speaking about Citigroup’s warning of loan losses in the billions: “People are not sure if there’s another shoe to drop.”

Another shoe to drop? More like all the shoes in Imelda Marcos’ closet.

The stock market has been up and down and up and down and up and down more times the past few weeks than a Coney Island roller coaster.

Rumors run wild of more writedowns to come, forcing at least one giant investment bank to issue public denials.

“…and you tell me over and over and over and over again my friend, you don’t believe we’re on the eve of destruction?”

Talk about eyes wide closed.

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Tags: Housing, mortgage crisis, mortgage mess, subprime