future maintainable earnings and pes, page-22

HI HotDog,

I completely agree.
A deflation of the WORLDWIDE credit bubble is going to create:

- Less profits for banks for at least the next couple of years.
- More expensive living for us, as our wealth in terms of 'Housing Equity' continues to dwindle.

FOOD won't get any more affordable than it is now either.

Regarding NAB share price. I would like to think it will find support around $19-$20 per share. However, I'm in no rush to buy them as an investment for at least a couple of years.

Nobody really knows the full extent of the 'credit default swap' market. If you don't know what a CDS is - you would do well to find out. They are at least 10x bigger market than the Mortgage Backed Securities you heard about last year. Here is a VERY GOOD link from a BBC news story explaining them.
http://news.bbc.co.uk/2/hi/programmes/newsnight/7506653.stm

This is one of the few times in history when money in the bank is proving to be better than shares in the bank.

I very much hope that the recent intervention by the Fed underwriting Fannie Mae and Freddie Mac debt (2/3 of US housing market), and helping out AIG with $85Billion (probably not enough), will stem any fallout in the $62 Trillion CDS market.


Joel