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Conquer The Crash Quotes

In 2002, when bank stocks and Fannie and Freddie were flying high, before today’s credit crisis or asset deflation were on anyone’s radar, Bob Prechter’s Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression described dozens of today’s troubles and explained why they were imminent. Many of the events forecast in the book lie ahead. Learn how to get your copy of the book. Psychological Change “When the social mood trend changes from optimism to pessimism, creditors, debtors, producers and consumers change their primary orientation from expansion to conservation....” Chapter 9 Confidence “Confidence has probably reached its limit. A multi-decade deceleration in the U.S. economy … will soon stress debtors’ ability to pay…. Total credit will contract, so bank deposits will contract, so the supply of money will contract….” Chapter 11 Collateralized Securities "Banks and mortgage companies… package and re-sell…. “securitized loans,” and [they] have issued $6 trillion worth of them….  In a major economic downturn, this credit structure will implode." Chapter 19 Mortgage-Backed Securities "Major financial institutions actually invest in huge packages of … mortgages, an investment that they and their clients (which may include you) will surely regret…. " Chapter 16 Fannie and Freddie “Investors in these companies’ stocks and bonds will be just as surprised when the stock prices and bond ratings collapse.” Chapter 25 Banks “Banks are not just lent to the hilt, they’re past it. In a fearful market, liquidity even on these so called ‘securities’ [corporate, municipal, and mortgage-backed bonds] will dry up.” …One expert advises, ‘The larger, more diversified banks at this point are the safer place to be.' That assertion will surely be severely tested….” Chapter 19 Insurance Companies “The values of insurance company holdings, from stocks to bonds to real estate (and probably including junk bonds as well), will be falling precipitously…. As the values of most investments fall, the value of insurance companies’ portfolios will fall…. When insurance companies implode, they file for bankruptcy…. Chapters 15, 24 Banking and Insurance Stocks “We will see stocks going down 90 percent and more…[and] bank and insurance company failures….” Chapter 14 Derivatives “Leveraged derivatives pose one of the greatest risks to banks….” Chapter 19 Real Estate "What screams 'bubble' — giant, historic bubble — in real estate today is the system-wide extension of massive amounts of credit to finance property purchases…. “[People] have been taking out home equity loans so they can buy stocks and TVs and cars…. This widespread practice is brewing a terrible disaster.” The worst thing about real estate is its lack of liquidity during a bear market…. In time, there is a massive glut of real estate.” If you have a huge mortgage on a McMansion or condo that you cannot afford unless your current income maintains, sell it and move into something more reasonable….” Chapter 16 Credit Deflation "Usually the culprit behind [simultaneous stock and real estate] declines is a credit deflation. If there were ever a time we were poised for such a decline, it is now." Chapter 16 Political Leaders “A leader does not control his country’s economy, but the economy mightily controls his image.” Chapter 27 Bailout Schemes “If [governments] leap unwisely into bailout schemes, they will risk damaging the integrity of their own debt, triggering a fall in its price. Either way…deflation will put the brakes on their actions.” Chapter 32 Rating Services “Most rating services will not see it coming.” Chapter 25