Credit Crunch Dynamics

Another must read post, speculating the direction of the current crisis and how it may unfold. Many of the respected Fools are participation and as such I reckon that it is a real eye opener.

Currently I am building up my HYLP portfolio, but after reading the thoughts here I am somewhat tempted to pause and do so at a slower rate, given the comments about investors using up their firepower too quickly and specualtion that the market could grind down slowly over a period of years.*

In a related note, this further comment is worth a read too. It seems that an investor shold be way of bear maeket rallies which could potetially last for months/years as this charting type post points out (Nonsense of course ;o)

* 2 Apr08 Update:

I have just watched a bbc program “Greed Game” that interviewed many high profile investors. The CEO of Blackstone stated that the big money is to be made once an economy is on its knees and he suggested that the time is not here yet (implying that it will be at some point in the next year or so).

In addition, George Soros had an interesting interview at Bloomberg saying that he expects the markets to fall more this year, with the current rebound lasting no more than three months.  George knows his stuff.