Permabear Peter Schiff's Worst-Case Scenario

Never wrong?!?

Peter said twice in this interview that he had never been wrong. Looking back now, he was wrong on several points. Gold never reached the levels he predicted, and commodities were the next bubble. When the speculators had to unwind their leveraged positions, oil and all other major commodities came tumbling down hard. His prediction for $150-200 oil next year looks DOA. Give him credit for some of his prognostications, but he is prone to making big mistakes as well.

KJ @ Dec 07, 2008 19:37:13 PM

meltdown

The next huge fallout is pension funds for police, fire, and other municipal employees. The cities have allowed them to accrue huge salaries based on overtime and carry those into retirement. Massive municipal tax increases are on the way!

Don G of TX @ Dec 05, 2008 23:47:23 PM

bubble

u need to take in2 acount usa

mic of WA @ Dec 04, 2008 21:09:40 PM

Most of us work and run businesses. We are the crew that keeps the ship running. We do our job and when we come on deck to see what is going on, we see an iceberg dead ahead and the officers are breaking open the cargo supplies. The Congress of the United States are the officers of the ship of state and they have detroyed the ship. The Democrat and the Republican Senators have become rich selling the nation out to voters who wanted more free to foreign lobbies who wanted to ship cheap products at the expense of domestic producers, lawyer lobbies wanting to increase litigation against businesses to make more money and government employees, also voters, who added onerous rules and regulations on top of regulations smothering U.S. business. The Congress has harmed us all except the illegals who still benefit from thier largess.

amtr of MA @ Dec 04, 2008 10:00:50 AM

NEXT FINANCIAL SHOE TO DROP

Have you read this article? Sounds important and timely. I would like to hear your commentary on the subject.

New U.S. Mortgage Crisis Looms

Matt Apuzzo - The Associated Press

Nov. 27, 2008

WASHINGTON — The full scope of the U.S. housing meltdown isn't clear and already there are ominous signs of a new crisis — one that could turn out the lights on malls, hotels and storefronts across the country.

Even as the holiday shopping season begins in full swing, the same events poisoning the housing market are now at work on commercial properties, and the bad news is trickling in. Malls from Michigan to Georgia are entering foreclosure.

Hotels in Tucson, Ariz., and Hilton Head, S.C., also are about to default on their mortgages.

That pace is expected to quicken. The number of late payments and defaults will double, if not triple, by the end of next year, according to analysts from Fitch Ratings Ltd., which evaluates companies' credit.

“We're probably in the first inning of the commercial mortgage problem,” said Scott Tross, a real estate lawyer with Herrick Feinstein in New Jersey.

That's bad news for more than just property owners. When businesses go dark, employees lose jobs. Towns lose tax revenue. School budgets and social services feel the pinch.

Companies have survived plenty of downturns, but economists see this one playing out like never before. In the past, when businesses hit rough patches, owners negotiated with banks or refinanced their loans.

But many banks no longer hold the loans they made. Over the past decade, banks have increasingly bundled mortgages and sold them to investors. Pension funds, insurance companies, and hedge funds bought the seemingly safe securities and are now bracing for losses that could ripple through the financial system.

“It's a toxic drug and nobody knows how bad it's going to be,” said Paul Miller, an analyst with Friedman Billings Ramsey, who was among the first to sound alarm bells in the residential market.

Unlike home mortgages, businesses don't pay their loans over 30 years. Commercial mortgages are usually written for five, seven or 10 years with big payments due at the end. About $20-billion (U.S.) will be due next year, covering everything from office and condo complexes to hotels and malls.

The retail outlook is particularly bad. Circuit City and Linens 'n Things have sought bankruptcy protection. Home Depot, Sears, Ann Taylor and Foot Locker are closing stores.

Those retailers typically were paying rent that was expected to cover mortgage payments. When those $20-billion in mortgages come due next year — 2010 and 2011 totals are projected to be even higher — many property owners won't have the money.

Some will survive, but those property owners whose loans required little money up front will have less incentive to weather the storm.

Refinancing formerly was an option, but many properties are worth less than when they were purchased. And since inves

Rocky of CA @ Dec 03, 2008 15:59:39 PM

Right on

I've been saying for several years that Americans have been living high-on-the-hog while producing little and spending much. This is a world economy and we're out of sync with much of the rest of the world. Other economies will grow as ours shrinks.It will be a long time until they are in balance, and the outlook isn't good for American in the mean time.

America can't produce products to be sold overseas because our labor costs are too high. We have to use overseas labor and that is draining money from our economy. Our salaries will have to come down and our stnadard of living with it. People will have to learn to live on what they earn, and they will earn less. We are in for a big adjustment.

I think Peter Schiff is right on and I'm not a permabear. America has the ability to snap back, and in the long run we will and it will feel good too. Check our Stephen Leeb's The Coming Economic Colapse for another opinion along the same lines - and I think Stephen is right too.

John Donaldson of CA @ Nov 30, 2008 00:24:38 AM

Brilliance in Simplicity

Peter,

I came to learn about you from New York's 95.5 WPLJ's Scott and Todd morning show.

Your simple statement of fact, and your ability to be visionary in your hypotheses is something I hope impresses President-Elect Obama. He clearly has a New Deal approach to the economic challenges the US faces.

But unlike you, I have a little more confidence in America's spirit and their ability to bounce back. America's fuel consumption has dropped incredibly, and the countries willingness to sacrifice is clear.

I believe our main challenge is to hold accountable the sin's of a few. Mr. Greenspan is clearly "the goat" in this economic troubled time. However, the American people have the desire and strength to recover.

Your words are powerful, please do not give up on the country. Lobby with Washington, and use your wisdom to help change, and don't lose hope in our great nation.

Mark Gialo of NJ @ Nov 26, 2008 09:33:57 AM

depression

I remember 1965 my dad saying to me the next depression will make the depression in 1929 look like a picnic.I wish he was around now to see this.My dad was living on a farm so they could kill something and eat. I talked to a guy in his 70 s who lived in the city when the depression hit ,he said with tears in his eyes just to think of those day's ,he said he cried himself to sleep many nights because he was so hungry. I think we will go through a period much the same .with allot of people moving around to find food ,jobs and shelter we got to say are prayers

Terry Lemery of WI @ Nov 25, 2008 22:11:58 PM