It’s not a credit problem stupid; It’s the result of OUTSOURCING.

[Flabbergasted]

Sub prime credit problems are not the real issue but a symptom of the underlying issue. The issue is labor. A quick review of some of the economies worldwide effected currently by "the Sub-prime Crisis indicates two things:

#1. Developing economies such as China, India, Brazil, Mexico, and Russia have positive outlooks on their prospects and are not facing credit problems because their labor force is becoming more affluent due to outsourcing. They are becoming more wealthy. And they are putting their cash into savings and investments.

#2. Developed countries with high labor costs and availability to credit are becoming less affluent because corporate investment has focused on moving labor to foreign markets.

Sub-prime credit problems are the symptom not the cause which is: Corporations moving their operations into economies where they face drastically lower labor costs.

This is emphasized by Sam Zell from this Forbes article:

http://www.forbes.com/home/entrepreneurs/2007/09/21/zell-eop-blackstone-ent-fin-cx_kw_0921whartonzell.html

Master real estate investor Sam Zell has built a fortune on the cycles that shape his industry. These days, he believes the current turmoil in financial markets is more an emotional reaction to another period of excess, not a true credit collapse.

snip

In 1999, Zell decided the REIT concept that had worked so well in the United States could be replicated in other parts of the world. He now controls major home builders in Mexico and Brazil, and is also branching out to India, China and Egypt.

He said the Guadalajara office of the Mexican company, Homex, is open 24 hours a day, seven days a week, to meet the needs of Mexican home buyers. "The beauty of all these places is there is unlimited demand," said Zell. "If you go back to Econ. 101, these countries have huge backlogs of housing demand. The population is increasing and housing has not."

No wonder this guy is positive about the economy he’s moving into markets which have an increase in consumers able to purchase homes. In the US and Europe there has been a decrease in the number of people able to afford homes but have done so anyway in what I regard as a scam of monumental proportions. Without the Sub prime Credit Institutions the economy would not have recovered during Bush's mis-administration

This is a failure of political leadership to the greatest degree. To say that those in high places both within the government, corporations and the banking system did not know about this coming crisis is hopelessly naive. We have been screaming about outsourcing for years and now that it has come to bite us in the ass we call it a credit crunch.

Last Laugh is on us....