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A chart to show the end of the credit crisis

September 16th, 2008

When will this crisis end?

The good news:

There is an end in sight to the credit crisis and mortgage mess. The loans that have been issued in the past that are fueling this crisis will finally either stabilize or wither away.

The bad news:

It will take until 2012 to flush out all the garbage in the system, with the most action in 2011. Until then, economic instability is likely to continue.

Source: CSFB Mortgage Resets

What should you be doing?

The same thing the big banks are doing.

Trim expenses. Cut spending to the bone. “Lay off” discretionary expenses like cable TV. Save and hoard cash, in the sense of decreasing your spending and consumption. Cash is king, cash is immediately usable, and cash is effective. Shred your credit cards, use just a debit card, and watch your spending like a hawk. Consider the use of free monitoring tools like Geezeo, Wesabe, Mint, etc. to help manage your budget.

Raise capital. Capital = cash. Work for wage increases, change jobs to better paying industries, start side income streams, whatever it takes to get more cash coming in the door.

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