As a nation, we have over borrowed and overextended ourselves in thepast several years. We took out too much debt to buy too many homes atinflated values. We bought too many commercial properties at sky-highvaluations. And frankly, we made a lot of dumb corporate deals. All ofthis was financed with high-risk loans and bonds.
Now, home valuesare coming back to earth. Now, commercial real estate deal volume hasdried up. Now, many of the leveraged loans that financed a dramaticM&A wave are sinking fast. And now, the economy is paying the pricebecause lenders are cutting consumers and businesses off as they focuson rebuilding their balance sheets.
As painful as this process is,remember something very important: This is what MUST happen for theeconomy to ultimately emerge healthier in the long run.
We have totake our medicine. We have to purge the bad debts. We need banks,investors, consumers, and borrowers to be reminded that losses can anddo happen when too much risk is taken on. Once that cleansing processhas had a chance to play out, I think our nation and economy willemerge much healthier, and with a more sustainable growth outlook.That's a future I can really look forward to, and I imagine you can too.