camaro68ss writes on the ATS forums:
So I have a story to tell you. Last week I went to my local gun shop to pick up some ammo and I got to talking to the owner about quantitative easing 2 (QE2) ending and its impacts to the economy and how the supply chain disruption in Japan will hit wall street hard once the quarterly earnings come out. He starts laughing at me and says I got some info that will make that look like a picnic.
He motions me to come in closer and lean over the counter. He then starts to speck in a low voice and starts to explain. He tells me that he has been doing “contract work” for the FDIC, I’m guessing he must be body guarding some banker. He says the banker he was working for got to talking economics and told him there are 4 million homes that have not been paying there house payments. So that’s 4 million families not spending their money on house payments and putting that money into the economy.
He says in the 3rd quarter, it was either the FDIC or the FED’s, are forcing the banks to clam those 4 million homes and foreclose on them and balance their books for the losses. He says,
1.) bank will go bankrupt over this because they now have to clam there loses that have been growing for years.
2.) 4 million families will become homeless and or will have to rent and take that discretionary spending they had for not paying there mortgage out of the economy and back into rent.
3.) Housing will collapse again having 4 million more homes pop up into the market.
He says it’s a one two three punch that will start the chain reaction of the economic collapse. So that’s what he told me. You can take it or leave. I believe the guy because he is a no BS type of person. Just wanted to share that with you guys
Obviously such a situation is entirely plausible. Indeed, it is probably inevitable.
I just recently authored an article that covers why housing prices still need to fall by at least half.