This Recession is Worse Than I Expected

 

A while back I wrote the "chart" of the DJIA confirmed to me we were entering a recession.   That was about 800 points ago!

I have based my last two years of bearishness on my real estate experience in Las Vegas as well as extensive reading.  As early as 2003 people were publishing books about how sub prime lending would result in economic disaster.  These put me on alert.  Then I saw double commissions to agents, so I sold all my rental property and 2nd home.  We saw a huge unprecedented and UNWARRANTED increase in real estate values over the last four years as a result of false demand.  During that time, corporations and individuals pocketed huge up front fees, and now the corporate entities want relief.  RUBBISH!

Well, what I didn’t realize was just how big the impact would be.  These collateralized loans are literally tearing apart the fabric of our financial system.   This is far far worse than the Internet bubble of 2000.  The reason is even non sub prime borrowers borrowed the increased equity out.  Lenders, then had insurers protect their portfolio of loans.  I fear these insurers may go bankrupt, and a ton of OFF BALANCE SHEET accounting will come home to roost. 

In Las Vegas you can now buy a $170k condo for just $1500 down and they will give you back $50,000 at closing for taking the junk off their books.  This is why Donald Duck is a major borrower across America!    This is WRONG WRONG WRONG! I mean if you have no assets, why not do it then skip?

Be very careful right now.  CNBC pundits are lying to you trying to get you to buy stock they want to sell.  California, Nevada, Arizona and Michigan are already in recession, and it is sure to spread. 

Everyone knows that the worst thing to do in a recession is raise taxes, yet that is precisely what Obama or Hillary want to do.

Be afraid, be very afraid.

 

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