Are We Headed for a Depression? This Guy Thinks So
How bad is our economic crisis? One real estate agent from Florida, Mike Morgan, thinks it’s pretty bad. Why should you care what an agent has to say? Because in addition to being an agent, Morgan is a lawyer and financial consultant who provides research analysis to hedge funds and banks.
Morgan wrote a blog post entitled ”Florida at the Precipice of Depression” that he says has been reposted on blogs throughout the world. His piece is chilling, and difficult to dispute.
I was going to call this “Banks March Us Into Depression,” or maybe more fitting is . . . “Complete Collapse of US Banking System.” Folks, that is what we are looking at. I don’t see any way around it. What we’re seeing here in Florida, is your crystal ball. And what happens here, is coming to a town near you . . . soon.
Why:
Banks cannot afford to take 50-75% hits on mortgages, and that is exactly what is happening. The precipice is here, and we are on it. Recent reports about home sales rebounding are insignificant, because no one is accurately describing the growing inventory build-up. Banks simply don’t have the margins to deal with this crisis. And for that reason, we will see massive bank failures and this will snowball into a complete economic meltdown.
A few weeks back, I wrote about how banks are holding on to foreclosed properties instead of putting them onto the MLS. They’re hoping the market will rebound in time for them to avoid taking a huge financial hit. Since the market is showing no signs of rebounding, these foreclosures are like an overfilled dam, putting more and more pressure on the banks. At some point, the dam will burst. What happens then?
Scary stuff. If you have time, please read Morgan’s blog and tell us what you think of what he’s saying.
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