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"This October, millions of Americans are going to watch horror movies and read horror stories because they enjoy being frightened. Well, if you really want to be scared, you should just check out the real horror story unfolding right before our eyes - the U.S. economic meltdown. It seems like more bad news for the U.S. economy comes out almost every single day now. Unfortunately, things are about to get a whole lot worse. The mainstream media has been treating "Foreclosuregate" as if it is a minor nuisance, but the truth is that the lid is about to be publicly lifted on years and years of massive fraud in the U.S. mortgage industry, and this thing has the potential to cause economic chaos that is absolutely unprecedented. Over the past several days, expert after expert has been coming forward and warning that this crisis could completely and totally paralyze the mortgage industry in the United States. If that happens, it will be essentially like pulling the plug on the U.S. economic recovery. "
The mortage industry may finally crater if and when all of that accounting trickery finally catches up to it.
But the rest of the economy going down with it?
Not a chance.
Here in California where I am, I see signs of life everywhere. Granted a few individual businesses here and there have gone belly up. But the main highway? Interstate 5 and Highway 99?
Absolutely stuffed to ten times its original design carrying capacity with big rig trucks and travellers any day of the week, any time night or day. It's bumper to bumper vehicles-albeit moving around 60-70 mph. But those roads have long straightaways. Trucks lined up like a freight train as far ahead as I can see in front of me. Trucks lined up like a freight train as far as I can see behind me. BOTH directions. And like I said. Anytime day or night.
Now obviously that means a lot of goods moving, which is indicative of commerce which is indicative of some economic signs of life.
And who are all these people? Where are they coming from and going to?
For Californias Central Valley supposedly being the armpit of the country (despite most of its food coming from here), I sure as hell see a LOT of people passing through and entering and exiting the freeway. Just the other night. 10PM on a weeknight. Out in the middle of otherwise isolated farmland: bumper to bumper.
This second side of the Hurricane is a Banker's Crisis, as well.
Presently the banks are sitting on REO, and trying to repo some more (the on-going foreclosure issue), and have so much of their loaned-out money into real estate that is technically upside down (more debt than value). If all of that were to go worthless, it would mean little to many of us, but would mean EVERYTHING to the bankers.
Their fantasy Cash Flow from the 40%+ interest Credit Cards is drying up, too -- as folks have stopped using them, and those folks the banks thought they could gouge with the high interest have stopped paying anything.
Bad days ahead to be a Banker. But F'em. Should have let them die back in 2008 when this mess hit. More and more of US are figuring out how to get along just fine without them.
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