Tycoon: US property in “chaos”

A few days old but worth the time:

This is what bothers us: a second round of financial crisis in the banks as the bad loans come due.

David Llewellyn-Smith

Comments

  1. That’s what I’ve been asking about last week regarding the U.S. housing market and it’s direct effect on banks there. Thanks DLS.

  2. DingwallMEMBER

    I’m surprised he didn’t finish it by saying “but the Fed’s got our back so it’s all good”

  3. This made me chuckle

    “…to punish the little people … the people who get crushed are the people who own the equity, the people who own bonds and debt, the pensioners – most of the securitised debt is owned by mutual funds, by etfs, by insurance companies, by 401k plans and at the end of the day the government is going to have to subsidise it all if people don’t go back to work.”

    Sure mate. The little guy is unemployed and probably renting with almost nothing in savings and you definitely aren’t bailing them out by getting the government to buy up etfs and debt.

    • Yes, but who owns the mutual funds? The middle class got a bailout in 2008 as well. If there had been a real haircut for all but deposit holders, the GFC would have made the economy find real feet and an organic place to build from. What happened was can kicking. And that brings us to where we are today.

  4. Ah-ha. So Tom Barrack says 30m people getting back to work (mainly low paid) is key to avoiding catastrophe …

    Interesting. How does that tally with Automation doomer line?

    Oops, it doesn’t