D36

Don't Buy (Sell) The Bear

No offense, but I don't feel that you understand the depth of the problem. Millions of Americans purchased or refinanced property in the past few years and property values have and are declining significantly for a multitude of reasons. If a middle class family purchased a house for $400k and it declines in value 10% (which is on the low end of the spectrum), the family loses $40k on the spot if it decides to sell (which is a whole other problem). Being that a lot of consumption in recent years has been financed with easy debt and that easy debt is disappearing, the recession is not going to be shallow or brief. Banks/others who are holding these mortgages are going to and have lost a lot of money, they are going to lay people off who will then have trouble finding comparable jobs for a while. This isn't even the half of it, but all in all consumption is going to take a major hit and that is going to compound the layoff problem.

We aren't heading for a little bump in the road. Stagflation is coming and this recession is going to be anything but minor.