By Mid to Late October... It will Not feel like a Recession but rather a Depression!
Here are the reasons why...
#1. We're about to see the Largest Bulk, of the "option arm-risky Loans" written by the banks, Re-adjust from a Fixed-- "Teaser-rate" to a Variable rate.
Home owners will go from a 4.25-4.5% interest rate, to 8-10% (Libor rates). People will No longer afford their mortgage payment! Foreclosures Will Skyrocket!..
Banks will Not have equity (payments) coming in...They're going to Fail!
#2. Banking system is Under water; according to the FDIC website, we have already seen more than Three times as many banks Fail this year, than the last 10 years put together... Banking Holiday??
The FDIC has published information about yet another "stimulus" plan called Foreclosure Prevention Initiative which you can read about by clicking the above link.
#3. Unemployment is rising; many prominent economist believe Real unemployment is closer to 15%... At the height of the 1930s Depression, unemployment hit 18%...we're almost there!
#4. Housing is being artificially kept from crashing by Banks, whom are holding onto foreclosed properties, Only releasing a small amount of inventory.. They don't want to Flood the regional market with excess inventory.. Hence; Crashing Prices even further!
Nevertheless, foreclosures are rising ...They will have to release inventory at one point!
#5. The FEDS continue to bailout the banks by Buying "Toxic" Mortgage Backed Security, for both residential & commercial loans. Plus, the auto industry by their creative "Cash for Clunkers" program. Not to mention, the FEDS are Now Buying their own Bonds, at the T-Bill Auctions... China doesn't want our Debt/Bonds anymore...Who can blame them?
Ladies and Gentlemen, the writing is on the wall.
It's about to get Really Bad, Really Quick!
http://www.bankrate.com/finance/savings/q-a-with-the-fdic-s-david-barr-1.aspx
Questions for David Barr (FDIC Spokesperson):
Some industry analysts are predicting more than 200 bank failures in 2009. Does that seem like a reasonable number?
Predicting failures from the outside is a difficult thing to do. Last year we had 25 failures. To go back to when we had more than 25 failures in a given year you'd have to go to 1993, when we had 50. In 1992, we had 181.
From:
http://www.bankrate.com/finance/savings/2009-list-of-failed-banks.aspx
2009 list of (94 so far by September) failed banks
Failed bankDate closedEstimated cost to DIF ($millions)
Irwin Union Bank, F.S.B., Louisville, KY*9/18/2009*850 for both
Irwin Union Bank and Trust Co., Columbus, IN*9/18/2009*850 for both
Corus Bank, National Association, Chicago, IL9/11/20091,700
Brickwell Community Bank, Woodbury, MN9/11/200922
Venture Bank, Lacy, WA9/11/2009298
First Bank of Kansas City, Kansas City, MO9/4/20096
InBank, Oak Forest, IL9/4/200966
Vantus Bank, Sioux City, IA9/4/2009168
Platinum Community Bank, Rolling Meadows, IL9/4/2009114.3
First State Bank, Flagstaff, AZ9/4/200947
Bradford Bank, Baltimore, MD8/28/200997
Mainstreet Bank, Forest Lake, MN8/28/200995
Affinity Bank, Ventura, CA8/28/2009254
eBank, Atlanta, GA8/21/200963
First Coweta Bank, Newman, GA8/21/200948
CapitalSouth Bank, Birmingham, AL8/21/2009151
Guaranty Bank, Austin, TX8/21/20093,000
Community Bank of Nevada, Las Vegas, NV8/14/20091,400
Community Bank of Arizona, Phoenix, AZ8/14/200926
Union Bank, National Assoc., Gilbert, AZ8/14/200961
Colonial Bank, Montgomery, AL8/14/20092,800
Dwelling House Savings and Loan Assoc., Pittsburgh, PA8/14/20097
Community First Bank, Prineville, OR8/7/200945
Community National Bank of Sarasota County, Venice, FL8/7/200924
First State Bank, Sarasota, FL8/7/2009116
Mutual Bank, Harvey, IL7/31/2009696
First BankAmericano, Elizabeth, NJ7/31/200915
Peoples Community Bank, West Chester, OH7/31/2009130
First State Bank of Altus, Altus, OK7/31/200925
Integrity Bank, Jupiter, FL7/31/200946
Waterford Village Bank, Williamsville, NY7/24/20095.6
Security Bank of Jones County, Gray, GA7/24/2009807
Security Bank of Houston County, Perry, GA7/24/2009807
Security Bank of Bibb County, Macon, GA7/24/2009807
Security Bank of North Metro, Woodstock, GA7/24/2009807
Security Bank of North Fulton, Alpharetta, GA7/24/2009807
Security Bank of Gwinnett County, Suwanee, GA7/24/2009807
Temecula Valley Bank, Temecula, CA7/17/2009391
Vineyard Bank, Rancho Cucamonga, CA7/17/2009579
First Piedmont Bank, Winder, GA7/17/200929
BankFirst, Sioux Falls, SD7/17/200991
Bank of Wyoming, Thermopolis, WY7/10/200927
John Warner Bank, Clinton, IL7/2/200910
First State Bank of Winchester, Winchester, IL7/2/20096
Elizabeth State Bank, Elizabeth, IL7/2/200911.2
First National Bank of Danville, Danville, IL7/2/200924
Rock River Bank, Oregon, IL7/2/200927.6
Millennium State Bank of Texas, Dallas, TX7/2/200947
Founders Bank, Worth, IL7/2/2009188.5
Mirae Bank, Los Angeles, CA6/26/200950
MetroPacific Bank, Irvine, CA6/26/200929
Horizon Bank, Pine City, MN6/26/200933.5
Neighborhood Community Bank, Newnan, GA6/26/200966.7
Community Bank of West Georgia, Villa Rica, GA6/26/200985
First National Bank of Anthony, Anthony, KS6/19/200932.2
Cooperative Bank, Wilmington, NC6/19/2009217
Southern Community Bank, Fayetteville, GA6/19/2009114
Bank of Lincolnwood, Lincolnwood, IL6/5/200983
Citizens National Bank, Macomb, IL5/22/2009106
Strategic Capital Bank, Champaign, IL5/22/2009173
BankUnited, Coral Gables, FL5/21/20094,900
Westsound Bank, Bremerton, WA5/8/2009108
America West Bank, Layton, UT5/1/2009119.4
Citizens Community Bank, Ridgewood, NJ5/1/200918.1
Silverton Bank, Atlanta, GA5/1/20091,003
First Bank of Idaho, Ketchum, ID4/24/2009191.2
First Bank of Beverly Hills, CA4/24/2009394
Michigan Heritage Bank, Farmington Hills, MI4/24/200971.3
American Southern Bank, Kennesaw, GA4/24/200941.9
Great Basin Bank, Elko, NV4/17/200942
American Sterling Bank, Sugar Creek, MO4/17/200942
New Frontier Bank, Greeley, CO4/10/2009670
Cape Fear Bank, Wilmington, NC4/10/2009131
Omni National Bank, Atlanta, GA3/27/2009290
FirstCity Bank, Stockbridge, GA3/20/2009100
Colorado National Bank, Colorado Springs, CO3/20/20099
Teambank, N.A., Paola, KA3/20/200998
Freedom Bank of Georgia, Commerce, GA3/6/200936.2
Security Savings Bank, Henderson, NV2/27/200959.1
Heritage Community Bank, Glenwood, IL2/27/200941.6
Silver Falls Bank, Silverton, OR2/20/200950
Pinnacle Bank, Beaverton, OR2/13/200912.1
Corn Belt Bank & Trust, Pittsfield, IL2/13/2009100
Riverside Bank of the Gulf Coast, Cape Coral, FL2/13/2009201.5
Sherman County Bank, Loup City, NE2/13/200928
County Bank, Merced, CA2/6/2009135
Alliance Bank, Culver City, CA2/6/2009206
FirstBank Financial Services, McDonough, GA2/6/2009111
Ocala NB, Ocala, FL1/30/200999.6
Suburban FSB, Crofton, MD1/30/2009126
Magnet Bank, Salt Lake City, UT1/30/2009119.4
1st Centennial Bank, Redlands, CA1/23/2009227
Bank of Clark County, Vancouver, WA1/16/2009120 - 145
National Bank of Commerce, Berkely, IL1/16/200997.1