An economic decline with its high unemployment, fussy lenders, and tight money will doom many homeowners. A big drop in home prices would devastate the mortgage holders and guarantors. Add Fannie Mae and Freddie Mac to the list that may need a transfusion. Baby Boomers with a savings account. Americans are in hock as never before.
Household debt stands at a record high.
People owe the equivalent of one year's income. As stocks falter and the economy cools into a recession, the credit spree will be replaced by a scramble to pay off debt and restore savings. Then comes record bankruptcies, and a retail drought. Service businesses will take a ferocious hit as the public adjusts its lifestyle to a new more Spartan reality. The world currency meltdown continues.