There is NO recovery next year. No way, no how, not a chance in hell. No matter how hard you wish for it, it is NOT coming.
What is going to recover? This is a multi-decade hyper-credit expansion that collapsing before our eyes. There are 10s of trillions in losses out there, and growing, and banks are not following accounting rules now. They are deferring losses until next year. They can’t process the losses they have now and their IS a tsunami coming back. Whether they release the properties to the market is another story. The losses are still there and will have to be recognized at some point. This is not accounting for ALL the other forms of debt defaulting to historic levels and climbing. Builders should just take several years off.
Credit is contracting and this is not going to stop anytime soon. It is quantifiable. You can easily forecast this by looking at the default trajectories. It is not stopping next year. This is what is driving unemployment. They can jigger with the numbers all day but tax receipts don’t lie and the are fall precipitously. This will lead to massive state budget shortfalls and falling services.
This credit expansion excesses DWARFs the great depressions. You can’t just wave a wand and make that go away. The way money, credit and banking work has not changed that much in the last hundred years. Unless you count all the financial engineering that is blowing up in there face now.
We should be in for the largest economic contraction for at least several hundred years, if not ever and it will be global. All the printing in the world can not stop this.
