To: John Vosilla who wrote (135419 ) 8/3/2013 8:55:19 AM From: RetiredNow Read Replies (1) | Respond to The crash doesn't have to be in housing prices. THink about what these big guys are doing with their exit strategies. They are securitizing the rent income and setting up IPOs or increased stock sales. Both of these types of securities are sold to pension funds, hedge funds, mutual funds, and some high net worth individuals. So what happens when consumer spending reaches the breaking point? Already we're seeing massive consumer debt and consumer incomes stagnant to decreasing as full time jobs are lost and replaced with part time jobs. When consumer spending reaches the breaking point, they have to cut back and the places they will default on will be rents. Renters are FAR more likely miss a payment than mortgage holders. Renters are transitory by their very nature, which makes the Rent Backed Security Derivatives (RBSD's) groups like Blackrock are putting together FAR more likely to implode than the RMBS' of the 2008 era, which were backed by mortgage payment revenue streams. When these RBSD's crack as the consumer cracks, that's going to send the newly issues stock securities crashing. The combination of both of these security types crashing is going to impact portfolios of pensioners, hedge funds, and individuals. If it becomes widespread, it will ripple through the economy. With panic of 2008 in recent memory, there could be another panic as the herd stampedes.
