Reply #63: Yup, this is already looking to be a hard crash, perhaps rivaling the Great Depression in scope [View All]

[MadHound]

Sub-prime lenders are going under. All fine and good, except for the fact that SP lenders get their money from the big boys at Citibank, Bank of America, Chase, etc. etc. Thus this will start dragging down those major financial institutions also. Shorten up the money supply, inflation goes up, interest rates go up, etc. etc. The other, really big devil in these details is how this will effect the consumer credit industry. Families with enormous debt loads will face the choice between the credit card payment or the house payment. Most will stay with the house, thus more and more money will be withheld from the CC companies. In addition, as things tighten up, less consumer spending, meaning less money charged, which will hurt the consumer credit industry hard, as will all of those defaulted home equity loans that were eaten up like candy over the past ten years. This could bring an enormous crash to the consumer credit sector, and thus toppling the whole economy.

We'll see what happens. But I suggest that people start making preparations. Get rid of as much debt, espcecially consumer debt, as you can. Learn to grow food, ride a bike, get back to the basics. For if the consumer credit sector goes, we're all going to be in for a world of hurt.