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What Next? Phase Two of the Great Deleveraging

What Next? Phase Two of the Great Deleveraging. Ian Shepherdson High Frequency Economics. We’re doomed. We’re still doomed. The Threat Of Systemic Meltdown Has Faded. …Though The US Mortgage Crisis Is Still Worsening. The Pace Of Contraction Has Slowed…. But The Debt Legacy Remains.

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What Next? Phase Two of the Great Deleveraging

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  1. What Next?Phase Two of the Great Deleveraging Ian Shepherdson High Frequency Economics

  2. We’re doomed

  3. We’re still doomed

  4. The Threat Of Systemic Meltdown Has Faded

  5. …Though The US Mortgage Crisis Is Still Worsening

  6. The Pace Of Contraction Has Slowed…

  7. But The Debt Legacy Remains

  8. The Only Way To Repay Is To Save More…

  9. …That’s Hard When Unemployment Is Rising

  10. …And Wage Increases Are Slowing

  11. Mortgage Arrears Will Rise Much Further

  12. …Repossessions Too

  13. House Prices Are Still Too High

  14. Lower Rates Have Had Only A Modest Impact

  15. Housing Equity Is Disappearing As Prices Fall

  16. …Equity Withdrawal Funded Much Of The Boom

  17. Homebuyers Aren’t Alone In Feeling The Squeeze

  18. …Broke Banks Can’t Lend

  19. So Private Housing Construction Has Collapsed…

  20. Social Housing Construction Will Follow

  21. Summary • Unemployment has much further to rise, despite stabilizing GDP • Payment problems for homeowners and tenants will rise and stay elevated for years • Leverage will prevent return to boom for a decade • Demand for social rented property will rise; can supply rise to meet it? • Boom and bust will never be abolished

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