“Unlike after the last three recessions, this time government cannot fire up the economy and a new speculative bubble, and then back off and let the bubble generate the paper wealth and credit to keep profits flowing into the business sector and the economy expanding,”
It’s not just consumers. The banks also realize that a massive wave of foreclosures is coming in the wake of the Option ARMs and Alt-A mortgages. How this reality is ignored by these economists is just beyond me. These banks are by no stretch of the imagination on safe ground.