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It wasn't a depression in the sense that economic activity mostly continued, it was a deleveraging. People are overestimating the leverage in play in the curren
by rogerkirkness 7y ago
It wasn't a depression in the sense that economic activity mostly continued, it was a deleveraging. People are overestimating the leverage in play in the current situation, other than giant public companies, there is less toxic debt, so it's more about actual economic activity (E.g. trade).
- Consultant32452 7y agoWhat are the odds some of that non-toxic debt turns into toxic debt as unemployment lingers?
- _delirium 7y agoIt's definitely possible that real estate (both commercial and residential) is going to see a bunch of deleveraging as the debt becomes unserviceable. Right now everything is frozen in place. But once it restarts and everyone is supposed to get up to speed on their rents and mortgages again, a bunch of landlords are going to realize they're never getting those n months of back rent that are officially just temporarily suspended. At that point, the more leveraged ones are going to end up with cash-flow problems and mortgages going into default (also currently officially just temporarily suspended). I won't venture a guess on how widespread that's likely to be though.
- anigbrowl 7y agoThat's what they said at the start of the financial crisis too. I'm too tired to write an essay, but wait until there's a de facto default on college debt.