Will the Real Estate Collapse Cause a Depression

photo credit: DávidSt.

We all understand that reality is subjective. Some would argue that reality is reality and there is no way around it, but not everyone sees things the same, so reality must be subjective. Even if we all fall in the same hole many will argue the reasons the hole existed and why we all fell in the hole in the first place, and if this really is a hole at all, or is it just a large depression in the Earth? The reality of the economy and the housing market is pretty clear to some economist and forecasters, and many agree that a hole is a hole and we are all in it. Many are asking "will the real estate collapse cause a depression?"

Simon Maierhofer and CFO.com reports that a change in the rules allows banks and financial institutions to report earnings without reporting their losses, which will, of course, change the actual outlook of the institutions and the economy as a whole. This reporting change can allow the banks to mask the real reality of the situation, the situation being the economy.

Mr. Maierhofer says banks are gambling with our economy the same way people gamble in Vegas, their using the old double down or all or nothing bet. This may buy the banks some time, and possibly the rest of us as well, but he believes the reality is that we are all about to fall into that large depression in the Earth.

Read the full article from Yahoo Finance

Posted on July 02, 2010 13:41:57 by Blog Author