In this economic fallout, the housing market is also not left out. This time we have something different from what we had during the 2008 global financial crisis where we had huge mortgage debts in form of CDOs. Inefficiency in controlling the amount of mortgages being issued prior to the 2008 financial crisis, sent the prices of homes to stratospheric levels and this is what created the bubble that later busted in a very scary way. In the current crisis, the collapse of the housing market is taking a different shape. Millions of Americans have already lost their jobs. Experts are warning that things will only get worse and it’s just the other day that Bloomberg reported that mortgage lenders across the country are preparing for one of the biggest waves of delinquencies in American history. Prepare for bank runs and bank collapse! Everyone is trying to buy time in hope that the economy will open by the end of April but this might not work. At the moment many small businesses in America are at the verge of collapsing and the Treasury is planning to provide the much needed liquidity to the economy otherwise we might have massive foreclosures and mayhem in the mortgage market. We have millions of borrowers who have already lost their jobs and this means that they can request for 180 days postponement of mortgage payment without any penalties or effect on their credit score. According to the Moody’s Analytics, close to 30 percent of Americans have outstanding home loans and this means that approximately 15 million homes might not be paid for if the US economy remains closed. No one knows how long it will last but it is estimated that for the next 2-4 months most of the people will not be able to pay their mortgages. This might end up being the biggest crisis in the housing market because things are happening very fast and if the economy remains closed for months, it will be almost impossible for anyone to pay their mortgages. While the housing market is tumbling, the US labor market is also on a free fall and thousands of Americans are losing their jobs every passing day. It has been reported that by now more than 6.6 million Americans have already lost their jobs and economists are warning that this number will continue skyrocketing in the coming weeks. The stimulus packages are not enough to sustain American people for long enough. As people lose their jobs they are getting depressed and this is creating a perfect storm for a big social unrest. The Federation of Red Crescent Societies has warned that in the western cities a social bomb can explode any moment specifically in the low income areas. As a result of this panic, in recent weeks it has been reporting that many Americans are hoarding guns because they fear that a massive social unrest can erupt because of this economic crisis. This fear has compelled president Trump to deploy the National Guard across various states to maintain order at this perilous moment. Everyone cat tell that we have never been this way again both economically and socially. The stock market has never crashed to this extent in a matter of weeks and the entire economy is virtually collapsing. This is the biggest economic fallout in modern history; this is just the beginning and this economic crisis is hitting everywhere across the world. The global economy is collapsing and supply chains are being disrupted in many nations. This is an economic inferno and the stock market is collapsing at a rate never seen before.
This is the biggest economic collapse in history and even the great depression cannot be compared to this. The entire economy has been shut down for the first time in history. Even during the Second World War we never saw this level of disruption. Americans need solutions to these economic and health challenges and everyone is looking upon president Trump to fix things. The government should gear up in solving these problems because Americans are suffering.
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