The downturn effect of job losses will be magnified this time...

The downturn effect of job losses will be magnified this time because everything is leveraged . . .

This is because when someone loses their job they will stop paying their rent. They will then either move back into their parents home or go live in a tent city somewhere for free.

Then the landlord loses his income and can no longer keep up with the mortgage repayments. So, he is forced to sell the rental unit or home when many other landlords are doing the same. But no one is buying because interest rates are too high, and the the downturn has investors worried and saying: "lets wait until the bottom". So, the housing market collapses.

Then the building industry goes bankrupt because they paid too much for the land and can no longer recover their costs. So, more people lose their jobs and more houses get dumped onto the crashing housing market.

All these job losses, bankruptcies, bad loans (including CRE) and lack of deposits causes half the banks to go broke.

It then leaks out that the number of bank failures is too big for the deposit insurance fund to cover, so you will only get back 30c in the dollar. So a run on the banks commences.

Then the big banks start getting worried about their exposure to the unfolding banking crisis, so they clam up and stop lending to other banks.

The problem now goes global and all of the above spreads to other countries like a virus in repeat mode.

But it gets worse! - The losses are too big to bail out without sending governments broke. So, rather than get punished at the polls, or strung up by the lynch mob, they start a war to serve as a distraction. They then print astronomical amounts of money to fund the war and inflation goes through the roof.

How do we survive all this is something to think about.