Monday, June 13, 2011

Jim Rogers Speaks.................

“It’s gonna be worse the next time around,” says commodities guru Jim Rogers of the next financial crisis — the one we’ve been trying to pinpoint here and here, among other places.
“The debts that are in this country are skyrocketing,” Rogers told CNBC yesterday. “In the last three years, the government has spent staggering amounts of money and the Federal Reserve is taking on staggering amounts of debt.
“When the problems arise next time...what are they going to do? They can’t quadruple the debt again. They cannot print that much more money.”
To our growing list of possible catalysts for a new crisis — a heavily leveraged Fed balance sheet, a revival of collateralized debt obligations, a Greek default — we add another:
   The number of homeowners willing to contemplate “strategic default” has nearly doubled in the last year.
Last year, a survey conducted for Fannie Mae found 15% of homeowners willing to walk away from an underwater mortgage even if they could keep up with the payments. This year, the number is 27%.
“People are more educated about the process,“ says Jon Maddux, CEO of a website that advises people on strategic default called Business is up 10% this year, he says. “They’re making more calculated, less emotional, decisions and are less fearful and less concerned about the stigma.”
So much for contract law, eh? Good job, Jon.

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