FOXNews.com - Record 1 in 10 American Homeowners in Foreclosure or a Month Behind in Payments - Local News | News Articles | National News | US News

FOXNews.com - Record 1 in 10 American Homeowners in Foreclosure or a Month Behind in Payments - Local News | News Articles | National News | US News: "WASHINGTON — A record one in 10 American homeowners with a mortgage were either at least a month behind on their payments or in foreclosure at the end of September as the source of housing market pressure shifted to the crumbling U.S. economy." I went back and looked at previous recessions to see how the stock market reacted. Many times it resulted in about a 30% drop in the Dow. I then went back to the Great Depression. That resulted in a 87% drop! If we are truly on the cusp of a second depression of the likes of GDI, then can we expect a similar plunge? If so, that would mean the Dow will bottom out at about 1800! Now that seems highly unlikely (I bet they thought the same thing in 1930) but it could drop somewhere between 30% and 90%. It's already over 30%. If I split the difference that means the Dow will bottom out at 60% of its most recent high of 14000, which is 5600. We might not reach that for another 6 months. On the other hand, this might be worse than GDI. Why, because the US government has pumped more money into the economy, maybe $4 trillion so far, than it ever has before, combined and adjusted for inflation and the effect has been negligible. Of course, I don't know why anyone would have expected otherwise, it's all phony money because it was never actually earned.