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gerrrg

First leg to fall: the build up of mortgage resets that will peak in September of next year. Over a $1 trillion dollars of mortgages resetting through 2012. Credit markets are most certainly going to tighten, as people walk away from their under water properties and banks' capital ratios sink, let alone shareholder ratios.

Second leg to fall: Austerity measures here and globally, that will undercut growth and exacerbate credit defaults. Cutting off unemployment will accelerate use of credit, and the subsequent credit defaults. Personal debt will accelerate and unemployment will jump as GDP shrinks. NYT has an excellent article on what happened to Ireland after they responded quickly to the fast-growing debt in 2007-2008.

At that point, this great idea will become moot.

Politics have ensured that no further bank bailouts will occur, therefore a cascade of bank failures will have no backstop.

Yes Mr. Libby, things can get a lot worse than October 2008, and this brilliant idea that would otherwise work in a shallow recession, will barely survive, if at all, as local government retrenches in spending.

Paul Krugman is already citing a Third Depression, although technically, this will be the US' fourth, but most people only count the Long Depression and the Great Depression.

Good luck to everyone in the next 2 years.

Peter Chapman

On behalf of Architecture 2030, thank you to Portland Architecture for helping to raise awareness about the CRE Solution.

The U.S. economy has only just begun to feel the impacts of the commercial real estate crisis currently underway. Fortunately, this $1.4 Trillion economic meltdown can be avoided.

With an increase in the CRE energy reduction tax deduction outlined the Energy Policy Act of 2005, the CRE Solution will:


* Create 1.3 million jobs, quickly and cost-effectively,
* Increase after-tax cash flow and property values, and reduce loan defaults,
* Increase CRE desirability and investment value,
* Increase new CRE sales (narrowing the gap between the bid and ask price of CRE property),
* Decrease building energy consumption, greenhouse gas emissions, and operating costs, and
* Generate billions of dollars in federal, state, and local tax revenue.

A detailed summary of the CRE Solution, as well as the full report, can be accessed here: http://www.architecture2030.org/cre/theCREsolution.html.

Peter Chapman, Architecture 2030

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