The investor who forecast the downfall of General Growth Properties says he sees an even bigger debacle on the horizon that should have implications for Las Vegas.
Investor Reggie Middleton has analyzed the numbers behind the federal government’s so-called "stress test" of the nation’s 19 biggest banks and the results aren’t pretty.
In short, Middleton says the government is badly misleading the public.
"The Fed says X through the stress test assumptions … yet if you simply surf over to the other side of the government’s own Web sites, they offer actual default and foreclosure rates (among other data), that are considerably more dire than they asked you (the taxpayer and investor) to believe is credible and ‘not that bad,’ " Middleton writes on his BoomBustBlog.
People who are interested in the numbers should head here: http://boombustblog.com/Reggie-Middleton/962-America-You-have-been-outright-lied-too-Bamboozled-Swindled-Hoodwinked-The-Worst-Case-Scenario.html
The Reader’s Digest version is this: The federal government has assured Americans the banks can survive even in a "worst case scenario" for the economy.
But according to economic indicators provided by the government itself, the alleged "worst case scenario" has already been surpassed in some instances.
So why should anyone in Las Vegas care? Middleton is forecasting another boom in foreclosures in May.
That’s because the foreclosure moratorium has ended, which means banks could well have a backlog. Considering Las Vegas is already a foreclosure epicenter, that might not bode well for the local economy.