Getting Closer, Part III

For a year or so, Brick Oven has been stating that banks will take a $3 trillion hit on the housing market downturn (30% of $20 trillion equals a $6 trillion loss; of which banks probably own half, or $3 trillion).

We’ve since tracked loss projections which started out at $300 billion (Goldman Sachs), then $1 trillion, $1.3 trillion was mentioned last month. And now, drum roll please…

$1.6 trillion.

The spooky thing is not the $3 trillion though; the spooky thing is the fact that ‘non-borrowed’ bank reserves have gone from $40 trillion to minus $130 trillion. Thus $3 trillion is less than 2% of whatever is happening. The housing market appears to be a smoke screen for something bigger.

$3 trillion is three months worth of GDP and is a game changer. $170 trillion is fourteen years worth of GDP and resets everything.

Be ready.