according to LEAP/E2020, and contingent on the specific evolution of each component of the US economy, the month of April will account for the inflexion point of the impact phase of the global systemic crisis, that is to say the moment when all negative consequences of the crisis pile up exponentially. More precisely, April will be the time when negative trends will converge, transforming many « sectorial crises » into a generalised crisis, a « very great depression », involving all economic, financial, commercial and political players.

In April 2007, nine practical consequences of the unfolding crisis will converge:

Acceleration of the pace and size of bankruptcies among US financial organisations: from one per week today to one per day in April

Spectacular rise of US home foreclosures: 10 million Americans out on the street

Accelerating collapse of housing prices in the US: - 25%

Entry into recession of the US economy in April 2007

Precipitous rate cut by the US Federal Reserve

Growing importance of China-USA trade conflicts

China's shift out of US dollars / Yen carry trade reversal

Sudden drop of US dollar value against Euro, Yuan and Yen

Tumble of Sterling Pound

In this February issue of the GlobalEurope Anticipation Bulletin (on subscription), LEAP/E2020 details the nature and sequence of these developments meant for all concerned players (currency or financial market operators, investors, international traders, political and economic decisions-makers or analysts) to better anticipation events. Strategy is time mastery! In the present issue of GEAB, our teams endeavoured to build a device to overcome this quarter's accelerating developments.

In this public announcement, LEAP/E2020 describes one of these nine direct consequences otherwise detailed in GEAB N°12 (on subscription), i.e.:

Spectacular rise of US home foreclosures: 10 million Americans out on the street

In 2006, US foreclosures increased by 42% , directly affecting an average of 1 US household out of 92. In states such as Colorado, California, Ohio, or Texas, 1 household on 35 or 40 falls victim of foreclosure. In October through December 2006 in Ohio, 3.3% of homes and apartments were filed in foreclosure . The pace of foreclosures accelerates as the number of insolvent US households increases (cf. GEAB N°10 on the issue of insolvency): in 2006, over 1.2 million foreclosures affected 4 to 5 million US citizens (counting between 3 and 4 persons per household).

Level of foreclosures in the US in December 2006 (See Photo at right)

According to LEAP/E2020, the year 2007 will register at least a doubling in the number of foreclosures (3) due to the surge of record high numbers of mortgage loan refinancing on the market (close to 2,000 billion USD). 2 to 3 million homes will probably be filed in foreclosure and about 10 million US citizens thrown out of their homes in the course of this year. All those who doubt whether the US actually entered a “very great depression” should pay a visit to field reality and observe the devastating effect of the housing and financial crisis for millions of Americans (4). Scores of blogs appeared on the web trying to review the on-going housing disaster and the stream of human tragedies (5). Taking into account that a US citizen has three months between initial default on interest repayment and actual foreclosure, LEAP/E2020 estimates that it is indeed in April that the second wave of foreclosures will hit the US market.