Tom Barak, billionaire real estate billionaire and president of the American company Colony Capital, warned that the commercial mortgage sector is on the verge of collapse.
According to ArabiaNet, Barak indicated that this would generate a series of catastrophic dependencies on the American economy, unless the government and banks act with the required measures, and quickly.
Barak added that failure to act to face the corona's consequences could end in massive evictions of real estate and a series of consecutive sales orders, which could lead to banks faltering.
Economists at Morgan Stanley and Goldman Sachs Group have said that the outbreak of the Corona virus will cause greater economic pain than previously expected, warning of a record drop in US output in the second quarter and a deeper global recession, according to Bloomberg. >
American economists working at Morgan Stanley told the bank's clients in a report that they now see a 30.1% drop in US gross domestic product from April to June. They said this would increase unemployment to an average of 12.8% during this period.
Goldman Sachs experts said they now expect the global economy to contract by 1% this year, which will be a bigger downturn than in 2009 amid the financial crisis. They had already expected a 24% drop in US production in the following quarter.
The worrisome forecasts from two of Wall Street's two largest banks reflect the abrupt halt in US and European economies in the wake of the Chinese recession at the beginning of the year.
Such forecasts raise fears of an economic recession, but economists at Morgan Stanley said in a separate report that continued deflation should be avoided given the response of fiscal and monetary policy makers.
