Yesterday was April 1, when about $40 billion of rent came due. Who paid it? Who didn't? And what the hell happens to the world economy if most people decide, like [Cheesecake Factory, Subway, and others, "Yeahhhh, I'm just not paying rent this month. Sue me."](https://finance.yahoo.com/news/cheesecake-factory-subway-other-major-retailers-tell-landlords-they-cant-pay-april-rent-due-to-coronavirus-141920106.html)

To me, that's kind of the elephant in the room right now. If people don't pay their rent, that could have serious follow-on effects that could blow up whatever chance we have at a coronavirus recovery. As I have throughout this apocalyptic scenario, I will hope for the best and prepare for the worst. But I'm leaning towards the worst on this one, to be honest.

![image.png](https://files.steempeak.com/file/steempeak/shanghaipreneur/AfbZEjNu-image.png)

While people may be able to get through one month and still stay current on their rent, Trump just added another month to the social distancing guidelines. Can tenants scrape together a second month of rent based off no work? [New Yorkers cannot](https://theglobepost.com/2020/04/01/rent-coronavirus-us/). Some people need [Instagram hotties to pay their rent](https://www.dailymail.co.uk/femail/article-8167793/Coronavirus-Instagram-star-Jenna-Lee-offers-pay-followers-rent-month.html). Then there are [the students who can't finish the semester](https://www.bbc.com/news/uk-northern-ireland-52040432). And still have to pay rent.

I feel for all these folks. I really do. But if enough folks like this don't pay their rent, we are headed for a global economic disaster. The last one we saw was in 2008. And do you remember what caused that crisis? Sour mortgages. What's a sour mortgage? It happens when a homeowner fails to pay their mortgage for 3 consecutive months. When does that usually happen? When the homeowner is living in the home and loses their job OR the homeowner is letting out the home and their tenant DOESN'T PAY THE RENT. Do you see where I'm going with this?

The bonds that are created on top of the expectation of timely rent being paid will go belly up if those coupon payments aren't made. If the valuations of bonds crash in value because there is no longer any underlying cash flows to support them, then despite our best efforts, we will lose all liquidity in the bond markets.

If you thought 2008 was bad, wait till you see a whole world defaulting on their home loans in the same quarter.