- It all started with Congress' big wet kiss to the REIC with the "no cap gains taxes on home sales" law
- Then Greenspan panicked after 9/11 and took interest rates down way too far, for way too long, opening up the credit spigot and creating a flood of liquidity
- Then mortgage loan risk and oversight was taken away from local bankers - packaged, commoditized and sold off by the corrupted Fannie and Freddie to hedge funds, China and others far far removed
- Sprinkle in rampant collusion and corruption between realtors, mortgage brokers, home builders and appraisers, which allowed home prices to be recorded at unrealisticly high prices on the books
- Millions of cheap illegal Mexican labor pours over the unprotected border to get REIC homebuilding jobs, allowing more homes to be pumped out cheaper and faster then ever before
- Add in the "cash back at closing" scam, with spreading like wildfire in the underworld of con artists, get rich quick scamsters and down-on-their-luck life's losers (i.e. Phoenix call center employees)
- Creating more and more unrealistic home price "comps", spiraling upward led by corrupted appraisers and foaming-at-the-mouth get-rich-quick investors and flippers
- Then, as always, the general population and immigrant shoeshine guy get caught up in the mania, believing that "it really is different this time" and that their homes truly were worth 100% more than they were just a few years ago, cheered on by a clueless REIC-ad-supported MSM, the Greg Swann's and Harvard Joint Center for Housing Studies of the world, and the ethicless REIC themselves
And then the big game, the big con, got exposed. The MSM turned on their masters and started to finally do their jobs for a change, and report on the out of control ponzi scheme. Regular folks started a plethora of "housing bubble blogs" to fill the vacuum and report from the street.
And now, we're seeing the cracks. Inventory has exploded, sales have fallen off of the cliff, and the first of so many banks and lenders are going belly up, with the Subprime Implosion underway.
So how will it all end?
- Millions of unwanted homes will continue to flood the market, sold by regular folks, people in foreclosure, investors, flippers, homebuilders and liquidating banks.
- Sales volume will continue to plummet, as people know for certain a home will be worth less, significantly less, the longer they wait
- Millions of REIC-connected individuals will lose their jobs - real estate clerks, appraisers, mortgage brokers, builders, Home Depot salesmen, etc.
- The overvalued loan bag-holders (China, hedge funds, Fannie, Freddie, Countrywide, etc) will be devastated
- The cash-back, cash-out-refi based US economy will suffer a great blow, with effects felt worldwide
- The House and Senate will launch investigations in 2008 to soothe housing-crash-victim voters. Significant new regulations and oversight will be created, mistakes and fraud will be addressed, and the REIC will be brought to heel
- And finally, years later, homes will again be places people live, not get-rich-quick schemes and lottery tickets.
It hath been foretold. Enjoy the ride.