As you know, my theory is that the Late Great Housing Bubble served as a nice comfortable little band-aid for the past few years, letting Americans live beyond their means, feel wealthy and fund Wal-Mart Chinese cheap crap shopping sprees.
It feels pretty good when you feel wealthy. And it sucks bigtime when you wake up to realize that the wealth was a mirage, your job has been exported, and you have crushing, lasting, paralyzing debt.
The latest Newsweek "on the right track" number is a shockingly low 28% - with 64% feeling dissatisfied with how things are going in the US.
So, how low will the "satisfied" number get now? And for extra credit, how low will George Bush's 30% "favorable" rating go, now that home wealth is disappearing faster than his 2004 campaign pledges?
It feels pretty good when you feel wealthy. And it sucks bigtime when you wake up to realize that the wealth was a mirage, your job has been exported, and you have crushing, lasting, paralyzing debt.
The latest Newsweek "on the right track" number is a shockingly low 28% - with 64% feeling dissatisfied with how things are going in the US.
So, how low will the "satisfied" number get now? And for extra credit, how low will George Bush's 30% "favorable" rating go, now that home wealth is disappearing faster than his 2004 campaign pledges?
14 comments:
My hole take on this housing thing is, if and when if does go bottom, people are just going to leave the keys on the table and walk away.
With credit tightning and no more money tap...what is there to loose..what a credit score..B.F.D!..By a motor home at least when the house gets forclosed on you can pack your shit up and drive away...get odd jobs, just enough to keep gas and food avalible ...after that who gives a shit.
Just saw this ad on CNBC:
www.buysiderealty.com
where they will refund up to 75% of their commission...
BAILOUTS - A HISTORICAL PERSPECTIVE
http://www.financialsense.com/fsu/editorials/sutton/2007/0316.html
Subprime Mortgage Bailout - 2007 - ?
After the stock market collapse of 2000-2002, the economy faced a stiff headwind and the Federal Reserve reacted by creating the most credit-friendly monetary policy in American history with low interest
rates and liquidity abound. However, the tragic flaw of easy money is that it leads to speculation, and ultimately, malinvestment. Low interest rates caused speculation in the residential real-estate market to a level that has been unprecedented. Double-digit home appreciation led lenders to make more and more risky loans based on the faulty assumption that appreciation was infinite and could always be relied on to make the payments when the borrowers were unable to do so. Developers took the cue and built a massive inventory of spec homes, creating a glut looking for a reason to happen. That reason came mostly in the form of 18 consecutive rate hikes by the Fed from 2004 - 2006. Mortgage gimmicks designed to allow fast-food workers to buy half million dollar homes began resetting at much higher rates and the defaults and foreclosures began. We are now seeing only the tip of the iceberg. While the media chooses to pretend this is a non-issue, the snowball gathers speed.
The fact that there will be a bailout is a foregone conclusion. We should be more interested in the timing and ultimately the cost of any such bailout and who is going to bear the cost. It is my guess that most of the people reading this column will not like the answer to the last question.
Two words: "jingle mail."
Budvar and Keef,
I think one of the bigest questions
involves timing of this disinflation,
and the comming hyperinflation (bailout).
How you time your entry(s) to gold and
silver over the next year are key.
I think HP should pay attention to that.
IMHO, we have lower to go still in PMs
and XAU. I see the yen higher in a
month and the S&P much lower. Others?
-Matt C
Regarding the comment about people just picking, leaving the keys and walking away with nothign worse than a lower FICO score, you might be surprised to learn that as soon as you refinance or get a home quity line of credit, your mortgage tunrs into a "recourse" loan -- meaning the lender can exhaust all recourse to recover the debt. That means a possible judgment, attaching other assets, wage garnishment...you get the idea. So yes, it IS a BFD if you plan to go on living and have any income or assets. If you just plan to crawl into a hole and die, then I suppose you have nothing to worry about.
These so-called evangelical republicans are similar to little Hitlers with a Bible. Who gives a rat's ass what these dirtbags think!
I think this JibJab movie goes pretty well with the tone of this entry:
http://tinyurl.com/nzdv6
Article in the libertyforum.org posts busines and economy section today about Detroit, without manufactures jobs, housing selling for a dime on the dollar, perhaps? the U.S with its job offshorings will wind up, at the same prices, sold at auction, to be bought at a penny on the dollar, in the depression mind set, suckers??/
another government bailout,? due, to be paid in taxes, by homeowners, like 5400 tax on a 27,000 house, coming to an area near you???
libertyforum.org article post on detroit housing selling for a dime on the dollar, at auction. perhaps to suckers, at the great depression2, deep penny on the dollar, smart? money
please pardon its hate speach, zenophobia, xenophobia, phobes
gotta blame someone, something
Not sure what all these means to most of peoples
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