August 18, 2007

Come on! Work with me people! Fear has to be here by now, eh? Let's get this crash over already and move on.

As the CEPR pointed out in their housing crash report the other day, Americans will be best off if we get this housing crash over quickly, versus the 10+ years Japan wasted.

If home prices are simply "Marked to Market", the old prices and expectations thrown away, then we could move on.

Home would start selling again. Builders could eventually start building again. Losses would be known, retirees would be able to prepare, new home buyers wouldn't go bankrupt, and existing home debtors wouldn't go out spending money they don't really have.

Or we can do this the long and painful way.

So work with me, people of America. Your home isn't worth anywhere near what it would have sold for in 2005. The funny money days are over. "Liar's Loans" are no more. Housing speculation is dead for a generation. The Ponzi Scheme is over.

And your house is worth what it was in 2000, at best.

Now deal with it.

Here's the thinking from the CEPR on this:

It is worth noting that from the standpoint of current homeowners and prospective homebuyers a quick unraveling is more desirable than a gradual one, even if the macroeconomic consequences may be more severe.

If a homeowner has a house that will lose a substantial portion of its value over the near future, then she will be better situated to deal with this loss of wealth if it happens sooner rather than if it is delayed for a substantial period of time.

For example, if the homeowner is preparing for retirement, she would benefit from knowing sooner rather than later how much equity she can actually expect to have accumulated from her house. This would allow her to plan her savings, and possibly her retirement decision based on her actual wealth rather than wealth that is only a bubble illusion.


Anonymous said...

I'd say worth 2000 price 3% a a year. Saying homes are worth 2000 prices is as ludicrous as saying they are worth 2005 prices.

Anonymous said...

The crash will only get going when realtors admit prices are crashing

Anonymous said...

So I take it next week will be slow on HP as you loons are up in Canada protesting....

LauraV said...

With new jumbo (McMansion) loan standards MAXED @ 417K, and no piggy backs in sight, homeowners will finally get it.

It's everywhere now...all the relentless & droning bad news coverage on RE prices will be hitting the sheeple really hard like water torture...

By the end of this year, the dreaded "R" and "D" word along with lower stock market prices, higher property taxes and job layoffs will finally take it's toll on house prices.

Mark my word!

Anonymous said...

But my Realtor said housing only goes up.... And the bank said I could refi my ARM at a later date, so what are you talking about?

Anonymous said...

I don't think you understand what is going on Keith. This crash is being orchestrated to bring down the United States economically. They are going to take every penny the baby boomers have saved up over the years. Every penny. Then they will call for a new currencey, the amero. Then they will call for a new country, called the north american union. The American middle class in the mean time is destroyed and becomes extinct. Then they will call in united nations troops to quell the violence that is sure to follow. Welcome to the police state Keith. We are the last pebble in the shoe. Once we fall, liberty or what's left of it , will be only a dream in the minds of men. That is unless someone does something about it. My advice to them is to never underestimate the audacity and cleverness of the American insurgent. If they think Iraq is bad. Just wait.

Anonymous said...

That would be "here" not "HEAR." Don't make us look stupid...

covered wagon said...

Pockets of fear, but I'd say nationally we're still in denial.

Anonymous said...

Look, for better or worse I've been a renter my whole life. But I don't think a quick crash is either desireable or in the cards. Most homeowners bought years before the crash and can afford to sit this slow spell out while wages eventually catch up with prices. The idiots who bought over their heads over the last seven years or so are screwed but they are a substantial minority in this market.

Anonymous said...

Is that "here" or "hear"? "Hear" as in ear?

Anonymous said...

Interesting video...

Anonymous said...

it's probably depression before you know it.

rcochran said...

Big big players in the financial universe have been in full-blown desperation and panic. They will do everytyhing they can to push the pain off to the little guy. The big sh|tstorms for Joe Sixpack aren't here yet.

Anonymous said...

Keith, I agree that it would be best for this to happen quickly. But from a buyer's standpoint, how can it happen quickly when the ARM resets are still going to be occuring for the next several years. There will be foreclosures from FB's for years which will continue bog down the market for quite some time. Knowing this will keep me from buying until at least 2010.

gringostar said...

homeprices will again have to be sustainable, which means that they have to affordable for middle income families without funny money financing. california is going to get slaughtered.

Anonymous said...

I told my brother and father earlier this week to pull 5K out of the banks and have it cash ready because a run on the banks may happen. My brother and father both laughed hard, and my bro. said I was just smart enough to be stupid.

LOL, and today i read about the extremely long lines at cfc on Thursday with its banking facilities, and with That I say, most people are still in overt denial, not even close to fear yet.

Oh yea, I am so stupid I am up 300% this year in my portfolio. Needless to say, most folks are simply incapable of clear independant thought processes, and I say thank gawd; because if they were I could not and I would not be up 300%. ROTFLMAOATWTTB

That's rolling on the floor,
laughing my ass off,
all the way to the bank.

Anonymous said...

If evidence of reality/facts were going to snap an ostrich out of denial, i bet they would all have their own crash websites by now.

I believe a person in denial by definition does not base their perceptions on reality. So tracking big crash events in the news, may not be able to predict declines in denial.

Any predictor event would have to be something un-spinnable, directly personal, and permanent-like no gas for cars???

Even so, the 1929 crash had their own group of Suzannes who believed the economy was fine throughout the depths of the depression. We may have our own 19% that never wake up. So do we move out of denial as a group when we have 80% of the people in the real world camp?

Also, how can prices crash if there are no buyers? One realtor told me that there were a lot of auctions now, but absolutely nothing sold, as the highest bids were less than half of what they were 'worth' they all went back to the bank and not back on the market(in this county at least). I attended one auction where the property sold, but it is up for sale again after less than a month.

Anonymous said...

It's HERE, not HEAR.

Wherever you went to 1st grade, go sue them, you obviously have a case.

bozonian said...

The number of defaults is going to grow, and its going to grow faster each month as ARM resets accumulate.

The Federal Reserve, by announcing the rate cut BEFORE the market opened on Options Expiration Day, intended to PUNISH people who are shorting the market.

Was it a wise move? I wasn't short so I didn't get hurt. However, it did get the Fed a double whammy. Increased the optimism about stocks and made people who are pressing down on the market think twice before doing so. Actually a stroke of genius, if it works. Some brokers are saying it will make things worse because now the Fed is not dependable and orderly but might throw in some surprises.

I'm not seeing any price reductions coming in from my watch list. A few weeks ago there was a rash of them so I think we might have to wait for month ending before we see more actual reductions to confirm we are in fear but I think we are just touching it. Some sellers are afraid. Most are not. The price reductions prove it.

soft landing said...

Fear is here. Even the trolls have the jitters. Even WallSt has figured out they are in a corner. Even Kiyosaki(rich dad) and Trump on Larry King this week said we're f*cked. Only rich people can buy houses now and even they have to put down real money.

broken arms said...

What should I do if my mortgage rate adjusts higher and I can't afford the new payments?

Talk to the company that services your mortgage and ask for a new payment schedule. This is a tough situation because often the company that originated your mortgage has sold it to another company -- a mortgage servicer. The mortgage servicing firm is the one that sends you your monthly bills and collects the checks you write.

If you can't afford the new payments, try to talk with the mortgage servicing firm to ask if it can change your payment schedule. Unfortunately, the mortgage servicer might tell you that it does not have the authority to make that change.

The owner of the mortgage might be willing to make that change. But if that owner is an institutional investor in Germany that owns your mortgage and 14,000 others as part of a mortgage-backed security, you will probably be out of luck.

So you can't even renegotiate the terms...With all of those ARMs like this most likely to the case to reset...It's been said before, but this is not even CLOSE to being resolved. Scary how many FBs there are out there...and many don't even realize it yet. When that happens, THEN I think there will be major panic.

Anonymous said...

That's happening. My realtor buddies are now finally admitting the problem. All their rentals are on the market. One is closing his mortgage office.

Anonymous said...

I am not sure whether this has been discussed, but in order to move houses the banks and mortgages companies probably were doing it any way they could, I am not convinced that people that got loans and defaulted were all subprime loans either, I think that is a smokescreen of the severity of the problem, even if everyone had good credit, the last two or three years the majority of individuals looking either had no real assets collateral or savings to have purchased a home in the first place because they probably couldn't or didn't have any money saved to do it???
In 2005, the U.S. savings rate hit negative levels for the first time since the Great Depression.
I found some stats on the Hoover Institution page
Savings behavior
In 2004, only 8.7 percent of families did not have a savings, checking, or similar account, down from 14.9 percent in 1989.
In 2004, 56.1 percent of surveyed families reported saving. Retirement and liquidity were the top two reasons those families gave for saving.
Savings trends
The annual saving rate, defined as the ratio of personal savings to disposable income over a one-year period, hovered close to 10 percent between 1970 and the mid-1980s; it steadily declined during the 1990s. Between 1999 and 2004, the savings rate has averaged around 2 percent, until it became negative in 2005.
The saving rate was the highest in 1944, 26.1 percent.
Financial assets*
In 2004, the median value of financial assets of surveyed families was $23,000. This shows a roughly $7,000 decrease (in 2004 dollars) from 2001 levels.
Stocks and retirement accounts combined made up half of those families’ financial assets.

freddie hot said...

- Homedebtors are in Denial
- Lenders are in Panic
- REO departments are still in Euphoria pricing
- Homebuilders are in Capitulation
- Realtrolls and Mortgage Brokebacks are in Despondency

Anonymous said...

Still Denial- especially after those BS FED moves- hell, I am a bubblehead and I am still somewhat kind of in denial about a crash- although, I have moved what little there is of my 401K to safer investments.

belchorama said...

Willingly admit/realize a loss? That's not the American way. No, this is going to be dragged out as long as humanly possible. The sheeple will follow the market down, always 5-10% behind the decrease. Will give the less-dumb more time to come around and react.

Anonymous said...

so I've heard this "mark to market" being thrown around...what does that actually mean??? 10% markdown? 15% If anyone out there has any ideas, I'm all ears. My wife and I are about to put our house on the market - a house we (over)paid for in 2005.

Anonymous said...

Anyone who doesn't see values heading back to 2000 or worse is not paying attention to all the data, or has a strong reason to want to delude themselves (e.g., little or no equity in their home)

fish said...

My brother in law is ahead of the curve and well into depression. He just put his half of a two story duplex on the market in Sacramento and in 6 weeks he's had two of the callers burst into laughter when he heard what the asking price was!

I don't think he'll be selling it any time soon!

Anonymous said...

I don't see how letting the market quickly correct will help that much. I think that is a scary and misguided thought. I think people need to adjust to the enormous dislocation that is going to happen. You know, learn a new skill for a new job, move
closer to work, get a roommate, learn to cook at home... you get the idea.
People don't just change their ways and ideas that easily, and many will have to be forced to do things differently. Some people can't cope, and something will have to be done to help these people.

Anonymous said...

Still denial, BIG TIME. News from Los Angeles is that while there is practically a run at countrywide, I have family that live in the same town as countrwide's headquarters and the local newspapaer and LA Times are all running stories that all is well.

Nope, no problems here.

Anonymous said...

Anonymous said:

"I'd say worth 2000 price 3% a a year. Saying homes are worth 2000 prices is as ludicrous as saying they are worth 2005 prices."

NOT TRUE: During bubbles, not to mention this, the greatest MEGA financial bubble in the history of the world, prices DO NOT REVERT BACK TO THE MEAN!

NO, THEY GO BELOW THE MEAN! Your 3% appreciation (cost of inflation) citation only applies when you are talking about NORMAL times (not bubble times). These are NOT normal times. AGAIN, we are in the biggest financial bubble in history. Therefore, the housing price correction will be more severe than a simple correction back to the mean adjusted for inflation. It will go below that, probably back to 1997 or 1998 prices. Check out financial bubble history before you speak!

Anonymous said...

Mark to market means pricing the mortgage backed securites in a way that all can see a CEAR AND TRANSPARANT bid and ask. mark to market.

Today we have mark to myth, that is not pricing mortgage backed securities in a transparant way in order to inflate the book value of ones company. Marked to myth also benefits insiders that are dumping securities at a time when their company is worth nowhere near what they are making there securites at, mark to myth.

Anonymous said...

I think in some sectors they're still in denial. Fear is in the air for sure, but denial seems to be clinging on like a tick on a shaggy dog. People just don't want to think about it...they can't. If they do...then they become desperate. That's the key...when peeps start to THINK.

What the Fed did last week was insane. I'm still in shock. The implications are disastrous.

I'm sorry folks, but this will lead to a societal situation were martial law will be declared. Wanna bet on it?

Oh yeah...and when economic collapses occur...GLOBAL WARS are started.

Have fun.

Anonymous said...

Fear is here.

I heard two seperate stories yesterday of guys pulling 500k out of Countrywide at different branches in California. After the news that ETrade is essentially up to their ASS in CDO garbage, most of the posters on my main finance board were scrambling this week to pull money out of their trading accounts.

On my wife's Chinese Girls BBS !!! all the hens were clucking about how much money their 401k's had lost in the last few weeks, one lost 40k, one lost 4k in a single week for example.

Me, I pulled 10 large out of the credit union and it's sitting in my closet. Even my completely zombified co-worker came up to me this week and out of the blue mentioned how bad housing was in her area and how her 401k was tanking.

And one last thing ... consider you're a Boomer, just a year or two from retirement and you hear these stories and more - how long are you going to wait before running to the bank/credit union/ATM/brokerage to pull your funds out ASAP so you don't end up working at McDonalds when you're 70 ?

Even the Goddamn FED panicked yesterday - based on calls from the FedBanks in SanFran (Countrywide anyone) and NY.

The Boomers are the ultimate herd generation. They're going to panic en masse in the next few weeks and the jig will be UP.


Anonymous said...

Can they indefinitely give out 110% LTV teaser rate pay option loans and allow people to refi every two years? That is the only way to prop up the market in many part of the country.

The other option, from Harvard PhD Nicholas Retsinas, is for employers to give their employees a 100% pay raise. No wonder he has a PhD

Anonymous said...

I bought in 2003. When I saw I could get a 30-year fixed at 5.01% I bought it down and locked it in. I am not a genius, nor a financial wizard. So I guess I'm a little confused about who all these people are who got these crazy loans. I'm serious - who are they? Nobody I know made a move like that. Not a soul. And I live in DC, btw, hardly an underpriced housing market. It's hard for me to feel this crisis vibe when literally NO-ONE I know is affected. What's up with that?

Anonymous said...

12:26, I live in AZ and most people that I know took out one of these kinds of loans. I am in my late 20's and the majority of my friends that bought are in the same age range. Not only did they buy with toxic loans, but they filled their house with high priced electronics and fancy furnishings. My first house was a 2 bedroom condo with a fixed loan and 20% down that I purchased in 2000. I cashed out in 2006 after my co-worker who had just filed for bankrupcy 8 months earlier and had already racket up thousands of credit card debt walked into a lenders office and was qualified for a loan for 100% of the purchase price. I knew that we were in trouble then and had my house listed the next day. It was one of the best decisions that I have ever made.

Anonymous said...

Fear is here, no doubt about it at in the professional investment community.

But what happens on a daily basis in stocks and bonds takes months to trickle down to the ear of average Americans.

Similarly, there is a substantial lag time between when housing prices fall and people find out their housing prices have fallen.

Prices have fallen 14% in LA county in the last 2 think anyone things there house in LA believes their house is worth LESS than a year ago?

No one will believe their house has fallen in value until their neighbor sells and they find out how much it sold for. Add on a period of denial for the time for the average American to come to that reality.

I'd say most average Americans are still in denial but just waking up to the reality. Fear won't truly hit the market until some of the banks start reporting trouble and those Option Arms start resetting later this year.

That's ok though, I feel like I'm watching history in the making.....from my rented apartment.

Popcorn anyone?

Anonymous said...

San Diego north county inland

Plenty o denial,

....some fear rearing it's head tho

james said...

"I bought in 2003. "

All my friends in their mid 30s have ARMS and such in DC. Most were planning on refinancing in a year or so.

Anonymous said...

The fed will do everything to let the air out of this bubble as slowly as possible. It is in all of our interest that this take as long as possible.

See, the point of Greenspans bubble was to create a nation of debt slaves. 30 year indentured servants. That is what drives our productivity.

If prices crash, millions will walk and recession is guaranteed, depression is possible.

If prices slowly deflate (along with increasing inflation) then by the time all these suckers realize that their home bought in 2005 and really worth 40% of the price they paid, they will be stuck. They will have gotten to know the neighbors, their kids will go to school, the home will be overflowing with crap from big box stores and their mortgage will be just slightly greater than what rent would be. They are now 10 years into a 30 year loan, they have a job in town.

What are they to do?

They stay, keep their job and continue to pay their mortgage and their taxes for another 20 years.

That's the name of this game kids. That's why the feds will do EVERYTHING to ease this baby down. They can only do 3 things.

1) Lie and say things have bottomed every 3 months.

2) Lower interest rates which "creates cash" or liquidity.

3) Print money and toss it into the pig pen.

That's exactly what they will do.

Bottom is many years off.

RE Investor said...

"The owner of the mortgage might be willing to make that change. But if that owner is an institutional investor in Germany that owns your mortgage and 14,000 others as part of a mortgage-backed security, you will probably be out of luck."

Make no mistake, in the past they may have been unwilling to work with individual homeowners, but unless these institutional investors in Germany or elsewhere want to lose MILLIONS and possibly BILLIONS in defualts in the coming months, they will be telling the servicers to work with these folks. I believe that they were unwilling to work with them in the past because they were in denial, or did not actually know what the real danger was. Now they do, and they know that they are just one large default away from serious pain or insolvency. They will either sell their MBS to someone else at .30 on the dollar, or hold on and hope like hell they can get their servicer to convince the homeowners to stay put. Mark my words, in a couple of more months adjustable mortgage holders will be receiving letters from the servicer begging them to work out a plan. These MBS holders can no longer risk having massive defaults, the genie is out and if they don't mitigate the risk, they may fall the same way so many other hedge funds have lately.

RE Investor said...

"NOT TRUE: During bubbles, not to mention this, the greatest MEGA financial bubble in the history of the world, prices DO NOT REVERT BACK TO THE MEAN!

NO, THEY GO BELOW THE MEAN! Your 3% appreciation (cost of inflation) citation only applies when you are talking about NORMAL times (not bubble times). These are NOT normal times. AGAIN, we are in the biggest financial bubble in history. Therefore, the housing price correction will be more severe than a simple correction back to the mean adjusted for inflation. It will go below that, probably back to 1997 or 1998 prices. Check out financial bubble history before you speak! "

I have to disagree. If this was a financial bubble of true finanacial assets, you would be absolutely correct. However, what you fail to take in to account is that this is not a pure financial crisis. It is only a financial crisis as far as Wall Street is concerned. From the main street perspective, it is emotional. Because there is relatively low unemployment (other than RealtWhores, Brokers, and title people), most of those that bought on an adjustable rate loan (without a toxic margin added to the fed rate, treasury or libor index) will just stay put and eat the increase. Those that can't or have a reset to above 2.5 to 3% of index will walk, but must find another place to live close to their old residence unless they lost their job along with the house, which I doubt. This will force them to rent. That will allow a landlord (that did not buy on a toxic mortgage) to keep from selling. I am sure you can see where I am going with this. A normal bubble crash does not involve someones living quarters, it involves tulips, paper investments etc, that people don't really need and have no requirement of survival to. The three things that most humans need are 1. food 2. shelter 3. water. See a house was never intended to be a financial instrument, so it will not behave in a crash the same as other financial crashes. We are also approaching an election year. If the apocolypse happens without intervention, a lot of voters own homes and will NOT be happy.

I have done a lot of research on this, as I own many properties purchased well before all of this nonsense began, and none of my research has been from the lying NAR stats. It has been real stats going back to at least 1961. That is back before we were tied to the fed, and gold was the standard backing. As near as I can approximate, we are looking at an initial shock of about 2002 prices in some markets and then up to 2003 prices. From that point, simple 3%. That is assuming of course that Mortgages will eventually revert back to minimum 680 credit score, 20% down, and FHA continues to finance first time homebuyers with 3% down as they did for the previous decades prior to this Wall Street created bubble. I could be wrong, but I think that is the rational analysis. I could be wrong, but it is some food for thought between apocalypse and euphoria.

Paul E. Math said...

Sorry Keith, I think we are closer to fear but not quite there. I think if fear were really here then even us on hp wouldn't be so happy and carefree about the coming armagedon. Myself included.

I, and I think most others, understand the future as an abstract concept. But if we really thought hard about what it's going to mean for us then we wouldn't sleep at night.

Lost Cause said...

It took a long time for the Crash of 1929 to happen. All summer long there was volitility. In fact, the market did not stop falling until 1932. And then it fell again. It did not reach the historic high again until 1955.

Anonymous said...

I have some friends that put their house on the market this week in Rancho Cucamonga - the "trendy" area of the I.E. (as if there were such a thing, LOL). Not a single call to view the property this weekend, and they are the lowest price/sq.ft. in the area. They started out in '01 paid about 300K for the place, then HELOC'd and refied it up to 500K. The house is in excellent condition, newer home with three-car garage and big yard, six br and three ba. A year and a half ago, their home would have sold fast at $725K. Fast forward to today and...

Now they can't lower their price and it won't sell for a max of 525K (guessing, we don't really know, may be lower since no one is interested so far). They won't even come close to breaking even, so their choices are:

1. Stay in the house and pay the "pay option" amount on their existing ARM that is half of the fully indexed interest rate, while deferring the other half of interest (and all the principal). It's all NegAm, of course, so they're piling on principal that some day should be repaid - upon sale or refi, if it were possible. The only 'option' here is, in two years, when the payment rises dramatically, time for "jingle mail". Walk away, and consider it cheap "rent" during this time period.

2. Refi to a new fixed rate loan, if they could, but after last week we all know what happened to fixed jumbos...7.25% or more, if a loan can be found and funded.

3. Sell and take a possible loss, which is what they are attempting now - but if no one calls even at "fire-sale" pricing, where does that leave them and all the other FB's here that have wishing prices?

Methinks the bloom is off the rose, at least here in the I.E. (Inland Empire, to you non-SoCal types). Rancho used to be the "premier" place to be out here, with the fou-fou "Victoria Gardens" mall that no one shops at, and the poseurs driving their Hummers from their HELOC'd liar loan homes. It's gonna come crashing down HARD here, moreso than, say, the OC or LA county. No jobs out here, just lots of tile roofs as far as the eye can see, and nothing is selling.

If Rancho is this F'd, you can imagine what's going on in places like Fontana and San Bernardino...good luck selling in those hell-holes.

On a side note, my friends got a letter from their mortgage co. today offering to lower their payment to - get this - $156 a month! It actually said in the letter "this is not a TYPO". Guess they are getting desperate to keep their loan going, and the ponzi scheme afloat. Can you imagine how fast the deferred interest would pile up at this rate? I've never heard of anything like this in my life (BTW, the full interest only payment is about $3,000 a month). Keith has said many times - this will end badly...

Just waiting for next week for more fun :)

Anonymous said...

Not yet, Keith. Wait until October for fear to really set in nicely, then comes the worst xmas of the last 20 years to welcome "desperation". Oh boy, and there are many sheeple whistling pass the graveyard...

PS: Don't forget the big quake (literally, the natural disaster) that will hit California until the end of 2007, which will make things really interesting. Remember my words.

Anonymous said...

Psssssst...come on over here: if you don't have 5k (half in euros) in a Sentry Fireprrof Safe at home for disaster money, you are asking for it!

Now, if you are a Joe6PK-Bushie Lover, nevermind...just keep watching Nascar and go shoot some toads in the swamp.

Anonymous said...

I know people in the DC area that bought using `crazy`loans. I also know people in the DC area that bought at the peak with traditional loans and are now significantly underwater. Since they make decent money their lives won`t be ruined, but I`m sure it still stings.

Anonymous said...

anon Aug 19 8:46am

Rancho Cucamonga 'was' a nice area long ago!
Too many cookie cutter developements.
At an area where the interstate 15 10, 60, and 210 converge.....the traffic is horrendous!

The 10 alone is the main east west artery in and out of L.A.

RJ said...

Nice points Re Investor.
I have believed that the issue is not a major crash in housing prices but an end to the double digit gains that allowed a massive debt binge through equity withdrawals. Without the continued manic growth of credit starting back in 2001-2002- which has proved unsustainable - the economy would have remained in what would now be a very deep recession. Now that the credit orgy is over, the economy is slowing. Real fear will set in if it becomes apparent that nothing the FED does can jump start the economy, is pushing on a string. This probably won't be realized until late fall. In the meantime, it's entirely possible the financial markets will hit new highs. But I don't believe it will matter.

johnny rao said...

Even if some people can afford the ARM resets, it will still hurt the economy due to the redirection of billions of dollars being used to pay for housing instead of buying other products and services. If Mary Jane Potter has to pay $2500/mo PITI instead of $1500/mo PITI, she has to cut back on Starbucks, vacations, eating out, new car, clothes, investments etc.

Housing killed the goose that laid the golden egg.

k.w. - southern ca. said...

Prior house debters don't want prices in their areas to drop, and so there is resistance both from the home builders and house debters to keep prices as they are.

Well, soon reality hits, and prices drop anyways - despite the resistance.

Anonymous said...

The surest way to prolong the suffering and gouge out a deep and long trench of financial ruin relative to the housing Ponzi Scheme, is to have Hp'ers telling these fools that their ride is over.

Their stubborness and unwillingness to bring home prices down so that "everyone wins," is a testament to stupidity.

This type of stupidity is going to ring in a whole slew of serious nastiness. We're talking incarceration, suicide, financial ruin and lots of ugliness of that ilk.

I would think that peeople potentially losing homes, not having money for their children's college education, with extreme debt piling up while their overpriced piece of junk is aging rapidly, could very easily create the aforementioned scenerios.

What else would?