March 25, 2008

HousingPANIC Quote of the Day

"The housing crash, currently in its infancy, will soon grow up into an economy killing monster that the Federal Reserve has no weapon strong enough to defeat"

- Rob Blake,, March 2008


Anonymous said...

This is what I have been praying for for the last 4 years. The Fed creating such a huge monster that it would kill the creator. Die Fed Die.

Anonymous said...

Let's hope this housing bubble monster can kill the creature from Jekyll Island.

Anonymous said...

Why the hell can't people get it through their skull that unless the no down no doc mortgages come back the average family is not going to be able to buy a house that costs 5-10x their gross income?

Anonymous said...

Yeah, it's kinda like fighting vampires. The Fed has no crosses, garlic, wooden stakes or sunlight. Good luck with that, Ben.

Anonymous said...

"soon grow up into an economy killing monster..."

Soon grow up? It's already there...

Anonymous said...

Double true! But they must just make it past the election so Bush is not seen as yet another failure.

Anonymous said...

I'm with you, Eric...I make a very decent salary for the area I'm in, and all I can afford, on paper, within REAL ratios is a 75K house.

The good news is that within the next few months around here, that's not going to be a problem any longer. Muwhahahaha...

The prices were so far removed from real, long term affordability that they MUST come back down. 8 years ago, a home in our town averaged 20-50K. They shot up to 150-175K. Now, we're back down to 90-120K...and that's since October.

After selling my home last fall, right before this all blew up, folks were willing to loan me 120K with no money down and a stated income. I KNEW I couldn't afford it and that prices would tank (thanks in part to you all here!) so I said no thank you and found a rental. Where I sit on my 5% down waiting to bottom feed.

No loans = no sales = continuted price drops to the point where loans are possible again. If you borrowed too much, and need to sell, send in those keys, baby!

Anonymous said...

Dishonets and lying Bush, Cheney, Rumsfeld, Wolfowicz, Powell, Rice, Rove, Tenant, et. al uncovered for the scum they are on Frontline last night "Bushs' War"

This morning, they all should be arrested and jailed for their respective crimes.

Q: What are they allowed to remain free?

A: Because America is the most vicious corrupt place in the world run by mindless power-mad thugs with a population of fat lazy idiots.

F*ck America. America is DEAD.

DinOR said...

Gosh Rob, thanks for sharing that! How visionary!

Uh.. we've been saying that since at least 2005, possibly 2004 depending on which bear you ask?

Firstly (and taking a giant step back) is there anything uglier than a mortgage? I mean seriously. What's the avg. length of employment, 3 years? How many marriages last 30 years?

But as Americans we obviously have no reservations whatsoever in signing them. Interest Only for crissakes! Then "securitize" them in "tranches" and sprinkle more acronyms and derivitives than you can shake a stick at and you have the mess we see today.

Yeah, we talk about "physical" gold and moving abroad when what we should be talking about is making the 15 Year Mortgage "the standard". Can we get real here?

Can we get more serious about our jobs and businesses than our damn homes for a minute? Let's face facts, the "home as a retirement plan" is dead. Possibly forever. Since it will no longer be possible to use your home as a never ending ATM can we build them so they can last for 30 years and be paid off in 15!?


Miss Goldbug said...

The Feds will try to pull a rabbit out of their hat on this one too.

Thats why they want Rubin, Greenspan and Volcker on this brand-new committee to solve this huge RE problem.

Can anyone here think of any possible way they can keep housing prices at these insane levels?

major problem: Lending standards have reverted back to basics and, house prices have dropped, leaving FB's without the option to refi.

I assume the banks cant sell their loans to Wall Street anymore (I'm under that impression, correct me if I'm wrong)

Maybe this new committee will give more cash freebies to banks to refi toxic mortgages.

the Govenment will create a brand new enity - similar to Fannie Mae that will buy up all the toxic mortgages, because on Wall Street, they are 'marked to market' worthless.

When this new enity gets "maxed out" with toxic mortgages, it goes belly up. Procedure will repeat itself until everything is flushed from the system.

Meanwhile, tax payers will be given the bill.

Oh gosh, my head hurts.

Anonymous said...

The Fed has may have already used up their ammo. When I finially calmed down about the 13-week TBill trading under .5%, I suggested it just meant the Fed was 1-2 1/4 cuts from a liquidity trap.

Turns out Krugman concurrs:

Also, ftalphaville has a good updated post on it:

I fear the Fed may have reduced itself from 'setting' the market to just 'participating' in it.

RiperDurian said...

Dr. Frankenstein, your child has come a knockin' and he's not in one of his smiley moods.

Anonymous said...

"Can anyone here think of any possible way they can keep housing prices at these insane levels?"

There's two ways. We go back to the insane lending standards we had during the bubble, or we see big wage inflation. Unfortunately we can't go back to the bubble lending standards because like you said no one is going to buy them again. As for wage inflation I'm sure McDonalds is eager to start paying people $25 an hour to flip burgers.

Anonymous said...

America is the most vicious corrupt place in the world run by mindless power-mad thugs with a population of fat lazy idiots.


You say it like it's a bad thing.

Anonymous said...

I believe that after ww2 a typical mortgage was 12 years. In the 1920's it was 7 years and you had to put a lot down, maybe even 50%.

It is not healthy for an economy to have so many enslaved by debt. We need to stop subsidizing homes with interest deductions, FHA, etc.

Anonymous said...

What part of the country can you buy a house for 75k?

Is it where people look at you and say "You got a pretty mouth"?

Anonymous said...

A home for $75,000? Try one of those little towns so small that you can drive through it - not even having to speed - and not notice it if you blink.