| In a story on the current foreclosure
environment, the following writer explains what a scary place we are at:
Housing
bubble bloodbath
By
Mike Whitney
Online
Journal Contributing Writer
"The crash of the housing bubble will
not be pretty. Millions of people stand to lose their homes and life savings.
However, it was inevitable. The bubble created a fantasy world that could
not continue. At the peak of the bubble, 160,000 people a week were buying
a home, most at bubble inflated prices. The longer the bubble persists,
the larger the group of people who paid way too much for their home. While
it is not good that so many dreams had to be ruined, the number will be
even larger if the bubble deflates slowly. So I make no apologies about
hoping for the hasty demise of the bubble." Dean Baker, "Slow Motion Train
Wreck" --The American Prospect, Aug 2, 2006
"No question about it, the housing
downturn is here now, and it’s big." --Jim Hamilton "New Home Sales continue
to Fall", Econbrowser Aug 25, 2006.
The New York Times reported
last week that "about 2.2 million borrowers that took out sub-prime loans
from 1998 to 2006 are likely to lose their homes". That translates into
about 10 million people! But that, of course, is just the beginning of
the bloodbath. The real fun begins when the whole, ugly ball-o-corruption
starts to unwind and we get an insider’s-view of a system that is rotten
to the marrow. The housing industry is saturated with fraud; the banks,
the mortgage lenders, the Fed and the homeowners themselves have all played
a major role in this sordid confidence game. |
