Skip to comments.An Economic Pillar on the Verge of Collapse
Posted on 12/07/2006 8:52:46 AM PST by GodGunsGuts
An Economic Pillar on the Verge of Collapse
By Steven Pearlstein Wednesday, December 6, 2006; D01
It's been more than a year since we've heard from those who denied there was a housing bubble.
Since then, the industry boosters, along with the "soft-landing" crowd over at the Federal Reserve, have coalesced around the idea that maybe the market got a bit frothy after all, but now the correction is almost complete, the unsold inventory's been worked off and the worst is behind us.
But just when you're feeling hopeful again, you get reports like yesterday's Wall Street Journal piece reporting that delinquency rates are suddenly soaring on all those loosey-goosey subprime mortgages. They are starting to cause real heartburn for pension funds and other investors who bought securities backed by those mortgages on the theory that they were no more risky than a Treasury bond.
"We are a bit surprised by how fast this has unraveled," Thomas Zimmerman, head of asset-backed securities research at UBS, told the Journal, removing his head from the sand. Trust me, Tom, you ain't seen nothin' yet. After the subprime loans come the 100 percent, interest-only loans, followed by the meltdown in the overbuilt multi-family housing sector....
(Excerpt) Read more at washingtonpost.com ...
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." -Manuel II Paleologus
A market correction portrayed as a doomsday scenario.........
Ping...nod to Ex-Tex for turning me on to this article--GGG
The only slowdown in construction is because of the winter weather. That should help deplete the inventory even more.
Actually, I am ready for a little break. Been working pretty much 6 days a week since summer because of the demand.
For those who fell for ARM Mortgage deals that were too good to be true.... they always are...... when Americans are ignorant, stupid and dumb and get in over their heads it is someone else's fault.......
You guys are reading this all wrong --this is excellent news. The economic forecasts have just been upgraded from "worst economy since Hoover" to "on the verge of collapse".
Up here in the Northeast, the "housing slump" is already over. People looked around, noticed the sky wasn't falling, and jumped back in with both feet. I am busy, believe me. I wouldn't have minded a little Christmas vacation this year, but oh well.
I'm not real sure that's an upgrade. Sounds like a downgrade.......
How fast that gap unwinds may determine whether the landing is soft or hard.
The first hit is free. But now you're a gloom junkie.
You got it.
With fixed rates at all-time lows, taking out an adjustable-rate loan is so stupid as to defy comprehension. Seriously, it is staggering. Plus, a lot of them have pre-payment penalties! All you can do is shake your head and mutter, "Financial Darwin alert."
"The first hit is free. But now you're a gloom junkie."
All markets change over time. If your situation is tolerable as is and the market makes you nervous, stay out.
people who think real estate always appreciates are leaving out the last part of the sentence, "...if you wait long enough."
Very well said ... and the gov't must step in and do something!
Just once I'd like to those who get into finacial trouble have to get themselves out. Bailing out the ignorant is one way to make sure they stay ignorant.
Told my dad I wanted to learn how to swim, so he thru me in the deep end of the pool. Guess what? I learned how to swim.
Maybe you're right, going from collapse to verge-of-collapse is a step backwards I suppose.
Yeah, just ignore the huge tax change that took place in 1997.
>>We're doooooooooooooomed! <<
You may actually be right.
>>For those who fell for ARM Mortgage deals that were too good to be true.... they always are...... <<
If you are the first in and sell before the pyramid reaches saturation, you make out like a bandit.
Of course, those that got in late and are still holding the bag, well, they just may take the whole economy down with them.
Looks like a steady trend to me with pullbacks that are progressively less severe.
What are we saying here-- that the bigger the leg up the bigger future maybe leg down, or that the bigger the leg up the better?
I like the second because it's easier to prove. Besides, the graph contradicts that first idea.
Ignore hell. He's never heard of it. He's googling it up now.
Generally speaking, that's true.
WillieGreen, is that you?
So it should be a great time to buy a house.
Are you a real estate agent?
He never did admit the magnitude of his double counting when pushing the "triple deficits". Maybe his google button is broken?
>>LOL. If I post articles from the MSM you cry "liberal", if I post from conservative blogs you cry "clowns" or "blogpimpery", and if I post from gold or bear sites you call it "gloomwhoring" or "goldbuggery." Gee, if I didn't know any better, I'd say your real problem is with the message, not the sources.<<
This is one reason I don't give people individual sources. There is a skeleton in EVERY closet. And to suggest that people with "agendas" don't have valid opinions is like saying a jew in late 1930's germany should be ignored when he comments on the nazis because he has an agenda.
I have learned so see if the words stand of their own strength.
LOL! I love Mr. Housing Bubble!
Are you claiming this stupid blog is conservative?
Nope. I generally don't associate with people who have a connection to the name "Willie."
LOL Good grief.
It's not like that at all.
Your anecdotes are much stronger if you don't bother to source them.
In southern OR, the builders have been idling for more than the winter months.
It will be, but now is not the time. The slide should continue to for several years and then bottom...that would be the time to buy.
We're making progress here. We agree that I complain whether you justify your investments with a right-wing or with a right-wing rant. What I like is we first do our own research, and then we invest in what research points to. If we later find out something new, then we change the investments and not our findings.
It's easy; it's like yesterday I was talking about income balances and said "it always went up during recessions and down during expansions" --and today I plotted this and said I was "wrong. What came out is that sometimes they match and sometimes they don't."
>>It's not like that at all.<<
Not all the time. Sometimes it is, sometimes it aint.
>>Your anecdotes are much stronger if you don't bother to source them.<<
That is true as well. ;)
Maybe you should check out Oprah? I heard there are lots of fact free, emotion filled stories that back up your view point. Hope that helps. :^)
That works with points of belief and logic and not when you're trying to base that logic on an observation. If others aren't allowed to make the same observation independently, then they're being expected to take your word for it.
It's the choice between saying "unemployment is down because it's morally good to trust the government", or saying "the BLS announced lower unemployment".
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