Reuters-blogs (yes, Reuters has blogs like everyone else) is running a James Saft op-ed piece today that bears a stinging but cogent message: Let Housing Crash.
Ok, it might be a bit late, housing already has crashed, but supporting a broken market is useless and expensive. Let’s just get this out of the way: asset prices in housing were made of fog. Bringing them back is simply beyond the capacity of any central planner. No one has a sufficiently large checkbook.
The Mortgage Bankers Association did a study in 2008 that found 70 percent of foreclosures were on properties either not occupied by owners, were on borrowers who could not be found or did not respond, or on borrowers who had already had a modification and were defaulting again. Of the 30 percent not in those categories must surely be quite a few of tomorrow’s re-defaulters!
The housing rescue plan is in part an attempt to rescue banks, whose balance sheets will be further undermined by falls in house prices and defaults causing many more failures. The bottom line is that many Americans who now have mortgages would be better off renting.
But, but… what would become of the American Dream of Home Ownership?
Let Housing find its clearing price [Reuters]
this is what happens when government not free market decides what people should have.. home ownership is only the american dream if you can afford it
Thanks Mr. Bush for your “ownership society.” American nightmare is more like it.
Whoa, a useful study from an industry group? Surely, this cannot be…
but then what happens to the lady who said O was gonna pay her mortgage? poor thing…
Housing prices have crashed before. Problem is that this time they seem to be taking down the entire global economy as well. So isn’t it a little simplistic to just say let em crash?
Thanks Mr. Bush for your “ownership society.” American nightmare is more like it.
@ 6 u doosh. this was started by barney frank long before Bush was around
What ever happened to predictibility?
The milkman, the paperboy, evening TV.
Everywhere you look , everywhere you go (there’s a heart).
There’s a heart
A hand to hold onto.
Everywhere you look , everywhere you go.
There’s a face
Of somebody who needs you.
Eveywhere you look,
When you’re lost out there and you’re all alone,
A light is waiting to carry you home,
Everywhere you look.
Everywhere you look.
http://www.youtube.com/watch?v=MO5oDScu4ps
@5 are you suggesting we embrace a planned world economy? You want free markets? Let home prices crash and the banks alongside them. It’s not like there are space aliens hovering over the earth waiting to strike once the markets fail. We don’t start moving up until we finish going down. All the big O(bama) is doing is delaying the inevitable.
Rolling thunder. Load up some B52s and bomb the shit out of housing oversupply. Creative destruction.
What will Peggy Joseph do?
http://www.youtube.com/watch?v=P36x8rTb3jI
Housing prices have been unnaturally supported by government intervention for over 50 years now — mortgage interest deduction, VA/FHA financing guarantees, etc. “ownership society” rhetoric was just the latest real estate rah rah bullshit.
We thought we could build an entire economy on paving over farmland and selling tract homes to fucktards…wooopsie
8 Now that’s the LA that we all know and love. I feel better already.
Real estate is the opiate of the capitalist masses.
Bunch of fine looking real estate ladies probably working the day shift at tittie bars across the country these days.
@2 and 6, while I am party agnostic I think you’ll find without too much trouble searching that expanding home ownership and doing away with what was perceived as “anti-minority” redlining (really anti-risk) by government mandate forcing lenders started under Clinton and was backed heavily by the Dems who also didn’t want to rein in Fanny/Freddie. You can’t drop this mess on one party or group’s doorstep although I realize it makes people feel better or a bit more certain about the world to try.
@6 this has been passed around ad nauseam but clearly you don’t get on this intertubes often…
http://query.nytimes.com/gst/fullpage.html?res=9c0de7db153ef933a0575ac0a96f958260&sec=&spon=&pagewanted=1
The “dream” of home ownership was to get people to save money via a mortgage (in reality a forced savings account that matches the CPI over the long term) not to create a million millionaires every year.
ill help 15…
http://query.nytimes.com/gst/fullpage.html?res=9c0de7db153ef933a0575ac0a96f958260&sec=&spon=&pagewanted=1
@6, you are dead wrong. Clinton started the “everyone needs a home” plan you jerkoff
The real problem is that you cannot sustain a society built on credit. My great great gram used to say “If you don’t have the cash money to buy it, then you can’t afford it”. She lived through the depression. When we had a birthday party that woman would take the wrapping paper and re use it. Oh we made fun of her but I guess the depression left its mark. She never wasted anything and she never bought anything she could not afford.
9 I generally do want free markets but sometimes it costs less to throw money at a problem than to let the market sort it out and then pay the consequences. Hence my earlier comment – this is not just a housing correction, but something much bigger. So you cant just say, let houses get cheeper.
damn it… still not counting that as a double post. never!
7,200 Awesome! Totally Awesome! Today may not be >500 but close enough.
http://www.youtube.com/watch?v=eONhto0x_nI
Here’s one for our one term Messiah. Anyone see the New Post cartoon the other day? No Maxine! The market shot dead the stimulus package, just say’n. One more thing, fuck you John McCain! Why the fuck did you pick a booger picking moron for VP? You went out of your way to lose my vote.
http://www.youtube.com/watch?v=cnzjddAQzzo&feature=PlayList&p=BF4A8FFD3667159A&index=0&playnext=1&ytsession=ZdbgXC8eni_wcAAAzOXI1zXDS_DM10RjwbOF0zT73NecM3R0gHZwlEukMXzHylXYYGEfBieHg6EYiDdtDP9-Vxmo14UOJvavvD5PEAOLh7tQ6tk5oqmH1UzF5mV7BR7pOYms36oeiOSH5COm-D10FOw48b3DzdlewLohhwmqgwA_XRu2R2VqoSWpfpPiK0R5G9MDYdfwxhdbbuVaAWV8hAyMo7qXh1hTQW67gx6AvhDUM0u93fdvBtooiBQdMj2-6ZtezwRzZLFHIUP7c0sBMZBwXGqBJI8mLwZ2AMy2YKiI0ULtLWPLebnGIF-6YH9ZyOHQ8KCgNZ3uKj8HbiTFRnAXqzcHExzn
SPODE
What? Housing is crashing, question is whether the prices will stabilize anytime soon. The deflationary spiral continues to haunt.
I blame Texas, Eric Holder and a Monkey for these shenanigans.
Maybe somebody can get the exact quotes, but this reminds me of the statements made by Alan Schwartz and Dick Fuld the week before their firms collapsed. Why the market responds postively to Lewis’s statement is beyond me. What else is he supposed to say. Do people really think that the government is consulting with him about the options for BofA.
16 and 18: except that extending credit to lower income people was not the problem. Look at troubled markets like FL, CA, NV – the problems are not in low income areas. Low income people in homes with 30 year self amortizing mortgages generally have no problems keeping up. The big problems came with spec building, flippers, loan fraud, and exotic terms that were foisted on people that didn’t know any better (so that mortgage bankers could get up front fees and brokers could make sales). Which in turn inflated housing prices.
cramdown party at dodd’s house, the moz is paying for the beer!
For the rest of the day I am going to punch random people in the eye until I feel better.
@ SPODE (23). Don’t you think McCain did this on PURPOSE? Who would want to solve the unsolvable? Remember how he “suspended” his campaign after LEH went down (9/15)?
At that moment, HE KNEW.
But #27, the home and garden programs said flipping was easy. They showed you week after week and there were even people who bought in new developments and sold the week before closing for a profit or the ones who sold one apartment after another, for a profit. Then there was the new “in thing” to do, have your primary house, have a house in the country for the summer and have a ski house for the winter. Everyone was doing it.
Let me fix it – “Let Lehman Crash.”
There, that worked well. Let’s try it again with housing, the banks, the insurers, the credit unions, the money funds.
Let the market work it out. I’m sure the market knows best. After all, we can’t recover until we finish going down, right?
I bet the auto execs are laughing their asses off at the bank execs today.
33
illogial. that’s like saying my blue mercedes was a lemon, so i oughtn’t buy a blue bmw.
Free-market idealism is now forever and totally shattered by its own pretenses that it ever existed in the first place. Yes, its biggest practitioners were the biggest con artists.
Go back to read fiction you suckers.
Our house, in the middle of our street
Our house, we’ve got fuck all to eat.
http://www.youtube.com/watch?v=KEdZrV0j6zM
#8 has it. We need to call Uncle Jesse, he can fix anything. You need to ask yourself bitches, “what would Uncle Jesse do?” WWUJD
http://www.wwujd.com/
MYTH: Uncle Jesse can’t breathe under water.
TRUTH: Uncle Jesse’s hair acts like gills when he tells it to. He can breathe under water, as well as breathe while totally rocking out. Sometimes, he does both at the same time!
http://www.wwujd.com/myths.htm
Thank you #8, you do the dirty work that others won’t. The heavy lifting when others can’t. You jerk off with Icy Hot and piss courage all while drinking a Martini. You do the Lords work. You may use me as reference on your resume.
SPODE
@36 in third world countries the biggest threat to the general public is the military. In first world countries it’s the financial sector.
Either way the masses get trampled upon by the powerful. Say goodbye to the notion that Wall Street ever had America’s best interests at heart.
#8 has it. We need to call Uncle Jesse, he can fix anything. You need to ask yourself bitches, “what would Uncle Jesse do?” WWUJD
http://www.wwujd.com/
MYTH: Uncle Jesse can’t breathe under water.
TRUTH: Uncle Jesse’s hair acts like gills when he tells it to. He can breathe under water, as well as breathe while totally rocking out. Sometimes, he does both at the same time!
http://www.wwujd.com/myths.htm
Thank you #8, you do the dirty work that others won’t. The heavy lifting when others can’t. You jerk off with Icy Hot and piss courage all while drinking a Martini. You do the Lords work. You may use me as reference on your resume.
SPODE
The Mortgage Bankers Association did a study in 2008 http://www.mortgagebankers.org/files/Research/LoanModificationsSurvey.pdf that found 70 percent of foreclosures were on properties either not occupied by owners, were on borrowers who could not be found or did not respond
Been trying to tell people this for two F’ing years now.
….FLREGUY