Thursday, Dec 27, 2007
Great Depression Time
Washington Times: Blame abounds for housing bust
This year's housing bust is shaping up to be one of historic proportions. Sales and construction have sunk to levels not seen since the 1990 savings and loan crisis, while foreclosures and price drops are the largest since the Great Depression — and expected to get worse next year.
Many parallels can be seen with earlier housing debacles. Each episode had some combination of easy money, loose lending, greed and fraud that turned a housing boom into a speculative bubble. But few housing bubbles have ended so badly as the one today, when the nation is confronting the prospect of mass foreclosures and family dislocations.
Posted by lvmreader @ 09:30 PM (507 views) Add Comment
6 Comments
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1. Mr Plumbase said...
Coming to a street near you soon folks!
2. lvmreader said...
3. uncle tom said...
The god of 'consumer choice' has been weighed in the balance and found wanting..
I suspect that when the dust settles, the practice of offering limited period discount mortgage rates that revert to a variable rate when the 'fix' expires - will be outlawed on both sides of the pond..
4. Camping said...
there is nothing new about the fact that a few ol men have enslaved a whole new generation. it will happen again and again and again....and i suspect you are right, the discounted loans scenario will be replaced but some hidden aspect of something or another will reappear, often buried in nano print and camouflaged in altruism, if its not housing it will be something else, methinks the next stage will be .....what you think you need most?
5. Hotairmail said...
The following quote is more insightful than the chief of Wells Fargo realises.
"Wells Fargo avoided the riskiest practices and, as a result, is not suffering the major losses that are crippling top lenders such as Countrywide and Citigroup, though it, too, made some unwise investments in home-equity loans, Mr. Stumpf said.
"It's interesting that the industry has invented new ways to lose money when the old ways seemed to work just fine," he joked.
Why? Because at heart it is not a lax lending issue, it is not a sub prime issue, it is not even a miss-selling of investments issue.
These are all typical symptoms of a credit bubble. If these were not the reasons, something else would eventually be.
6. inbreda said...
Of course it is perfectly reasonable to suggest that their may - in these times of globalisation and inextricably linked markets - be a depression in the US, and yet the UK will carry on as if all is rosey.
NOT!!