Coming Soon: A 300-Percent Increase in Foreclosures

At Calculated Risk, Tom Lawler, a real estate economist and former risk policy veep at Fannie Mae, tries to figure out how many people have actually lost their homes to foreclosure, short sales or deed-in-lieu desertions. The answer: Not enough. Lawler (who is now living the life of Riley on a Virginia farm) says the number of foreclosures that have been completed so far is a drop in the bucket compared to the number of loans that have gone bad:

On the other hand, the above numbers could well OVERSTATE significantly the number of homeowners who lost their primary home either to foreclosure or to a short sale. A “significant” % of completed foreclosure sales has been completed foreclosures on non-owner-occupied homes, though estimates vary as to what that % has been. In addition, not all short sales have involved homeowners “involuntarily” leaving their home, but who instead wanted to (for economic or other reasons) move and who were able to negotiate a short sale with their lender.

So what is the right number for folks who lost their residence to foreclosure, a short sales, or a DIL? I don’t rightly know.

It is pretty clear, however, that overall foreclosure moratoria, foreclosure delays, modifications, and other workout activity continued to keep the number of homeowners who “lost” their homes to foreclosure massively lower than one would have expected given the delinquency/in foreclosure numbers.

So what will this mean when the last moratorium is lifted, the last show-me-the-note lawsuit gets thrown out of court, and the last loan modification has failed? Well by that time you’ll probably be able to buy property on a planet orbiting some nice warm star in Constellation Cygnus. But there could be roughly three times as many homes on the market as there are now. Lawler points to 1,445,000 completed foreclosures and short sales at the end of 2010, compared with 4,296,01 mortgages that are past due by 90 days or more.

Getting a handle on the shadow inventory is more than just a way to fill up the time between Sunday afternoon looky-loos. You should feel for these foreclosed people because they’ve lost their jobs – even though in most cases they haven’t lost their jobs. You should be worried about how foreclosure drives up neighborhood crime – even though it doesn’t. And be afraid, be very afraid of the failure of the Home Affordable Mortgage Program to keep hardworking American working families who work hard in America from losing their homes – even though the HAMP is actually designed to buy time for the banks. And if you really want to drop tears as fast as the Arabian trees their medicinal gum, read up on HAMP's underwhelming numbers, ineffectiveness, and costly efforts to limit redefaults.

Speaking of redefaults, the OCC/OTC Mortgage Metrics report [pdf] is out for the third quarter of 2010, and the results are barely less horrific than they were in the previous report. Just under half (47.6 percent) of modified loans are 30 days or more overdue (strong likelihood of permanent default) within a year; more than a third (36.7 percent) are 60 days overdue (near certainty of permanent default) and nearly a third (29.8 percent) are 90 days overdue (for God’s sake, get out of the house). Just to be clear: These are mortgages that the bank – frequently with backstopping from the taxpayers – has already fixed up once.

Redefault rates are showing gradual improvement, but the numbers are still pathetic. A quarter of all modified loans go bad after six months. To get even B-minus performances you have to make serious reductions in the borrower’s monthly payment. A third of bad borrowers who have had their payments reduced by up to 10 percent still default again; more than a quarter default after having their payment reduced between 10 percent and 20 percent. And 14.6 percent who have had their mortgage payments cut by more than 20 percent still manage to default within half a year. That goes beyond bad personal finance and becomes an achievement you have to respect.

Loans modified under HAMP actually have much better performance than other modifications. But the numbers are so poor all around that you shouldn’t hold your breath waiting to hear arguments for the success of the program. At this point the consensus that HAMP has failed seems pretty much unassailable. Which is just as well: If HAMP actually worked as promised, it would cost us almost a trillion dollars.

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  • ||

    former risk policy veep at Fannie Mae

    Not exactly the strongest recommendation . . . .

    So what will this mean when the last moratorium is lifted, the last show-me-the-note lawsuit gets thrown out of court,

    You do realize that at least some of these suits have been successful, and that the lender has been reduced to the status of an unsecured creditor because they botched the lien?

  • ||

    Forclosure is a small-scale remedy for individual loan defaults. It was not designed as, and does not function as, a fix for wholesale, market-wide, grand diasasters like what we are facing now in the real estate market.

    Banks are going to be loathe to foreclose on a bunch of underwater houses and 'fess up to holding tons of bad loans. They would rather 'walk like a zombie' for as long as they can and hope that the market turns around enough to save them from insolvency. It's a forelorn hope, but it is the controlling incentive in the banking sector right now.

    Sorry, Libbers. If you want to "restart" the housing market in the near term, government is going to have to "do something." The banks are not going to jump in and save America's real estate industry by "scaling up "foreclosures to the size of the present meltdown.

  • sevo||

    "Sorry, Libbers. If you want to "restart" the housing market in the near term, government is going to have to "do something.""

    Sorry, lefty, you're wrong.

  • Virginia||

    Who wants to restart the housing market?

  • sevo||

    I do, but not at distorted values all over again.

  • Auntie Semitic||

    Who wants to restart the housing market?

    Joo Bankers

  • Vermont Gun Owner||

    I'm hoping it stays down for another couple years so I can buy cheap.

  • ||

    Vermont Gun Owner:

    The hope you have will be more than rewarded. Prices are going to go down MORE before they revive. Just keep watching them decline.

  • Red Rocks Rockin||

    I'd love to see the housing market not "restart." The fact of the matter is that the accepted loan/income ratios got completely out of whack during the housing bubble. Trying to blow that back up has been one of Obama and Bernanke's dumbest moves.

    In 1963, the average home price was about $17K and the average income was about $6000/yr, a roughly 3-1 differential. In 2008, right before the bubble popped, those numbers were $300K for the house and $48K/yr household income, a 6.25-1 difference.

    Generally speaking, 50 years ago people didn't buy a home unless they had 20% down, and the house usually wasn't more than 1.5-2 times their household income. All that easy credit in the housing market (among other things) completely distorted the normal metrics of home buying, and anyone that was paying attention to those basic figures knew that eventually the bubble was going to pop.

    The housing market is the one part of the economy where we NEED deflation, even if our current lords and masters can't see it.

  • ||

    Now I'm using median income/home price, but in Phoenix right now, where I invest, median income/home price is lower than a 3/1 ratio. So are places like Kansas City, Houston, and Dallas.

    Curious why you chose 1963? I use stats, ratios, economic indicators etc. to guide my real estate investing. I bought in the Phx metro from 1997-2000, sat and waited 2000-05, sold much of my portfolio in 05, have sat 05-now, and think it's about time to start buying again.

  • Red Rocks Rockin||

    Now I'm using median income/home price, but in Phoenix right now, where I invest, median income/home price is lower than a 3/1 ratio. So are places like Kansas City, Houston, and Dallas.

    Hey, I don't know what to tell you, man--those figures are from the Census Bureau's records. Obviously, figures change from state to state, and even county to county or city to city, but you have to admit those figures are pretty startling.

    Phoenix's drop has largely been due to all the foreclosures, from what I've been reading--I guess people are getting $250K-$300K homes for about 1/3 of their value at auctions, although you probably have a more accurate assessment in that regard. Regardless, if true, THAT'S certainly going to submarine the median home price.

    Curious why you chose 1963?

    Most of the charts I found on a quick internet search start in the late 50s-mid 60s.

  • Zeb||

    No, the government doesn't have to do something. The government doing something is a lot of the reason why prices were (and still are) too high in the housing market. Prices still need to go down a lot. Then the housing market can be healthy again. Stupid government programs aimed at propping up prices will only prolong the problem and put off the pain. Someone has to eat the shit.

  • sevo||

    Uh, chart format broken.

  • BakedPenguin||

    Seriously.

    <table border="1" cellspacing="2"> <caption>Foreclosures by year</caption>
    <tr><th>Year</th> <th> Foreclosure Sales</th> <th>Short Sales</th> <th>Total</th></tr> <tr><td>2008</td> <td>914,000</td> <td>95,000</td><td>1,009,000</td></tr> <tr><td>2009</td><td>949,000</td><td>263,000</td><td>1,212,000</td> </tr>
    <tr> <td>2010</td><td>1,070,000</td><td>375,000</td><td>1,445,000</td></tr> </table>

  • BakedPenguin||

    Or you could just steal the original image. That works, too.

  • sevo||

    Looks like that's what the hamsters did.

  • Virginia||

    Mr. Lawler emerged in 2006 darkly predicting an abrupt end to the housing boom

    Wow, how prescient. Quick, somebody ask him who wins the 2010 Super Bowl!!

  • ||

    Sorry, Libbers. If you want to "restart" the housing market in the near term, government is going to have to "do something."

    This Libber, at least, believes the housing market will not get restarted at current price levels, ever.

    The key to restarting it is to let prices fall to market-clearing rates. Something the government is expending trillions to prevent.

    If the government would stop "doing something", the market would indeed restart. All by itself! And with much more "affordable housing", to boot!

  • Zeb||

    This. I have to restrain myself from throwing shit whenever I hear some jackass on the news talking about how housing prices have stabilized or some such crap. Supply and demand is not hard to understand and it is obvious that the supply of housing is still way to high in many markets.

  • Night Elf Mohawk||

    How can anyone not see this, even if he doesn't admit he sees it?

  • ||

    Duh. But foreclosure-palooza isn't going to deliver the "market-clearing" we need.

    Some kind of new auditing of mortgage investments coupled with assembly-line insolvency proceedings are going to be needed, and Congress is probably the only institution with the authority to get this done under its "uniform laws on the subject of Bankruptcies" power.

    (Right now, though, they are too busy hashing over waaaay more important things, like incest exceptions to the Hyde amendment.)

  • ||

    But foreclosure-palooza isn't going to deliver the "market-clearing" we need.

    Citation needed.

  • ||

    Indeed. We're waiting.

  • sevo||

    Danny|2.3.11 @ 5:44PM|#
    "But foreclosure-palooza isn't going to deliver the "market-clearing" we need."

    What sort of lefty hoo-haw leads to that conclusion?

  • ||

    Just keep standing there with your finger up your keister and wait for the things you believe in to come true, sevo.

  • sevo||

    Danny|2.3.11 @ 6:44PM|#
    "Just keep standing there with your finger up your keister and wait for the things you believe in to come true, sevo."

    So, you stupid shit, you don't even have some fantasy to offer?

  • LOL||

    You don't change your tune much, do you? Here's something to think about, would liquidation and market clearing happen if congress repealed the 2005 bankruptcy law?

  • sevo||

    LOL|2.3.11 @ 8:41PM|#
    "You don't change your tune much, do you? Here's something to think about, would liquidation and market clearing happen if congress repealed the 2005 bankruptcy law?"

    You don't change your bullshit much, do you?
    Would market clearing be required if people acted like they were, well, somewhat other than infants?

  • LOL||

    Good morning, thanks for answering my question, oh wait, you didn't. You just spat out more one lined freeper cliches, how smart you must feel. This is the place where you use your brain and reason, right? Gonna have to do better than one liners coupled with gratuitous swears.

    You can say things like, the market knows best, (angry pirate voice) YARR people aren't infants blah blah blah, then go back to not thinking, or free republic, i mean Reason(TM).

    I'll move back some to that line you said about people not acting like children, does that even make sense to you? Or are you just cool with not thinking, and just nodding your head like a good little collectivist when Matt or Tim impart their manly wisdom. Here's the punchline, marry a french babe, a real one.

    Peace

  • sevo||

    LOL|2.4.11 @ 10:41AM|#
    "Good morning, thanks for answering my question, oh wait, you didn't. You just spat out more one lined freeper cliches, how smart you must feel."
    Good evening, bozo. You should learn how to read.

    May the bird of paradise fly up your nose.

  • LOL||

    Just because you're repressed, and have issues, Tim, is no reason to take your hate out on others. Your desperation to lay personal and moral indignation on these borrowers is illuminating to the type of anger you hold inside yourself. Maybe you should stick to drooling over starchild or libertarian girl?

  • sevo||

    ^?

  • LOL||

    I guess it helps if you see the repressed one in action. From reasontv themselves,

    http://www.youtube.com/watch?v=FcDFHM76zKs

    http://www.youtube.com/watch?v=XLPPm4ZU3Js

    Until i saw these, i wondered why so much anger against borrowers for a liquidation that desperately needs to happen, not just in real estate, but in most things from commercial property, students loans, and CC, loads of stuff needs to be flushed and cleaned out for a recovery to happen. While ignoring and downplaying criminal action by lenders and banks, Tim here is all about putting these borrowers in their place, whatever the repressed one deems that may be. The videos help explain where the anger may be coming from, his habit of shielding lenders from their bad decisions, and pouring scorn and hate on borrowers will lead to damage and force in our communities, but i dont think that's the kind of force this magazine is concerned with....

  • BakedPenguin||

    The anger is coming from you. Tim is simply pointing out that until the government gets out of the process, the housing market isn't going to get any better.

  • LOL||

    No, i've just read the words the man used, simple as that. Your reponse is not surprising though, this place is all about punishing borrowers, workers, especially if you happen to be in a union, students, anyone that doesn't cow toe to the collective line.

  • sevo||

    LOL|2.3.11 @ 7:26PM|#
    "No, i've just read the words the man used, simple as that."

    Lying asshole.

  • LOL||

    Sorry man, you might want to go back and refresh yourself with a couple of his articles, very transparent.

  • sevo||

    LOL|2.3.11 @ 7:47PM|#
    "Sorry man, you might want to go back and refresh yourself with a couple of his articles, very transparent."

    Two-bit "analysis" is typical of brain-deads who have only ideology to pitch; try to find some facts before you make a fool of yourself.
    Again.

  • LOL||

    and what ideology have i pitched? Now that is some projection. I've just been stating the obvious, and here you are with the anger. Man has a definate hate on for borrowers, look for yourself. Look out your window, walk around, you can see the damage that has been done since the recession has been going on, and here Tim is pouring scorn on some of those who are suffering. What a macho man he is, mr. tough guy, and his thing for deadbeats. A one dimensional gurgatron for the collectively minded, just because you call yourself libertarian, or freedom loving (TM), or ProLiberty (TM), or any of the other countless euphemisms, doesn't make you any less of a collectivist.

  • sevo||

    LOL|2.3.11 @ 8:08PM|#
    "and what ideology have i pitched?"

    See:
    "While ignoring and downplaying criminal action by lenders and banks, Tim here is all about putting these borrowers in their place, whatever the repressed one deems that may be."

    Sophistry looks good on you; it expresses both your idiocy and your dishonesty.

  • LOL||

    I don't see where that line indicates any ideology on my part, but keep up the one liners, it's par for the course when people on here don't like what they hear.

    So are you saying lenders and wall street are totally innocent and shouldn't be investigated, because that reveals a lot of ignorance on your part.

    Www.zerohedge.com

    Something to broaden the selection of your reading material.

  • sevo||

    LOL|2.3.11 @ 8:31PM|#
    "I don't see where that line indicates any ideology on my part,..."

    Willful ignorance will do that.

  • johnl||

    If a borrower is suffering he should mail the keys to the bank and enjoy a few mortgage free years.

  • LOL||

    More one lined cliches, and a willful ignorance to look past the crimes of your betters.

  • sevo||

    LOL|2.4.11 @ 10:45AM|#
    "More one lined cliches, and a willful ignorance to look past the crimes of your betters."

    More lefty whining; stuff it.

  • ||

    "Cow toe"? "Kowtow" or maybe "camel toe".

  • sevo||

    LOL|2.3.11 @ 6:30PM|#
    "I guess it helps if you see the repressed one in action."

    Not really. It does help when you admit you have nothing to offer other than sophomoric inanities.

  • LOL||

    Better than pouting one liners.

    /blows kisses

  • sevo||

    LOL|2.3.11 @ 8:09PM|#
    "Better than pouting one liners."

    Dumber than a pile of rocks.

  • LOL||

    I see this all the time here, someone says something, and sticks to their guns, that doesn't toe the collectivist line here, and the dirty names, derogatory comments ensue.

    Sorry man, i'm not down with sticking it to the borrowers, or whoever the Reason boogie man is today.

  • sevo||

    LOL|2.3.11 @ 8:34PM|#
    "I see this all the time here,..."

    Of course you do; it's called "Reason", not "Brain-Dead".
    Reasoning is a skill; you should try to learn in instead of parroting "poor victims" bullshit.

  • LOL||

    Since you're probably gonna ignore my question up above, I'll simply end with a one liner, i think I'm entitled( booga booga) to one.

    You're reading comprehension skills leave a lot to be desired.

  • sevo||

    "You're reading comprehension skills leave a lot to be desired."

    Nice try; you're a brian-dead ignoramus. And I've got facts on my side.

  • LOL||

    Sorry, couldn't resist,"Nice try; you're a brian-dead ignoramus. And I've got facts on my side."

    Try using one some time.

    The things i have said are true, where have your facts been to back them up.

  • LOL||

    Oops, the things i have said are true, where have your facts been, or are you just going to throw names and insults.

  • LOL||

    I see you still skipped my question. Good night

  • sevo||

    LOL|2.3.11 @ 9:24PM|#
    "I see you still skipped my question. Good night"

    Possibly you buried some irrelevant question I missed; so what?
    You are never going to get sympathy at a site named "Reason" when you argue that humans are not moral agents; that they are poor infantile egos that need watching over by their 'betters', which I presume means brain-deads like you.
    Here's the best answer I can offer: Get lost.

  • LOL||

    Whole lot of assumptions there, and no where did i make that case. I see you and Tim have a lot in common, except he can write better, you where your thoughts, or lack thereof, on your sleeve.

  • LOL||

    Whole lot of assumptions there, and no where did i make that case. I see you and Tim have a lot in common, except he can write better, you where your thoughts, or lack thereof, on your sleeve.

  • sevo||

    LOL|2.4.11 @ 10:43AM|#
    "Whole lot of assumptions there, and no where did i make that case."

    Can't read your own crap? Stuff it, asshole.

  • BakedPenguin||

  • Tim Cavanaugh||

    Had a bunch of links to previous coverage of the show-me-the-note movement, going back to before any cases had been decided in favor of the homeowner, and also to my anti-TARP cover story as well as a bunch of other pieces on bank/lender bailouts and shenanigans. But the squirrels rejeced me for having too many links.

    Anyway, these are all sins after the fact. To the extent I can follow your prose, you seem to be referring to fraud by lenders when the original loan was made. State AGs have been working hard for almost five years to find cases like that, and what's striking is how few instances of fraud they have discovered. Overwhelmingly, people took out these loans with their eyes wide open.

    As for heaping scorn or whatever you're talking about, I think it's a lot crueler to encourage people to stay in hopeless situations when foreclosure and/or bankruptcy would be a more merciful end -- one in which the bank takes the largest amount of hurt, the borrower takes a smaller amount of hurt, and the rest of society doesn't get hurt at all. Public policy that drags out the foreclosure process -- for years at this point -- is more vicious than anything I have written.

    No doubt I'm repressed in unspeakable ways, but I don't see how my interview with Starchild demonstrates that, given that he's a professional provider of erotic services and if I liked him that way all I'd have to do is pay him. Maybe that proves I'm a cheapskate?

    OK, feeding time's over. Back under the bridge you go.

  • gnut||

    With the recession, foreclosure filings for delinquent HOA assessments in Texas have increased from about 1 percent of all home foreclosures to more than 10 percent currently, according to the industry.

    "Not So Neighborly Associations Foreclosing On Homes"
    NPR
    June 29, 2010

    It must be noted that given the prevalence of the "priority of payments" scam accounting system used by HOA unions, "delinquent HOA assessments" could mean disputed fines and attorney fees.

  • gnut||

    Because the website operators have good evidence that nonjudicial foreclosures actually outnumber judicial foreclosures, the complete annual number for foreclosure filings in Harris County is very likely more than double the count which appears in this chart.

    This website also has detailed statistics on which attorneys are filing the most HOA foreclosures. Without revealing specific names, here is what the numbers for the top ten attorney filers look like through 2007.

    [ chart ]

    Notice the incredible number of filings for the top two attorneys. It is not an exaggeration to suggest that they have been running HOA foreclosure mills in the Houston area.

    It would be a mistake to think that the HOA foreclosure crisis in Texas is limited to Harris County. Take a look at the following table which lists foreclosure filings by type in Dallas and its surrounding counties for May 2010.

    "HOA Foreclosures; Necessary Tool or Extortion Racket?"
    Keith Jurow
    July 28, 2010

  • ||

    These damned fools on the left just want to have everyone wet-nursed. People put themselves in the position to be foreclosed. No banker came along and said, "Take this money or I'll blow your brains out with this .45." PEOPLE WANTED THE MORTGAGES AND THEY VOLUNTARILY SIGNED ON THE DOTTED LINE THAT THEY WANTED THEM. THEY'RE RESPONSIBLE. END OF STORY.

    If you're going to now change the rules so that no one can lose even if they make a bad bet, are you going to shut Vegas and Atlantic City down as well? People do stupid things and lose money in those places too. Bottom line: they made the choice, they have to live with it. The rest of us shouldn't have to pay for other people's bad/stupid decisions.

  • Bucky||

    c'mon man responsibility? that's for constitution readers! next your gonna tell me i have to go to bed early.

  • LOL||

    stomp your foot a little more this is riveting stuff.

  • ||

    So only the borrowers made a bad bet?

    Seems the lenders might have been involved as well, at least peripherally doesn't it?

    Bottom line: they made the choice, they have to live with it.

    True enough, I guess, at least for borrowers. As for lenders, they made the choice (to loan money) and the government had to save their ass. These buffoons didn't even lose their jobs or their bonuses.

    The rest of us shouldn't have to pay for other people's bad/stupid decisions.

    The rest of us have paid a hell of a lot less for the borrowers' bad decisions than the lenders' bad decisions.

  • Red Rocks Rockin||

    The rest of us have paid a hell of a lot less for the borrowers' bad decisions than the lenders' bad decisions.

    I think the point is that we shouldn't have to pay for it regardless of who made the bigger mistake.

  • db||

    Well by that time you’ll probably be able to buy property on a planet orbiting some nice warm star in Constellation Cygnus.

    Be very selective about which stars in Cygnus you decide to homestead near:


    In the constellation of Cygnus
    there lurks a mysterious, invisible force.

    The Black Hole of Cygnus X1

    Six stars of the Northern Cross
    In mourning for their sister's loss
    In a final flash of glory
    Nevermore to grace the night

  • Mr. Bingley||

    Shouldn't that be a 200% increase?

    (I mean, it's still horrific and all)

  • ||

    i was renting my condo to hud house program sec 8, at the same time went to a mortage counseler rec by my congressman to help me get a loan mod and the band wouldn't help me

  • ||

    "the last show-me-the-note lawsuit gets thrown out of court"

    LOL. They aren't getting thrown out at all.

    I didn't know Reason supported illegality and tramping all over property rights.

    "Show me the note" is one of the most libertarian movements in the country. Seriously, go jump off a bridge, You Phony.

  • ||

    If I borrow money from my father, that doesn't give Tim Canvenaugh any right to take my home and if I borrow from Citi that doesn't give JPMorgan a right to take my home. If they want it they can f***ing prove they bought the debt from Citi and if they can't do that they they can go screw themselves.

  • ||

    It's real simple. Lenders lent and borrowers borrowed far more on these properties than they are worth, at terms that the borrowers can't afford to repay. The simplest and cheapest mass modification program is cramdown. Time to give up the fantasy that these bad loans will be repaid, and just do it. This will ensure that banks stop reckless lending practices in the future.

  • J Alexander||

    Congrats that you recognize the SCAM written by Geithner, and called HAMP !
    Now, we use taxpayer dollars to have banks 'buy time for the banks'--- HAMP's 'underwhelming numbers, ineffectiveness, and costly efforts to limit redefaults' are nothing short of a National Disgrace. It must be stopped so housing/building/real estate
    can recover.
    Madashellhomeowner

  • Atticus||

    "If HAMP actually worked as promised, it would cost us almost a trillion dollars."

    Yeah, only bankers get trillion dollar government programs; serfs get evicted.

    The "market" did not create this problem, and the "market" cannot solve it. This is not a matter of economics, this is a matter of law.

    But on the practical side, to put this into perspective, WWII Europe, with a similar population to present day USA, experienced 35 million "displaced persons". You are talking about a comparable result if every mortgage that can't be paid produces an evicted family.

    We need two things right now: a jubilee; and a return to sound money.

    It has to be a constitutional amendment. Read about it here:

    http://strikelawyer.wordpress......amendment/

    http://strikelawyer.wordpress......ilee-text/

    and following related posts.

  • ||

    The article had a snide tone to it, particularly when citing the re-foreclosure rates, that undermine its points, providing guidance to those commenting above who dally almost exclusively in ad hominem discourse. Subjects like this have a myriad of intricate causes, as most bubbles do, including any number of misguided laws, "greed"/close your eyes instant gratification outlooks on all sides, reactionary "solutions" which invariably lead to deeper, albeit different, problems. If it is blame one wants to assign there is more than enough to go around. But that isn't really much help is it? What a less snide tone in the article may well have produced would instead have been comments on specific solutions/alternatives/scenarios which can be debated. When approving articles for publication the editors would do well to keep this in mind.

  • ||

    So... We have a bubble that that grew to the point that it literally could take down the capitalistic system (making LTCM / '98 look like peanuts) which in turn gives those who naturally turn to, and call for, government and government programs to save us from ourselves the opportunity they rarely get. Unfortunately, simultaneously, and partially as a result of the bursting bubble, "we" elected what may be a Manchurian Candidate at worst and clearly a collectivist at best as President and gave him super majorities in Congress with which to implement his dreams. You can create a socialistic society through shear size and high (currently 46% depending on how you calculate it)Government to GDP spending ratio regardless of the specific programs. Rightly or wrongly (which is a long debate)we have a strongly interventionist academic Fed chairman using his "viscous cycle / deceleration of money supply" computer models developed during his tenure years printing money at levels the gold bugs could only have dreamed a short while ago (and bond investors fear) in hopes of inflating both Tier 1 capital of the banks and the market value of both the residential real estate sector and commercial sector (which hasn't as yet really been written down by OCC regulators on most bank's books (LLLR) as yet) long enough to allow for private sector debt to be paid down to acceptable percentages and economic cycles turn to grow us out of the greater deflationary danger he perceives (he doesn't fear commodity (PPI and CPI) inflation as without labor inflation (global labor competition)you aren't likely to have the stagflation scenario (or so the theory goes). Thus, we have the Japanese model/solution being played out 20 years later on a global scale, (and a micro scale for each borrower/lender loan at issue) which despite the Bernank's authorship of the model for the Rising Sun all that time ago, he hopes will have better results this time 'round.

  • Karl X. A. Raeder||

    The economy will never turn around until the real estate mess is corrected. Why aren't the politicians trying to fix the economy? I'm not a gov't policy wonk, but here's my solution to this broke economy.

    http://kxars.blogspot.com/2010.....erica.html

  • Vans Skate Shoes||

    This Libber, at least, believes the housing market will not get restarted at current price levels, ever.

    The key to restarting it is to let prices fall to market-clearing rates. Something the government is expending trillions to prevent.

  • Atticus||

    Housing is not simply a "market"; you're talking about places for people to live.

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