Friday, June 24, 2011

Housing crisis factoid of the day 

Where are all the home buyers? Interestingly, credit standards have tightened so far that fully one-third of people who would have qualified for a prime mortgage a few years ago cannot today.

We all well know the subprime market is dead. I had not realized that fully 1/3 of potential prime borrowers are now no longer considered qualified by virtue of higher FICO scores being required by banks. Simply put, we’ve apparently got big issues on both sides of the equation (way too much supply, and a demand problem that is being exacerbated by banks’ newfound religion on credit standards). Exactly how is the tremendous slack supposed to be picked up?

If you have an extra house, you might consider becoming a landlord.


By Anonymous Old Fan, at Fri Jun 24, 05:51:00 PM:

Wow, the market certainly reacts.

On another note...

Governor Wonderful strikes again in NJ:
"New Jersey assembly passes worker benefits overhaul"

Christie continues to impress.  

By Anonymous Ignoramus, at Fri Jun 24, 10:03:00 PM:

"Wow, the market certainly reacts."

Not exactly. USA mortgages are hardly a normal market. We've gotten to the point where over 90% of the mortgages in America are running through Fannie/Freddie, which are under federal conservatorship -- and still losing skads of money.

I could give a longer response, if there's interest. My day job has gotten me into this in depth.

"Mortgages/Foreclosures/PrivateMarketSecuritizatonFail" has huge implications. It's tied to PrivateSectorJobCrisis. Together they're enough to take down The Republic. Anything else is a sideshow, in the near-term

From the day O&Co took office, they've completely fucked up "Mortgages/Foreclosures/PrivateMarketSecuritizatonFail" .

I had a "radical solution" that would have cost us half what Stimulus cost us. Want to know what it was?  

By Blogger PD Quig, at Fri Jun 24, 10:55:00 PM:

I had a solution back in 2008 too: the USG 100% guarantees all checking, savings, and money market accounts. All bond- and equity holders are on their own. Back to mark-to-market. 80% of banks go BK and the good banks get all the deposits moved to them. All the MFers who caused the problem go broke.

Would there have been chaos? Sure. But we'd be in the 8th or 9th inning by now...instead of half way through batting practice.

The worst is yet to come. No doubt about it. All the 'recovery' is chimera stoked by monetary policy that has ruined the middle and lower classes.

Time for some politicians and bankers to hang upside down from lampposts.  

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