stock market and the housing market are only small pieces to the puzzle. It's the credit market you really have to worry about. Don't forget US borrows money from other countries too. If state doesn't have liquidity and that only means that they can't have bonds for schools, improvement for public roads, etc (read pothole city) you are going to have bigger issues. Why do you think Arnold and the state had such a tough time with the budget?? It's a whole spiral effect. BTW, for something closer to home, how do you think the paramount and 21st century, dreamworks out there finance their projects... It sure as hell ain't all cash. Guess what happens when they don't have funds for projects...
food for thought. Bank of America AND Countrywide were HEAVILY involved in the subprime market also. You can throw your argument out the window. Like I said, I am not condoning the behavior of borrow more than what you can afford. We have to look past who fcuked up and lay blame. We should be focusing on creating a somewhat soft landing to ensure credit quality for the nation as a whole. BTW, my wife is a VP at very large brokerage in the credit market and she warned against all of these a couple years ago so some insight from insider.
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Originally Posted by B-Line
You have got to be kidding me if you think we are just naive. You don't think we realize that default and foreclosures are driving down the stock market and the housing market?
-- But I am ok with that. The market needed to correct and property values needed some cooling. Lets get rid of the trash, start clean with buyers who can actually afford what they are buying, and let the market self correct.
- Real estate is not a short term investment, and I could care less if my values have gone 20% in the last 4 months, they will climb back up at a rate dictated by real world values, not stupid, interest only, 5 year mortgages.
-- And I don't blame the brokers, if they forged documents that's one thing. But most where just selling a product to consumers who were more than willing to sign on the dotted line to make a quick buck.
Nothing in life comes that fast or that easy without an expected, quick turn.
Can't afford your house now.. MOVE... Chances are most likely you couldn't afford it when you bought it and you mortgaged your future. Taking a big loss on the property? Then you shouldn't have bought something you coulnd't afford to hold onto until the market corrected.
You want to buy a house, don't be a putz. Call a reputable bank, ala Bank of America. Pay the appropriate amount for a 30 year fixed mortgage (6% is a fantastic deal), and ride the wave's of an up and down real estate market..
But don't go crying to uncle Sam that it's not fair, because your neighbor who is living in the identical adjacent house, is paying twice what you are for the privialge, but at least they locked in a long term rate.
B
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