I am baffled that people thought the US Govt would sit by idly and do nothing. That’s what Hoover did in 1929 and they aren’t about to repeat that purist “no federal relief” stance of his that prolonged the pain for years.

This time around, there will likely be a 3 pronged attack to head off dire straights:
– Government bailout to the greatest extent possible.
– Infusions from countries that we have a trade deficit with (witness the oil producing region and Citibank)…they don’t want us to stop buying their stuff!
– If the first two don’t work, I would look for a spike in inflation….they have a built-in excuse with rising energy costs. If paychecks increase, house values may stop falling and the number of owners underwater can be minimized. The big losers if this does indeed happen: renters and those living on fixed incomes.

This is gonna be painful, but I doubt it will be catastrophic given the new interdependencies of economies around the world.

Should one buy or rent right now? The consensus here is clearly that renting is the only way to go. I’m not so sure it is that black and white. Ladies and gentlemen, place your bets and let’s roll those dice!