Had foreclosures been pursued timely starting over three years ago, we would have been much further along in a recovery. Because they weren’t, we now have a lot of squatters who aren’t going anywhere until they are evicted.
you are not looking at the big picture, globally, as well as the other “interventions” done nationally. Halting foreclosures is just one of the few major manipulations done. Which all amount to a massive deflation stopping plan. While I agree we would have been farther along to where ever it is going, I would not call it a recovery in a sense that most understand. Once the global debtocalypse plays out, like it invariably will, we will be at a much, much lower level of economic activity with all the unpleasantness it brings. There is no magic cure for the deflationary pressures unleashed, all we have is stalling tactics.
I’m not saying I agree with what officialdom has done, then again, at this point I don’t agree with the operation of our whole financial structure to it’s core.
It is a highly unsustainable and irresponsible model.
There might be some initial dip in values when all the squatters are sent packing in the same 3-6 mo. time period, but then the resulting REO’s will be quickly snapped up and we can get back to a “regular” market.
So you are saying if we released 40,000 homes to the SD market it would be cleared up in a few months with just a little dip. Now I have not followed local RE numbers in about 2 years, but I seem to remember that being a little more that a few months supply
Coupled with an anemic job market I think you may be down playing the severity of the correction.
On top of the credit contracting implications of banks taking that many losses, which by many analysts number think they just can’t afford, would lead to more job losses and subsequent defaults — It’s a viscous cycle once unleashed. Credit is the lifeblood of the economy and massive losses begets credit contracting — like we saw first half of 09.
Credit collapses are not something new and there really is no new and improved money and banking technology over the last few decades. It works essentially same as it always did.
Like I said, let it flow but I would be detached from any expected out come.
The have not pledged 24 trillion dollars to this fiasco because they think it would be a minor dip in prices and quickly cleaned up. Or because of political pressure. The are fearful of the whole western world’s banking system collapsing.
