Depending on the severity of the jumbo defaults we will almost certainly see a bailout. We’ve already answered the questions in regards to the irresponsible getting a bailout so it’s definitely an option for our government.
The only question that remains is can the government control the inventory long enough for this jumbo default’s impact to minimize the effect on the banks. I believe the system is already in place for the banks, so in theory if they keep playing the game the way they are and it keeps working then I could see them being against another bailout. I don’t even know if I make sense anymore. Trying to dissect the moves of our government is rocket science.
To be completely honest, I don’t see unemployment playing much of role in the RE markets anymore as the system is a game of cat and mouse. Too many homes on the market means less released over a certain period. I guarantee we are going to see some revolutionary steps in the RE markets over the next 6 months to a year in regards to the game. Who knows maybe Robert Kiosaki will even come out with a new game that follows the government’s strategy. There has to be a new book called “Poor Dad, Poor Dad” that he is working on!!
