I used the term backstopping incorrectly. Let me rephrase it.
Your government is ACTIVELY TRYING TO INFLATE HOME PRICES.
How is that?
They are actively doing this through incentives to buyers via tax credits. This is happening at the state and federal level. Our president has said, we need to raise the values of homes. He said that.
So yes my mistake. I should not have used backtstopping as that is an incorrect term.
Back in 2006 when I started posting I always always always maintained that there were forces we could not even imagine that will come to fight this depreciation cycle.
The fact is that it doesn’t matter if it doesn’t work. Right? They don’t care. They will spend as much money as it takes to simply delay it, to keep it as “orderly” as possible. They will impose cram downs, impose foreclosure moratoriums, they will nationalize banks, they will cause as much peripheral damage as they need to.
Of course non of the programs will work. However it doesn’t matter? The problem is that you give WAY TO MUCH CREDIT to the average consumer. If you think that there are braindeads at NAR then do you suppose the general populace is much better? The average consumer is an idiot and will do what they are told. PERIOD. As smart as everyone is on this board I can tell you alot of people are still buying right now. Our consumers got us into this mess because they did what they were told, they did not think for themselves. They will continue to do that.
Please do not think that I am not in the camp that the bond market will not blow up and that the combination of high unemployment and high rates will not suppress housing prices because they will. However the lending environment will be WAY more harsh then in 1997 under that scenario.
Don’t think that I don’t think those will explode the market because I believe they will. Personally do I think they will push it to 97 prices? No I don’t but that is just me.
I also believe that folks like Schumer, Dodd, Frank, Pelosi, Reid and our president have not finished making bonehead attempts at propping this housing market up.
Do I think it would be a good thing if the prices were allowed to free fall and hit 1997 or whatever pricing?
