[quote=pemeliza]I think people that are wondering why the government is doing what they are doing need to consider these numbers:
“First American CoreLogic reports that 26% of homeowners with a mortgage had substantial equity, or paper profit, in their properties at the end of June in the Los Angeles-Orange area. More data:
* 35% were underwater, owing more than their homes were worth.
* 39% were within 5% of being underwater.”
These numbers are ridiculously bad and likely historically unprecedented. If it is this bad with all the massive intervention, imagine what it would be like without it. We are currently down to 02-03 price levels in most of SD county and probably headed towards 00-01 price levels as it is. Do we really want 95-96 price levels (which were the same as late 80 price levels). That is two lost decades and would be Japan level statistics. I suppose it could happen but I’m pretty sure most people are vastly unprepared for the consequences even if you are sitting on a pile of cash or think you have a stable job.[/quote]
Herein lies the problem. Home prices should be a reaction to economic activity not the driver of it. Somewhere along the way we got turned around backwards and everybody’s thinking is skewed.
The whole “private” banking system is rigged to implode if home prices continue to decline.
Now we are stuck in a losing battle and throwing the farm at keeping home prices elevated while the real economy crashes and burns.
The zeroth bottom line is: We have decided to bankrupt the nation in an attempt to save the banking industry. The sneakiest part of this whole plan is how they try to package it to citizens as keeping home prices high for their benefit, when in actuality the citizens and a consumer based economy benefit from low housing costs.
The die is cast though. We have set a course for complete economic destruction via loss of confidence in the US financial system. Full speed ahead.
