What we have here is a truly global economic crisis that has been triggered by defaulting loans. There is plenty of blame to go around but make no mistake, if the powers that be do not address the coming wave of future defaults then things are get to get much much worse.
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The “crisis” was not triggered by defaulting loans, but by the origination of those guaranteed-to-fail loans in the first place. Falling housing prices are NOT the problem; falling prices are the solution to too much debt and the resultant artificially-inflated prices.
Perhaps you consider falling asset prices a bad thing, but many of us think it’s the best thing that could ever happen to this country.
We’ve been trying to fake our way through the falling wages/inflated prices stagflation for too long. Best to have debt destruction (via foreclosures and bankruptcies) and deflation so we can get back to REAL growth, not this credit-driven, artificial eCONomy where we just pass paper back and forth.
Jobs will be lost and asset prices will tumble, but that is the pain we deserve for allowing Greenspan to paper over and inflate our way out of every recession that would have kept the economy in check.
