We thought that the collapse of Lehman Brothers and Merrill Lynch over the weekend, the two latest “victims” in the financial calamity unfolding in our newspapers and on our TV screens, was an excellent opportunity for us to point out how right we were about the mortgage mess even before it started;
…especially those who are mortgaged to the hilt, should read this article;
Signs of a “”new era”" in housing are everywhere. Housing construction is taking place at record rates. New records for real estate prices are being set across the country, especially on the east and west coasts…As one loan officer explained to me: “”It’s almost too good to be true.”"In fact, it is too good to be true. What the prophets of the new housing paradigm don’t discuss is that real estate markets have experienced similar cycles in the past and that periods described as new paradigms are often followed by periods of distress in real estate markets, including foreclosure sales, bankruptcy and bank failures.
OOOH, This Is BAD (7/2/2004);
From today’s WSJ;
The Johnsons thought they had it all figured out. After changing jobs, Paul had planned to rollover the $36,000 balance from his former employer’s 401(k) plan into an IRA. But a desire to live closer to their parents and worries that mortgage rates would head higher spurred them to cash out the 401(k) account last year and use some of the money to buy a home…”We’re making more money, but a lot of that is going into improvements on the home.”"The couple also still owes state and federal taxes on the retirement-account withdrawal, and they haven’t started to rebuild their nest egg.
No real-estate bubble you say?;
A President’s Job Is Never Done (8/24/2004);
I just spotted this on the Mises Institute blog. James Bovard (always a must-read) wrote in Barron’s about George Bush’s initiative to close the gap between rich and poor. I can’t even start to comment on it. Here are some clips:
* A White House Fact Sheet issued June 17, 2002, declared that Bush’s agenda “”will help tear down the barriers to homeownership that stand in the way of our nation’s African-American, Hispanic and other minority families. … The single biggest barrier to homeownership is accumulating funds for a down payment.”"
* Federal Housing Commissioner John Weicher said in January 2004 that “”the White House doesn’t think those who can afford the monthly payment but have been unable to save for a down payment should be deprived from owning a home,”" National Mortgage News reported.
* While zero-downpayment mortgages have long been considered profoundly unsafe (especially for borrowers with dubious credit history), Weicher confidently asserted: “”We do not anticipate any costs to taxpayers.”"
Although Barron’s is a pay site, the full text of the article is on the blog if you scroll down a little. I just have one question that Bovard leave’s unanswered: Did we indeed elect Al Gore in 2000?
Some Eagles Fans Have Really, Really Lost Their Minds (2/3/2005);
…and could lose their houses.
From “”The Rude Awakening”", published by Bill Bonner and Addison Wiggin, authors of Financial Reckoning Day comes the following;
“”Mr. Dave Brekher, president and co-owner of North American Federal Mortgage Co. in blue-collar Northeast Philadelphia, realizes that enthusiasm is not the same as good credit.
His company has been asked to lend money to local football fans wishing to mortgage their houses so they can afford to go to the Super Bowl. “”No,”" he said.
“”If someone is that desperate, there’s always repercussions,”" he explained.
I Hope the Voters Remember This When He’s Up for Reelection (2/4/2005);
This is from the Philadelphia Daily News:
Kevin P. O’Donoghue, 36, of Glen Mills, sank $4,000 into a Super Bowl package that includes round-trip airfare, a four-night hotel stay, and one ticket.
He said that he told his wife after the Eagles defeated the Atlanta Falcons for the NFC championship: “”I don’t care if we have to mortgage our house, I’m going.”"
He applied for a home-equity line of credit that required him to put up his home as collateral. He’s getting the money in a few days.
“”Sometimes the cards are maxed out, and you got to do what you got to do,”" he said.
For those of you who don’t know him, O’Donoghue is the township supervisor where I live so he wields fiduciary responsibility over my money. I will surely not forget this next time it comes time to elect a township supervisor. .
We Hate To Say We Told You So… (10/17/2005);
- Detroit’s sales are down 33% over last year, with GM’s sales down FIFTY-SEVEN PERCENT,
- Delphi Automotive filed for bankruptcy, will offload its $10B pension obligations on you and I,
- Hewlett-Packard is laying off over 14,000 employees,
- 30-year mortgage rates are over 6%, probably for the forseeable future,
- Oil prices are hitting record highs,
- Hey, gold is up! (cool!),
- The housing bubble is beginning to implode, and;
- Bankruptcy filings exploded ahead of the Federal government’s reinstitution of debt peonage.
When you get right down to it, people vote their pocketbooks.
And they are all about to be given a HARD kick.
Taking Advantage Of FHA, Buyers, Beazer Destroys Lives, Neighborhoods (3/28/2007);
When we last left this sorry tale, builder Beazer Homes had sold crappy 2-bedroom starter houses to low-income buyers in Charlotte, NC, an average of 20% of whom, it turns out, have since had those homes foreclosed.
As great as it is to see such a corporate pig get skewered, Beazer was only doing what the Bush Administration was urging them to do, which is to sell houses to people who have no realistic way to ever pay for them.
(link from Breitbart.com)
The Fed’s Fatal Overreach (4/1/2008);
Just when you think you have seen it all, a proposal has arisen from the Bush White House to empower the Federal Reserve to take over the entire US financial system.
Now right about now, anyone like us who has followed the Fed-inflated real-estate bubble, followed by the collapse of the housing market, the Fed origins of the mortgage crisis, and the Fed-caused recession can be forgiven for making a gurgling noise as their head explodes from the unbelievable hubris, the BALLS behind such a move.
We had missed the 5:30 Ferry, but the good people at Shepler’s quickly boarded us on another boat and made a special run to take us and Ron Paul over to the Island..
… I asked him how much longer he thought those guys in Washington could keep going before everything started to collapse, and he said “”Not much longer, things are starting to fall apart and this time they will not be able to stop it.”"
To singlehandedly destroy an economy, quickly steal away from the scene, then return with a flourish annoncing that salvation is at hand is exactly what compulsive arsonists do.
And the people should rise up and put them in exactly the same place as arsonists – in prison, every last one of them.