CBS 60 Minutes Preview: 2nd Mortgage Shock on Way in 2009

[Hissyspit]

Run time: 00:29 https://www.youtube.com/watch?v=mzjPEAv-HE8   Posted on YouTube: December 13, 2008 By YouTube Member: Views on YouTube: 0   Posted on DU: December 13, 2008 By DU Member: Hissyspit Views on DU: 1244

 
The mortgage mess that touched off the financial meltdown is far from over, with a second wave of expected defaults on the way that could deepen the bottom of this recession.

[Warpy]

1. Next year through the beginning of 2010 will see the worst of the paper

default. These are the jumbo loans at the end of the bubble, issued to speculators and families who had no business taking on half a million dollars worth of debt and up and who had to use creative financing to do it. It's also going to see the real fraud, the loans written for people with no income and no credit who were encouraged to lie on the application just to get them into a house with the promise that the house would appreciate enough to give them a profit before the loan reset. Some of the latter was pure pump and dump, trying to keep the prices high at the end of the bubble.

This is all the paper written by people who just didn't care any more, as long as they made the sale and got the house off the books, it was all good. As long as they could unload the loan to a hedge fund or Indy Mac (Fannie and Freddie didn't touch subprimes), they were done. The money was made and they were on to the next sale.

I'm afraid we're going to see a lot of empty houses and full parking lots for some time to come while prices dive, jobs dry up, and banks figure out it's probably better to keep even a total deadbeat in a house and discouraging vandals than throwing them out on the street and ending up with a property so damaged it has to be bulldozed.

This is a one-two debt punch. It would never have happened had wages kept pace with real inflation (not those CPI fantasy numbers Greenspan inspired) and not been encouraged to take on debt they could never pay just to own a house.

I hope 60 Minutes picks up on the fraud that created the second punch.

[Hulk]

2. Grapes of Wrath all over again.....'cept this will be the 21st Century ...

I bought the movie on CD a few months back, and I can't help but see the comparison between the "then" and the "now". Very, very similar.

Hang on folks. We're in for a bad ride. We've had eight years of total mismanagement and there are LOTS of fat cats out there that won't be touched, but the "middle American" and the lower income are going to get it in the ass....thanks to george herbert hoover bush and his thugs.

Once we stop making tanks and bombs, we'll be seeing lots more folks out of work. Then we can all blame President Obama for putting these folks out of work and taking our economy further into the tank.

It's all we have anymore.....tanks and bombs and planes. Nobody is buying...and we'll have to find a war someplace to build the market.