One significant step toward putting the US economy back on its feet would be to for the government to treat borrowers like adults. It’s a novel idea, huh? And one that’s likely to fall on deaf ears up on Capitol Hill. But we firmly believe here at Notes that it is a prerequisite of any real economic recovery in the US.
The housing bubble was one for the ages. We’ve all heard stories of one kind or another… There was the glass cutter who earned $5,000 per month, pretax. WaMu gave him a $615,000 home loan with payments of $3,600 per month.
My five-year old daughter has a thick mane of chestnut colored hair on her head. By the time she goes to school, it always looks perfect – but few people know about the work involved beforehand. My wife or I usually have to spend 15 minutes untangling the knots in what invariably starts out as a post-sleep bird’s nest.
Wall Street created the U.S. housing bubble and now it’s missing the real estate rebound. And Andrew Waite understands why.
Last Tuesday the Wall Street Journal published an op-ed by my friend Gary Shilling and Richard LeFrak. They offer a simple solution for the housing crisis: give foreigners who will come to the US and buy a home resident status, green cards).
“I have a funny feeling that we’re not in Kansas, anymore.” Like Dorothy’s sublime observation of the surreal in “The Wizard of Oz,” our taking stock of where we are in the vortex of this economic tornado leads us to the same scary observation.
This is no ordinary downturn. After the biggest credit bubble in history, we face a correction on an unimaginable scale. Make no mistake about it: This is a credit-cycle bust that the government cannot stop. The losses are already catastrophic. And the massive unwinding is nowhere near finished yet…
If you’re thinking of getting back into stocks, it’s better to arrive late than too early says Ben Traynor. Yes, losses this year have been spectacular. And the temptation to bargain hunt is strong. But Ben says investors should remember that they still have a once-in-a-lifetime opportunity to lose a lot of money very quickly.
New home sales rose by 2.7% in September, according to the Commerce Department. Andrew Snyder says this is an important sign of a rebound in the property market. And that means adjusting your portfolio to include real estate investment trusts (REITs) like Post Properties (NYSE:PPS) and American Campus Associates (NYSE:ACC).
The Economist recently reported that “house prices are falling even faster than during the Great Depression”. The housing bubble kept inflating for far longer than most expected.
