Fighting Yoda

Will FHA Fall into the Sub-Prime Trap?

FHA is following a much worse plan than even Fannie/Freddie - only 3.5% down payment. So the likelihood of failure here is much much higher, it is not likelihood anymore - it has already happened. By end of year bailout would become necessary. It is the same policies as articulated by Barney Frank - socialism, and propping up a over priced and unsustainable housing market.

There is a lot more pain still to come on the economic and jobs front - lot more foreclosures will happen. The green shoots myth and Wall Street hype will all die its usual miserable death. You simply can't borrow or print your way to prosperity. America is the only country that still believes in this Ponzi myth.

Home Price Declines: How Much Further Do We Have to Go?

Read Peter Schiff’s article from a few days ago: Housing's Big Picture Isn't Pretty
seekingalpha.com/artic...

“…Given that we are entering uncharted territory with price declines much sharper than those seen in the Great Depression, I would argue that the 100-year price trend would be the better projection to use. In such a scenario, the index would bottom out at around 108 if a 10% overshoot on the downside is seen. That leaves another 34% decline in home prices on the table…”