djsunshine

The Humpty Dumpty Economy

Home prices all over are so high no one can qualify at the guide line. The system is woring on at 7-10% home appriciation rate.We need to bail them and do a Loan MOD or they all stop playing in the system. Whole episode of 'slowing the economy' by Fed's rate increase is outdated. That cause more problems then solutions. Global economy is too big and so complex our law abiding citizens are being crushed every month. They are borrowing from Paul to pay Peter. In this case to pay Iraq war or Saudi OPEC. Loan MOD will bring some stailisation..too late to worry about moral hazard...This much borrowing was a moral problem to begin with.


On Nov 16 10:53 AM dinochick wrote:

> Excellent article.
>
> It bothered me when they brought the bailout proposal on three sheets
> of paper, then it expanded to over 50.
>
> The prosperity that we were living in was false, created by credit.
> The inflation of housing prices is what caused many to use their
> "easy credit", and of course the "disposable goods". When a toaster
> broke, you tried to fix it. Now you throw away and spend another
> $20 on one.
> However, this "tude" has gone on for a long time. While allot of
> goods are cheaper than they used to be, some don't work as well.
> And, of course by the time you buy a laptop, it is outdated.
>
> The old underwriting formula was 29/33 ratios. (yep I am an underwriter)
> and we didn't even include women's income of child bearing age (yes
> there was that "prejudice" in the seventies). So obviously, there
> is a serious "gap" that needs to be closed. Increase salaries or
> lower housing prices..
>
> When companies lower salaries (as many are doing now due to the extensive
> unemployed who are desperate for anything) they contribute to the
> problem. Until standardized salaries for specific work, and limitations
> on housing inflations are regulated, you will continue to have this
> mess. I know this affects free enterprise, but obviously we didn't
> handle it very well.
>