Malkiel

Housing Decline Will Begin Weighing On The Consumer

I have trouble understanding where the people who are calling various bottoms to the housing implosion are coming from; the fundamental facts of this problem are tightened lending standards which choke off marginal borrowers (including first-timers) and ARMS mortgage resets. Resets will be building to a crescendo through this time next year, and the market and government haven't figured out how to restructure mortgage lending products and policies yet, so no bottom can be in sight for any part of 2008. Unless restructing of some kind heads off the ARMS foreclosure tidal wave, bad things will continue to happen throughout 2008 and perhaps even 2009...

Miracle: Bush To Part The Bankrupt Sea

Every public promise or commitment ever made by this president has turned out to be rhetoric for effect with no follow-through. Expect the White House to take no concrete administrative or legislative action to actually effect the proposals. We will probably not be able to trace the inaction until the first ARMS rollover foreclosure waves begin in a couple of months, by which time people will have forgotten that Bush even said anything. This president is the most relentlessly incompetent chief executive imaginable and Wall Streeters should know that by now...