Tranquilmeditation

The End of the Credit Crisis

I appreciate the author's optimism in a time of despair but this is fantasy. For example, 50% of the mortgages in California are now under water (negative equity) and real estate prices are still dropping. Someone will have to realize these massive losses.

Not until real estate values stop dropping will this crisis abate. No Obama economic team accounting gimmick can rescue this. As real estate values crater, business declines, unemployments rises, foreclosures increase and real estate craters more: a nasty self feeding cycle. It is something, painful as it will be and as much suffering as it will cause, we have to go through. Markets work, government's artificial solutions don't.

There are a lot of sins that a society can commit but it can never fool with its real estate / mortgage markets. They are just toooooo big. Unfortunately, that is what we did: supprime, mortgage equity withdrawals, liar loans, teaser loans, fannie/freddie, etc. The losses are mind blowing. They will need to be amortized by our nation over many years.

This is not a Black Swan. This was a guaranteed time bomb put into motion by the government's stupid but well intentioned desire to have everyone own a home, structured finance thievery and our old capitalist friend, unabated greed.

Too bad Aeschylus is not still around. He would of written a wonderful tragedy with this material.