Austrian School

Western Cities Top U.S. Home Price Declines

Yes Maverick blame Greenspan. What did he do that made him so great? All he did was the easy thing, just keep easing everythime the market tries to correct. Just keep running down hill. Eventually you reach the bottom of the hill and have nowhere to go, thats where we are now. So instead of have several small corrections, we're going to have one big disaster. The market players were just doing what you'd expect when put in an interest rate environment created by Greenspan.

The Government's Subprime 'Bailout' Plan Will Kill the Housing Market

The current crop of politicians are only guilty of being of the same ilk as their predecessors that created the climate one step at a time. In fact the seeds of this disaster were sowen by FDR following the last one of similar origin. Specifically the formation of the Home Loan Bank system. Any mechanism to artificially hedge the risk of investors only serves to raise the prices for people with good credit. The ironic thing is all these types of things are done in the name of affordable housing. And the more they intervene, the less affordable housing gets.

Regarding the idea that the government is simply orginizing the action I like this quote:

"When authority presents itself in the guise of organization, it developes charms fascinating enough to convert communites of free people into totalitarian states." from the The Times, London circa early mid 20th century

The Government's Subprime 'Bailout' Plan Will Kill the Housing Market

I read the the article to he thought it was too much intervention, rather than not enough.

The Government's Subprime 'Bailout' Plan Will Kill the Housing Market

Good article Davy. Wanted to point out the the bubble blew the biggest not coincidentally in the nonrecourse states. I've talked to more than one of my Cali associates about the risks of buying in the recent market have been told in effect, if it doesn't work I'll just walk. When the governemt does things like tell buyers that they don't have any skin in the game if their equity is gone, it encourages more people to take risks because they know their downside is limited to their down payment. And wth no down payment, there is no downside risk, and everybody is a buyer. Prices go through the roof, then come crashing down through the floor. This is yet another unintended consequence of medling in markets. Intervention causes strife which begs yet more intervention, etc, etc. Wash, rinse, repeat until the country is bankrupted.

I think these programs are more about slowing the rate (prolonging) the crash than stopping it, and they know it. I keep hearing noise from mortgage servicers that they aren't set up to handle so many defaults all at once. They're really staffed just to collect checks every month from 99% of the people.

Mortgage Meltdown on the Horizon

Perhaps there are so few people smart enough to have these qualifications for a mortgage but dumb enough to be buying in this market?

Fannie Mae's Housing Forecast Seems Too Optimistic

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Fannie Mae's Housing Forecast Seems Too Optimistic

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