Hopeful

Peter Schiff on the Housing Market and the Rescue Plan

Get ready for the shock of our lives. What we are witnessing is the first thread to unravel in the fabric of our society. Think I'm kidding - or some nutcase doom and gloomer. Let me tell you, Schiff is dead on in his overall economic predictions and his take on the symptomatic mortgage crisis. And where this mortgage crisis is concerned - it is a train without a brakeman headed straight for Main Street USA at terminal velocity loaded with TNT. No central bank is going to stop it. I mean come on, they're pumping money at this thing so fast and every red cent is simply going to prop up the balance sheets of every bank with their hand out at the Discount Window and the special poverty auctions now underway. Wake up people! I worked at New Century. I saw it all. I spent twenty plus years in the mortgage industry and watched it deteriorate from a respectable profession to an industry overrun with carpet-baggers and charletons. And while the funding did come from the Wall Street wizards behind the curtain - it went out into the hands of everyday people hoping to Flip a profit on the never-ending gravy train of real estate riches. I've said it a million times - everyone is culpable. From the Fed chairman to the investment banker, to the MBS investors and lenders, to the borrowers and the loan officers, to the underwriting managers and product development teams - why didn't anyone ever stand up and say 'Hey, these people can't afford these mortgages.' The whole thing was a joke. It was a huge transfer of ill-gotten wealth that is now unwinding in the reverse. So let it unwind. It'll be a tougher pill to swallow for some. But a necessary one. Oh yeah, buy Schiffs book. And buy some some gold. Short the real estate indexes and divest yourself of dollar denominated equities. I don't think we're at the hoarding of canned goods stage yet but keep your eye on rising commodity prices.