Homestead mailing list

[Clansgian AT wmconnect.com]

> >The combination of escalating resets, ever higher fuel prices, and
> unsophisticated buyers using some of the most complex financial instruments.
> 

The Calculated Risk entry underscores  a stark reality being, says I, ignored 
in the present bail out debate.

What got us here was the old saw being chanted like a mantra that 'ho hum, 
this talk of bubbles is so boring, we've seen housing prices rise and fall, 
this 
is just another cycle, nothing more'.  After all, everyone knows in the long 
run housing prices only go up.

They didn't.  The bubble burst.  The economic world is turned on its ear, and 
the primary perps of the debacle are those who collecitvely chanted, 'Bubble? 
 Don't make me laugh!"

Now the whole premise on why the bailout is supposed to work is that armed 
with a ghastly amount of credit, the Fed will buy up the bad paper that 
represents all those houses described in the Calcualted Risk blurb, hold the 
paper 
until housing prices go up, and then sell them at a tremendous profit and pay 
back the public coffers.

But as in the SoCal area described in the article, those houses are 
deteriorating.  This financial situation is expected to last ten to twenty 
years.  By 
then people will no longer expect (nor expect to pay for) houses with three 
car 
garages, granite counter tops, etc.  There will be nothing of worth to sell 
by then with the houses being an anachronism and a falling down anachronism 
at 
that,   </HTML>