http://moneynews.newsmax.com/money/archives/st/2007/9/19/140623.cfm
Treasury secretary Henry Paulson recently called for an aggressive response to deal with an unfolding housing crisis that he said presents a significant risk to the economy. ... “It’s the steepest housing slump in 16 years” and “has not yet hit bottom.”
“Paulson urged the financial industry to provide immediate help for homeowners trying to refinance to more affordable mortgages.
He also called for Congress to overhaul rules governing mortgage lending to ban abusive practices that helped drag homebuyers into a financial morass that triggered the crisis.
Paulson had brokered a $100 billion rescue deal over the weekend in which the three biggest banks would set up a pool to become buyers of last resort for the questionable mortgage-backed securities that have stalled the credit system.”
http://www.nypost.com/seven/10172007/business/like_a_house_on_fire.htm
Indications of the extent of this crisis: Annual housing starts have fallen 40% in the past year. Paulson’s exact words: “Annual housing starts peaked at an annual rate of almost 2.3 million units in early 2006 before falling off more than 40% through August of this year.
US home foreclosures are double those of a year ago, late mortgage payments continue to be on the increase, and the mortgage crisis is not abating.
http://biz.yahoo.com/ap/071011/foreclosure_rates.html
Paulson advises that “an enhanced regulatory role is likely necessary to prevent these problems from reoccurring.”
Gee whiz, the Republicans are starting to talk like Democrats! Why? Because they realize that their Republican strategies really don’t work.
Meanwhile, guess who’s talking about buying a big stake in the Bear Stearns investment bank? China! Specifically, “An investment bank controlled by the Chinese government is interested in buying a stake in Bear Stearns, the Wall Street securities firm hit hard by the subprime mortgage sell-off, an executive of the Chinese firm and a Chinese regulator said Tuesday.” http://www.nytimes.com/2007/10/17/business/17citic.html?ref=business
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