Share on Google Plus Share on Twitter Share on Facebook Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit Share on StumbleUpon Tell A Friend

Printer Friendly Page Save As Favorite View Favorites (# of views)   No comments
Exclusive to OpEdNews:
General News

Meltdown on Main Street

By       Message Mike Colpitts     Permalink
      (Page 1 of 1 pages)
Related Topic(s): ; ; ; ; ; ; ; ; ; ; (more...) ; ; ; ; ; ; ; , Add Tags  (less...) Add to My Group(s)

View Ratings | Rate It

- Advertisement -

Oh, we hate the taste of cough syrup churning down our throats. The distaste of some things just really gets us. The same nation that voted for George W. Bush and then reelected him for a second term doesn’t like a lot of things that are good for it – any wonder?

The U.S. economy is battling the most severe economic crisis since the Great Depression, and now the meltdown on Wall Street may be averted with further actions by the Fed. But the meltdown on Main Street may just be beginning.

- Advertisement -

Deregulation triggered the U.S. Savings and Loan Fraud Crisis in the late 1980’s. But it seems we didn’t learn from history. Deregulation of the financial markets and mortgage lenders has caused the economic melt down.

Investment banks and other lenders have no way to determine the extent of the crisis since their risk-management models do not take unprecedented events like the nation is currently experiencing into account. As a consequence, the banks have not only been caught off guard, but have been amazed at the speed at which the crisis is accelerating.

The facts are facts. We know new investment vehicles (SIV’s) were developed to trade new emerging securities in the investment markets like pork bellies on Wall Street, that lenders took liberties with liar loans, making them to anyone who could sign their name and that the real estate boom was caused by artificial appreciation manipulated by newly developed creative financing that went outside the bounds of any common sense.

Some people made millions of dollars, and other investors in financials and real estate did pretty well during the boom. But the boom’s last gasp is close to over just about every where – even Hawaii.

- Advertisement -

Millions of Americans are being thrown out of their homes due to foreclosure. The crisis is making monumental inroads into the nation’s economy.

The Fed’s slow methodical response to the nation’s real estate recession has sent home prices in the over-whelming majority of housing markets tracked by Housing Predictor falling, some at unprecedented double digit levels. Since the economic crisis started more than 2 million homes and other properties have been foreclosed.

The White House and the Fed are finally in Emergency Crisis management mode. The bailout of one of the nation’s oldest and once most powerful investment banks, Bear Stearns is another sign that the Fed may be out of touch with what has really been going on in the national economy.

The $200-billion dollar infusion into the money markets is an attempt by the Fed to save major banks and mortgage companies from failing. This is a long time consuming, arduous process, and at this point, even the most naive realize that in many cases the criminals and unethical types were in charge of the lending process for way too long and that unregulated mortgages were made to far too many borrowers during an era of deregulation that blew up the financial system.

The crisis is dragging down the national economy, and the rest of the world’s financial markets, which have been thrown out of whack since the economic crisis blew up more than a year ago.

Still, there are those that will benefit from the crisis, investing in real estate and financial instruments at the right time to share in big profits. The majority of Americans will not because of the nation’s “pack mentality,” the sense that when things are bad it’s bad for everyone.

Perhaps, the most amazing aspect of the crisis is that the masses don’t seem to either know about or care about it much to change things. Grocery prices are spiraling out of control. Anyone who eats knows that. Gasoline and commodity prices are edging upward. It’s hitting us all in the wallet. Inflation is a huge issue.

- Advertisement -

When will it get better, you ask? Sometime after it all works through the Fed. Whether or not Americans want a full scale bail out isn’t the issue anymore. It’s simply a question of how long it will be before the Fed feels it has to pull the trigger. It seems we need to gag that cough medicine down.


- Advertisement -

View Ratings | Rate It
Mike Colpitts is the Editor of Housing, an independent web site, which forecasts more than 250 local housing markets in all 50 U.S. states and real estate news. Housing Predictor has a staff of researchers, economists and computer (more...)

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon

Go To Commenting
/* The Petition Site */
The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
- Advertisement -

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Worst Real Estate Market Forecasts in 2008

Foreclosure Forecast Worsens with New Plan

10 Signs to the Bottom of Real Estate Markets

Congress Cashes-In in Real Estate Bust

Real Estate Foreclosures Forecast to Double

Real Estate in Economic Cross Hairs