The bubble camp vindicated?
So apparently even the great economic guru Alan Greenspan is now admitting that things aren't so rosy. As the feds look now at low interest rates and continuing skyrocketing housing prices, alongside the number of interest only home loans going out there, the genius has finally realized what many of us, myself included, have been saying for years; what goes up must come down.
http://news.yahoo.com/s/nm/20050610/bs_nm/economy_housing_froth_dc;_ylt=Aj6GtP3zps0y4BrPdWc.wqGyBhIF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl
By Kristin Roberts Fri Jun 10, 4:52 PM ET
WASHINGTON (Reuters) -
Federal Reserve Chairman
Alan Greenspan this week added to a chorus of worry about the growth of home loans seen as far riskier than the 30-year mortgage that has been U.S. housing's bedrock for decades.
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Those alternatives, called "exotic" by the Fed chief on Thursday, have played a big role in sustaining the four-year housing boom by making homes more affordable, which in turn stoked demand and drove prices higher and higher.
But these hundreds of alternative mortgage products have also injected more risk into the market -- both for lenders and borrowers, according to regulators and some analysts.
Of most concern are loans that require little downpayment and delay big principal payments, leaving homeowners highly leveraged for longer just as rates appear poised to rise.
"The dramatic increase in the prevalence of interest-only loans, as well as the introduction of other relatively exotic forms of adjustable-rate mortgages are developments of particular concern," Greenspan told Congress.
He's not alone.
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And alongside all of this are numerous "experts" within the real estate industry who are doing their best to suppress this news, or simply ignore it entirely. It is noteworthy that I had to search for this story through a number of pages. Considering we are talking about one of the biggest bailouts since the s and l crisis, you would think all the finance geniuses would be talking.
But then again fancy titles and the amount of money in your bank has never been much of a sign of intelligence in the US.
http://news.yahoo.com/s/nm/20050610/bs_nm/economy_housing_froth_dc;_ylt=Aj6GtP3zps0y4BrPdWc.wqGyBhIF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl
By Kristin Roberts Fri Jun 10, 4:52 PM ET
WASHINGTON (Reuters) -
Federal Reserve Chairman
Alan Greenspan this week added to a chorus of worry about the growth of home loans seen as far riskier than the 30-year mortgage that has been U.S. housing's bedrock for decades.
ADVERTISEMENT
Those alternatives, called "exotic" by the Fed chief on Thursday, have played a big role in sustaining the four-year housing boom by making homes more affordable, which in turn stoked demand and drove prices higher and higher.
But these hundreds of alternative mortgage products have also injected more risk into the market -- both for lenders and borrowers, according to regulators and some analysts.
Of most concern are loans that require little downpayment and delay big principal payments, leaving homeowners highly leveraged for longer just as rates appear poised to rise.
"The dramatic increase in the prevalence of interest-only loans, as well as the introduction of other relatively exotic forms of adjustable-rate mortgages are developments of particular concern," Greenspan told Congress.
He's not alone.
========================
And alongside all of this are numerous "experts" within the real estate industry who are doing their best to suppress this news, or simply ignore it entirely. It is noteworthy that I had to search for this story through a number of pages. Considering we are talking about one of the biggest bailouts since the s and l crisis, you would think all the finance geniuses would be talking.
But then again fancy titles and the amount of money in your bank has never been much of a sign of intelligence in the US.
posted by Robert Smith at 9:19 AM
1 Comments:
Wow...
combine that with the green light congress and the president just gave to Credit Card companies to stop being as selective about whom they issue cards to....
I think it went something like this "we should make bankrupcy laws stricter so that Credit card companies don't lose as much money, it isn't their fault afterall that they do a lousy job of screening their clients also what about the devilish people who get sick without medical insurance, or so sick that their insurance doesn't cover it... we should really make bankrupcy harder and make them pay out their noses...
Abu Yusef
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